1
EXHIBIT ___
COMMERCIAL MULTI-TENANT LEASE-MODIFIED NET
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("LEASE"), dated for reference
purposes only, June __, 1997, is made by and between AGBRI Xxxxx Xxxxx, LLC, a
Delaware Limited Liability Company (the "Effective Date") ("LESSOR") and
CardioDynamics International Corporation, a California corporation ("LESSEE"),
(collectively the "PARTIES," or individually a "PARTY").
1.2(a) PREMISES: That certain portion of the Building,
including all improvements therein or to be provided by Lessor under the terms
of this Lease, commonly known by the street address of Suite 300 of 6175 Xxxxx
Xxxxx Drive, located in the City of San Diego, County of San Diego, State of
California, with zip code 92121, and containing 17,779 square feet as outlined
on Exhibit A attached hereto and described further herein (the "PREMISES").
The Building is one of three (3) Buildings, as shown on the site plan of
Exhibit A-1. The "BUILDINGS" are those certain buildings containing the
Premises and generally described as three building research and development
project commonly known as Xxxxxxx Vista Center.
As a material part of Lessee's rights to use and occupy the Premises 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 Buildings, Common Areas, the land upon which they are located,
along with all other buildings and improvements thereon, are herein
collectively referred to as the "INDUSTRIAL CENTER." (Also see Paragraph 2.)
1.2(b) PARKING: Lessee's prorata share of unreserved
vehicle parking spaces, on a non-exclusive basis which shall not be less than
61 legal spaces in the Common Areas ("UNRESERVED PARKING SPACES"); and no
reserved vehicle parking spaces ("RESERVED PARKING SPACES"). (Also see
Paragraph 2.6.) Notwithstanding the foregoing, Lessee may paint its name on up
to five (5) parking spaces directly in front of the Premises' entry, however
Lessor will not grant or enforce exclusive parking, and Lessee may not enforce
the same as being Lessee's exclusive spaces.
1.3 TERM: Approximately five (5) years (the "ORIGINAL
TERM") commencing on August 1, 1997 unless extended due to Lessor Delays or
Unavoidable Delays as provided in the Tenant Work Letter ("COMMENCEMENT DATE")
and ending July 31, 2002 ("EXPIRATION DATE"). (Also see Paragraph 3.)
1.4 EARLY POSSESSION: June 1, 1997 (the "EARLY
POSSESSION DATE").
1.5 BASE RENT: Payable monthly, on the first day of each
month, in the amount depicted in the table below, calculated on a Triple Net
basis ("BASE RENT"), and commencing on September 1, 1997. (Also see Paragraph
4.)
Monthly
Months of Annual Installment
Lease Term Base Rent of Base Rent
----------- --------- ------------
02-12* $181,345.80 $16,485.98**
13-24 $188,599.68 $15,716.64
25-36 $196,143.60 $16,345.30
37-48 $203,989.32 $16,999.11
49-60 $212,148.96 $17,679.08
* The first month of the Lease Term, August, 1997, Tenant's Base Rental
obligation shall be conditional free rent. Provided Tenant is not in default
hereunder during the first twelve (12) months of the Lease Term, the first
month's Base Rental obligation shall be forgiven to the same extent the same is
thereafter amortized over months 2 through 12 of the first Lease Year.
** Monthly amount is equal to the Annual Base Rent, amortized over months
2-12 of the first Lease Year.
2
1.6(a) BASE RENT PAID UPON EXECUTION: $16,485.98.
1.6(b) LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES:
sixteen and 53 one hundredths percent (16.53%) ("LESSEE'S SHARE") as determined
by prorata square footage of the Premises as compared to the total square
footage of the Buildings.
1.7 SECURITY DEPOSIT: $90,672.90 ("SECURITY DEPOSIT").
(Also see Paragraph 5.)
1.8 PERMITTED USE: General office, manufacturing,
warehousing, testing and repairs, research and development, sales and
marketing, and such other similar uses as may be permitted under existing
zoning governing the Premises PERMITTED USE"). (Also see Paragraph 6.)
1.9 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:
CB Commercial represents Lessor exclusively ("LESSOR'S BROKER");
The Xxxxxx Xxxxxx Group represents Lessee exclusively ("LESSEE'S
BROKER").
1.10(b) PAYMENT TO BROKERS. Upon the execution of this Lease
by both Parties, 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).
1.11 TENANT IMPROVEMENT ALLOWANCE: $302,243.00.
1.12 ADDENDA AND EXHIBITS. Attached hereto is Exhibits A,
A-1 and B and the Extension Option Rider and the Expansion Option Rider, all of
which constitute a part of this Lease and Expansion Option.
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 this Lease. Unless
otherwise provided herein, any statement of square footage set forth in this
Lease, or that may have been used in calculating Rent and/or Common Area
Operating Expenses, is an approximation which Lessor and Lessee agree is
reasonable 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,
serving the Premises, other than those constructed or modified by Lessee, shall
be in good operating condition and the roof membrane shall be water tight on
the Commencement Date and that the Building's structures, including roof
structures, foundations and load-bearing walls shall be in good condition for
the term of this Lease. 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, commence to 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. Lessor warrants and represents that,
other than as disclosed in the Environmental Report, as defined in Paragraph
6.4, and except as may have otherwise been disclosed to Lessee, it has no
actual knowledge of: (a) any material construction defects, latent or patent,
or (b) any Hazardous Substances, including but not limited to any solvents,
metals, petroleum, lead based paint, or PCBs in, on or under the Premises or
any pending or threatened exercise of the power of eminent domain against the
Premises. Notwithstanding this representation, but subject to Lessor's rights
in Section 6.2 of this Lease, Lessor shall indemnify and hold Lessee harmless
against and from all liability and claims of any kind or loss or damage to
Lessee for expenses and fees of Lessee (including reasonable attorneys' fees
and court costs), incurred, directly or indirectly, as a result of the
existence of Hazardous Substances (other than those which may be described in
the Environmental Report) on, in or under the Premises as of the date of
delivery of the Premises to Lessee and not caused, directly or indirectly, by
Lessee or Lessee's Agents, and any Hazardous Substances release resulting from
the negligent or willful wrongful acts or omissions of Lessor, or their
respective officers, employees, agents or subcontractors. For purposes of the
foregoing representation, and as may otherwise be described herein, "LESSOR'S
ACTUAL KNOWLEDGE" shall mean the actual knowledge of Xx. Xxxxxxx Xxxxx and Xx.
Xxx Xxxxxxxxxxx, without a duty of inquiry. Lessor hereby
-2-
3
represents and warrants that Xx. Xxxxx and Xx. Xxxxxxxxxxx are the
representatives of Lessor who are most knowledgeable concerning the physical
state of the Premises.
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 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 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 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).
Lessee warrants that any improvements which have been
constructed by Lessee or at Lessee's direction on or in the Premises shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement Date
and throughout the Term of this Lease. Lessee further warrants to Lessor that
Lessee has no 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 specifically 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, Lessee shall,
except as otherwise provided in this Lease, promptly after receipt of written
notice from Lessor or any governmental authority, take such action, at Lessee's
expense, as may be deemed reasonable or appropriate by Lessor to rectify the
non-compliance.
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 of 1990
(the "ADA")(except for the exterior of the Buildings, for which Lessor shall be
responsible in ensuring the same comply with the ADA requirements for buildings
such as the Buildings) and applicable zoning, municipal, county, state and
federal laws, ordinances and regulations and any covenants or restrictions of
record (collectively, "APPLICABLE LAWS") and the present and future suitability
of the Premises for Lessee's intended use; (b) except as may be otherwise
provided herein, including but not limited to this Section 2.4, 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. Notwithstanding any other term of this
Lease to the contrary, Lessor shall be responsible for making any repairs or
alterations which are required by law to conform the Premises to the
requirements of the Americans With Disabilities Act and Title 24 of the
California Administrative Code (collectively "ADA REQUIREMENTS") (as applicable
to occupancy by a generic occupant with no special requirements and to premises
which are not a place of public accommodation) as of the date the Premises are
delivered to Lessee in accordance with Section 2.2 of this Lease. Lessee shall
be responsible for making any repairs or alterations to the Premises which are
required (a) as a result of any of Lessee's Alterations, or (b) due to any
particular use of the Premises made by Lessee. Notwithstanding the preceding
sentence, if because of any change in the ADA Requirements while this Lease is
in effect (and not within the scope of subsections (a) or (b) of the preceding
sentence), any repair or alteration as required to be made to the Premises, the
cost of which repair or alteration would be deemed a "capital" expenditure
under generally accepted accounting principals, then Lessee shall pay that
portion of the cost of each such repair alteration which the unexpired term of
this Lease (and any extension thereof) bears to the useful life of the repair
or alteration, and Lessor shall pay the balance of such cost.
Without limiting the generality of the foregoing, Lessor
agrees that Lessor shall be responsible for making alterations to the Building,
other than the interior of the Premises, which Lessor is required to maintain
or repair if such alterations are (i) required by changes in the law after the
Commencement Date, and (ii) are the type customarily made or required to be
made by landlords and not by tenants, and (iii) are not required as a result of
(a) Lessee's particular manner of occupancy or manner of use of the Premises,
(b) the Lessee's Alterations to the Premises (including, without limitation,
the installation of Lessee's personal property in the Premises) or (c) Lessee's
doing or permitting anything to be
-3-
4
done in or about the Premises or Industrial Center, or bringing, keeping or
suffering anything to be brought or kept thereon.
2.5 INTENTIONALLY OMITTED.
2.6 VEHICLE PARKING. Lessee shall be entitled to use 61
Unreserved Parking Spaces on those portions of the Common Areas designated from
time to time by Lessor 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, vans, mini-vans 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.). Notwithstanding anything in this Paragraph 2.6 to the
contrary, Lessee may, at its sole cost and expense, paint its name on up to
five (5) reserved parking spaces directly in front of its entry, however such
spaces shall not be Lessee's exclusive spaces and Lessor shall not be deemed to
grant such spaces to Lessee on an exclusive basis, nor shall Lessor be required
to nor Lessee entitled to, enforce such spaces as exclusive. Subject to
reasons of Force Majeure and circumstances of damage, destruction or
condemnation, as provided herein, Lessor's failure to provide Lessee with the
parking spaces as provided herein shall be a Lessor's default hereunder.
(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 any of the
prohibited activities described in this Paragraph 2.6, then Lessor shall have
the right, following at least one written notice for a prohibited activity, 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 general non-exclusive use of Lessor, Lessee and other Leases 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 exclusive control and
management of the Common Areas and 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, shippers, customers, contractors and invitees to so abide and
conform. Lessor shall not be responsible to Lessee for the non-compliance 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 limitation, changes in the location, size, shape and number
of driveways, entrances, parking spaces, parking areas,
-4-
5
loading and unloading areas, ingress, egress, direction of traffic, landscaped
areas, walkways and utility raceways; provided that the number of Lessee's
parking spaces shall not be reduced;
(b) To close temporarily any of the Common Areas
for maintenance purposes so long as reasonable access to the Premises and
Lessee's parking spaces remains available;
(c) To designate other land outside the
boundaries of the Industrial Center to be a part of the Common Areas at no
additional expense to Lessee;
(d) To add additional buildings and improvements
to the Common Areas at no additional expense to Lessee;
(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. No charge, service fee or any other consideration shall be
imposed in exchange for the right of Lessee, its employees, agents,
contractors, customers and invitees to enter or depart from or park a motor
vehicle in the Common Areas unless such charges are lawfully ordered by
appropriate governmental authority having jurisdiction over the Industrial
Center, and any such charge shall be paid for by Lessor at its sole cost and
expense. If the governmental authority does not permit such treatment of the
charge, but requires that it be collected directly from parking area users, for
the privilege of using the parking area, then Lessor shall collect such charge
and shall credit the amount received from users, less collection expenses,
against Base Rent.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and
Original Term of this Lease are as specified in Paragraph 1.3. Options to
extend the Original Term of the Lease are described in the Extension Option
Rider. For purposes of this Lease, the Term of this Lease shall refer to the
Original Term, as it may be extended by any properly exercised options granted
hereunder.
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 that portion of Lessee's Share of Common Area
Operating Expenses described in Sections 4.2 (a)(ii) and (vi) herein [costs of
insurance and utilities], and Lessee's obligation to carry the insurance
required by Paragraph 8, but specifically excluding those other portions of
Common Area Operating Expenses) 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 of Lessee under the terms of this Lease until
Lessor delivers possession of the Premises to 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 United States, without offset or deduction, on or before the day
on which it is due under the terms of this Lease. For purposes of this Lease,
Base Rent and all other sums or charges due Lessor from Lessee hereunder may be
collectively referred to from time to time as "Rent." 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 stated 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. Lessee 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
-5-
6
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 costs of management, operation,
repair, replacement 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, parkways, driveways, landscaped areas, striping, bumpers, irrigation
systems, Common Area lighting facilities, fences and gates, elevators and roof.
(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.
(iii) Trash disposal, property management
(but not to exceed 3% of Base Rent) 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 Buildings and the Common Areas
under Paragraph 10 hereof.
(vi) The costs of the premiums for the
insurance policies maintained by Lessor under Paragraph 8 hereof.
(vii) Any deductible portion of an insured
loss concerning the Buildings or the Common Areas.
(viii) Any other services to be provided by
Lessor that are stated elsewhere in this Lease to be a Common Area Operating
Expense.
In Section 4.2(a), the following costs and expenses
shall be specifically excluded from Common Area Operating Expenses:
(i) Depreciation, amortization and all
principal, interest, loan fees, and other carrying costs related to any
mortgage or deed of trust encumbering the Buildings and all rental and other
amounts payable due under any ground or underlying lease, unless such costs are
directly attributable to Lessee's, its agents' or employees' activities in, on
or about the Industrial Center, or as a result of a Lessee's breach or default
under this Lease;
(ii) Costs of maintenance of structural
portions of the building foundations, exterior walls and structural parts of
the Buildings,
(iii) Any costs incurred for capital
repairs, replacements and improvements, except as specifically permitted under
this Lease, which capital costs shall be amortized at the lowest lending rate
reasonably available to Lessor over the useful life of such capital item, as
determined in accordance with generally accepted accounting principals
consistently applied;
(iv) Expenses incurred in leasing or
procuring new tenants of the Buildings, including advertising and marketing
expenses and costs of preparation of leases and renovating space for other
tenants of the Buildings;
(v) Legal, auditing, consulting and
professional fees associated with the leasing of the Project (which shall be
covered by Lessor's management fee);
(vi) Lessor's expenses for repair or
replacement paid by condemnation awards, or covered by insurance, warranties or
guarantees;
(vii) Costs and expenses necessitated
solely by the negligence or willful misconduct of Lessor or Lessor's employees,
contractors or agents, including, without limitation,
-6-
7
costs incurred by Lessor due to a violation by Lessor of the terms and
conditions of any lease of space in the Industrial Center; costs, penalties or
fines arising from Lessor's violation of any governmental rule or authority;
and costs incurred in correcting any building code violations existing as of
the date this Lease is signed;
(viii) Costs incurred which are reimbursed
by tenants in the Buildings (including Lessee) or third parties (including
insurance carriers);
(ix) Costs incurred due to a violation by
Lessor or any tenant (other than Lessor) in the Industrial Center of the terms
of any lease, any law or private restrictions affecting the Premises and/or the
Industrial Center;
(x) Penalties and interest for late
payments, including, without limitation, Real Property Taxes, insurance,
equipment leases and other past due amounts to the extent not directly caused
by Lessee;
(xi) Overhead, salaries and other
compensation paid to Lessor's off-site officers and employees (which shall be
covered by Lessor's management fee);
(xii) Contributions to political or
charitable organizations or any expenses incurred by Lessor for the use of any
public portions of the Project, including, but not limited to, shows and
benefits; and
(xiii) Any cost of acquiring, installing,
moving, insuring or restoring objects of art.
Lessor shall reduce the amount of Common Area
Operating Expenses by any refund Lessor receives in connection with any costs
or expenditures previously included in Common Area Operating Expenses, less any
cost incurred by Lessor in obtaining any such refund.
(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 to 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 thirty (30) days after a reasonably
detailed statement of actual expenses is presented to Lessee by Lessor. At
Lessor'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 over-payment 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 thirty (30) days after delivery by Lessor to Lessee of said
statement. At reasonable times during normal business hours, upon no less than
seventy-two (72) hours' written request from Lessee, and within one hundred
twenty (120) days after Lessee's receipt of Lessor's detailed statement of
Lessee's Share of annual Common Area Operating Expenses as provided in this
paragraph (or any statement from Lessor relating to Lessor's reimbursable
expenses not included as part of Common Area Operating Expenses), Lessor shall
make available to Lessee at Lessor's offices in San Diego, following Lessee's
written request therefor, Lessor's books and records associated with the Common
Area Operating Expenses, including invoices and other source documents relating
to such Common Area Operating Expenses or
-7-
8
other reimbursable expenses. Such audit shall be performed by a Certified
Public Accountant who is not being compensated, nor whose firm is being
compensated, on a contingency or commission basis, and shall be limited to the
items necessary to a determination of the applicable Common Area Operating
Expenses or other reimbursable expenses. In any event, such audit shall be at
Lessee's sole cost and expense unless it is determined that Lessee was
overcharged by more than five percent (5%) of the amount actually owed to
Lessor, in which case such overcharge shall entitle Lessee to credit against
its next payment of Lessor's Share of Common Area Operating Expenses the amount
of the overcharge and the costs associated with the audit (and, if such credit
occurs following the expiration of the Term, Lessor shall promptly pay the
amount of such credit to Lessee). If it is determined that the Lessee was
overcharged less than five percent (5%), such overcharge shall entitle Lessee
to credit against its next payment of Lessee's Share of Common Area Operating
Expenses the amount of the overcharge and Lessee shall pay for all costs
associated with the audit. If it is determined that Lessee was undercharged
for the Common Area Operating Expenses, Lessee shall promptly pay the amount of
such undercharge to Lessor and Lessee shall pay for all costs associated with
the audit.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon
Lessee's execution hereof the Security Deposit set forth in Paragraph 1.7 as
security for Lessee's faithful performance of Lessee's obligations under this
Lease. Eighty three and thirty three one hundredths percent (83.33%) of such
amount shall be referred to as the "Additional Security Deposit" and Sixteen
and sixty seven one hundredths percent (16.67%) of such amount shall be
referred to as the Base Security Deposit. If Lessee fails 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.. Lessor shall not be required to keep all or any part of the
Security 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.
Notwithstanding anything herein to the contrary, the Additional Security
Deposit shall bear interest at a simple interest rate of eight percent (8%) per
annum. Provided that Lessee is not then in Default of any of its monetary
obligations hereunder, Lessor shall reimburse to Lessee the unapplied amount of
the Additional Security Deposit, and any interest accrued thereon, prior to the
first anniversary of the Commencement Date. In the event Lessee is in Default
of any of its monetary obligations hereunder as of such Anniversary Date, then
upon the cure of such Default, Lessor shall thereafter reimburse to Lessee the
amount of the unapplied Additional Security Deposit, plus any interest accrued
thereon.
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
voluntary or permissive waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to the Premises or neighboring premises or
properties.
(b) Lessor hereby agrees to not unreasonably
withhold or delay its consent to any written request by Lessee, Lessee's
assignees or subtenants, and by prospective assignees and subtenants of Lessee,
its assignees and subtenants, for a modification of said Permitted Use. If
Lessor elects to withhold such consent, Lessor shall give a written
notification of same, which notice shall include an explanation of Lessor's
reasonable objections to the change in use.
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
-8-
9
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) the 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, in Lessor's good faith and reasonable business judgment, expose the
Premises, the Buildings or the Industrial Center, or any part thereof, or
neighboring properties to any meaningful risk of contamination or damage or, in
Lessor's good faith and reasonable business judgment, expose Lessor to the
possibility of any liability therefor. In addition, Lessor may (but without
any obligation to do so) condition its consent to any Reportable Use of
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 Lessor's option, removal on or before Lease
expiration or earlier termination) or 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 Buildings, 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 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 in violation of Applicable Requirements (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 or with Lessee's knowledge or consent.
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.
(d) EXCULPATION OF LESSOR. Other lessees of the
Industrial Center may be using, handling or storing certain Hazardous
Substances in connection with such lessees' use of their premises. The failure
of another lessee to comply with applicable laws and procedures could result in
a release of Hazardous Substances and contamination to the Industrial Center,
or any part thereof or the soil and ground water thereunder. In the event of
such release, the lessee responsible for the release, and not Lessor, shall be
solely responsible for any claim, damage or expense incurred by Lessee by
reason of such contamination. Lessee waives any rights it may have to later
assert that the foregoing release does not cover unknown claims. Unless
specifically provided to the contrary herein, Lessee and anyone claiming by,
through or under Lessee hereby fully and irrevocably releases Lessor, its
partners and their respective employees, officers, directors, representatives,
agents, successors and assigns ("LESSOR ENTITIES") from any and all claims that
it may now have or hereafter acquire against such persons and entities for any
cost, loss, liability, damage, expense, demand, action or cause of action
arising from or related to any construction defects, errors, omissions or other
conditions, including, but not limited to, environmental matters, affecting the
Property, or any portion thereof; provided, however, that by releasing the
Lessor Entities from liability for any and all claims arising from conditions
arising from the actions, errors or omissions of any other lessee of the
Industrial Center, such lessees are not intended as third party beneficiaries
of such release. Accordingly, Lessee hereby reserves from the foregoing
release any and all claims of Lessee, which might otherwise be made by Lessee
against Lessor under this Lease or at law, and which are the subject of any
indemnification rights of Lessor from any other lessee of the Industrial Center
if such claims were brought
-9-
10
against Lessor by Lessee. Notwithstanding the foregoing Lessor shall only be
obligated to Lessee to the extent that Lessor actually recovers from such other
lessee the benefit of such indemnification as it relates to Lessee's loss in
excess of any loss incurred by Lessor. Notwithstanding Lessee's release of
Lessor under this paragraph 6.2(d), Lessor agrees to cooperate in good faith
with Lessee in bringing legal action against another lessee of the Industrial
Center to enforce such lessee's indemnity obligations under its lease. This
release includes claims of which Lessee is presently unaware or which Lessee
does not presently suspect to exist in its favor which, if known by Lessee,
would materially affect Lessee's release of Lessor. Lessee specifically waives
the provision of California Civil Code Section 1542, which provides as
follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
/s/ DG /s/ SPL
------------------- ---------------------
Lessor's Initials Lessee's Initials
6.3 LESSEE'S COMPLIANCE WITH REQUIREMENTS. 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, citation, warning, 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 Lessee 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. Notwithstanding anything
herein to the contrary, and in addition to the foregoing, Lessee shall also
provide to Lessor, at Lessee's sole cost and expense, within thirty (30) days
of the termination of this Lease, a Phase I Environmental Report for the
Premises (which may consist of an updated pre-existing Phase I Environmental
Site Assessment covering the Premises), dated as of the expiration of the Lease
Term, and to be performed by a company reasonably acceptable to Lessor. 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. Lessee acknowledges that Lessor
has previously delivered to Lessee that certain Phase I Environmental Report
prepared by Dames and Xxxxx, dated October 24, 1996 and entitled "Phase I
Environmental Site Assessment Update," which report summarizes the
environmental status of the Premises and has been reviewed and approved by
Lessee (the "Environmental Report"). After the Effective Date, but no later
than June 15, 1997, Lessor shall conduct an "Entrance Assessment," consisting
of a walk-through inspection and update of the Environmental Report, for the
Premises only, performed by Dames and Xxxxx, one-half of such Entrance
Assessment which shall be paid for at Lessor's cost and expense (which
obligation shall not exceed $700), the remainder of the costs of which shall be
deducted from Lessee's Tenant Improvement Allowance. In the event such
Entrance Assessment indicates the existence of Hazardous Substances on, in or
under the Premises, this Lease shall continue in full force and effect subject
to the Lessor's obligations and rights under Section 9.7 of this Lease,
respectively; provided, however, that the Entrance Assessment shall be deemed
the physical condition of the Premises required for Lessee's surrender of the
Premises in accordance with Paragraph 7.4(c) below.
-10-
11
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 (Lessor'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 need 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; provided, however,
that Lessee shall not be liable for any repairs arising from construction
defects, latent or patent, in the Premises not constructed by or for Lessee.
Lessee, in keeping the Premises in good order, condition and 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) Lessee shall, at Lessee's sole cost and
expense, procure and maintain a contract, with copies to Lessor, in customary
form and substance for and with a contractor specializing and experienced in
the inspection, maintenance and service of the heating, air conditioning and
ventilation for the Premises, including but not limited to the heat source
pumps on the roof of the Premises. However, Lessor reserves the right, upon
notice to Lessee, to 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; provided that such cost
shall be at commercially reasonable rates.
(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, except as excluded
therein), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14
(Condemnation), and subject to the reimbursement requirements of Paragraph 4.2,
Lessor, shall keep in good order, condition and repair the foundations,
exterior walls, structural condition of interior bearing 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, the cooling tower equipment
portion of the air conditioning system, 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. Notwithstanding
the foregoing, or anything in this Lease to the contrary, Lessor shall not be
responsible to repair or maintain any roof mounted equipment of Lessee or any
repairs required due to the installation of such equipment by Lessee pursuant
to this Lease, but instead, Lessee shall responsible to repair and maintain any
such equipment or make any such repairs as part of Lessee's obligations
hereunder. Lessor shall not be obligated to paint the exterior or interior
surfaces of 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 Lessor's failure to keep the Buildings, Industrial Center
or Common Areas in good order, condition and repair. Notwithstanding anything
contained herein to the contrary, if Lessor fails to perform any of its repair
and maintenance obligations under this paragraph 7.2, and such failure
materially interferes with Lessee's ability to use and occupy the Premises for
the purposes permitted herein, Lessee shall have the right, but not the
obligation, to perform such repairs and/or maintenance under the following
circumstances: (i) if such failure continues for more than twenty (20)
business days after written notice from Lessee, which notice shall include
Lessee's determination that such repair or maintenance item is materially
interfering with Lessee's use of the Premises; provided however, that if the
nature of the repairs and/or maintenance to be completed by Lessor is such that
more than twenty (20) business days are required to complete such repairs
and/or maintenance, Lessor shall have such additional time as is reasonably
necessary to complete such repairs and/or maintenance so long as Lessor takes
appropriate action to commence such repairs and/or maintenance to completion;
or (ii) if such failure results in a bona fide emergency and Lessee gives
Lessor written notice of such emergency, Lessor's failure to take such
-11-
12
action as may be reasonably necessary to address the emergency within a
reasonable time, after receipt of Lessor's initial notice of the emergency and
a second notice from Lessee indicating Lessee's intent to perform such repair
or maintenance obligation. Lessor shall reimburse Lessee for the reasonable
costs incurred by Lessee to complete such repairs and/or maintenance within
thirty (30) days after receipt of Lessee's written demand therefor, together
with copies of the paid invoices evidencing the costs incurred by Lessee.
7.3 UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term
"UTILITY INSTALLATIONS" 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 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 Alterations 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 fire detection systems and the
cumulative cost thereof during the term of this Lease as extended does not
exceed $5,000.00. Lessee shall provide Lessor with as-built descriptions and
renderings of all Lessee-Owned Alterations and/or Utility Installations upon
request from Lessor.
(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 Installation 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 $15,000.00 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. Lessee shall pay to Lessor all of Lessor's actual costs
incurred in conjunction with the review of Lessee's proposed Alterations or
Utility Installations within fifteen (15) days of Lessee's receipt of an
invoice therefore (which shall not exceed $350.00 per request).
(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 Premises 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 non-responsibility in or on the
Premises as provided 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 letter of credit or
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 reasonable 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.
(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 Lessee shall be the property of and owned
by Lessee, but considered a part of the Premises. Unless otherwise instructed
per Subparagraph 7.4(b) hereof, all
-12-
13
Lessee-Owned Alterations and Utility Installations shall, at the expiration or
earlier termination of this Lease, automatically and without further action on
the part of Lessor, 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 at the time of Lessor's consent to such installation 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 and subject to
Paragraph 9 below. 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 in accordance with good practice, 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 then be required by Applicable Requirements. 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 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 prorated to coincide with the corresponding Early Possession Date or
Expiration Date.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and
keep in force during the 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, personal injury and property damage based upon, involving or
arising out of the 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 Insured-Managers or Lessors of Premises"
endorsement and contain the "Amendment of the Pollution Exclusion" endorsement
for damage caused by heat, smoke or fumes from a hostile fire. Notwithstanding
the foregoing, Lessee shall be entitled to satisfy the above requirement by
acquiring primary coverage of $1,000,000 with an additional $1,000,000 umbrella
policy, provided that such umbrella policy only applies to the Premises and no
other properties or operations at other properties of Lessee. 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 INSURANCE-BUILDINGS, IMPROVEMENTS AND RENTAL
VALUE.
(a) BUILDINGS 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 insurable value thereof if, by reason of the unique
nature or age of the improvements involved, such latter amount is less than
full replacement cost. Lessee-Owned Alterations and Utility Installations,
Trade Fixtures and Lessee's personal property shall be
-13-
14
insured by Lessee pursuant to Paragraph 8.4. If the coverage is available and
Lessor deems it to be commercially appropriate, Lessor's policy or policies
shall insure against all risks of direct physical loss or damage (including the
perils of flood and/or earthquake), 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 Buildings required to be
demolished or removed by reason of the 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 shall 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 less 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. The insurance maintained by Lessor
pursuant to this Paragraph 8.3(a) shall include reasonable deductibles as are
maintained by prudent owners of similar projects in the San Diego metropolitan
area; provided, however, that Lessee's liability for any deductible in
connection with any such casualty shall not exceed an amount equal to Lessee's
Share of the amortized portion of the deductible, which shall be determined as
follows: the deductible, shall be amortized over the useful life of the
repaired or replaced improvement (determined in accordance with generally
accepted accounting principles), with interest on the unamortized balance at
the prevailing market rate of interest paid by Lessor to an institutional
lender. For the duration of the original Term (as such original Term may be
extended hereunder), commencing with the date of completion of such replacement
or repair, Lessee shall pay Lessor monthly, as additional Rent, Lessee's Share
of such amortized portion of the deductible as applicable to such month.
Earthquake insurance, if available and deemed commercially appropriate by
Lessor, shall be written with such commercially reasonable premiums as are
maintained by or available to prudent owners of similar projects in the San
Diego metropolitan area.
(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, with loss payable to Lessor and any Lender(s), insuring the loss of the
full rental and other charges payable by all lessees of the Buildings 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 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
reflect 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 Buildings 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 Party, 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 $10,000.00 per
occurrence. The proceeds from any such insurance shall be used by Lessee for
the replacement of personal property and the restoration of Trade Fixtures and
Lessee-Owned Alterations and Utility Installations, unless due to an event in
the last twelve (12) months of the Lease term and the damaged items would
otherwise be removed at expiration of the Lease Term. 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
-14-
15
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 be 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
right to subrogation that such companies may have against Lessor or Lessee, as
the case may be.
8.7 INDEMNITY. Except for Lessor's or its agents',
employees', officers', independent contractors', partners' or lenders'
negligence and/or willful misconduct or breach of express warranties, Lessee
shall indemnify, protect, defend and hold harmless the Premises, Lessor and its
agents, employees, officers, independent contractors, 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 any 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. To the fullest extent permitted by law, Lessor covenants with
Lessee that Lessee, Lessee's officers, directors, agents and employees shall
not be liable for any damage or liability of any kind for any injury to or
death persons, or damage to property of Lessor or any other person occurring
from any cause whatsoever and caused by the negligent or willful wrongful
actions of Lessor, Lessor's agents, employees or contractors on or about the
Industrial Center, or caused by Lessor's negligent or willful wrongful
operation of the Industrial Center, including without limitation, Lessor's
maintenance of the Common Areas, the construction of the Buildings or Lessor's
failure to maintain the Industrial Center or the structural portions of the
Buildings. Except for any costs, claims or liabilities arising from Lessee's
negligence or willful misconduct, and except to the extent such costs, claims
or liabilities are specifically waived by Lessee under this Lease, Lessor
hereby agrees to indemnify Lessee against and hold Lessee harmless from any and
all costs, claims and liabilities caused by: (a) any intentional and material
misrepresentation or breach of warranty by Lessor under this Lease; and (b)
bodily injury or property damage caused by the negligent or wrongful acts or
omissions of Lessor, its agents, employees and contractors brought onto the
Property by Lessor.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Except to the
extent of Lessor's negligence, willful misconduct or breach of this Lease, and
the negligence and willful misconduct of Lessor's agents, employees, officers,
independent contractors, partners or lenders, Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property
of 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 Buildings 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
seventy-five percent (75%) of the then Replacement Cost (as defined in
-15-
16
Paragraph 9.1(d) of the Premises (excluding Lessee-Owned Alterations and
Utility Installations and Trade Fixtures) immediately prior to such damage or
destruction.
(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
seventy-five percent (75%) or more 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 Buildings, other than Lessee-Owned Alterations and
Utility Installations and Trade Fixtures of any lessees of the Buildings, the
cost of which damage or destruction is seventy-five percent (75%) or more of
the then Replacement Cost (excluding Lessee-Owned Alterations and Utility
Installations and Trade Fixtures of any lessees of the Buildings) of the
Buildings 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, and where adequate insurance
proceeds are available to Lessor for the reconstruction of the Premises.
Notwithstanding the foregoing and anything else herein to the contrary, in the
event of a loss which is covered by insurance, the insuring party shall use all
diligence and its best efforts to collect the proceeds of insurance from its
insurance carrier.
(d) "REPLACEMENT COST" shall mean the cost to
repair or rebuild the improvements owned by Lessor at the time of the
occurrence to their condition existing immediately prior thereto, including
demolition, debris removal and upgrading required by the operation of
applicable building codes, 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 6.2(a), in, on
or under the Premises.
9.2 PREMISES PARTIAL DAMAGE - INSURED LOSS. If Premises
Partial Damage occurs, and such damage or destruction is an Insured Loss, 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 available to
Lessor, Lessor shall have no obligation to pay 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 receives 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 Leases 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 Lessee to repair any such damage or destruction. Premises
Partial Damage due to flood shall be subject to Paragraph 9.3 rather than
Paragraph 9.2, notwithstanding that there may be some insurance coverage, but
the net 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 occurs and such damage or destruction is not an Insured Loss, then
unless such damage or destruction was caused by a negligent or willful
misconduct of Lessee (in which the event Lessee shall make the repairs at
Lessee's expense, except to the extent covered by applicable insurance
proceeds, 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 nature of the loss (i.e., uninsured
vs. insured and partial vs. total) 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 the receipt of
such notice to give written notice to 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
-16-
17
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 in the times specified above, this Lease shall terminate as of the date
specified in Lessor's notice of termination.
9.4 TOTAL DESTRUCTION. Notwithstanding any other
provision hereof, if Premises Total Destruction occurs (including any
destruction required by any authorized public authority), and Lessee is
prevented from utilizing the Premises for the Permitted Use, this Lease shall
terminate thirty (30) 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,
either party may terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to the other party
of its 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 which, in Lessor's good faith reasonable business
judgment, 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 subject to Paragraph 8.8, 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 is obligated to repair or restore
the Premises under the provisions of this Paragraph 9 and does not commence the
repair or restoration of the Premises within ninety (90) days after either (i)
such obligation shall accrue, or (ii) receipt of all applicable insurance
proceeds, whichever time period is greater, then 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 sixty (60)
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 sixty (60) days 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 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 which event Lessor shall
reimburse Lessee's actual moving expenses. In the event Lessor elects to give
such notice of
-17-
18
Lessor's intention to terminate this Lease, Lessee shall have 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 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 Buildings 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 interest 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. "Real Property Taxes" shall not
include (i) any item to the extent otherwise included in Common Area Operating
Expenses, (ii) any environmental assessments, charges or liens arising in
connection with the remediation of Hazardous Substances; (iii) reserves for
future Real Property Taxes, or (iv) any personal property taxes attributable to
sculptures, paintings or other objects of art.
If a reduction in Real Property Taxes is obtained for any year
of the Term during which Lessee paid Lessee's percentage of Real Property
Taxes, then Operating Expenses for such year shall be retroactively adjusted
and Lessor shall provide Lessee with a credit against Lessee's next due
obligations for Base Rent and Lessee's Share of Common Area Operating Expenses
or, if none, refund such amount to Lessee within thirty (30) days based on such
adjustment.
If, by applicable law, any taxes or assessments may be paid in
installments at the option of the taxpayer, then whether or not Lessor elects
to pay taxes and assessments in such installments, Lessee's liability for such
taxes and assessments shall be computed as if such election had been made, and
only the installments thereof for which Lessee would be responsible during the
Term shall be included in Lessee's tax obligations.
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
-18-
19
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 Buildings are not
separately assessed, Real Property Taxes allocated to the Buildings 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 be assessed
with Lessor's real property, Lessee shall pay Lessor the taxes attributable to
Lessee's property within thirty (30) 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
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.
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 "assignment") or sublet all or any part of Lessee's
interest or obligations in this Lease or in the Premises without Lessor's prior
written consent given under and subject to the terms of Paragraph 36, which
Lessor shall not withhold unreasonably. The parties agree, however, that the
manner of operation of the Premises and conduct of business thereon by Lessee
will have an impact on the quality and reputation of the Industrial Center.
Accordingly, the parties agree that in approving or disapproving of any
proposed assignment or subletting of the Premises or the Lease, Lessor shall be
entitled to take into consideration, by way of example and not limitation, any
or all of the criteria set forth below and that it shall not be unreasonable
for Lessor to withhold its consent if any of the following circumstances exist
or may exist: (i) the transferee's contemplated use of the Premises following
the proposed assignment or subletting is different from the permitted use
specified herein; (ii) in Lessor's reasonable business judgment, the Rent that
Lessor reasonably anticipates receiving from the transferee is less than that
which Lessor has received from Lessee; (iii) the proposed assignment or
subletting would breach any covenant of Lessor in any other lease, financing
agreement or other agreement relating to the Industrial Center or otherwise; or
(iv) the transferee requests an amendment to the Lease other than the identity
of Lessee. No assignment or subletting shall release Lessee from its
obligations and liabilities hereunder.
(b) A Change of Control of Lessee shall
constitute an assignment requiring Lessor's consent. Change of Control shall
mean the transfer by sale, assignment, death, incompetency, mortgage, deed of
trust, trust, operation of law, or otherwise, of any shares, voting rights or
ownership interest which will result in a change in the identity of the entity,
entities, person or persons exercising, or who may exercise, effective control
of Lessee, unless such change results from the trading of shares listed on a
recognized public stock exchange and such trading is not for the purpose of
acquiring effective control of Lessee. If Lessee is a private corporation
whose stock becomes publicly held, the transfers of such stock from private to
public ownership shall not be deemed a Change of Control 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. Any provision in
this Lease to the contrary notwithstanding, Lessor's consent shall not be
required for an assignment or subletting to any person or entity who controls,
is controlled by or is under common control with Lessee, or to any corporation
resulting from the merger or consolidation with Lessee or to any person or
legal entity which acquires all the assets of Lessee as a going concern of the
business being conducted on the Premises (each of the foregoing is hereinafter
referred to as a "LESSEE AFFILIATE"); provided that before such assignment
shall be effective, (a) said Lessee Affiliate shall assume, in full, the
obligations of Lessee under this Lease, (b) Lessor shall be given written
notice of such assignment and assumption and (c) the use of the Premises by the
Lessee Affiliate shall be as set forth in Section 1.8. For purposes of this
paragraph, the term "control" means possession, directly or indirectly, of
-19-
20
greater than fifty percent (50%) of the ownership interests of such entity.
The bonus rental provisions of Paragraph 21(b) of this Lease shall not apply to
an assignment or sublease by Lessee to a Lessee Affiliate. Notwithstanding
anything to the contrary contained in this Section 12.1, and provided the use
of the Premises does not change, Lessee may assign this Lease without first
obtaining Lessor's consent as follows (each a "Permitted Assignment"): (i) to
a limited liability company, corporation or other entity which results from a
merger, consolidation, reorganization or asset sale with Lessee, in which the
surviving entity (A) acquires substantially all of the assets of Lessee as a
going concern, (B) assumes, or is deemed by law to be liable for, all of the
liabilities of Lessee, and (C) has, after such merger, consolidation,
reorganization or asset sale, a net worth not less than Lessee's net worth as
of the date of this Lease; or (ii) as a result of a sale, issuance or transfer
of all of the capital stock of Lessee, provided that Lessee continues to be a
publicly-traded corporation, limited liability company or other entity.
(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 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 exercise any of its rights
at law, or equity or otherwise including but not limited to: (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 then fair market rental
value of the Premises. Further, in the event of such Breach and rental
adjustment, (i) 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 (ii) 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 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 sublessee. 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
-20-
21
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor.
(e) Should Lessee desire to enter into an
assignment or subletting transaction, Lessee shall give notice thereof to
Lessor by requesting in writing Lessor's consent to such assignment or
subletting at least ninety (90) days before the proposed effective date of any
such assignment or subletting and shall provide Lessor with the following: (i)
the full particulars of the proposed assignment or subletting transaction,
including its nature, effective date, terms and conditions, and copies of any
documents pertaining to such proposed transaction; (ii) a description of the
identity, net worth and previous business experience of the transferee,
including, without limitation, copies of transferee's latest income, balance
sheet and change-of-financial-position statements (with accompanying notes and
disclosures of all material changes thereto) in audited form, if available, and
certified as accurate by the transferee; and (iii) any further information
relevant to the transaction which Lessor shall have requested within thirty
(30) days after receipt of Lessee's request for consent and all information
specified above in Subsections (i), (ii) and (iii).
Each assignment or subletting to which Lessor has
consented shall be evidenced by an instrument made in such written form as is
satisfactory to Lessor and executed by Lessee and transferee. By such
instrument, transferee shall assume all the terms, covenants and conditions of
this Lease which are obligations of Lessee. Lessee shall remain fully liable
to perform its duties under the Lease following the assignment or subletting.
Lessee shall, on demand of Lessor, reimburse Lessor for Lessor's reasonable
costs, including legal fees, incurred in obtaining advice and preparing
documentation for each assignment or subletting to which Lessor has consented.
(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.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO
SUBLETTING. The following terms and conditions shall apply to any subletting
by Lessee of all or 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, Lessee 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 Lessee to
perform and comply with any of Lessee's obligations to such sublessee under
such Sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, 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. 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 sublessee 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 for 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.
-21-
22
(e) Lessor shall deliver a copy of any notice of
Default or Breach by Lessee to the sublessee, who shall have the right to cure
the Default of Lessee within the grace period, if any, specified in such
notice. The sublessee shall have a right of reimbursement and offset from and
against Lessee for any such Defaults cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. Lessee's obligations to Lessor
hereunder shall include any and all costs or expenses incurred by Lessor in
conjunction with enforcing Lessor's rights and remedies hereunder, which shall
include, but shall not be limited to, reasonable attorneys' fees or other legal
expenses or costs associated therewith, and that Lessor may include the cost of
such services and costs in any notice of Default 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 Default, including but not limited those listed below,
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 abandonment of the Premises.
(b) Except as expressly otherwise provided in
this Lease, the failure by Lessee to make any payment of Rent, Lessee's Share
of Common Area Operating Expenses, or any other monetary payment required to be
made by Lessee hereunder as and when due, the failure by Lessee 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 Paragraph 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) the 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 term,
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 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 or any successor statute thereto (unless, in the case of
a petition filed against Lessee, the same is dismissed within one hundred
twenty (120) 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
-22-
23
a bankruptcy filing, (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 following 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. Upon the
second event of any check given to Lessor by Lessee not being 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 Lessee 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 the 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 to the condition
required for Lessee's surrender of the Premises upon expiration of this Lease,
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 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 statute 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 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 or termination of this Lease
and/or the termination of Lessee's right to possession shall not relieve Lessee
from liability under any indemnity provisions of this Lease as to matters
occurring or accruing during the term hereof or by reason of Lessee's occupancy
of the Premises.
-23-
24
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; provided, however, that upon the first occurrence
during the Term that Lessor fails to receive any amount due hereunder on or
before the date due, such late charge shall not be incurred by Lessee unless
Lessee fails to deliver such amount to Lessor within five (5) business days
following Lessee's receipt of written notice from Lessor that such amount was
not received by Lessor on the date due. 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 the
other 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, then 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.
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 more 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
permanently 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
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 thirty (30) days after Lessor shall have given
Lessee written notice of such taking (or in the absence of such notice, within
thirty (30) 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 floor area of the Premises taken bears to the total
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 and any Lessee-Owned Alterations and/or
Utility Installations which Lessee would be entitled to salvage at the
expiration of the Lease. In the event that this Lease is not terminated by
reason of such condemnation, Lessor shall to the extent of its net severance
-24-
25
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
Premises 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.
15.2 ADDITIONAL TERMS. Unless Lessor and Broker(s) have
otherwise agreed in writing, and other than as is specifically set forth in
this Lease, Lessor and Lessee agree that: (a) if Lessee exercises any Option
(as defined in Paragraph 39.1) granted under this Lease or any Option
subsequently granted, or (b) if Lessee acquires any rights to the Premises or
other premises in which Lessor has an interest, or (c) if Lessee remains in
possession of the Premises with the consent of Lessor after the expiration of
the term of this Lease after having failed to exercise an Option, or (d) if
said Brokers are the procuring cause of any other lease or sale entered into
between the Parties pertaining to the Premises and/or any adjacent property in
which Lessor has an interest, or (e) if Base Rent is increased, whether by
agreement or operation of an escalation clause herein, then as to any of said
transactions, Lessor shall not be required to pay said Broker(s) any additional
fees.
15.3 INTENTIONALLY OMITTED.
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, 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 Buildings, or any part thereof, Lessee
and all Guarantors shall deliver to any potential lender or purchaser
designated by Lessor such financial 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 "LESSOR" 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. Lessor shall not be liable for any failure or
interruption of any utility or service, and Lessee shall not be entitled to any
reduction or abatement of rent on account of any such failure or interruption,
unless such failure or interruption results from Lessor's breach of this Lease
or the negligence or willful misconduct of Lessor or its agents, employees or
independent contractors and the Premises are not useable by Lessee for the
conduct of Lessee's business as a result thereof for a period of more than
twenty (20) consecutive business days (a "MATERIAL INTERRUPTION"). In the
event of a Material Interruption, Base Rent and applicable Operating Expenses
not actually incurred up to that point by Lessee shall be abated for the period
which commences five (5) days after the date Lessee gives to Lessor notice of
the occurrence of such Material Interruption until such utilities or services
are restored.
-25-
26
18. SEVERABILITY. The invalidity of any provision of this Lease,
as determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due
either party hereunder, other than late charges, not received by a party within
thirty (30) 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 shall be and deemed duly served
or given when actually delivered, if personally delivered (including delivery
by Federal Express, Express Mail or other similar overnight or personal courier
service which confirms delivery in writing), or upon actual delivery or
attempted delivery as indicated by attached receipt, or within three (3)
business days after deposit in the U.S. Mail, if sent by certified mail,
postage prepaid, return receipt requested, and shall be deemed sufficiently
given if served in a manner specified in this Paragraph 23. If notice is
received on a Saturday or a Sunday or a legal holiday, it shall be deemed
received on the next business day. 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 INTENTIONALLY OMITTED.
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, in a form acceptable to Lessor, 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 one
hundred twenty-five percent (125%) on a daily
-26-
27
basis for the first thirty (30) days, and thereafter one hundred fifty percent
(150%) 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 automatically be subject and subordinate to any ground lease,
mortgage, deed of trust, or other hypothecation or security device or amendment
or modification thereto (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 or 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. Lessor shall use its good
faith and best efforts to ensure that any Security Device which addresses or
governs the use of insurance proceeds shall contain a commercially reasonable
provision requiring that, unless Lessor is in default under such Security
Device, any such Lender shall make insurance proceeds available to Lessor to
reconstruct the Premises in the event of an insured loss.
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 or 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 for the first time (as opposed to amendments or modifications to
existing Security Devices) by Lessor after the execution of this Lease,
Lessee's subordination of this Lease shall be subject to receiver 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. With regard to any Security Devices entered into by Lessor prior
to the execution of this Lease, Lessor shall secure and deliver to Lessee
within one hundred twenty (120) days after the execution of this Lease by both
Lessor and Lessee, a non-disturbance and attornment agreement in favor of
Lessee and such Lender in the form required by such Lender.
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 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 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 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
-27-
28
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.
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 upon advance notice and
without unreasonably interfering with Lessee's business in the Premises, for
the purpose of showing the same to prospective purchasers, lenders, or (during
the last one hundred eighty (180) days of the term), lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
Buildings, as Lessor may reasonably deem necessary. Lessor may at any time
place on or about the Premises or Buildings any ordinary "For Sale" signs and
Lessor may at any time during the last one hundred eighty (180) 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 Buildings, except that Lessee may, with Lessor's prior
written consent (which shall not be unreasonably withheld), 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 sign 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 Buildings, and the right to install advertising signs on the
Buildings, 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. Subject to the provisions of this Paragraph 34, Lessor
hereby consents to and approves Lessee's installation of standard building and
monument signage, at Lessee's sole cost and expense. Lessee shall submit all
signage plans to Lessor and the City of San Diego for approval and necessary
permitting prior to the installation thereof.
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 reasonable actual 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 therefor along with reasonable supporting
documentation. In addition to the deposit described in Paragraph 12.2(e),
Lessor may, as a condition to considering any such request by 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
unless otherwise provided herein to the contrary. 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.
-28-
29
37. INTENTIONALLY OMITTED
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, and unless
specifically provided herein, 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; provided, however,
that the Options may be assigned to (and exercised by) any Lessee Affiliate who
does not require Lessor's consent to assignment.
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 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 Lessee three (3) or more notices of separate Defaults under
Paragraph 13.1 during the twelve (12) month 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) Lessee 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 of 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) if 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 Lessees of the Buildings and the Industrial Center and their
invitees.
41. SECURITY MEASURES. Lessee 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 and shall install, at Lessee's sole cost and expense, any and all
necessary security devices, as determined by Lessee in Lessee's sole
discretion.
-29-
30
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, rights of way, 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 Lessee 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 Lessor or Lessee
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.
48. 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. CONSTRUCTION. Headings at the beginning of each paragraph and
subparagraph are solely for the convenience of the parties and are not a part
of the Lease. Whenever required by the context of this Lease, the singular
shall include the plural and the masculine shall include the feminine and vice
versa. This Lease shall not be construed as if it had been prepared by one of
the parties, but rather as if both parties had prepared the same and,
consequently, any inconsistencies or ambiguities herein shall not be
interpreted against either party as the drafter of the Lease. Unless otherwise
indicated, all references to paragraphs and subparagraphs are to this Lease.
All exhibits referred to in this Lease are attached and incorporated by this
reference.
50. FORCE MAJEURE. Performance by either party under this Lease
shall not be deemed to be in default where delays or defaults are otherwise due
to war, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires,
casualties, acts of God, acts of public enemy, epidemics, quarantine
restrictions, freight embargoes, lack of general transportation, governmental
restrictions, moratoriums, acts or failure to act of any public, private or
governmental agency or entity or any other causes beyond the control or without
the fault of the party claiming an extension of time to perform as a result
thereof (excluding a party's financial inability to perform) (individually, an
event of "Force Majeure").
-30-
31
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 AS TO THE POSSIBLE PRESENCE
OF ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. 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 LOCATED 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 on the dates specified
above to their respective signatures.
Executed at 000 Xxxx Xxx, XX, XX Executed at 0000 Xxxxxxxxxxx Xx., XX, XX
on June 20, 1997 on June 13, 1997
by LESSOR: by LESSEE:
AGBRI Xxxxx Xxxxx, LLC, a Delaware CardioDynamics International Corporation,
Limited Liability Company a California corporation
By: AG Asset Manager, Inc., a
Delaware corporation
Its: Manager
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
------------------------------- ----------------------------------
Name Printed: Xxxx Xxxxxxxx Name Printed: Xxxxx X. Xxxxxx
-------------------- -----------------------
Title: Vice President Title: Vice President Finance, CFO
--------------------------- ------------------------------
Address: c/o Xxxxxx, Xxxxxx & Co., By: /s/ Xxxxxx X. Xxxxxxxx
000 Xxxx Xxx., ----------------------------------
------------------------- Name Printed: Xxxxxx X. Xxxxxxxx
XX, XX 00000 ---------------------------------
------------------------- Title: President
Telephone: (000) 000-0000 -----------------------------
-----------------------
Facsimile: (000) 000-0000
------------------------ Address: 0000 Xxxxxxxxxxx Xx Xxxx #000
-----------------------------
Xxx Xxxxx, XX 00000
-----------------------------
Telephone: (000) 000-0000
-----------------------------
Facsimile: (000) 000-0000
-----------------------------
-31-
32
EXTENSION OPTION RIDER
This Extension Option Rider ("RIDER") is made and entered into by and
between AGBRI Xxxxx Xxxxx, LLC, a Delaware Limited Liability Company
("LESSOR"), and CardioDynamics International Corporation, a California
corporation ("LESSEE"), and is dated as of the Effective Date of the Lease
("LEASE") by and between Lessor and Lessee to which this Rider is attached.
The agreements set forth in this Rider shall have the same force and effect as
if set forth in the Lease. To the extent the terms of this Rider are
inconsistent with the terms of the Lease, the terms of this Rider shall
control.
1. OPTION TO EXTEND LEASE TERM. Lessor hereby grants to Lessee
one (1) option to extend the Lease Term for a period of sixty (60) months,
(the "OPTION TERM"). The option must be exercised, if at all, by written
notice ("OPTION NOTICE") delivered by Lessee to Lessor not more than thirteen
(13) and not less than six (6) months prior to the end of the initial Lease
Term. Further, the option shall be deemed not to be properly exercised, if, as
of the date of the Option Notice or at the end of the initial Lease Term,
Lessee is in default under the Lease or if Lessee has previously been in
default under this Lease more than once. Provided Lessee has properly and
timely exercised the option, the Lease Term shall be extended for the number of
months specified above, and, except as provided below, all terms, covenants and
conditions of the Lease shall remain unmodified and in full force and effect.
The rights contained in this Extension Option Rider shall be personal to Lessee
and may only be exercised by Lessee (and not any assignee, sublessee or other
transferee of Lessee's interest in this Lease) if Lessee occupies the entire
Premises.
2. ADJUSTMENT TO BASE RENT. Base Rent shall be adjusted as of
the commencement of the Option Term to reflect one hundred percent (100%) of
the then-current prevailing market rental rate, as reasonably determined by
Lessor (one hundred percent (100%) of the then prevailing market rate, as
described below, shall be the "FAIR MARKET RENTAL VALUE") including annual
increases of four percent (4%) during such extended term, for similar space,
improved as the Premises have been improved, including all Lessee-Owned
Alterations and/or Utility Installations, within comparable industrial centers
in San Diego, as determined herein. In addition to the foregoing, and for
purposes of calculating Fair Market Rental Value, Lessee's creditworthiness,
rental inducements and concessions then being offered to prospective tenants,
and brokerages commissions payable by landlords, shall be considered, to the
extent Lessor is the offering such inducements to other potential lessees of
the Premises.
3. EXERCISE OF OPTION. The option contained in this Extension
Option Rider shall be exercised by Lessee, if at all, and only in the following
manner: (i) Lessee shall deliver written notice to Lessor not more than
thirteen (13) months nor less than six (6) months prior to the expiration of
the initial Lease Term, stating that Lessee is interested in exercising its
option; (ii) Lessor, after receipt of Lessee's notice, shall deliver notice
(the "Option Rent Notice") to Lessee not less than thirty (30) days after
receipt of Lessee's notice, setting forth the Fair Market Rental Value and the
Option Rent; and (iii) if Lessee wishes to exercise its option to extend the
term of this Lease, Lessee shall, on or before the date that is ten (10)
business days receipt of the Option Rent Notice, exercise the option by
delivering written notice thereof to Lessor. If Lessee does not so elect to
exercise its right to exercise this option to extend the term of the Lease,
Lessee shall be deemed to have elected not to so extend the Term.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Extension
Option Rider as of the Effective Date.
LESSOR: AGBRI Xxxxx Xxxxx, LLC, a Delaware
Limited Liability Company
By: AG Asset Manager, Inc.,
a Delaware corporation
Its: Manager
By: /s/ Xxxx Xxxxxxxx
-------------------------
Xxxx Xxxxxxxx
Its: Vice President
-------------------------
LESSEE: CardioDynamics International
Corporation, a California
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
---------------------------
Title: Vice President, CFO
--------------------------
-32-
33
EXPANSION OPTION RIDER
This Expansion Option Rider ("RIDER") is made and entered into by and between
AGBRI Xxxxx Xxxxx, LLC, a Delaware Limited Liability Company ("LESSOR"), and
CardioDynamics International Corporation, a California corporation ("LESSEE"),
and is dated as of the Effective Date of the Lease ("LEASE") by and between
Lessor and Lessee to which this Rider is attached. The agreements set forth in
this Rider shall have the same force and effect as if set forth in the Lease.
To the extent the terms of this Rider are inconsistent with the terms of the
Lease, the terms of this Rider shall control.
1. EXPANSION SPACE. Lessor hereby grants to the Lessee named in
the Summary the right to lease approximately 15,003 square feet of space
located adjacent to the Premises and more particularly described as Suite 100
(the "EXPANSION SPACE"), currently occupied by MultiSpectra Engineering (the
"CURRENT TENANT"), the precise amount of and the location of which Expansion
Space shall be designated by Lessor.
1.1 METHOD OF EXERCISE. The expansion option contained
in this Section 1 shall be exercised by only by the Lessee and only in the
following manner: (i) Lessee shall deliver notice to Lessor not more than
eight (8) months nor less than six (6) months prior to the earlier to occur of
(A) May 31, 1999 (which is date whereby the Current Tenant's lease is due to
expire by the passage of time, or the "EXPIRATION DATE"), or (B) fifteen (15)
business days after receipt of written notice from Lessor that the Current
Tenant's lease will sooner terminate, stating that Lessee is interested in
exercising its option; (ii) Lessor, after receipt of Lessee's notice, shall
deliver notice (the "EXPANSION RENT NOTICE") to Lessee not less than four (4)
months prior to the earlier to occur of (A) and (B) above, setting forth the
"Expansion Rent," as that term is defined in Section 1.3 of this Lease; and
(iii) if Lessee wishes to exercise its expansion option, Lessee shall, on or
before the later of (x) the date occurring three (3) months prior to Expiration
Date, and (y) the date occurring thirty (30) days after Lessee's receipt of the
Expansion Rent Notice, exercise the option by delivering written notice thereof
to Lessor within ten (10) business days of receipt of Lessor's Expansion Rent
Notice. If Lessee does not so elect to exercise its right to lease the
Expansion Space at the Expansion Rent quoted by Lessor, Lessee shall be deemed
to have elected not to lease the Expansion Space. In the event Lessee elects
not to exercise the expansion option at the Expansion Rent quoted by Lessor,
before Lessor reduces the rent quoted for the Expansion Space by an amount more
than five percent (5%) less than the Expansion Rent quoted Lessee, Lessor shall
provide Lessee with the right to exercise the expansion option at such lower
rate.
1.2 DELIVERY OF THE EXPANSION SPACE. Lessor shall
deliver the Expansion Space to Lessee within thirty (30) days of the earlier to
occur of the Expiration Date or the date specified in 1.1(B) above (the
"DELIVERY DATE"), unless either (i) Lessor agrees to install certain Tenant
Improvements pursuant to section 1.3 below, in which case the Delivery Date
shall occur upon the substantial completion of such tenant improvements by
Lessor, or (ii) the Current Tenant holds over beyond the Expiration Date, in
which event the Delivery Date shall be delayed by the number of days the
Current Tenant holds over in its possession of the Expansion Space.
1.3 EXPANSION RENT. The Rent payable by Lessee for
Expansion Space leased by Lessee (the "EXPANSION RENT"), which Expansion Rent
shall also include a comparable escalation to the Rent made and to be made
during the Lease Term for the remainder of the Premises, shall be reasonably
determined by Lessor and shall be equal to the greater of (i) the same rate at
which Rent is payable by Lessee under the Lease as of the "Expansion Space
Commencement Date," as that term is defined in Section 1.5 of this Rider, and
(ii) the face or stated rent then being quoted by Lessor for the lease of
comparable space in the Buildings to be occupied as of the time of the
Expansion Space Commencement Date, excluding, for purposes of calculating the
Expansion Rent, rental inducements and concessions then being offered to
tenants, and brokerages commissions payable by landlords, shall be disregarded
unless the same are then being offered by Lessor to other potential tenants for
similar space, in which case such inducements then being offered shall be
included within such calculation.
1.4 CONSTRUCTION OF EXPANSION SPACE. Lessee shall take
the Expansion Space in its "as is" condition, subject to the right to construct
improvements with an improvement allowance equal to that being offered for the
marketing of comparable space in the Building which is marketed at the same
rent as the Expansion Rent.
1.5 AMENDMENT TO LEASE. If Lessee timely exercises
Lessee's right to lease Expansion Space as set forth herein, Lessor and Lessee
shall within fifteen (15) days thereafter execute an amendment adding such
Expansion Space to the Lease upon the same terms and conditions as the initial
Premises, except as otherwise set forth in this Section 1. Lessee shall
commence payment of Rent for the Expansion Space and the term of the Expansion
Space shall commence upon the Delivery Date of the
-33-
34
Expansion Space to Lessee (the "EXPANSION SPACE COMMENCEMENT DATE"). The lease
term of the Expansion Space shall expire on the Lease Expiration Date.
1.6 NO DEFAULTS. The rights contained in this Section 1
shall be personal to the Lessee, may only be exercised by Lessee (and not any
assignee, sublessee or other transferee of Lessee's interest in this Lease
except a Lessee Affiliate) if Lessee occupies the entire Premises. Lessee
shall not have the right to lease Expansion Space as provided in this Section
1, if, as of the date of the attempted exercise of the expansion option by
Lessee, or as of the scheduled date of delivery of such Expansion Space to
Lessee, Lessee is in default under this Lease or Lessee has previously been in
default under this Lease beyond the applicable cure period.
1.7 EXPANSION RIGHTS SUBORDINATE. The rights of Lessee
pursuant to this Expansion Rider shall be subject and subordinate to the
exercise of any rights of first refusal or expansion rights regarding the
Expansion Space and provided to any other Lessee prior to the Effective Date.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Expansion Option Rider
as of the Effective Date.
LESSOR: AGBRI Xxxxx Xxxxx, LLC, a Delaware
Limited Liability Company
By: AG Asset Manager, Inc.,
a Delaware corporation
Its: Manager
By: /s/ Xxxx Xxxxxxxx
-------------------------
Xxxx Xxxxxxxx
Its: Vice President
-------------------------
LESSEE: CardioDynamics International
Corporation, a California
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
---------------------------
Title: Vice President, CFO
--------------------------
-34-
35
EXHIBIT A
(Depiction of the Premises)
Lessor and Lessee acknowledge that this plot plan is for general information
purposes only. Lessor shall not be liable and makes no representation or
warranty whatsoever concerning the existence or further existence or accuracy of
description or location, any buildings or improvements whatsoever depicted
herein shall be subject to correction modification or change at any time
without notice at Lessor's sole discretion. The parties hereby acknowledge
that the actual Demised Premises may vary as to size, dimensions and/or
location from the description of same hereinabove set forth. The aforesaid
description of the Demised Premises represents an approximation only and Lessor
makes no representation or warranty concerning the accuracy thereof in any
respect. Lessor hereby waives any and all claims, damages and/or right of
recovery against Lessor, its officers, agents, representatives, and employees,
arising on account or by reason of the description of the Demised Premises
hereinabove set forth.
[DIAGRAM]
36
EXHIBIT A-1
(Site Plan of the Buildings)
Lessor and Lessee acknowledge that this plot plan is for general information
purposes only. Lessor shall not be liable and makes no representation or
warranty whatsoever concerning the existence or further existence or accuracy of
description or location, any buildings or improvements whatsoever depicted
herein shall be subject to correction modification or change at any time without
notice at Lessor's sole discretion. The parties herein acknowledge that the
actual Demised Premises may vary as to size, dimensions and/or location from the
description of same hereinabove set forth. The aforesaid description of the
Demised Premises represents an approximation only and Lessor makes no
representation or warranty concerning the accuracy thereof in any respect.
Lessor hereby waives any and all claims, damages and/or right of recovery
against Lessor, its officers, agents, representatives, and employees, arising on
account or by reason of the description of the Demised Premises hereinabove set
forth.
XXXXXXX VISTA CENTER
[DIAGRAM]
