Exhibit 10.12
STANDARD INDUSTRIALCOMMERCIAL MULTI-TENANT LEASE - NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Basic Provisions ("Basic Provisions").
1.1 Parties: This Lease ("Lease"), dated for reference purposes only March
14 2003, Is made by and between POMERADO LEASING NO. 3, a California Limited
Partnership
("Lessor")
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and MILSPERING CORPORATION, a California corporation, dba "American Medical
Wholesale"
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("Lessee"), (collectively the "Parties", or individually a 'Party").
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1.2(a) Premises: That certain portion of the Project (as defined below),
including all improvements therein or to be provided by Lessor under the terms
of this Lease, commonly known by xxx xxxxxx xxxxxxx xx 00000 , Xxxxx Street
located in the City of Poway County of San Diego Slate of California with zip
code 92064 , as outlined on attached hereto ("Premises") and Exhibit 2 generally
described as (describe briefly the nature of Pomerado Corporate Center, an the
Premises): Building A, approximately 42,191 square foot building of which Lessee
shall lease approximately 20,904 square feet commonly known as Suite A In
addition to 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 root, exterior walls or utility raceways of the building
containing the Premises ("Building") or to any other buildings In the Project.
The Premises, the Building, the Common Areas, the land upon which they are
located,along with all other buildings and Improvements thereon, are herein
collectively referred to as the "Project." (See also Paragraph 2)
1.2(b) Parking: thirty (30) unreserved vehicle parking spaces ("Unreserved
Parking Spaces"); and reserved vehicle parking spaces ("Reserved Parking
Spaces"). (See also Paragraph 2.e)
1.3 Term: Five (5) years and zero months ("Original Term") commencing April
11, 2003 ('Commencement Date") and ending April 30, 2008 ("Expiration Date").
(See also Paragraph 3)
1.4 . Early Possession: None ("Early Possession Date"). (See also
Paragraphs 3.2 and 3
1.5 Base Rent per month ("Base Rent"), payable on the first day of each
month commencing May 1, 2003 . (See also Paragraph 4) 0 If this box is checked,
there are provisions in this Lease for the Base Rent to be adjusted.
1.6 Lessee's Share of Common Area Operating Expenses: twenty and 73/100
percent (20 . 73%) ("Lessee's Share").
1.7 Base Rent and Other Monies Paid Upon Execution:
a) Base Rent: [INSERT MISSING TEXT] -for the period April 11 through
April 30, 2003 ,
(b) Common Area Operating Expenses: (est.) for the period April 11. -
30, 2003
(c) Security Deposit: ("Security Deposit"). (See also Paragraph 5)
(d) Other. [INSERT MISSING TEXT] for last month's estimated Common
Area Operating Expenses
(e) Total Due Upon Execution of this Lease:
1.8 Agreed Use: Off ice, warehouse and distribution of medical products .
(See also Paragraph 6)
1.9 Insuring Party. Lessor Is the "Insuring Party". (See also Paragraph 8)
1.10 Real Estate Brokers: (See also Paragraph 15)
(a) Representation: The following real estate brokers (the "Brokers")
and brokerage relationships exist In this transaction (check applicable
boxes):
0 XX Xxxxxxx El l is , Inc. represents Lessor exclusively ("Lessor's Broker");
0 Rancho Funding represents Lessee exclusively ("Lessee's Broker"):or
represents both Lessor and Lessee ("Dual Agency").
(b) Payment to Brokers: Upon execution and delivery of this Lease by both
Parties, Lessor shall pay to the Brokers the brokerage fee agreed to In a
separate written agreement (or If there is no such agreement, the -real" of or 6
% of the total Base Rent for the brokerage services rendered by the Brokers).
1.11 Guarantor. The obligations of the Lessee under this Lease are to be
guaranteed by N/A ("Guarantor"). (See also Paragraph 37)
1.12 Addenda and Exhibits. Attached hereto Is an Addendum or Addenda
consisting of Paragraphs 1 through 15 and Exhibits 1 through 'I , all of which
constitute a part of this Lease.
2. Premises.
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 size set forth In this Lease, or [hat may have been
used in calculating Rent, is an approximation which the Parties agree is
reasonable and any payments based thereon are not subject to revision whether or
not the actual size is more or less.
2.2 Condition. Lessor shall deliver that portion of the Premises contained
within the Building ('Unit") to Lessee broom clean and free of debris on the
Commencement Date or the Early Possession Date, whichever first occurs ("Start
Date"), and, so long as the required service contracts described In Paragraph
7.1(b) below are obtained by Lessee and in effect within thirty days following
the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems ("HVAC"), loading
doors, if any, and all other such elements in the Unit, other then those
constructed by Lessee, shall be in good operating condition on said date and
that the structural elements of the roof, bearing walls and foundation of the
Unit shall be free of materiel defects. If a non-compliance with such warranty
exists as of the Start Xxxx, or If one of such systems or elements should
malfunction or fall within the appropriate warranty period, Lessor shall, as
Lessor's sole obligation with respect to soot, matter, except as otherwise
provided in this Lease, promptly after receipt of written notice from Lessee
setting forth with sspecificity the nature and extent of such non-compliance,
malfunction or failure, rectify same at Lessor's expense. The warranty periods
shall be as follows: (I) 6 months as to the HVAC systems, and 60 days as to the
remaining systems and other elements of the Unit. If Lessee does not give Lessor
the required notice within the appropriate war tied, correction of any such
non-compliance, malfunction or failure shall be the obligation of Lessee at
Lessee's sole cost and expense (except for repairs to the tire sprinkler
systems, root. foundations, and/or bearing walls - see Paragraph 7).
2.3 Compliance. Lessor warrants that the improvements on the Premises and the
Common Areas comply with the building codes that were in effect at the time that
each such Improvement, or portion thereof, was constructed, and also with alt
applicable laws, covenants or restrictions of record, regulations, and
ordinances in effect on the Xxxx Date ("Applicable Requirements"). Said warranty
does not apply to the use to which Lessee will put the Premises or to any
Alterations or Utility Installations (as defined in Paragraph 7.3(e)) made or to
be made by Lessee. NOTE: Lessee Is responsible far determining whether or not
the Applicable Requirements, and especially the zoning, are appropriate for
Lessee's intended use, and acknowledges that past uses at the Premises may no
longer be allowed. N the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided, promptly after receipt of written notice
from Lessee selling forth with specificity the nature and extent of such
non-compliance, rectify the same at Lessors expense. If Lessee does not give
Lessor written notice of a non-compliance with this warranty within 6 months
following the Start Date, correction of that non-compliance shall be the
obligation of Lessee at Lessee's sole cost and expense. It the Applicable
Requirements are hereafter changed so as to require during the term of this
Lease the construction of an addition to or an alteration of the Unit, Promises
and/or Building, the remediation of any Hazardous Substance, or the
reinforcement or other physical modification of the Unit, Premises and/or
Building ("Capital Expenditure'), Lessor and Lessee shall allocate the cost of
such work as follows:
(a) Subject to Paragraph 2.3(c) below, If such Capital Expenditures are required
as a result of the specific and unique use of the Premises by Lessee as compared
with uses by tenants to general, Lessee shall be fully responsible for the cost
thereof, provided, however that if such Capital Expenditure Is required during
the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent,
Lessee may Instead terminate this Lease unless Lessor notifies Lessee, In
writing, within 10 days after receipt of Lessee's termination notice that Lessor
has elected to pay the difference between the actual cost thereof and the amount
equal to 6 months' Base Rent. It Lessee elects termination, Lessee shall
Immediately cease the use of the Premises which requires such Capital
Expenditure and deliver to Lessor written notice specifying a termination date
at least 90 days thereafter. Such termination date shall, however, in no event
be earlier than the last day that Lessee could legally utilize the Premises
without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the specific and unique use
of the Premises by Lessee (such as, governmentally mandated seismic
modifications), then Lessor and Lessee shall allocate the obligation to pay for
the portion of such costs reasonably attributable to the Premises pursuant to
the formula set out in Paragraph 7.1(d); provided, however, that if such Capital
Expenditure is required during the last 2 years of this Lease or if Lessor
reasonably determines that it is not economically feasible to pay Its share
thereof. Lessor shall have The option to terminate this Lasso upon 90 days prior
written notice to Lessee unless Lessee notifies Lessor, in writing, within 10
days after receipt of Lessor's termination notice that Lessee xxxx pay for such
Capital Expenditure. If Lessor does not elect to terminate, and falls to tender
Its share of any such Capital Expenditure, Lessee may advance such funds and
deduct same, with Interest, from Rent until Lessor's share of such costs have
been fully paid. If Lessee Is unable to finance Lessor's share, or If the
balance of the Rant due and payable for the remainder of this Lease is not
sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the
right to terminate this Lease upon 30 days written notice to Lessor. (c)
Notwithstanding the above, the provisions concerning Capital Expenditures are
intended to apply only to non-voluntary, unexpected, and new Applicable
Requirements. If the Capital Expenditures are instead triggered by Lessee as a
result of an actual or proposed change in use, change in intensity of use, or
modification to the Premises then, and in that event, Lessee shall be fully
responsible for the cost thereof, and Lessee shall not have any right to
terminate this Lease.
2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by
Lessor and/or Brokers to satisfy itself with respect to the condition of the
Premises (Including but not limited to the electrical, HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable
Requirements and the Americans with Disabilities Act), and their suitability for
Lessee's intended use, (b) Losses has made such Investigation as it deems
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to its occupancy of the Premises, and (c) neither Lessor,
Lessors agents, nor Brokers have made any oral or written representations or
warranties with respect to said matters other than as set forth in this Lease.
In addition, Lessor acknowledges that: (I) Brokers have made no representations,
promises or warranties concerning Lessee's ability to honor the Lease or
suitability to occupy the Premises, and (ii) it is Lessors sole responsibility
to investigate the financial capability and/or suitability of as proposed
tenants.
2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor In Paragraph 2
shall be of no force or effect if immediately prior to the Start Date Lessee was
the owner or occupant of the Premises. In such event, Lessee shall be
responsible for any necessary corrective work.
2.6 Vehicle Parking. Lessee shall be entitled to use the number of Unreserved
Parking Spaces and Reserved Parking Spaces specified in Paragraph 1.2(b) on
those portions of the Common Areas designated from time to time by Lessor for
parking. Lessee shag not use more parking spaces than said number. Said parking
spaces shall be used for parking by vehicles no larger than full-size passenger
automobiles or pick-up trucks, herein celled "Permitted Size Vehicles." Lessor
may regulate the loading and unloading of vehicles by adopting Rules and
Regulations as provided in Paragraph 2.9. No vehicles other than Permitted Size
Vehicles may be parked in the Common Area without the prior written permission
of Lessor.
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(a) Leases shaft 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) Lessee shall not service or store any vehicles in the Common Areas.
(c) If Lessee permits or allows any of the prohibited activities described in
this Paragraph 2.6, then Lessor shall have the right, without notice, In
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Lessee, which cost shall be
Immediately payable upon demand by Lessor.
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
Project and Interior utility raceways and Installations within trip Unit that
are provided and designated by the Lessor from time to time for the general
non-exclusive use of Lessor, Lessee and other tenants of the Project and their
respective employees, suppliers, shippers, customers, contractors and invitees,
Including parking areas, loading and unloading areas, trash areas, roadways,
walkways, driveways and landscaped areas.
2.8 Common Areas - Lessee's Rights. Lessor 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 Project. 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
Lessors 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 properly and charge the cost to leases, 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 ("Rules and Regulations") for the
management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Building and the Project and
their Invitees. 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 tenants of the Project.
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, loading and unloading areas, Ingress,
egress, direction of traffic, landscaped areas, walkways and utility
raceways;
(b) To close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the Project to be a
part of the Common Areas;
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged In making additional
Improvements, repairs or alterations to the Project, 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 Project as Lessor may, In the exercise
of sound business judgment, deem to be appropriate.
3. Term.
3.1 Term. The Commencement Date, Expiration Date end Original farm at this Lease
are as specified In Paragraph 4.3. 3.2 Early Possession. It Lessee totally or
partially occupies the Premises prior to the Commencement Date, the obligation
to pay Base Rent shall be abated for the period of such early possession. All
other terms of this Lease (Including but not limited to The obligations to pay
Lessee's Share of Common Area Operating Expenses, Real Property Taxes and
Insurance premiums and to maintain the Premises) shall, however, be in effect
during such period. Any such early possession shell not affect the Expiration
Date,
3.3 Delay In Possession. Lessor agrees to use Its best commercially reasonable
efforts to deliver possession of the Premises to Lessee by the Commencement
Date. If, despite said efforts, Lessor is unable to deliver possession as
agreed, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease. Lessee shall not, however, he
obligated to pay Rent or perform its other obligations until It receives
possession of the Premises. If possession Is not delivered within 60 days after
the Commencement Date, Lessee may, at Its option, by notice In writing within to
days after the end of such 60 day period, cancel this Lease, In which event the
Parties shall be discharged from all obligations hereunder. If such written
notice is not received by Lessor within said 10 day period, Lessee's right to
cancel shall terminate. Except as otherwise provided, if pas Ion is not tendered
to Lessee by the Start Date end Lessee does not terminate this Lease, as
aforesaid, any period of rent abatement that Lessee would otherwise have enjoyed
shall run from the date of delivery of possession and continue for a period
equal to what Lessee would otherwise have enjoyed under the terms hereof, but
minus any days of delay caused by the acts or omissions of Lessee. If possession
of the Premises is not delivered within 4 months after the Commencement Date,
this Lease shall terminate unless other agreements are reached between Lessor
end Lessee, in writing.
3.4 Lessee Compliance. Lessor shall not be required to tender possession of the
Premises to Lessee until Lessee complies with Its obligation to provide evidence
of insurance (Paragraph 8,6). Pending delivery of such evidence, Lessee shall be
required to perform all of its obligations under this Lease from and after the
Start Date, Including the payment of Rent, notwithstanding Lassoes election to
withhold possession pending receipt of such evidence of Insurance. Further, it
Lessee Is required to perform any other conditions prior to or concurrent with
the Start Date, the Start Date shall occur but Lessor may elect to withhold
possession until such conditions are satisfied.
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4. Rent.
4.1 Rent Defined. All monetary obligations of Lessee to Lessor under the terms
of this Lasso (except for the Security Deposit) are deemed to be rent ("Rent").
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) of all Common Area Operating Expenses, as hereinafter defined, during each
calendar year of the term of this Lease, in accordance with the following
provisions:
(a) "Common Area Operating Expenses" are defined, for purposes of this Lease,
as aft costs incurred by Lessor relating to the ownership and operation of
the Project, including, but not limited to. the following:
(i) The operation, repair and maintenance, in neat, clean, good order and
condition of the following:
(aa) The Common Areas and Common Area improvements, Including parking
areas, loading and unloading areas, trash areas, roadways,
parkways, walkways, driveways, landscaped areas, bumpers,
irrigation systems, Common Area lighting facilities, fences and
gates, elevators, roofs, and roof drainage systems.
(bb) Exterior signs and any tenant directories.
(cc) Any lire detection and/or sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to service the
Common Areas and any utilities not separately metered.
(Iii) Trash disposal, pest control services, property management, 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).
(vi) The cost of the premiums for the insurance maintained by Lessor
pursuant to Paragraph 8. (vii) Any deductible portion of an Insured
loss concerning the Building or the Common Areas.
(viii) The cost of any Capital Expenditure to the Building or the Project
not covered under the provisions of Paragraph 2.3 provided; however,
that Lessor shall allocate the cost of any such Capital Expenditure
over a 12 year period andLessee shall not be required to pay more than
Lessee's Share of 1/144th of the cost of such Capital Expenditure in
any given month.
(Ix) Any other services to be provided by Lessor that are stated elsewhere
in this Lease to be a Common Area Operating Expense:
(b) Any Common Area Operating Expenses and Real Property Taxes that are
specifically attributable to the Unit, the Building or to any other building In
the Project or to the operation, repair and maintenance thereof, shall be
allocated entirely to such Unit, Building, or 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 Project.
(c) The inclusion of the improvements, facilities and services set forth In
Subparagraph 4,2(a) shall not be doomed to impose an obligation upon Lessor to
either have said Improvements or facilities or to provide those services unless
the Project 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 10 days after a reasonably detailed statement of actual expenses is
presented to Lessee. 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 shag
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 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. It Lessee's payments under this Paragraph 4.2(d) during the
preceding year exceed Lessee's Share as Indicated on such statement, Lessor
shall credit 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 the preceding year were less than Lessee's Share as
Indicated on such statement, Lessee shall pay to Lessor the amount of the
deficiency within 10 days after delivery by Lessor to Lessee, of the statement.
4.3 Payment. Lessee shall cause payment of Rent to be received by
Lessor in lawful money of the United States, without offset or deduction (except
as specifically permitted in this Lease), on or before the day on which it is
due. Rent for any period during the term hereof which is for less than one full
calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Lessor at its address slated herein or
to such other persons or place as Lessor may from time to lime designate in
writing. Acceptance of a payment which is lees than the amount then due shall
not be a waiver of Lessor's rights to the balance of such Rent, regardless of
Lessor's endorsement of any check so slating. In the event that any check,
draft, or other instrument of payment given by Lessee to Lessor is dishonored
for any reason, Lessee agrees to pay to Lessor the sum of $25 In addition to any
late charges which may be due.
5. Security Deposit. Lessee shall deposit with Lessor upon execution
hereof the Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. It Lessee falls to pay Rant, or otherwise Defaults
under this Lease, 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, expense, loss or damage which Lessor may
suffer or Incur by reason thereof. If Lessor uses or applies all or any portion
of the Security Deposit, Lessee shall within 10 days after written request
therefor deposit monies with Lessor sufficient to restore said Security Deposit
to the full amount required by this Lease. If the Base Rent increases during the
term of this Lease, Lessee shall, upon written request from Lessor, deposit
additional monies with Lessor so that the total amount of the Security Deposit
shall at all times bear the same proportion to the Increased Base Rent as the
initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be
amended to accommodate a material change in the business of Lessee or to
accommodate a sublessee or assignee, Lessor shall have the right to Increase the
Security Deposit to the extent necessary, in Lessor's reasonable judgment, to
account for any increased wear and tear that the Premises may suffer as a result
thereof. If a change In control of Losses occurs during this Lease and following
such change the financial condition of Lessee is, in Lessor's reasonable
judgment, significantly reduced, Lessee shall deposit such additional monies
with Lessor as shall be sufficient to cause the Security Deposit to be at a
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commercially reasonable level based on such change in financial condition.
Lessor shall not be required to keep the Security Deposit separate from Its
general accounts. Within 14 days after the expiration or termination of this
Lease, If Lessor elects to apply the Security Deposit only to unpaid Rent, and
otherwise within 30 days after the Premises have been vacated pursuant to
Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit
not used or applied by Lessor. No pall of the Security Deposit shall be
considered to be held in trust, to hear interest or to be prepayment for any
monies to be paid by Lessee under this Lease.
6. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, 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 damage, waste or a nuisance, or that disturbs occupants of
or causes damage to neighboring premises or properties. Lessor shall not
unreasonably withhold or delay Its consent to any written request for a
modification of the Agreed Use, so long as the same will not Impair the
structural Integrity of the Improvements on the Premises or the mechanical or
electrical systems therein, and/or Is not significantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after
such request give written notification of same, which notice shall include an
explanation of Lessor's objections to the change in the Agreed Use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in
this Lease shall mean any product, substance, or waste whose presence, use,
manufacture, disposal, transportation, or release, 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
(ill) a basis for potential liability of Lessor to any governmental agency or
third party under any applicable statute or common law theory, Hazardous
Substances shall Include, but not be limited to, hydrocarbons, petroleum,
gasoline, and/or crude oil or any products, by-products or fractions thereof.
Lessee shall not engage in any activity in or on the Premises which constitutes
a Reportable Use of Hazardous Substances without the express prior written
consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. "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/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, so long as such use
Is in compliance with all Applicable Requirements, is not a Reportable Use, and
does not expose the Promises or neighboring property to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor. In addition,
Lessor may condition Its consent to any Reportable Use upon receiving such
additional assurances as Lessor reasonably deems necessary to protect itself,
the public, the Premises and/or the environment against damage, contamination,
Injury and/or liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasements) and/or increasing the Security
Deposit.
(b) Duty to Inform Lessor. It Lessee knows, or has reasonable cause to believe,
that a Hazard... Substance has come to be located In, on, under or about the
Premises, other than as previously consented to by Lessor, Lessee shall
immediately give written notice of such fact to Lessor, and provide Lessor with
a copy of any report, notice, claim or other documentation which 11 has
concerning the presence of such Hazardous Substance.
(c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance
to be spilled or released In, on, under, or about the Premises (including
through the plumbing or sanitary sewer system) and shall promptly, at Lessee's
expense, take all investigators and/or remedial action reasonably recommended,
whether or not formally ordered or required, for the cleanup of any
contamination of, and for the maintenance, security and/or monitoring of the
Premises or neighboring properties, that was caused or materially contributed to
by Lessee, or pertaining to or involving any Hazardous Substance brought onto
the Premises during the term of this Lease, by or for Lessee, or any third
party.
(d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its
agents, employees, lenders and ground lessor, if any, harmless from and against
any and all loss of rents and/or damages, liabilities, judgments, claims,
expenses, penalties, end attorneys' and consultants' fees arising out of or
Involving any Hazardous Substance brought onto the Premises by or for Lessee, or
any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Premises from areas outside of the Project). Lessee's obligations
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, removal, remediatlon, restoration and/or abatement, and
shall survive the aspiration or 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.
(a) Lessor indemnlfcation. Lessor and its successors and assigns shall
Indemnity, defend, reimburse and hold Lessee, Its employees and lenders,
harmless from and against any and alt environmental damages, Including the cost
of remediation, which existed as a result of Hazardous Substances on the
Premises prior to the Start Date or which are caused by the gross negligence or
willful misconduct of Lessor, its agents or employees. Lessor's obligations, as
and when required by the Applicable Requirements, shall Include, but not be
limited to, the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.
(I) Investigations and Remedlations. Lessor shall retain the responsibility and
pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous
Substances on the Premises prior to the start Date, unless such remediation
measure is required as a result of Lessee's use (including 'Alterations", as
defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall
be responsible for such payment. Lessee shall cooperate fully in any such
activities at the request of Lessor, Including allowing Lessor end Lessors
agents to have reasonable access to the Premises at reasonable times In order to
carry out Lessor's Investigative and remedial responsibilities.
(g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph
9.1(e)) occurs during the lean of this Lease, unless Lessee Is legally
responsible therefor (in which case Lessee shall make the Investigation and
remediation thereof required by the Applicable Requirements and this Lease shall
continue In full force and effect, but subject to Lessor's rights under
5
Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i)
investigate and remediate such Hazardous Substance Condition, If inquired, 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 remediate
such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within 30 days after
receipt by Lessor of knowledge of the occurrence of such Hazardous Substance
Condition, of Lassoes desire to terminate this Lease as of the date 60 days
following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within 10 days thereafter, give written notice
to Lessor of Lessee's commitment to pay the amount by which the cost of the
remediation of such Hazardous Substance Condition exceeds an amount equal to 12
times the then monthly Base Rent or $100,000, whichever Is greater. Lessee shall
provide Lessor with said funds or satisfactory assurance thereof within 30 days
following such commitment. In such event, this Lease shall continue in full
force and effect, and Lessor shall proceed to make such 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 provided, this Lease shall terminate as of the date specified in Lessor's
notice of termination.
6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise
provided In this Lease, Lessee shall, at Lessee's sole expense, fully,
diligently and In a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of Lessor's engineers and/or consultants
which relate in any manner to the Premises, without regard to whether said
requirements are now In affect or become effective after the Start Date. Lessee
shall, within 10 days after receipt of Lessor's written request, provide Lessor
with copies of all permits and other documents, and other Information 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 the failure of Lessee or
the Premises to comply with any Applicable Requirements.
6.4 Inspection; Compliance. Lessor and Lessor's 'Lender" (as defined in
Paragraph 30) and consultants shall have the fight to enter into Premises at any
time, In the case of an emergency, and otherwise at reasonable times, for the
purpose of Inspecting the condition of the Promises and for verifying compliance
by Lessee with this Lease. The cost of any such Inspections shall be paid by
Lessor, unless a violation of Applicable Requirements, Or a contamination is
found to exist or be Imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor
for the cost of such Inspection, so long as such inspection Is reasonably
related to the violation or contamination.
7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee's Obligations.
(a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3
(Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2
(Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee
shall, at Lessee's sole expense, keep the Premises, Utility Installations
(intended for Lessee's exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises
requiring repairs, 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, but not limited to, all equipment or facilities,
such as plumbing, HVAC equipment, electrical, lighting facilities, boilers,
pressure vessels, 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. Lessee,
in keeping the Premises in good order, condition and repair, shall exercise and
perform good maintenance practices, specifically including the procurement and
maintenance of the service contracts required by Paragraph 7.1(b) below.
Lessee's obligations shall include restorations, replacements or renewals when
necessary to keep the Promises and all improvements thereon or a pad thereof in
good order, condition and state of repair.
(b) Service Contracts. Lessee shall, at Lessee's sole expense, procure and
maintain contracts, with copies to Lessor, In customary form and substance for,
and with contractors specializing and experienced In the maintenance of the
following equipment and improvements, if any, it and when Installed on the
Premises: (I) HVAC equipment, (ii) boiler and pressure vessels, (iii) clan
tiers, and (Iv) any other equipment, if reasonably required by Lessor. However,
Lessor reserves the right, upon notice to Lessee, to procure and maintain any or
all of such service contracts, and If Lessor so elects, Lessee shall reimburse
Lessor, upon demand, for the cost thereof.
(c) Failure to Perform. If Lessee falls to perform Lessee's obligations under
this Paragraph 7.1, Lessor may enter upon the Premises after 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, and Lessee shall promptly
reimburse Lessor for the cost thereof.
(d) Replacement. Subject to Lessee's Indemnification of Lessor as set forth in
Paragraph 8.7 below, and without relieving Lessee of liability resulting from
Lessee's failure to exercise and perform good maintenance practices, i1 an Item
described in Paragraph 7.1(b) cannot be repaired other than at a coat which is
in excess of 50"/" of the cost of replacing such item, than ouch item shall he
replaced by Lessor, and the cost thereof shall be prorated between the Parties
and Lessee shall only be obligated to pay, each month during the remainder of
the term of this Lease, on the date on which Base Rent Is due, an amount equal
to the product of multiplying the cost of such replacement by a fraction, the
numerator of which is one, and the denominator of which is 144 (Is. 11144th of
the cost per month). Lessee shall pay Interest an the unamortlzed balance at a
rate that Is commercially reasonable in the judgment of Lessor's accountants.
Lessee may, however, prepay Its obligation at any time.
7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use),
7.1 (Lessee's Obligations, 9 (Damage or Destruction) and 14 (Condemnation),
Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good
order, condition and repair the foundations, exterior walls, structural
condition of Interior bearing walls, exterior roof, fire sprinkler system,
Common Area fire alarm and/or smoke detection systems, fire hydrants, parking
lots, walkways, parkways, driveways, landscaping, fences, signs and utility
systems serving the Common Areas and all parts thereof, as well as providing the
services for which there is a Common Area Operating Expense pursuant to
Paragraph 4.2. Lessor shah not be obligated to paint the exterior or Interior
surfaces of exterior walls nor shall Lessor be obligated to maintain, repair or
6
replace windows, doors or plate glass of the Premises. Lessee expressly waives
the benefit of any statute now or hereafter in attack to the extent it is
Inconsistent with the terms of this Lease.
7.3 Utility Installations; Trod. Fixtures; Alterations.
(a) Definitions. The term "Utility Installations" refers to all floor and window
coverings, air lines, power panels, electrical distribution, security and tire
protection systems, communication systems, lighting fixtures, HVAC equipment,
plumbing, and fencing in or on the Premises. The to redo Fixtures' shall mean
Lessee's machinery end equipment that can he removed without doing material
damage to the Premise term "Alterations" shall mean any modification of the
improvements, other than Utility Installations or Trade Fixtures, whether by
addition or deletion. "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).
(b) Consent. Lessee shall not make any Alterations or Utility Installations to
the Premises without Lessor's prior written consent. Lessee may, however, make
non-structural Utility installations to the interior o1 the Premises (excluding
the root) without such consent but upon notice to Lessor, as long as they are
not visible from the outside, do not Involve puncturing, relocating or removing
the real or any existing walls, and the cumulative cost thereof during this
Lease as extended does not exceed a sum equal to 3 month's Base Rent In the
aggregate ore sum equal to one month's Base Rent in any one year.
Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting such approval,
require Lessee to utilize a contractor chosen and/or approved by Lessor. 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. Consent shall be deemed conditioned upon Lessee's: (i)
acquiring all applicable governmental permits, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to
commencement of the work, and (ill) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed In a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion
furnish Lessor with as-built plans and specifications. For work which costs an
amount in excess of one month's Base Rent, Lessor may condition its consent upon
Lessee providing a lien and completion bond in an amount equal to 150% of the
estimated cost of such Alteration or Utility Installation and/or upon Lessee's
posting an additional Security Deposit with Lessor.
(c) Indemnification. Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been tarnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanic's or
materialman's lien against the Premises or any Interest therein. Lessee shall
give Lessor not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Lessor shall have the tight to post notices of
non-responsibility. If Lessee shell 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. If
Lessor shall require, Lessee shall furnish a surety bond in an amount equal to
150% of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessor's attorneys' fees end costs.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require removal or elect ownership
as hereinafter provided, all Alterations and Utility installations made by
Lessee shall be the property of Lessee, but considered a part of the Premises.
Lessor may, at any time, elect In writing to be the owner of all or any
specified part of the Lessee Owned Alterations and Utility Installations. Unless
otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations
and Utility Installations shall, al the expiration or termination of this Lease,
become the property of Lessor and be surrendered by Lessee with the Premises.
(b) Removal. By delivery to Lessee of written notice from Lessor not earlier
than 90 and not later than 30 days prior to the and of the term of this Lease,
Lessor may require that any or all Lessee Owned Alterations or Utility
Installations be removed by the expiration or termination of this Lease. Lessor
may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.
(c) Surrender; Restoration. Lessee shall surrender the Premises by the
Expiration Date or any earlier termination date, with all of the Improvements,
parts and surfaces thereof broom clean and free of debris, and In good operating
order, condition and state of repair, ordinary wear and tear excepted. "Ordinary
wear and lest" shall not Include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, It
this Lease Is for 12 months or lass, then Lessee shall surrender the Premises In
the same condition as delivered to Lessee on the Start Date with NO allowance
for ordinary wear and tear. Lessee shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations
and/or Utility Installations, furnishings, and equipment as well as the removal
of any storage lank installed by or for Lessee. Lessee shall also completely
remove from the Premises any and all Hazardous Substances brought onto the
Premises by or for Lessee, or any third party (except Hazardous Substances which
were deposited via underground migration from areas outside of the Project) even
d such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor
shall constitute a holdover under the provisions of Paragraph 26 below.
8. Insurance; Indemnity.
8.1 Payment of Premiums. The cost of the premiums for the Insurance policies
required to be carried by Lessor, pursuant to Paragraphs 8.2(b), 8.3(a) and
8.3(b), shall be a Common Area Operating Expense. Premiums for policy periods
commencing prior to, or extending beyond, the term of this Lease shall be
prorated to coincide with the corresponding Start Date or Expiration Date.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial
General Liability policy of Insurance protecting Lessee and Lessor as an
additional Insured against claims for bodily Injury, personal injury and
property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Promises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not
less than $1,000,000 per occurrence with an annual aggregate of not less than
$2,000,000, an "Additional Insured-Managers or Lessors of Premises Endorsement"
and contain the 'Amendment of the Pollution Exclusion Endorsement' for damage
caused by heal, smoke or fumes from a hostile fire. The policy shall not contain
7
any intra-Insured exclusions as between Insured persons or organizations, but
shall Include coverage for liability assumed under Ibis Lease as an 'Insured
contract" for the performance of Lessee's indemnity obligations under this
Lease. The limits of said insurance shall riot, however, limit the liability of
Lessee nor relieve Lessee of any obligation hereunder. All Insurance 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 shell maintain liability insurance as described In
Paragraph 8.2(a), 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.
8.11 Property Insurance -Building, Improvements and Rental Value.
(a) Building and Improvements. Lessor shall obtain and keep In force a policy or
policies of Insurance In the name of Lessor, with loss payable to Lessor, any
ground-lessor, and to any Lender insuring loss or damage to the Premises. The
amount of Such insurance shall be equal to the full replacement cost of the
Premises, as the same shall exist from time to lime, or the amount required by
any Lender, but in no event more than the commercially reasonable and available
insurable value thereof. Lessee Owned Alterations and Utility Installations,
Trade Fixtures, and Lessee's personal property shell be insured by Lessee under
Paragraph 8.4. If the coverage is available and commercially appropriate, such
policy or policies shall insure against all risks of direct physical loss or
damage (except the perils of flood and/or earthquake unless required by a
Lender), including coverage for debris removal end the enforcement of any
Applicable Requirements requiring the upgrading, demolition, reconstruction or
replacement of any portion of the Premises as the result of a covered loss. Said
policy or policies shall also contain an agreed valuation provision in lieu of
any coinsurance clause, waiver of subrogation, and Inflation guard protection
causing an increase In the annual property Insurance coverage amount by a factor
of not less man the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where the Premises are located. If
such Insurance coverage has a deductible clause, the deductible amount shall not
exceed $1,000 per occurrence.
(b) Rental Value. Lessor shall also obtain and keep in force a policy or
policies in the name of Lessor with loss payable to Lessor and any Lender.
Insuring the loss of the frill Rent for one year with an extended period of
Indemnity for en additional 180 days ('Rental Value insurance"). Said Insurance
shall contain an agreed valuation provision in lieu of any coinsurance clause,
and the amount of coverage shat) be adjusted annually to reflect the projected
Rent otherwise payable by Lessee. for the next 12 month period.
(c) Adjacent Premises. Lessee shall pay for any Increase In the premiums for the
property Insurance of the Building and for the Common Areas or other buildings
In the Project It 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; Business Interruption Insurance.
(a) Property Damage. Lessee shall obtain and maintain Insurance coverage an all
of Lessee% personal property, Trade Fixtures, and Lessee Owned Alterations and
Utility Installations. Such insurance shall be full replacement cost coverage
with a deductible of not to exceed $1,000 per occurrence. The proceeds from any
such insurance shall be used by Lessee for the replacement of personal property,
Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee
shall provide Lessor with written evidence that such Insurance is in force.
(4) Business Interruption. Lessee shall obtain and maintain loss of income and
extra expense insurance in amounts as will reimburse Lessee for direct or
indirect loss of earnings attributable to all perils commonly Insured against by
prudent lessees In me business of Lessee or attributable to prevention of access
to the Premises as a result of such perils.
(c) No Representation of Adequate Coverage. Lessor makes no representation that
the limits or forms of coverage of insurance specified herein are adequate to
cover Lessee's property, business operations or obligations under this Lease.
8.5 Insurance Policies. Insurance required herein shall be by companies duly
licensed or admitted to transact business in the state where the Premises are
located, and maintaining during the policy term a "General Policyholders
Elating" of at least e,, V, as sot forth in the most current issue of "Best's
insurance Guide", or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which Invalidates the required
Insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of such insurance or certificates evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 30 days prior written notice
to Lessee shall, at least 30 days prior to the expiration of such policies,
furnish Xxxxxx Xxxx evidence of renewals or "insurance binders" dancing renewal
thereof, or Lessor may order such Insurance and charge the cost thereof to
Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such
policies shall be for a term of at least one year, or the length of the
remaining term of this Lease, whichever is less. It either Party shall fail to
procure and maintain the insurance required to be carded by it, the other Party
may, but shall not be required to, procure and maintain the same.
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 against the other, far loss of or damage to Its
property arising out of or incident to the perils required to be Insured against
herein. The effect of such releases and waivers is not limited by the amount of
insurance carried or required, or by any deductibles applicable hereto. The
Parties agree to have their respective property damage Insurance carriers waive
any right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the Insurance Is not invalidated thereby.
8.7 Indemnity. Except for Lessors gross negligence or willful misconduct, Lessee
shall Indemnity, protect, defend and hold harmless the Premises, Lessor and its
agents, Lassoes master or ground lessor, partners and Lenders, from and against
any and all claims, loss of rents and/or damages, lions, judgments, penalties,
attorneys' and consultants' fees, expenses and/or liabilities arising out of,
Involving, or in connection with, the use and/or occupancy of the Premises by
Lessee. If any action or proceeding Is brought against Lessor by reason of any
of the foregoing matters, Lessee shall upon notice 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 defended or indemnified.
8 Exemption of Lessor from Liability. Lessor shall not be liable for injury or
damage to the person or goods, wares, merchandise or other property of Lessee,
8
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, HVAC or lighting fixtures, or tram any other cause, whether the said
injury or damage results from conditions arising upon the Premises or upon other
portions of the Building, or from other sources or places. Lessor shall not be
liable for any damages arising from any actor neglect of any other tenant of
Lessor nor from the failure of Lessor to enforce the provisions of any other
lease In the Protect. 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
improvements on the Premises, other then Lessee Owned Alterations and Utility
Installations. which can reasonably be repaired In 3 months or less from the
date of the damage or destruction, and the cost thereof does rat exceed a sum
equal to 6 month's Base Rent. Lessor shall notify Lessee In writing within 30
days from the date of the damage or destruction as to whether or not the damage
Is Partial or Total, (b) "Premises Total Destruction' shall mean damage or
destruction to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations and Trade Fixtures, which cannot
reasonably be repaired In 3 months or less from the date of the damage or
destruction and/or the cost thereof exceeds a sum equal to 6 month's Base Rent.
Lessor shall notify Lessee In writing within 30 days from the date of the damage
or destruction as to whether or not the damage is Partial or Total. (c) "Insured
Loss" shall mean damage or destruction to improvements on the Premises, other
than Lessee Owned Alterations and Utility Installations and Trade Fixtures,
which was caused by an event required to be covered by the Insurance described
in Paragraph 8.3(a), Irrespective of any deductible amounts or coverage limits
Involved. (d) 'Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, Including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation. \4 (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 Partial Damage - Insured Loss. If a Premises Partial Damage that Is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lesson Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, In such event, Lessor shall make any applicable
insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required Insurance was not In force or the
insurance proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly contribute the shortage in proceeds as and when required to
complete said repairs. In the event, however, such shortage was due to the fact
that, by reason of the unique nature of the Improvements, full replacement cost
Insurance coverage was not commercially reasonable and available. 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 10 days following
receipt of written notice of such shortage and request Therefor. It Lessor
receives said funds or adequate assurance thereof within said 10 day period, the
party responsible for making the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If
such funds or assurance are not received, Lessor may nevertheless elect by
written notice to Lessee within 10 days thereafter to: (t) make such restoration
and repair as is commercially reasonable with Lessor paying any shortage In
proceeds, In which case this Lease shall remain in full force and effect, or
(if) have this Lease terminate 30 days thereafter. Lessee shall not be entitled
to reimbursement of any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject
to Paragraph 9.3, 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. It a Premises Partial Damage that Is not an
Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in
which event Lessee shall make the repairs at Lessee's expense), Lessor may
either: (I) repair such damage as soon as reasonably possible at Lessor's
expense, In which event this Lease shell continue in full force and effect, or
(It) terminate this Lease by giving written notice to Lessee within 30 days
after receipt by Lessor of knowledge of the occurrence of such damage. Such
termination shall be effective 60 days following the date of such notice. In the
event Lessor elects to terminate this Lease, Lessee shall have the right within
10 days after receipt of the termination notice to give written notice to Lessor
of Lessee's commitment to pay for the repair of such damage without
reimbursement from Lessor, Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days after making such commitment. In
such event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible after the required
funds are available. If Lessee does not make the required commitment, this Lease
shall terminate as of the date specified in the termination notice.
9.4 Total Destruction. Notwithstanding any other provision hereof, If a Premises
Total Destruction occurs, this Lease shall terminate 60 days following such
Destruction. If the damage or destruction was caused by the gross negligence or
willful misconduct of Lessee, Lessor shall have the right to recover Lessors
damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage Near End of Term. If at any lime during the last 6 months of this
Lease there Is damage for which the cost to repair exceeds one month's Base
Rent. whether or not en insured Loss, Lessor may terminate this Lease effective
60 days following the date of occurrence of such damage by giving a written
termination notice to Losses within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, If Lessee at that time has an execrable
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 (1) the date which Is 10 days after
9
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 Lassoes commercially reasonable expense, repair such damage as soon as
reasonably possible and this Lease shall continue in full force and effect. If
Lessee falls to exercise such option and provide such funds or assurance during
such period, then this Lease shall terminate on the date specified in the
termination notice and Lessee's option shall be extinguished.
9.6 Abatement of Rent; Lessee's Remedies.
(a) Abatement In the event of Premises Partial Damage or Premises Total
Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediatlon or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value Insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall
have no liability fur any such damage, destruction, remediation, repair or
restoratlon except as provided herein. (b) Remedies. II Lessor shall be
obligated to repair or restore the Premises and does not commence, In a
substantial and meaningful way, such repair or restoration within 90 days after
such obligation shall accrue, 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 e date not less than e0 days following the giving of such notice. If Lessee
gives such notice and such repair or restoration is not commenced within 30 days
thereafter, this Lease shall terminate as of the date specified In said notice.
If the repair or restoration is commenced within such 30 days, tills Lease shall
continue in full force and effect. 'Commence" shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.
9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to
Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to
Lessor. Lessor shall, in addition, return to Lasses so much of Lessees Security
Deposit as has not been, or is not then required to be, used by Lessor.
Waive Statutes. Lessor and Lessee agree that the terms of this Lease shall
govern the effect of any damage to or destruction of the Premises with respect
to the termination of this Lease and hereby waive the provisions of any present
or future statute to the extent inconsistent herewith,
10. - Real Property Taxes.
10.1 Definition. As used herein, the term "Real Property Taxes" shall include
any form of assessment; real estate, genera , ordinary or extraordinary, or
rental levy or tax (other than inheritance, personal income or estate taxes);
improvement bond; and/or license xxx imposed upon or levied against any legal or
equitable interest of Lessor in the Project, Lessor's right to other income
therefrom, and/or Lessor's business of leasing, by any authority having the
direct or Indirect power to tax and where the funds are generated with reference
to the Project address and where the proceeds so generated are to be applied by
the city, county or other local taxing authority of a jurisdiction within which
the Project is located. 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 during the term of this Lease, including but not limited to,
a change In the ownership of the Project or any portion thereof or a change in
the Improvements thereon. In calculating Real Property Taxes for any calendar
year, the Real Property Taxes for any real estate tax year shall be Included in
the calculation of Real Property Taxes for such calendar year based upon the
number of days which such calendar year and tax year have In common.
10.2 Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to
the Project, 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.
10.3 Additional Improvements. Common Area Operating Expenses shall not include
Real Property Taxes specified in the tax assessor's records and work shoots as
being caused by additional Improvements placed upon the Project by other lessees
or by Lessor for the exclusive enjoyment of such other lessees. Notwithstanding
Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time Common
Area Operating Expenses are payable under Paragraph 4.2, the entirety of any
increase in Real Property Taxes If assessed solely by reason of Alterations,
Trade Fixtures or Utility Installations placed upon the Promises by Lessee or at
Lessee's request,
10.4 Joint Assessment. If the Building Is not separately assessed, Real Property
Taxes allocated to the Building shell be an equitable proportion of the Real
Properly 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 Personal 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. 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. II 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 10 days after receipt of a written
statement setting forth the taxes applicable to Lessee's property. it.
11. Utilities. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
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Premises, together with any taxes thereon. Notwithstanding the provisions of
Paragraph 4.2, If at any time In Lessor's sole judgment, Lessor determines that
Lessee is using a disproportionate amount of water, electricity or other
commonly metered utilities, or that Lessee Is generating such a large volume of
trash as to require an Increase in the size of the dumpster and/or an Increase
In the number of times per month that the dumpster Is emptied, then Lessor may
increase Lessee's Base Rent by an amount equal to such Increased costs.
12. Assignment and Subletting.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation or law assign, transfer,
mortgage or encumber (collectively, "assign or assignment") or sublet all or any
part of Lessee's Interest in this Lease or In the Premises without Lassoes poor
written consent.
(b) A change in the control of Lessee shall constitute an assignment requiring
consent. The transfer, on a cumulative basis, of 25% or more of the voting
control of Lessee shall constitute a change in control for this purpose.
(c) The Involvement of Lessee or Its assets In any transaction, or series of
transactions (by way at merger, sale, acquisition, financing, transfer,
leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee by an amount greater than 25%
of such Net Worth as It was represented at the time of the execution of this
Lease or at the lime of the most recent assignment to which Lessor has
consented, or as it exists immediately poor to said transaction or transactions
constituting such reduction, whichever was or Is greater, shall he considered an
assignment of this Lease to which Lessor may withhold its consent. 'Net Worth of
Lessee" shall mean the net worth of Lessee (excluding any guarantors)
established under generally accepted accounting principles.
(d) An assignment or subletting without consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unapproved assignment or subletting as a noncurable Breach, Lessor may
either: (f) terminate this Lease, or (II) upon 30 days written notice, increase
the monthly Base Rent to 110% of the Base Rent then In affect. Further, In the
event of such Breach and rental adjustment, (I) the purchase price of any option
to purchase the Premises held by Lessee sham be subject to similar adjustment to
110% of the price previously in affect, and (it) all fixed and non-fixed rental
adjustments scheduled during the remainder of the Lease term shall be increased
to 110% of the scheduled adjusted rent,
(a) Lessee's remedy for any breach of 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 Lassoes consent, no assignment or subletting shall: (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, or (lit) alter the primary liability of Lessee for the
payment of Rent or for the performance of any other obligations to be performed
by Lessee.
(b) Lessor may accept 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 Rent or performance shall constitute a waiver or estoppel of
Lessor's right to exercise its remedies for Lessee's Default or Breach.
(c) Lessor's consent to any assignment or subletting shall not constitute a
consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may proceed directly
against Lessee, any Guarantors or anyone else responsible for the performance of
Lessee's obligations under this Lease, including any assignee or sublessee,
without first exhausting Lessor's remedies against any other person or entity
responsible therefore to Lessor, or any security held by Lessor.
(a) Each request for consent to an assignment or subletting shall be in writing,
accompanied by information relevant to Lessors determination as to the financial
and operational responsibility and appropriateness of the proposed assignee or
sublessee, including but not limited to the Intended use and/or required
modification of the Premises, If any, together with a fee of $1,000 or 10% of
the current monthly Base Rent applicable to the portion of the Premises which is
the subject of the proposed assignment or sublease, whichever is greater, as
consideration for Lessors considering and processing said request. Lessee agrees
to provide Lessor with such other or additional information and/or documentation
as may be reasonably requested.
(f) Any assignee of, or subleases under, this Lease shall, by reason of
accepting such assignment or entering Into such sublease, be deemed 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 to In writing.
(g) Lessors consent to any assignment or subletting shall not transfer to the
assignee or subleases any Option granted to the original Lessee by this Lease
unless such transfer is specifically consented to by Lessor in writing. (Sae
Paragraph 39.2)
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 end 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 Rent payable on any sublease, and Lessor may collect such Rent and apply
same toward Lessee's obligations under this Lease; provided, however, that until
a Breach shall occur In the performance of Lessee's Obligations, Lessee may
collect said Rent. Lessor shall not, by reason of the foregoing or any
assignment of such sublease, nor by reason of the collection of Rent, be deemed
liable to the sublessee for any failure of Lessee to perform and comply with any
of Lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes
and directs any such subleases, upon receipt of a written notice from Lessor
stating that a Breach exists in the performance of Lessee's obligations under
this Lease, to pay to Lessor all Rent due and to become due under the sublease.
Subleases shall rely upon any such notice from Lessor and shall pay all Rents to
Lessor without any obligation or right to inquire as to whether such Breach
exists, notwithstanding any claim from Lessee to the contrary.
(b) In the event of a Breath by Lessee. Lessor may, at its option, require
subleases to attorn to Lessor, In which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the
exercise of said option to the expiration of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or far any prior Defaults
or Breaches of such sublessor.
(c) Any matter requiring the consent of the sublessor under a sublease shall
also require the consent of Lessor.
(d) No sublessee shall further assign or sublet all or any part of the Premises
without Lessor's poor written consent.
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(o) Lessor shelf deliver a copy of any notice of Default or Breach by Lessee to
the Subleases, who shall have the right to cure the Default at 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 subleases.
13. Default; Breach; Remedies.
13.1 Default; Breach. A "Default" Is defined as a failure by the Lessee to
comply with or perform any of the terms, covenants, conditions or Rules and
Regulations under this Lease. A "Breach" is defined as the occurrence of one or
more of the following Defaults, and the failure of Lessee to cure such Default
within any applicable grace period:
(a) The abandonment of the Promises; or the vacating of the Premises
without providing a commercially reasonable level of security, or where the
coverage of the property insurance described In Paragraph 8.3 Is jeopardized as
a result thereof, or without providing reasonable assurances to minimize
potential vandalism.
(b) The failure of Lessee to make any payment of Rent or any Security
Deposit required to be made by Lessee hereunder, whether to Lessor or to a third
party, when due. to provide reasonable evidence of insurance or surety bond, or
to fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of 3 business days following
written notice it) Lessee.
(c) The failure by Lessee to provide (1) reasonable written evidence of
compliance with Applicable Requirements, (ii) the service contracts, (iii) the
rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 41
(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 10 days following written notice to Lessee.
(d) A Default by Lessee as 10 the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof,
other than those described in subparagraphs 13.1(a), (b) or (c), above, where
such Default continues for a period of 30 days after written notice; provided,
however, that if the nature of Lessees Default is such that more than 30 days
are reasonably required for its cure, then it shall not be deemed to be a Breach
if Lessee commences such cure within said 30 day period and thereafter
diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making of
any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "debtor" as defined in 11 U.S.C. ss. 101 or any successor statute
thereto (unless, in the case of a petition filed against Lessee, the same is
dismissed within 60 days); (iii) the appointment of a trustee or receiver to
take possession of substantially all of Lessee's assets located at the Premises
or of Lessee's Interest in this Lease, where possession is not restored to
Lessee within 30 days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Lessee's assets located al the Premises or of
Lessee's interest in this Lease, where such seizure is not discharged within 30
days; provided, however, in the event that any provision of this subparagraph
(a) is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of Lessee or of any
Guarantor given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory basis, and
Lessee's failure, within 60 days following written notice of any such event, to
provide written alternative assurance or 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 of its affirmative duties or
obligations, within 10 days after written notice (or In case of an emergency,
without notice), Lessor may, at its option, 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 upon receipt of Invoice therefor. I f any check given to
Lessor by Lessee shall not be honored by the bank upon which it Is drawn,
Lessor, at its option, may require all future payments to be made by Lessee to
be by cashiers check. In the event of a Breach. Lessor may, 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:
(a) Terminate Lessee's right to possession of the Promises by any lawful means,
in which case this Lease shall terminate and Lessee shall immediately surrender
possession to Lessor. In such event Lessor shall be entitled to recover from
Lessee: (I) the unpaid Rent which had been earned at the time of termination;
(if) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the lime 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 Walking, Including necessary renovation and alteration of
the Premises, reasonable attorneys' fees, and that portion of any leasing
commission paid by Lessor In connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (Iii) of the Immediately preceding sentence shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of the District within which the Premises are located at the time of award
plus one percent, Efforts by Lessor to mitigate damages caused by Lessee's
Breach of this Lease shall not waive Lessors right to recover damages under
Paragraph 12. If termination of this Lease Is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding any 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, if a
notice and grace period required under Paragraph 13.1 was not previously given,
a notice to pay rent or quit, or to perform or quit given to Lessee under the
unlawful detainer statute shall also constitute the notice required by Paragraph
13.1, In such case, the applicable grace period required by Paragraph 13.1 and
the unlawful detainer statute shall run concurrently, and the failure of Lessee
to cure the Default within the greater of the two such grace periods shall
12
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 and recover the Rent as
it becomes due, in which event Lessee may sublet or assign, subject only to
reasonable limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Lessors interests, shall not constitute
a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the laws or
judicial decisions of the state wherein the Premises are located. 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 provision
of this Lease as to matters occurring or accruing during the term hereof or by
reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture. Any agreement for free or abated rent or other
charges, 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 ail
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Lessee, any such Inducement Provision shelf 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, 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 shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so slated in writing by Lessor
at the time of such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that tare payment by Lessee of
Rent 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 arid accounting charges, and late charges
which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall
not be received by Lessor within 5 days after such amount shall be due, then,
without any requirement for notice to Lessee. Lessee shall pay to Lessor a
one-time late charge equal to 10% of each such overdue amount or $100, whichever
Is greater. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of such late
payment. 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 the exercise of any of the other rights end remedies granted hereunder.
In the event that a late charge Is payable hereunder, whether or not collected,
for 3 consecutive installments of Base Rent, then notwithstanding any provision
of this Lease to the contrary, Base Rent shall, at Lessors option, become due
and payable quarterly In advance.
13.5 Interest. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base
Rent) or within 30 days following the date on which It was due for non-scheduled
payment, shall bear Interest from the date when due, as to scheduled payments,
or the 31st day after It was due as to non-scheduled payments. The interest
("Interest") charged shall be equal to the prime rate reported In the Wall
Street Journal as published closest prior to the date when due plus 4%, but
shall not exceed the maximum rate allowed by law. Interest is payable In
addition to the potential fate charge provided for in Paragraph 13.4.
13.6 Breach by Lessor.
(a) Notice of Breach. 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, a reasonable time shall in
no event be less than 30 days after receipt by Lessor, and any Lender whose name
and address shall have been furnished 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 Lassoes obligation Is such
that more than 30 days are reasonably required for its performance, then Lessor
shall not be In breach It performance Is commenced within such 30 day period
said thereafter diligently pursued to completion. (b) Performance by Lessee on
Behalf of Lessor. In the event that neither Lessor nor Lender cures said breech
within 30 days after receipt of said notice, or if having commenced said cure
they do not diligently pursue it to completion, then Lassos may steel to cure
said breach at Lessee's expense end offset from Rent an amount equal to the
greater of one month's Base Rent or the Security Deposit, and to pay an excess
of such expense under protest, reserving Lessee's right to reimbursement from
Lessor. Lessee shall document the cost of said cure and supply said
documentation to Lessor.
14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "Condemnation"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than 10% of the floor area of the Unit, or more than 25%
of Lessee's Reserved Parking Spaces, is taken by Condemnation, Lessee may, at
Lessee's option, to be exercised in writing within 10 days after Lessor shall
have given Lessee written notice of such taking (or in the absence of such
notice, within 10 days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning Authority takes
much 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 proportion
to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether
such award shall be Media as compensation for diminution In vale a leasehold,
the value of the part taken, or for severance damages; provided, however, that
Lessee shall be entitled to any compensation for lessee's relocation expenses,
loss of business goodwill and/or Trade Fixtures, without regard to whether or
not this Lease is terminated pursuant to the provisions of this Paragraph. All
Alterations and Utility Installations made to the Premises by Lessee, far
purposes of Condemnation only, shall be considered the property of the Lessee
and Lessee shall be entitled to any and all compensatlon which is payable
therefor. In the event that this Lease is not terminated by reason of the
Condemnation, Lessor shall repair any damage to the Premises caused by such
Condemnation.
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15. Brokerage Fees.
15.1 Additional Commission. In addition to the payments owed pursuant to
Paragraph 1.10 above, and unless Lessor and the Brokers otherwise agree In
writing, Lessor agrees chat: (a) it Lessee exercises any Option, (b) If Lessee
acquires from Lessor any rights to the Premises or other premises owned by
Lessor and located within the Project, (c) It Lessee remains In possession of
the Premises, with the consent of Lessor, after the expiration of this Lease, or
(d) If Base Rent Is increased, whether by agreement or operation of an
escalation clause herein, then, Lessor shall pay Brokers a fee in accordance
with the schedule of the Brokers in effect at the lime of the execution of this
Lease.
15.2 Assumption of Obligations. Any buyer or transferee of Lessor's interest in
this Lease shall be deemed to have assumed Lessor's obligation hereunder:
Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.10,
15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for
brokerage fees pertaining to this Lease when due, then such amounts shall accrue
Interest. In addition, If Lessor fails to pay any amounts to Lessee's Broker
when due, Lessee's Broker may send written notice to Lessor and Lessee of such
failure and if Lessor fails to pay such amounts within 10 days after said
notice, Lessee shall pay said monies to Its Broker and offset such amounts
against Rent. In addition, Lessee's Broker shall be deemed to be a third party
beneficiary of any commission agreement entered into by and/or between Lessor
and Lassoes Broker for the limited purpose of collecting any brokerage tee owed.
15.3 Representations and Indemnities of Broker Relationships. 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 the Brokers, if any) in connection
with this Lease, and that no one other then said named Brokers is entitled to
any commission or finder's tee In connection herewith. Lessee and Lessor do each
hereby agree to Indemnity, 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, attorneys'
fees reasonably Incurred with respect thereto.
16. Estoppel Certificates.
(a) Each Party (as "Responding Party") shall within 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 form similar to the then most
current "Estoppel Certificate' 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.
(b) If the Responding Party shall fail to execute or deliver the Estoppel
Certificate within such 10 day period, the Requesting Party may execute an
Estoppel Certificate stating that: (I) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party's performance, and (iii)
if Lessor is the Requesting Party, not more than one month's rent has been paid
In advance. Prospective purchasers and encumbrances may rely upon the Requesting
Party's Estoppel Certificate, and the Responding Party shall be estopped from
denying the truth of the facts contained in said Certificate.
(0 ) If Lessor desires to finance, refinance, or sell the Premises, or any part
thereof, Lessee and all Guarantors shall deliver 1o any potential lender or
purchaser designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, Including but not limited to Lessee's
financial statements for the past 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. Definition of Lessor. The term "Lessor" as used herein shall mean the owner
of owners at the lime In question of the fee title to the Premises, or, If this
Is a sublease, of the Lessee's Interest in the prior lease, In the event of a
transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Except as provided In Paragraph 15, 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 he
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined. Notwithstanding the above, and subject to the provisions of Paragraph
20 below, the original Lessor under this Lease, and all subsequent holders of
the Lessor's interest In this Lease shall remain liable and responsible with
regard to the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined In Paragraph 6.2 above.
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. Days. Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Lease shall moan and refer to calendar days.
20. Limitation on Liability. Subject to the provisions of Paragraph 17 above,
the obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, the Individual partners of Lessor or Its or their
Individual partners, directors, officers or shareholders, and Lessee shall look
to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse
against the Individual partners of Lessor, or Its or their individual partners,
directors, officers or shareholders, or any of their personal assets for such
satisfaction.
21. 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.
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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 use, 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. The liability (including court costs and attorneys'
fees), of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to en amount up to the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.
23. Notices.
23.1 Notice Requirements. All notices required or permitted by this Lease or
applicable law shall be in writing and may be delivered In person (by hand or by
courier) or may be sent by regular, certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid, or by facsimile transmission, and
shall be deemed sufficiently given If served in a manner specified in this
Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease
shall be that Party's address for delivery or mailing of notices. Either Party
may by written notice to the other specify a different address for notice,
except that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate In writing.
23.2 Date of Notice. Any notice sent by registered or certified mail, return
receipt requested, shall be deemed given on the xxxx of delivery shown on the
receipt card, or if no delivery date Is shown, the postmark thereon. If sent by
regular mall the notice shall be damned given 46 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mall or overnight courier that guarantee next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices transmitted by facsimile transmission or similar
means shall be deemed delivered upon telephone confirmation of receipt
(conflrmation report from fax machine is sufficient), provided a copy Is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.
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 of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any 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. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breech by Lessee. Any payment 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. Disclosures Regarding The Nature of a Real Estate Agency Relationship.
(a) When entering into a discussion with a real estate agent regarding a real
estate transaction, a Lessor or Lessee should from the outset understand whet
type of agency relationship or representation it has with the agent or agents in
the transaction, Lessor and Lessee acknowledge being advised by the Brokers in
this transaction, as follows:
(I) Lessor's Agent. A Lessor's agent under a listing agreement with the Lessor
acts as the agent for the Lessor only. A Lessor's agent or subagent has the
following affirmative obligations! To the Lessor A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee
and the Lessor: (a) Diligent exercise of reasonable skills end care in
performance of the agent's duties. (0) A (Jury or honest and fair dealing and
good faith. (c) A duty to disclose all facts known to the agent materially
affecting the value or desirability of the property that are not known to, or
within the diligent attention and observation of, the Parties. An agent is not
obligated to reveal to either Xxxxx any confidential information obtained from
the other Party which does not involve the affirmative duties set forth above.
(II) Lessee's Agent. An agent can agree to act as agent for the Lessee only. In
these situations, the agent Is not the Lessor's agent, even it by agreement the
agent may receive compensation for services rendered, either In full or In part
from the Lessor. An agent acting only for a Lessee has the following affirmative
obligations. To the Lessen: A fiduciary duty of utmost care, integrity, honesty,
and loyalty in dealings with the Lessee. To the Lessee and the Lessor: (e)
Diligent exercise of reasonable skills and care In performance of the agent's
duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to
disclose all facts known to the agent materially affecting the value or
desirability of the property that are not known to, or within the diligent
attention and observation of, the Patties, An agent Is not obligated to reveal
to either Party any confidential information obtained from the other Party which
does not Involve the affirmative duties set forth above.
(iii) Agent Representing Both Lessor and Lessee. A real estate agent, either
acting directly or through one or more associate licenses, can legally be the
agent of both the Lessor and the Lessee in a transaction, but only with the
knowledge and consent of both the Lessor and the Lessee. In a dual agency
situation, the agent has the following affirmative obligations to both the
Lessor and the Lessee: (a) A fiduciary duty of utmost care, integrity, honesty
and loyalty in the dealings with either Lessor or the Lessee. (b) Other duties
to the Lessor and the Lessee as stated above In subparagraphs Q) or (ii). In
representing both Lessor and Lessee, the agent may not without the express
permission of the respective Party, disclose to the other Party that the Lessor
will accept rent in an amount less than that indicated in the listing or that
the Lessee is willing to pay a higher rent than that offered. The above duties
at the agent in a real estate transaction do not relieve a Lessor or Lessee from
the responsibility to protect their own interests. Lessor and Lessee should
carefully read all agreements to assure that they adequately express their
understanding of the transaction. A real estate agent is a person qualified to
advise about real estate. If legal or tax advice is desired, consult a competent
professional.
(b) Brokers have no responsibility with respect to any default or
breach hereof by either Party. The liability (including court costs and
attorneys' fees), of any Broker with respect to any breach of duty, error or
15
omission relating to this Lease shall not exceed the foe received by such Broker
pursuant to this Lease; provided, however, that the foregoing limitation on each
Broker's liability shall not be applicable to any gross negligence or willful
misconduct of such Broker.
(c) Buyer and Seller agree to identify to Brokers as "Confidential" any
communication or information given Brokers that is considered by such Party to
be confidential.
26. No Right To Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
150% of the Base Rent applicable immediately preceding the expiration or
termination. Nothing contained herein shall be construed as 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; Construction of Agreement. AN
provisions of this Lease to be observed or performed by Lessee are both
covenants and conditions. In construing this Lease, all headings and titles are
for the convenience of the Parties only and shall not be considered a part of
this Lease. Whenever required by the context, the singular shall include the
plural and vice versa. This Lease shall not be construed as if prepared by one
of the Parties, but rather according to its fair meaning as a whole, as it both
Parties had prepared it.
29. Binding Effect Choice of Low. 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 he Initiated in the county in which
the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be subject
and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, 'Security Device'). now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as 'Lender") shall have no liability or obligation to perform any of
the obligations of Lessor under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of its Security
Device by giving written notice thereof to Lessee, whereupon this Lease and such
Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.
30.2 Attornment. In the event that Lessor transfers title to the Premises, or
the Premises are acquired by another upon the foreclosure or termination of a
Security Device to which this Lease Is subordinated (I) Lessee shell, subject to
the non-disturbance provisions of Paragraph 30.3, atton to such new owner, and
upon request, enter into a new lease, containing all of the terms and provisions
of this Lease, with such new owner for the remainder of the term hereof, or, at
the election of such new owner, this Lease shall automatically become a new
Lease between Lessee and such new owner, upon all of the terms and conditions
hereof. for the remainder of the term hereof, and (ii) Lessor shall thereafter
be relieved of any further obligations hereunder and such new owner shall assume
all of Lessor's obligations hereunder, except that such new owner shall not: (a)
be liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership; (b) be subject to any offsets or
defenses which Lessee might have against any prior lessor, (c) be bound by
prepayment of more than one month's rent, or (d) be liable for the return of any
security deposit paid to any prior lessor.
30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor
after the execution of this Lease, Lessee's subordination of this Lease shall be
subject to receiving a commercially reasonable non-disturbance agreement (a
"Non-Disturbance Agreement") from the Lender which Non-Disturbance Agreement
provides that Lessee's possession of the Premises, 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. Further,
within 80 days alter the execution of this Lease, Lessor shall use Its
commercially reasonable efforts to obtain a Non-Disturbance Agreement from the
holder of any pre-existing Security Device which Is secured by the Premises. In
the even) that Lessor is unable to provide the Non-Disturbance Agreement within
said 80 days, then Lessee may, at Lessee's option, directly contact Lender and
attempt to negotiate for the execution and delivery of a Non-Disturbance
Agreement.
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 the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination, attainment and/or Non-Disturbance Agreement provided for herein.
31. Attorneys' Fees. If any Party or Broker brings an action or proceeding
involving the Premises whether founded In tort, contract or equity, or to
declare rights hereunder, the Prevailing Party (as hereafter defined) In any
such proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys' fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term, 'Prevailing Party' shall Include, without limitation, a
Party or Broker who substantially obtains or defeats the relief sought, as the
case may be, whether by compromise, settlement, judgment, or the abandonment by
the other Party or Broker of Its claim or defense. The attorneys' fees award
shall not be computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys' tees reasonably incurred, in addition,
Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the
16
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 ($200 is a reasonable minimum per
occurrence for such services and consultation).
32. Lessor's Access; Showing Promises; 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 limes for the purpose of showing the same to
prospective purchasers, lenders, or tenants, and making such alterations,
repairs, improvements or additions to the Premises as Lessor may deem necessary.
All such activities shall be without abatement of rent or liability to Lessee.
Lessor may at any time place on the Premises any ordinary "For Sale" signs and
Lessor may during the last 8 months of the term hereof place on The Premises any
ordinary 'For Lease' signs. Lasses may at any time place on the Premises any
ordinary "For Sublease" sign.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction
upon the Premises Without Lessor's prior written consent. Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether to
permit an auction.
34. Signs. Except for ordinary 'For Sublease' signs which may be placed only on
the Premises, Lessee shall not place any sign upon the Project without Lessor's
prior written consent. All signs must comply with all Applicable Requirements.
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, ore termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Promises; provided, however, that Lessor may elect in continue any one or all
existing subtenancies. Lessor's failure within 10 days following any such event
to elect 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. Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required in an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Lessor's actual reasonable coals
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, 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 upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act, assignment or subletting 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. The failure to specify herein any particular
condition to Lessor's consent shall not preclude the imposition 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. In the
event that either Party disagrees with any determination made by the other
hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish Its reasons in writing and in reasonable detail
within 10 business days following such request. 37. Guarantor.
37.1 Execution. The Guarantors, if any, shall each execute a guaranty In the
form most recently published by the American Industrial Rest Estate Association,
and each such Guarantor shall have the same obligations as Lessee under this
Lease.
37.2 Default. II shall constitute a Default of the Lessee It any Guarantor falls
or refuses, upon request to provide: (a) evidence of the execution of the
guaranty, Including the authority of the party signing on Guarantors behalf to
obligate Guarantor, and In the ;see of a corporate Guarantor, a certified copy
of a resolution of its board of directors authorizing the making of such
guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d)
written confirmation that the guaranty is still in effect.
38. Quiet Possession. Subject to payment by Lessee of the Rent and performance
of all of the covenants, conditions and provisions on Lessee's part to b served
and performed under this Lease, Lessee shall have quiet possession and quiet
enjoyment of the Premises during the term hereof. 39 Options. If Lessee is
granted an option, as defined below, then the following provisions shall apply.
39.1 Definition. 'Option" shall mean: (a) the right to extend the term of or
renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (b) the right of first refusal or first offer to lease
either the Premises or other property of Lessor; (c) the right to purchase or
the right of first refusal to purchase the Premises or other property of Lessor.
39.2 Options Personal To Original Lasses. Any Option granted to Lessee in this
Lease Is personal to the original Lessee, and cannot be assigned or exercised by
anyone other than said original Lessee and only while the original Lessee Is in
full possession of The Premises and, if requested by Lessor, with Lessee
certifying that Lessee has no intention of thereafter assigning or subletting.
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 have been validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default and continuing until said
Default Is cured, (ii) during the period of time any Rent is unpaid (without
regard to whether notice thereof is given Lessee), (iii) during the time Lessee
is In Breach of this Lease, or (Iv) In the event that Lessee has boon given 3 or
more notices of separate Default, whether or not the Defaults are cured, during
the 12 month period immediately preceding the exercise of the Option.
(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(e).
17
(c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, it, after such
exercise and prior to the commencement of the extended term, (i) Lessee fails to
pay Rant for a period of 30 days offer such Rent becomes due (without any
necessity of Lessor to give notice thereof), (ii) Lessor gives to Lessee 3 or
more notices of separate Default during any 12 month period, whether or not the
Defaults are cured, or (Iii) it Lessee commits a Breech of this Lease.
40. Security Measures. Lessee hereby acknowledges that the Rent 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.
41 . Reservations. Lessor reserves the right: (i) to grant, without the consent
or joinder of Lessee, such easements, rights and dedications that Lessor deems
necessary, (ii) to cause the recordation of parcel maps and restrictions, and
(111) to create and/or install new utility raceways, so long as such easements,
rights, dedications, maps, restrictions, and utility raceways do not
unreasonably interfere with the use of the Promises by Lessee. Lessee agrees to
sign any documents reasonably requested by Les sor to effectuate such rights.
42. Performance Under Protest. If at anytime a dispute shall arise as to any
amount or sum of money lobe 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 pan 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.
43. Authority. If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, 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 an its behalf. Each party shall, within 30
days after request, deliver to the other party satisfactory evidence of such
authority.
44. 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.
45. Offer. Preparation of this Lease by either party or their agent and
submission of same to the other Party shall not be deemed an alter to tease to
the other Party. This Lease is not Intended to be binding until executed and
delivered by all Parties hereto.
46. Amendments. This Lease may be modified only in writing, signed by the
Parties In Interest at the time of the modification. 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 a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.
47. Multiple Parties. If more than one person or entity is named herein as
either Lessor or Lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.
48. Waiver of Jury Trial. The Parties hereby waive their respective rights to
trial by jury in any action or proceeding involving the Properly or arising out
of this Agreement.
49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation
and/or the Arbitration of all disputes between the Parties and/or Brokers
arising out of this Lease 1 Is (R) Is not attached to this Lease. 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.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE
AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S
INTENDED USE. WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN
CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY
WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED.
18
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures. Executed at:
Executed at: El Cajun, California Executed at: San Diego, California
on: 4/4/03 on 3/31/03
By LESSOR: By LESSEE:
POMERADO LEASING NO. 3 MILSPERING CORPORATION, a California
------------------------------- --------------------------------------------
corporation dba "American Medical Wholesale"
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx Xxxxxxxxx
Name Printed: Xxxxxxx X Xxxxxx Name Printed: Xxxxxxx Xxxxxxxxx
------------------------------- --------------------------------------------
Title: President Title: President and CEO
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx Xxxxxx
------------------------------- --------------------------------------------
Name Printed: Xxxxxx X. Xxxxxxxx Name Printed: Xxxxxxx Xxxxxx
Title: Secretary Title: Vice President, Operations
Address: 000 Xxxx Xxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
These forms are often modified to meat changing requirements of law and needs of
the Industry. Always write or call to make sure you are utilizing the moat
current form: American Industrial Real Estate Association, 000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000. (213) 687-877T .
19
ADDENDUM TO LEASE
This Addendum to Lease ("Addendum") is made by and between POMERADO LEASING
NO.3, A California Limited Partnership ("LESSOR") and MILSPERING CORPORATION, a
California Corporation, dba "American Medical Wholesale" ("LESSEE") and is
intended to supplement that certain Standard Industrial/Commercial Multi-Tenant
Lease-Net between LESSOR and LESSEE dated March 14, 2003, ("Lease") to which
this Addendum is annexed. If there is any inconsistency between this Addendum
and the Lease, the terms of this Addendum shall supersede and control. LESSOR
and LESSEE agree as follows:
1. Premises and Building Shell Description. "Building" means the freestanding
building denoted on the site plan ("Site Plan"), which Is annexed to this
Addendum as EXHIBIT "1 ", as "Building "A" and the "Premises" means and refers
to the portion of the Building as depicted in EXHIBIT "2" which is being leased
to LESSEE pursuant to this Lease.
1.1 Planned Size and Final Measurement Building "A" contains approximately
42,191 rentable square feet of which the Premises will consist of approximately
20,904 rentable square feet. The total project contains approximately 100.838
rentable square feet. All square footage measurements are from the root "drip
line" and in accordance with the Building Owners and Managers Association
International ("BOMA") standards.
2. Effective Date/Term/Commencement Date. Notwithstanding any other provision of
the Lease, this Lease shall be effective upon execution by LESSOR and LESSEE
('Effective Date") and shall constitute a legally binding contract for LESSOR to
deliver possession of the Premises in accordance with the requirements of this
Lease and for LESSEE to accept possession and pay the rentals beginning upon the
Commencement Date (as defined below).
2.1 Lease Term. The initial term ("Original Term") of the Lease shall be a
period of time beginning on the Commencement Date and ending sixty (60)
consecutive months later; provided, however, if the Commencement Date occurs
other than on the first day of a calendar month, the Original Term shall be
deemed extended for a period of time equal to the number of days between the
Commencement Date and the beginning of the first full calendar month following
the Commencement Date.
2.2 "Lease Year" Defined. The term "Lease Year" means consecutive twelve (12)
month periods during the Lease Term; provided, however, in the case of the first
Lease Year, such Lease Year shall be a period of time beginning on the
Commencement Date and ending twelve (12) consecutive months thereafter, and each
subsequent Lease Year shall be determined from the anniversary of the expiration
of such first Lease Year; provided, further, however, if the Commencement Date
occurs other than on the first day of a calendar month, the first Lease Year
shall be deemed extended for a period of time equal to the number of days
between the Commencement Date and the beginning of the first full calendar month
following the Commencement Date.
3. Rent. "Rent" for the Premises shall be the sum of (a) the Base Rent described
In subsection 3.1 of this Addendum, subject to adjustment as provided in
subsection 3.2 of this Addendum, (b) LESSEE'S Share of Operating Expenses as
defined in Section 4.2 of the Lease, (c) excess Tenant Improvement Amortization,
if applicable, as provided In subsection 5.2 of this Addendum, and (d) any other
amounts becoming payable by LESSEE under the Lease. The Rent shall be payable on
the first day of each month.
3.1 Bass Rent. The monthly Base Rent set forth in Paragraph 1.5 of the Lease for
the first Lease Year (as defined above) of the Original Term represents the full
Base Rent payable upon the Commencement Date determined by multiplying the
amount [INSERT] per rentable square foot by the total 20,904 rentable square
feet of the Premises. If there is a variance in the rentable square footage of
the Premises as actually constructed, the Base or the first Lease Year shall be
adjusted based on the actual rentable square feet within the Premises multiplied
times rentable square foot.
3-2 Increase In Base Rent. The Base Rent shall be increased at the beginning of
the second Lease Year, and at the beginning of each Lease Year thereafter
pursuant to the following rent schedule:
First Lease Year
Second Lease Year Third Lease Year Forth Lease Year Fifth Lease Year
4. LESSEE'S Payment of Operating Expenses. Beginning on the Commencement Date,
in addition to payment of the Base Rent, LESSEE shall be responsible for payment
of all "Operating Expenses" (as defined below). The term "Operating Expenses"
means the following expenses and costs of the ownership and operation of the
Premises: (a) amounts payable for maintenance contracts required to be procured
pursuant to Paragraph 7.1(b) of the Lease (but not the cost of repairs or
replacements payable by LESSEE). (b) insurance required to be maintained by
LESSOR for LESSEE under the Lease (exclusive of the insurance maintained by
LESSEE under Paragraph 8.4 of the Lease), (c) Real Property Taxes, (d)
reasonable reserves for replacement of the roof, reasonable reserves for
exterior building painting, and reasonable reserves for paving maintenance, (a)
assessments and dues payable to any association or other governing body
established pursuant to any covenants, conditions or restrictions affecting the
Premises as of the date of the Lease, (f) payment of Xxxxx Xxxx Bond
installments, (g) afire sprinkler monitoring contract if payable separate from
the fire sprinkler maintenance contract described in Paragraph 7.1(b) of the
Lease, (h) the Administrative Fee described in subsection 4.3 of this Addendum,
and (i) the reasonable amount of other ordinary and necessary expenses and costs
of operation of the Premises, which are customarily incurred in the operation of
similarly situated real estate projects; provided, however, the term "Operating
Expenses" does not include (I) the costs of repairs or maintenance required to
be performed by LESSEE to the extent such costs exceed the amount of any
reserves accumulated from the Operating Expense collections for the particular
repair or maintenance Item, or
(II) any other items of expanse or cost which the terms of the Lease expressly
require be paid or incurred by LESSEE, including all utility and trash charges
payable by LESSEE under Paragraph 11 of the Lease. 4.1 LESSEE'S Share of Common
Area Operating Expenses. The LESSEE'S Share of Common Area Operating Expenses
stated in Paragraph 1.7(b) of the Lease is based on the rentable square feet to
be included in the Industrial Center, the Building and the Premises.
4.2 Method of Payment. LESSEE shall pay to LESSOR monthly, as additional rent,
an amount equal to 1/12 of the LESSEE'S share of the projected annual Operating
Expenses. Such amount shall be due and payable concurrently with the payment of
the applicable Base Rent. Prior to the beginning of each Lease Year, LESSOR will
provide LESSEE an annual estimated Operating Budget ("Estimated Operating
Budget") for each calendar year or partial year. Subject to LESSEE'S payment to
LESSOR of the Operating Expenses as provided in this Addendum, LESSOR shall make
prompt payment of the Operating Expenses. Any excess or deficit from the
estimates shown in the Estimated Operating Budget will be credited or billed to
LESSEE within ninety (90) days following the end of the applicable calendar
year, and LESSOR shall concurrently furnish LESSEE with a detailed statement
showing the actual Operating Expenses Incurred for such year. Any deficit will
be payable as additional rent within ten (10) days of receipt of a final
Operating Budget setting forth the actual expenditures for the applicable year
and the deficit. Any excess shall be credited against the next payments of
Operating Expenses due from LESSEE or refunded to LESSEE at the expiration or
earlier termination of the Lease. LESSEE acknowledges that the amounts and/or
categories of expense will likely vary in future years as the Premises ages.
Promptly following LESSEE'S request, LESSOR shall furnish LESSEE with such
additional information as LESSEE may reasonably request with respect to such
Operating Expenses.
4.3 LESSOR'S Administrative Services. LESSOR agrees to provide certain
administrative services to assist LESSEE in the performance of LESSEE'S
obligations under Paragraphs 7, 8.2, 8.3 and 10 of the Lease in consideration
for LESSEE'S monthly payment of an administrative fee to LESSOR of three percent
(3%) of the Base Rent per month ("Administrative Fee"). Such Administrative Fee
shall be payable as a part of the Operating Expenses payable by LESSEE. LESSOR'S
administrative services shall consist of the following: LESSOR shall procure, on
behalf of LESSEE, maintenance contracts required to be procured by LESSEE under
Paragraph 7.1(b) of the Lease, and shall otherwise procure bids and contract
proposals from contractors when necessary for LESSEE'S performance of its
general maintenance and repair obligations under Paragraph 7.1 (a) of the Lease.
5. Tenant Improvements. The phrase 'Tenant Improvements' means all interior
Improvements which are riot a part of the Building Shell Improvements, including
(a) partitions, walls, doors, (b) all Interior surface finishes, including wall
coverings, paint, floor coverings, suspended callings and other similar items,
(c) duct work, heat pumps, vents, filters, diffusers, terminal boxes and
accessories for completion of heating, ventilation and air conditioning systems
within the Premises, (d) electrical distribution systems (including panels,
sub-panels, wires and outlets), lighting fixtures, outlets, switches and other
electrical work to be installed in the Premises, (e) plumbing lines, fixtures
and accessories, (f) all fire and life safety control systems such as fire walls
and lire alarms (including piping, wiring and accessories) to be located in the
Premises, (g) improvements required for compliance with Title 24, provided,
however, LESSEE'S trade fixtures, equipment and personal property (including
telephone systems, chairs, tables, furniture, movable partitions and other
equipment used In LESSEE'S business) shall not be considered part of the Tenant
Improvements.
The foregoing notwithstanding, the LESSOR at LESSOR'S cost and expense, per
Exhibit "7", shall make the following building standard improvements to the
Premises:
1, Demise the Premises (demising wall to be painted).
2. Separately meter electrical.
3. Clean carpets and paint two offices
4. Add door from reception area Into back office area.
5. Replace burned out light bulbs.
6. Remove all ONTO decals from conference room windows.
7. Demo all air and electrical drops in the warehouse area.
8. All electrical and HVAC systems to be in good working order.
9. If requested in writing by Lessee in the first six (6) months of the
Lease Term, Lessor shall remove the interior partitioning wall in the
warehouse area.
Other than the foregoing, the LESSEE accepts the Leased Premises in an "as Is"
condition. LESSEE agrees that he has determined the sufficiency of the zoning,
electrical voltage, lighting, amperage, wiring, heating/air conditioning, fire
sprinklers, water and waste systems available in and to the Premises for
LESSEE'S use and occupancy. Additionally, San Diego Gas and Electric Company
(SDG&E) does not always install transformers of sufficient size to power the
electrical panels provided by the LESSOR in the Premises and Building. Before
installing machinery at the inception of the Lease or making any significant
increase In LESSEE'S power consumption in the future, It is LESSEE'S
responsibility notify SDG&E of LESSEE'S usage so that San Diego Gas & Electric
can make any necessary equipment changes.
5.1. Excess Costs Payable By LESSEE. Other than LESSOR'S improvements, as
described in Subsection 5.1, LESSEE will be responsible for payment for all
additional Tenant improvement Costs end any increased Tenant Improvement Costs
attributable to any changes requested by LESSEE to the LESSOR'S Tenant
Improvements as described In Section 5 above, whether such changes are requested
during the design phase or during the course of construction of the Tenant
Improvements. If LESSEE requests changes to LESSOR'S Improvements, LESSEE shall
deposit funds with LESSOR (or make such other arrangements to guaranty payment
of such excess costs as are acceptable to LESSOR) in an amount equal to such
excess prior to the issuance of the building permit for construction of the
Tenant Improvements, except in the case of excess costs resulting from changes
during construction. Any construction changes shall be subject to LESSOR'S
approval and LESSEE shall deposit funds with LESSOR to pay such costs within
five (5) days following notice of the Contractor's cost for any change.
10. Hazardous Materials Questionnaire. Without limiting LESSEE'S obligations
under Paragraph 6 of the Lease regarding compliance with Hazardous Substance
Laws, LESSEE shall, within fifteen (15) days from the execution of the Lease,
2
complete and deliver to LESSOR for its filing with applicable government
authorities a Hazardous Materials Questionnaire in the form as set forth in
EXHIBIT "3" annexed to this Addendum.
11. Estimated Operating Expense Budget. A copy of the 2003 Estimated Common Area
Operating Expenses Budget Is attached to this Addendum as EXHIBIT "4". LESSEE
acknowledges that (a) this estimate is being provided only to Illustrate the
projected amounts and categories of expense and that actual results may be
different than the estimates; and (b) it is aware that amounts and categories of
expense may vary in future years as the Promises ages.
12. Current Rules and Requisitions. Pursuant to Paragraph 2.9 of the Lease,
LESSOR has adopted the Rules and Regulation annexed to this Addendum as EXHIBIT
"5", and such Rules and Regulations shall remain in effect until changed by
LESSOR in accordance with the Lease.
13. Parking. Pursuant to Section 1.2(b) of the Lease, LESSOR has granted LESSEE
the right to use thirty (30) unreserved parking spaces In the Project.
14. LESSEE'S Use of Premises. Subject to Section 6 of the Lease, LESSEE, at
LESSEE'S sole cost and expense, shall comply with all directions of any
governmental authority having jurisdiction which shall, by reason of LESSEE'S
particular use of the Premises, impose any duty or obligation upon LESSEE or
LESSOR with respect to the Premises or Property. Prior to LESSEE's execution of
the Lease and this Addendum, LESSEE and LESSEE's consultants shall have
independently verified LESSEE's use of the Premises is in compliance with all
and any zoning regulations as promulgated by the City of Poway. In no event
shall LESSOR have any responsibility to LESSEE for LESSEE's compliance with any
zoning regulations.
15. Nonbindinq Offer. LESSOR'S SUBMISSION OF THIS DOCUMENT FOR EXAMINATION,
NEGOTIATION AND/OR SIGNATURE BY LESSEE DOES NOT CONSTITUTE AN OFFER TO LEASE,
NOR A RESERVATION OF, NOR AN OPTION FOR THE LEASE OF THE PREMISES. THE DOCUMENT
SHALL NOT BE BINDING AND IN EFFECT AGAINST EITHER PARTY UNTIL AT LEAST ONE
COUNTERPART OF THIS LEASE IS FULLY EXECUTED AND DELIVERED BY LESSOR TO LESSEE.
"LESSOR"
POMERADO LEASING NO. 3,
a California limited partnership
By: Its General Partner,
WHITMANN CORPORATION,
a California corporation
Dated: 4/3, 2003 By: /s/ Xxxxxxx X. Xxxxxx,
-------------------------------------
Xxxxxxx X. Xxxxxx, President
Dated: 4/1, 2003 By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxx, Secretary
"LESSEE"
MILSPERING CORPORATION
A California Corporation dba
"American Medical Wholesale"
Dated 3/31, 2003 By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxxx
Its: President and CEO
Dated 3.31, 2003 By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx
Its: Vice President, Operations
3
Site Plan
[GRAPHIC OMITTED]
Exhibit "1"
Floor Plan
4
[GRAPHIC OMITTED]
Exhibit "2"
5
LIST OF BUSINESSES WHICH REQUIRE REVIEW AND APPROVAL FROM COUNTY
OF SAN DIEGO HEALTH DEPARTMENT
THE HAZARDOUS MATERIALS MANAGEMENT
DIVISION
AUTOMOTIVE CHEMICAL HANDLING OTHERS AND MISCELLANEOUS
----------------------------------------------------------------------------------------------------
Battery Manufacturing/Recycling Agricultural Suppliers/Distributors Asphalt Plant
Boat Yard Chemical Suppliers/Distributors Chiropractic Offices
Car Wash Chemical Manufacturer Ca-Generation Plant
Dealership Maintenance end Paint Coatings /Adhesives Dental Clinic/Offices
Machine Shop Compressed Gas Suppliet/Dislributor Dialysis Centers
Painting Dry Cleaning Frozen Food Processing
Facilities
Radiator Shop Fiberglass/Resin Applications Government Agencies
Rental Yard Equipment Gas Station Hazardous Waste Haulers
Repair, Preventive Maintenance Industrial Laundry Hospitals/Convalescent Homes
Repair, Major Overhaul Laboratories Laboratories, Biological
Laboratories
Transportation Services Laboratory Suppliers/Distributors Medical Clinics/Offices
Wrecking and Recycling Oil end Fuel Bulk Supply Public Utilities
Pesticide Operator/Distributor Rock Quarry
METAL WORKING Photographic Processing Veterinary Clinic/Hospitals
---------------------------------
Pool Supplies/Maintenance Wood/Furniture
Manufacturer/Refinishing
Anodizing Printing/Blue Printing Ship Repair/Construction
Chemical Milling/Etching Road Coatings
Finish-Coating. Painting Swimming Pool (Gas Chlorination AEROSPACE
------------------------------
Flame Spraying Systems Only)
Foundry Toxic Gas Handler Aerospace Industry
Machine Shop-Drilling, Lathes, Toxic Gas Mfg. Aircraft Manufacturing
Xxxxx
Metal Plating Aircraft Maintenance
Metal Prepping/Chemical Coating ELECTRONICS
---------------------------------------
Precious Metal Recovery
Send Blasting, Grinding Electronics Components Mfg.
Steel Fabricator Electronics Assembly end Sub Assembly
Wrought Iron Manufacturing Printed Circuit Board Mfg.
NOTE: THE ABOVE LIST INCLUDES BUSINESSES WHICH TYPICALLY USE, STORE, HANDLE AND
DISPOSE OF HAZARDOUS SUBSTANCES. ANY BUSINESS NOT INCLUDED ON THIS LIST WHICH
HANDLES, USES OR DISPOSES OF HAZARDOUS SUBSTANCES MAY STILL REQUIRE HAZARDOUS
MATERIALS MANAGEMENT DIVISION (HMMD) REVIEW OF BUSINESS PLANS. FOR MORE
INFORMATION CALL (000) 000-0000.
LISTING OF AIR POLLUTION CONTROL DISTRICT PERMIT CATEGORIES
Businesses which include any of the following operations or equipment will
require clearance from the Air Pollution Control District.
Environmental Health Services County of Sae Diego
DRSa4M-9171 (e/gz) Department of Health Services
CHEMICAL COMBUSTION ROCK AND MINERAL
47-Organic Gas Starilizers 04-Piston Internal-Combustion Engines 04-Hot Asphalt Batch
Plants OS-Rock Drills 13-Boilers & Heaters (1 MillionBlu/Hr. 05 - Rook Drills
32-Acid Chemical Milling or larger) 07 - Sand Rock &
33-Can & Coil Manufacturing
Aggregate Plants
44-Evaporators, Dryers & Stills 13 Gas Turbines end Turbine Test 08-Concrete Batch, CTB, Concrete
Processing Organic Materials Calls & Stands mixers mixers &
Sillos
24-Dry Chemical Mixing & 14-Incinerators & Crematories 10 Brick Manufacturing
Detergent Spray Towers 15-Burn Our Ovens
35-Bulk Dry Chemical Storage 16-Core Ovens
COATINGS & SURFACE PREPARATION ELECTRONICS SOLVENT USE
01-Abrasive Blasting Equipment 29-Solder levelers 28-Vapor & Cold
Depressing
27-Coating & Painting 29-Hydrosqueegees 30-Solvent & Extract
Dryers
37-Plasma Arc & Ceramic 42-Electronic Component Manufacturing 31 - Dry Cleaning
Deposition Spray Booths
38-Paint, Stain & Ink Mfg.
OTHER
03-Asphalt Roofing Kettles end Tankers
FOOD 46-Reverse Osmosis Membrane Mfg.
METALS 12-Fish Canneries 51-Aqueous Waste Neutralization
18-Metal Melting Devices 12-Smoke Houses 11-Tire Buffers
19-Oil Quenching & Soft Baths 5O-Coffee Roasters 17-Brake Debonders
39 Precious Metals Relining 35-Bulk Flour & Powdered Sugar 23-Bulk Grain & Dry Chemical Transfer & Storage
45-Rubber Mixers
48-Landfill Gas Flare or Recovery Systems
ORGANIC COMPOUND MARKETING (GASOLINE, ETC) 21-Waste Disposal & Reclamation Units
25 Gasoline & Alcohol Bulk Plans & Terminals 36-Grinding Booths & Rooms
25 Intermediate Refulers 40-Asphalt Pavement Heaters
26 Gasoline & Alcohol Fule Dispensing 43-Ceramic Slip Casting
41-Perlite Processing
40-Cooling Towers-Registration Only
NOTE: OTHER EQUIPMENT NOT LISTED HERE THAT 15 CAPABLE OF EMITTING AIR
CONTAMINANTS MAY REQUIRE AN AIR POLLUTION CONTROL DISTRICT PERMIT. IF THERE
ARE ANY QUESTIONS, CONTACT THE AIR POLLUTION CONTROL DISTRICT AT (819)
6943307.
EXHIBIT '3'
Exhibit "5"
Xxxxxxxx Xxxxxxxxxxxx Xxxxxx XX
00000 - 00000 Xxxxx Xxxxxx, Xxxxx, XX
PROJECT RULES AND REGULATIONS
These Rules and Regulations ("Rules") are adopted by the Lessor pursuant to the
Lease to which the rules are annexed. The Rules supplement the Lease and in the
event of any conflict or inconsistency between the Lease and the Rules, the
Lease will control. The Rules may be changed from time to time by Lessor,
subject to any restrictions set forth in the Lease, and any such changes shall
be effective immediately upon delivery to Lessee. Accordingly, the Lessor adopts
the following Rules:
GENERAL RULES
1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside, or inside if visible from the exterior,
of any building without the prior written consent of Lessor. Lessor Shall have
the right to remove, at Lessee's expense and without notice, any item installed
or displayed in violation of the Rule. All approved signs or lettering on doors
and walls shall be printed, painted, affixed or inscribed at the expense of
Lessee and in a configuration and style approved by Lessor, in its sole
discretion.
2. If Lessor objects in writing to any curtains, blinds, shades, screens or
hanging plants or other similar objects attached to or used in connection with
any window or door of the Premises, or placed on any windowsill, which is
visible from the exterior of the Premises, Lessee shall immediately discontinue
such use. Lessee shall not place anything against or near glass partitions,
doors or windows which is visible from outside the Premises without Lessor's
consent.
3. Concurrently with Lessee's occupancy of the Premises, Lessee shall furnish
Lessor, free of charge, three (3) sets of keys to each door lock on the
Premises. Lessee shall be entitled to make or have made additional keys as
Lessee desires. Lessee shall not alter any lock or install a new additional lock
or bolt on any door of its Premises without furnishing Lessor, without charge, a
new set of keys. Lessee, upon the termination of its Lease, shall deliver to
Lessor the keys to all doors within the Premises.
4. Except for Lessee's Tenant Improvements, if Lessee requires telegraphic,
telephonic, burglar alarm or similar services, it shall first obtain, and comply
with, Lessor's installation instructions for any such equipment.
5. Deliveries of equipment, materials, furniture, packages, supplies,
merchandise or other property will be received at the Project in a manner and
method which does not impede or interfere with other tenants or the operation of
any portion of the Project. Lessee shall be responsible for all repairs and
replacements to the Project required on account of damage or injury caused by
deliveries to Lessee's Premises.
6. Lessee shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry and which is
allowed by law. Business machines and mechanical equipment belonging to Lessee,
which cause objectionable noise or vibration that may be transmitted to any
structure of the Project or to any space therein to such a degree as to be
placed and maintained by Lessee, at Lessee's expense, on vibration eliminators
or other devices sufficient to eliminate noise or vibration. Lessor will not be
responsible for loss of, or damage to, any such equipment or other property from
any cause, and all damage done to the Project by maintaining or moving such
equipment or other property shall be repaired at the expense of Lessee.
7. Lessee shall not use or keep in the Premises or about the Project any
kerosene, gasoline or inflammable or combustible fluid or materials other than
those quantities necessary for the operation or maintenance of office equipment,
delivery trucks and its permitted use of the Premises. Lessee shall not use or
,permit to be used in the Premises any foul or noxious gas or substance, or
permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to, Landlord or other occupants of the Project by reason of noise,
odor or vibrations. The foregoing notwithstanding, the Lessee shall store all
hazardous and/or flammable materials in containers approved by the Poway Fire
Department and other regulatory agencies.
8. Lessee shall not use any method of heating or airconditioning other than that
approved by Lessor, in its reasonable discretion.
9. Lessee shall not waste electricity, water or airconditioning and agrees to
cooperate fully with Lessor to assure the most effective operation of the
Project's heating and airconditioning and to comply with any governmental
energy-saving rules, laws or regulations of which Lessee has actual notice.
10. Lessee shall close and lock the doors of its Premises and entirely shut off
all water faucets or other water apparatus, and electricity, gas or air outlets
before Lessee and its employees leave the Premises. Lessee shall be responsible
for any damage or injuries sustained by other tenants or occupants of the
Project or by Lessor arising from Lessee's noncompliance with this Rule.
11. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the Lessee who, or whose employees or invitee's, shall have caused
it.
12. Lessee shall not install any radio or television antenna, loudspeaker or
other devices on the roof or exterior walls of any building, except with
Lessor's consent. Lessee shall not interfere with radio or television
broadcasting or reception from or in the Project or elsewhere.
13. All Lessee's installations, improvements and alt Lions shall be carried out
in a manner and methodII designed to minimize any damage to the Premises on
account of the installation or removal of such items. Lessee shall repair any
damage resulting from Lessee's installations, improvements and alterations and
the removal thereof upon termination of the Lease.
14. Canvassing, soliciting and distribution of handbills or any other written
materials, and peddling upon the Project are prohibited and Lessee shall
cooperate to prevent such activities.
15. Lessor reserves the right to exclude or expel from the Project any person
who, in Lessor's judgement, is intoxicated or under the influence of liquor or
drugs or who is in violations of any of the Rules, provided Lessor shall be
under no obligation to do so nor have any liability to Lessee on account of
Lessor's failure to exclude any person.
16. Lessee shall store all its trash and garbage within its Premises or in other
facilities provided by Lessor. Lessee shall not place in any trash box or
receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal. All. garbage and refuse disposal
shall be made in accordance with directions issued from time to time by Lessor.
All trash placed in the trash box or receptacle shall be generated within the
Pomerado Distribution Center II. Lessee shall not import any trash or waste
generated in the conduct of the Lessee's business into the Pomerado Distribution
Center II nor shall Lessee use the trash box or receptacles to dispose of this
trash or waste. Lessee will instruct Lessee's employees, agents, clients or
invitees to dispose all trash or' waste in a clean, orderly manner, to break
down all cardboard containers and to place all trash IN the trash box or
receptacle and not on or about the trash box or receptacle.
17. Equipment Storage - No material, equipment (with the exception of delivery
trucks), supplies, or products shall be stored or permitted to remain on the
property outside a permanent structure unless prior approval is obtained from
the Lessor in the City of Poway. Approval of outside storage will be granted
only where storage is visually screened from all approaches.
18. Pets or Animals - No pets or animals are allowed on the property or within
Lessee's Premises. 19. Without the written consent of Lessor, Lessee shall not
use the name of the Project in connection with or in promoting or advertising
the business of Lessee except as Lessee's address.
20. Lessee shall comply with all safety, fire protection and evacuation
procedures and regulations established by Lessor or any governmental agency. 21.
Lessee assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed. 22. Lessor may waive any one or more of
these Rules for the benefit of Lessee or any other tenant, but no such waiver by
Lessor shall be construed as a waiver of any other Rule in favor of Lessee or
any other tenant, nor prevent Lessor from thereafter enforcing any such Rules
against any or all of the tenants of the Project.
23. The Rules are in addition to, and shall not be . construed to in any way
modify or amend, in whole or in part, the terms, covenants, agreements and
conditions of Lessee's Lease of its Premises in the Project.
24. Lessee shall be responsible for the observance of all of, the Rules by
Lessee's employees, agents, clients, customers, invitee's and guests.
PARKING RULES
25. Lessor shall not be responsible for loss, injury or damage to any vehicle
arising from the use of parking areas in the Project. In the event the general
exclusion of liability set forth in the preceding sentence is determined not to
apply to any particular claim, specific limitations on liability set forth below
shall apply to any claim against Lessor arising in connection with the use. of
parking areas in the Project. All claimed damage or loss must be reported and
itemized in writing, delivered to the Lessor within thirty (30) days after any
claimed damage or loss occurs. Any claim not so made is waived. Lessor has the
option to make repairs, at its expense, of any claimed damage within two (2)
business days after filing of any claim.' In all court actions the burden of
proof to establish a claim remains with the Lessee. Court actions by Lessee for
any claim must be filed within ninety (90) days from date of parking when a
claimed loss occurred. Lessor is not responsible for damage by water, fire or
defective brakes, or part, or for the act of omissions of others, or for
articles left in the car. The total liability of Lessor is limited to $250.00
for all damages or loss to any vehicle. Lessor is not responsible for loss of
use.
26. Lessee shall not park or permit the parking of any vehicle under Lessee's
reasonable control in any parking areas designated by Lessor as areas for
parking by visitors to the Project or for deliveries or assigned to other
tenants or occupants of the Project. With the exception of delivery trucks,
Lessee shall not leave vehicles in the parking area overnight (except that
vehicles used in Lessee's business may be parked overnight in the loading area
behind Lessee's Suite) nor park any vehicles in the parking areas other than
automobiles, motorcycles, motor driven or non-motor driven bicycles.
27. In the event Lessor reasonably determines that a system of parking
registration is required to provide for the orderly use of the parking areas
within the Project, Lessor may institute a system of requiring decals or
stickers. Parking stickers or any other device or form of identification
supplied by Lessor as a condition of use of the parking areas shall remain the
property of Lessor. Such parking identification device must be displayed as
requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Devices are not
transferable and any device in the possession of an unauthorized holder will be
void.
28. Vehicles must be parked entirely with the painted stall lines of a single
parking stall. All directional signs and arrows must be observed. The speed
limit within all parking areas shall be five (5) miles per hour.
29. Parking is prohibited:. (a) in areas not striped for parking except for
loading dock areas immediately behind the Premises; (b) in aisles; (c) where "no
parking" signs are posted; (d) on ramps; (e) in cross hatched areas and in fire
lanes; and (f) in such other areas as may be designated by Lessor.
30. Every vehicle owner is required to park and lock his own vehicle. All
responsibility for damage to a vehicle or theft of property from a vehicle is
assumed by the vehicle owner.
31. Parking areas are for the temporary parking of vehicles only. No storage of
vehicles or other items will be permitted. Washing, waxing, cleaning or
servicing of any vehicle is prohibited.
32. Lessee shall acquaint all employees, customers and guests of these rules.
33. Lessor reserves the right to modify and/or adopt such other reasonable and
non-discriminatory rules and regulations for the parking facilities as it deems
necessary for the operation of the parking facilities. Lessor may refuse to
permit any person who violates these rules to park in the parking facilities,
and any violation of the rules shall subject the vehicle to removal.
EXHIBIT '6
SALE/LEASE AMERICANS WITH DISABILITIES ACT
AND HAZARDOUS MATERIALS DISCLOSURE
Pomerado Distribution Center 11
13250-13350 Xxxxx street
Poway, CA 92064
State of California
SALE/LEASE AMERICANS WITH DISABILITIES ACT
AND HAZARDOUS MATERIALS DISCLOSURE
The United States Congress has enacted the Americans With Disabilities Act.
Among other things, this act is Intended to make many business establishments
equally accessible to persons with a variety of disabilities; modifications to
real property may be required. State and local laws also may mandate changes.
The Owners of the Property and the real estate brokers, if any, In this
transaction are not qualified to advise you as to what, if any, changes may be
required now, or in the future. Lessees should consult the attorneys and
qualified design professionals of their choice for information regarding these
matters. The Owners of the Property and real estate brokers cannot determine
which attorneys or design professionals have the appropriate expertise in this
area.
Various construction materials may contain items that have been or may In the
future be determined to be hazardous (toxic) or undesirable and may need to be
specifically treated/handled or removed. For example, some transformers and
other electrical components contain PCBs, and asbestos has been used in
components such as fire-proofing, heating and cooling systems, air duct
insulation, spray-on and tile acoustical materials, linoleum, floor tiles,
roofing, dry wall and plaster. Due to prior or current uses of the Property or
in the area, the Property may have hazardous or undesirable metals, minerals,
chemicals, hydrocarbons, or biological or radioactive items (including electric
and magnetic fields) in soils, water, building components, above or below-ground
containers or elsewhere in areas that may or may not be accessible or
noticeable. Such items may leak or otherwise be released, Expert inspections are
necessary. Current or future laws may require clean up by pest, present and/or
future owners and/or operators. It Is the responsibility of the Lessee to retain
qualified experts to detect and correct such matters and to consult with legal
counsel of their choice to determine what provisions, if any, they may wish to
include in transaction documents regarding the Property.
To the best of Lessor's knowledge, Lessor has attached to this Disclosure copies
of all existing surveys and reposts known to Lessor regarding asbestos and the
hazardous materials and undesirable substances related to the Property. Lessor
is required under California Health and Safety Code Section 25915 et. seq. to
disclose reports and surveys regarding asbestos to certain persons, including
their employees, contractors, co-owners, purchasers and tenants. Lessees have
similar disclosure obligations. Lessors and Lessees have additional hazardous
materials disclosure responsibilities to each other under California Health and
Safety Code Section 25359.7 and other California laws. Consult your attorney
regarding this matter. The Owners of the Property and real estate brokers, if
any, are not qualified to assist you in this matter or provide you with other
legal or tax advice.
"LESSOR"
POMERADO LEASING NO.3,
a California limited partnership
By: Its General Partner,
WHITMANN CORPORATION,
a California corporation
By: /s/ Xxxxxxx C.H.
---------------------------------
4/2/03
By: /s/ Xxxxxx X. Xxxxxxxx, Secretary
"LESSEE"
MILSPERING CORPORATION
A California Corporation dba "American Medical Wholesale"
By:
-----------------------------------------
Xxxxxxx Xxxxxxxx
Its: President
Date: 3/31/03
By: /s/ Xxxxxxx Xxxxxx
Its: Vice President, Operations
Date: 3/31/03
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