Exhibit 10.2
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE--NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. Basic Provisions ("Basic Provisions").
1.1 Parties: This Lease ("Lease"), dated for reference purposes only,
September 9,1999, is made by and between The Xxxxxxxxx Trust, Xxxx X. Xxxxxxx,
Trustee ("Lessor") and US XXXXXX.xxx Inc., ("Lessee"), (collectively, the
"Parties," or individually a "Party").
1.2 Premises: See Addendum, Paragraph 1.2.
1.3 Term: See Addendum, Paragraph 1.3 ("Expiration Date"). (Also see
Paragraph 2.)
1.4 Early Possession: Upon mutual Lease execution and receipt of
Irrevocable Letter of Credit as outlined in Paragraph 50 ("Early Possession
Date"). (Also see Paragraphs 3.2 and 3.3.)
1.5 Base Rent: See Addendum, Paragraph 1.5 (Also see Paragraph 4.)
[ ] If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted.
1.6 Base Rent Paid upon Execution: $83,925.00 as Base Rent for the
period first month's rent.
1.7 Security Deposit: $83,925.00 ("Security Deposit"). (Also see
Paragraph 5.)
1.8 Agreed Use: General office use. (Also see Paragraph 6.)
1.9 Insuring Party: Lessor is the "Insuring Party." unless otherwise
stated herein. (See also Paragraph 8).
1.10 Real Estate Brokers: (See also Paragraph 15)
(a) Representation: The following real estate brokers
(collectively, the "Brokers") and brokerage relationships exist in this
transaction (check applicable boxes:
[ ] represents Lessor exclusively ("Lessor's Broker");
[ ] represents Lessee exclusively ("Lessee's Broker"); or
[X] CB Xxxxxxx Xxxxx, Inc. represents both Lessor and Lessee ("Dual Agency").
(b) Payment to Brokers: See Addendum, Paragraph 15.4
1.11 Guarantor: See Addendum, Paragraph 50
1.12 Addenda and Exhibits: Attached hereto is an Addendum or Addenda
consisting of Paragraphs 1 through 53 and Exhibit A, all of which constitute a
part of this Lease.
2. Premises. See Addendum
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.
2.2 Condition. See Addendum 2.2.
2.3 Compliance. See Addendum 2.3. NOTE: Lessee is responsible for
determining whether or not the zoning is appropriate for Lessee's intended use
and acknowledges that past uses of the Premises may no longer be allowed.
Correction of any non-compliance shall be the obligation of Lessee at Lessee's
sole cost and expense (this specifically includes, but is not limited to, any
handicap or DA compliance that may be required).
2.4 Acknowledgements. Lessee acknowledges that: (a) that it has been
advised by Lessor and/or the 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 their suitability for Lessee's intended use; (b)
Lessee 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, Lessor's agents, nor any
Broker has 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: (a) Broker has made no representations, promises or
warranties concerning Lessee's ability to honor the Lease or suitability to
occupy the Premises; and (b) it is Lessor's sole responsibility to investigate
the financial capability and/or suitability of all proposed tenants.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 Early Possession. If 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 Real Property Taxes and
insurance premiums and to maintain the Premises) shall, however, be in effect
during such period. Any such early possession shall not affect the Expiration
Date.
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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,
be obligated to pay Rent or perform its other obligations until it receives
possession of the Premises. If possession for the "Initial Premises" is not
delivered within sixty (60) days after the Commencement Date, Lessee may, at its
option, by notice in writing cancel this Lease, in which event the parties
should be discharged from all obligations hereunder. Except as otherwise
provided, if possession is not tendered to Lessee by the Start Date and 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
four (4) months after the Commencement Date, this Lease shall terminate unless
other agreements are reached between Lessor and Lessee, in writing.
4. Rent.
4.1 Rent Defined. All monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent
("Rent").
4.2 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
specifcially 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 (1) 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 stated herein or
to such other persons or place as Lessor may from time to time designate in
writing. Acceptance of a payment which is less than the amount thendue shall not
be a waiver of Lessor's rights to the balance of such Rent, regardless of
Lessor's endorsement of any check so stating.
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. If Lessee fails to pay Rent 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 said Security Deposit, Lessee shall within
ten (10) days after written request therefor deposit monies with Lessor
sufficient to restore said Security Deposit to the full amount required by
this Lease. 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 suffer as a result thereof. After the
expiration of the Irrevocable Letter of Credit, if a change in control of
Lessee 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 a t a commercially
reasonable level based on said change in financial condition. Lessor shall
not be required to keep the Security Deposit separate from its general
accounts. Within fourteen (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 thirty (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 part of
the Security deposit shall be considered to be held in trust, to bear
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
owners and/or 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, is not significantly more burdensome
to the Premises. If Lessor elects to withhold such consent, Lessor shall within
five (5) business days after such request give a written notification of same,
which notice shall include an explanation of Lessor's objections to the change
in use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance"
as used in this Lease shall mean any product, substance, 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 (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, and/or crude oil or any products by-products or factions
thereof. Lessee shall not engage in any activity in or about 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 Premises or neighboring properties 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 or
injury and/or liability, incluidng, but not limited to, the installation (and
removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasements) and/or incraesing the Security
Deposit.
(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause
to believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, 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 it 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 investigatory 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 any6
Hazardous Substance brought onto the Premises during the term of this Lease, b y
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, and the
Premises, harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, costs, claims, expenses, penalties, and 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 u nderground
migration of any Hazarfdous Substance under the Premiseds from adjacent
properties). Lessee's obligations shall include, but not be limited to, the
effects of any contamination or injury to person, property or the environment
created
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or suffered by Lessee, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or earlier
termination of this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its obligations
under this Lease with respect to Hazardous Substances, unless specifically so
agreed by Lessor in writing at the time of such agreement.
(e) Lesssor Indemnification. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remeidation, 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.
(f) Investigation and Remediations. 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 and
Lessor's 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
occurs during the term 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 Paragraph 6.2(d) and
Paragraph 13), Lessor may, at Lessor's option, either (i) investigate and
remediate such Hazardous Substance Condition, if required, as soon as reasonably
possible at Lessor's expense, in which event this Lease shall continue in full
force and effect, or (ii) if the estimated cost to remediate such condition
exceed twelve (12) times the then monthly Base Rent or $100,000, whichever is
greater, give written notice to Lessee, within thirty (30) days after receipt by
Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of
Lessor's desire to terminate this Lease as of the date sixty (60) days following
the date of such notice. In the event Lessor elects to give a termination
notice, Lessee may, within ten (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
twelve (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 thirty (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 effect or become effective after the Start Date. Lessee
shall, within ten (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 failure by
Lessee or the Premises to comply with any Applicable Requirements.
6.4 Inspection; Compliance. Lessor and Lessor's "Lender" ( as defined in
Paragraph 30 below) and consultants shall have the right to enter the Premises
at any time in the case of an emergency, and otherwise at reasonable times, for
the purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease. The cost of any such inspections shall be
paid by Lessor, unless a violation a 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 inspectiosn, 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 Paragraphs 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, and Alterations in good order, condition and repair
(whether or not such portion of the Premises requiring repair, or the means of
repairing the same, are reasonably or readily accessible to Lessee, and whether
or not the need for such repairs occurs as a result of Lessee's use. any prior
use, the elements or the age of such portion of the Premises), including, but
not limited to, all equipment or facilities, such as plumbing, heating,
ventilating, air-conditioning, electrical, lighting facilities, boilers,
pressure vessels, fire protection system, fixtures, walls (interior and
exterior), foundations, ceilings, roofs, floors, windows, doors, plate glass,
skylights, landscaping, driveways, parking lots, fences, retaining walls, signs,
sidewalks and parkways located in, on, or adjacent tot he Premises. 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 Premises and all improvements thereon or a part thereof in
good order, condition and state of repair. Lessee shall, during the term of this
Lease, keep the exterior appearance of the Building in a first-class condition
consistent with the exterior appearance of other similar facilities of
comparable age and size in the vicinity, including, when necessary, the exterior
repainting of the Building.
(b) Service Contracts. Lessee shall, at Lessee's sole expense,
procure and maintain a contract, with copies to Lessor, in customary form and
substance for and with a contractor specializing and experienced in the
maintenance of the following equipment and improvements, if any, if and when
installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure
vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke
detection, (iv) landscaping and irrigation systems, (v) roof covering and
drains, (vi) driveways and parking lots, (vii) clarifiers, (viii) basic utility
feed to he perimeter of the Building, and (ix) any other equipment, if
reasonably required by Lessor.
(c) Replacement. Lessee shall be responsible for any and all
replacements during the term of the Lease.
7.2 Lessor's Obligations. See Addendum.
7.3 Utility Installations, Trade Fixtures, Alterations.
(a) Definitions; Consent Required. The term "Utility Installations"
refers to all floor and window coverings, air lines, power panels, electrical
distribution, security and fire protection systems, communications systems,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can
be removed without doing material damage to the Premises. The term "Alterations"
shall mean any modification of the improvements, other than Utility
Installations or Trade Fixtures, whether 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). 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 of the
Premises (excluding the roof) 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 roof or any existing walls, and the cumulative cost
thereof during the term of this Lease as extended does not exceed $100,000 in
the aggregate or $50,000 in any one year.
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(b) Consent. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. 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 commencment of the work, and (iii) 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 equal to the greater of one month's Base Rent, or
$10,000, Lessor may condition its consent upon Lessee providing a lien and
completion bond in an amount equal to one and one-half times 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 furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (,10) days' notice prior to the commencement of
any work in, on, or about the Premises, and Lessor shall have the right to post
notices of non-responsibility. If Lessee shall 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 one and one-half times 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 and 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 Utiltiy
Intlalations made by Lessee shall be the property of Lessee, but considered a
aprt fo the Premises. Lessor may elect in writing to be the owner of all or any
specified part of the Lessee-Owned Alterations and Utility Installations. All
Lessee Owned Alterations and Utility Installations shall, at the expiration or
termination of this Lease, become the property of Lessor be surrendered by
Lessee with the Premises.
(b) Removal. By delivery to Lessee of written notice from Lessor not
earlier than ninety (90) and not later than thirty (30) days proior to the end
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 for any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and fee of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted. "Ordinary
wear and tear "shall not include any damage or deterioration that would have
been prevented by good maintenance practice. 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 tank installed by or for Lessee, and the
removal, replacement, or remediation of any soil, material or groundwater
contaminated by Lessee. 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 provision of Paragraph 26 below.
8. Insurance; Indemnity.
8.1 Payment of Insurance. Lessee shall pay all insurance required under
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence.
Premiums for policy periods commencing prior to or extending beyond the Lease
term shall be prorated to correspond to the Lease term. Payment shall be made
by Lessee to Lessor within ten (10) days following receipt of an invoice.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force a
Commercial General Liability Policy of Insurance protecting Lessee, Lessor
against claims for bodily injury, personal injury and property damage based upon
or arising out of the ownership, use, occupancy or maintenance of the Premises
and all areas appurtenant thereto. Such insurance shall be on an occurrence
basis providing single limit coverage in an amount not less than $2,000,000 per
occurrence with an "Additional Insured-Managers or Lessors of Premises
Endorsement" and contain the "Amendment of the Pollution Exclusion Endorsement"
for damage caused by heat, smoke or fumes from a hostile fire. The Policy shall
not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Lessee's indemnity obligations
under this Lease. The limits of said insurance shall not, 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 shall also maintain liability
insurance described in Paragraph 8.2(a) above, in addition to and not in lieu
of, the insurance required to be maintained by Lessee. Lessee shall not be named
as an additional insured therein.
8.3 Property Insurance-Building, Improvements and Rental Value.
(a) Building and Improvements. The Insuring Party shall obtain and
keep in force a policy or policies in the name of Lessor, with loss payable to
Lessor, any groundlessor, and to any Lender(s) 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 time, or the amount
required by any Lenders, but in no event more than the commercially reasonable
and available insurable value thereof. If Lessor is the Insuring Party, however,
Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's
personal property shall be insured by Lessee under Paragraph 8.4 rather than by
Lessor. If the coverage is available and commercially appropriate, such policy
or policies shall insure against all risks of direct physical loss or damage
(including the perils of earthquake), including coverage for debris removal and
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 co-insurance clause, waiver of subrogation, and
inflation guard protection causing an increase in the annual property insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located. If such insurance coverage has a deductible clause,
the deductible amount shall not exceed _______, other than the earthquake
insurance, and Lessee shall be liable for such deductible amount in the event of
an Insured Loss.
(b) Rental Value. the Insuring Party shall 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 full Rent for one (1) year. Said
insurance shall provide that in the event the Lease is terminated by reason of
an insured loss, the period of indemnity for such coverage shall be extended
beyond the date of the completion of repairs or replacement of the Premises, to
provide for one full year's loss of Rent from the date of any such loss. Said
insurance shall contain an agreed valuation provision in lieu of any co-
insurance clause, and the amount of coverage shall be adjusted annually to
reflect the projected Rent otherwise payable by Lessee, for the next twelve (12)
month period. Lessee shall be liable for any deductible amount in the event of
such loss.
Page 4 of 13
(c) Adjacent Premises. If the Premises are part of a larger
building, or of a group of buildings owned by Lessor which are adjacent to the
Premises, the Lessee shall pay for any increase in the premiums for the property
insurance of such building or buildings if said increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises.
8.4 Lessee's Property/Business Interruption Insurance.
(a) Property Damage. Lessee shall obtain and maintain insurance
coverage on all of Lessee's 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.
(b) 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 int eh business of Lessee or attributable to prevent
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
Rating" of at least B+, V, or such set 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 or 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 thirty (30) days' prior
written notice to Lessor. Lessee shall, at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with evidence of renewals or
"insurance binders" 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.
If either Party shall fail to procure and maintain the insurance required to be
carried 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, for loss or damage to their
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 Lessor's gross negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, liens, 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 fo 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 so indemnified.
8.8 Exemption of Lessor from Liability. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether said injury or damage results from conditions arising upon the Premises
or upon other portions of the Building of which the Premises are a part, or from
other sources or places. Lessor shall not be liable for any damages arising from
any act or neglect of any other tenant of Lessor. 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. See Addnedum 8.9.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
improvements of the Premises, other than Lessee-Owned Alterations and Utility
Installations, which can reasonably be repaired in six (6) months or less from
the date of the damage or destruction. Lessor shall notify Lessee in writing
within thirty (30) days form 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 Premises, other than Lessee-Owned Alterations and Utility Installations and
Trad Fixtures, which cannot reawonsbly be repaired in six (6) months or less
from the date of the damage or destruction. Lessor shallnotify Lessee in writing
within thirty (30) days form the date of the damage or destructiona s to whether
or nothe damages 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.
(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 Lessee-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 $10,000 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 (except as to
the deductible which is Lessee's responsibility) 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 ten (10) days
following receipt of written notice of such shortage and request therefor. If
Lessor receives said funds or adequate assurance thereof within said ten (10)
day period, 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 ten (10) days thereafter to (i) make
such restoration
Page 5 of 13
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
.have hits Lease terminate thirty (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. If Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either : (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence of such
damage. Such termination shall be effective sixty (60) days following the date
of such notice.
9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate sixty (60) days
following such Destruction. If the damage or destruction was caused by the
gross negligence or willful act of Lessee, Lessor shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage Near End of Term. If at any time during the last six (6)
months of the term of this Lease there is damage for which the cost to repair
exceeds one (1) month's Base Rent, whether or not an Insured Loss, Lessor may
terminate this Lease effective sixty (60) days following the date of occurrence
of such damage by giving written notice to Lessee within thirty (30) days after
the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee
at that time has an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by (a) exercising such option, and
(b) providing Lessor with any shortage in insurance proceeds (or adequate
assurance thereof) needed to make the repairs on or before the earlier of (i)
the date which is ten days after Lessee's receipt of Lessor's written notice
purporting to terminate this Lease, or (ii) the day prior to the date upon which
such option expires. If Lessee duly exercises such option during such period and
provides Lessor with funds (or adequate assurance thereof) to cover any shortage
in insurance proceeds, Lessor shall, at Lessor's commercially reasonable
expense, repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during such period, then this Lease shall
terminate as of the date 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 Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is not
legally responsible under this Lease, the Rent payable by Lessee for the period
required for the repair, remediation or restoration continues, shall be abated
in proportion to the degree to which Lessee's use of the Premises is impaired.
All other obligations of Lessee hereunder shall be performed by Lessee, and
Lessor shall have no liability for any damage, destruction, repair, remediation
or restoration except as provided herein.
(b) Remedies. If 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 ninety (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 a date not less than
sixty (60) days following the giving of such notice. If Lessee gives such notice
and such repair or restoration is not commenced within said thirty (30) days,
this 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 occurs first.
9.7 Termination--Advance Payments. Upon termination of this Lease pursuant
to this Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance made by Lessee to Lessor.
Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit
as has not been, or is not then required to be, used by Lessor.
9.8 Waiver of Statutes. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination of this Lease and hereby waive the provisions of
any present or future statute to the extent it is inconsistent herewith.
10. Real Property Taxes.
10.1 Definition of "Real Property Tax." As used herein, the term "Real
Property Taxes" shall include any form of assessment; real estate, general,
special, ordinary or extraordinary, or rental levy or tax (other than
inheritance, personal income or estate taxes); improvement bond; and/or license
fee imposed or levied against any legal or equitable interest of Lessor in the
Premises, 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 Building 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 premises are 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 Premises.
10.2
(a) Payment of Taxes. Lessor shall pay the Real Property Taxes
applicable to the Premises during the term of this Lease. Subject to Paragraph
10.2(b), all such payments shall be made at least (10) days prior to any
delinquency date. Lessee shall promptly furnish Lessor with satisfactory
evidence that such taxes have been paid. If any such taxes shall cover any
period of time prior to or after the expiration or termination of this Lease,
Lessee's share of such taxes shall be prorated to cover only that portion of the
tax xxxx applicable to the period that this Lease is in effect, and Lessor shall
reimburse Lessee for any overpayment. If the Lessee shall fail to pay any
required Real Property Taxes, Lessor shall have the right to pay the same, and
Lessee shall reimburse Lessor therefor upon demand.
(b) Advance Payment. In the event Lessee incurs a late charge on
any Rent payment, Lessor may, at Lessor's option, estimate the current Real
Property Taxes, and require that such taxes be paid in advance to Lessor by
Lessee, either: (i) in a lump sum amount equal to the installment due, at least
twenty (20) days prior to the applicable delinquency date, or (ii) monthly in
advance with the payment of the Base Rent. If Lessor elects to require payment
monthly in advance, the monthly payment shall be an amount equal to the amount
of the estimated installment of taxes divided by the number of months remaining
before the month in which said installment becomes delinquent. When the actual
amount of the applicable tax xxxx is known, the amount of such equal monthly
advance payments shall be adjusted as required to provide the funds needed to
pay the applicable taxes. If the amount collected by Lessor is insufficient to
pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand,
such additional sums as are necessary to pay such obligations. All monies paid
to Lessor under this Paragraph may be intermingled with other monies of Lessor
and shall not bear interest. In the event of a Breach by Lessee in the
performance of its obligations under this Lease, then any balance of funds paid
to Lessor under the provisions of this Paragraph may, at the option of Lessor,
be treated as an additional Security Deposit.
10.3 Joint Assessment. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be conclusively determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available.
10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee. When possible, Lessee shall cause such property to be
Page 6 of 13
assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee's property within ten
(10) days after receipt of a written statement.
11. Utilities. Lessee shall pay directly for all water, gas, heat, light,
power, telephone, trash disposal and other utilities and services supplied to
the Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion to be
determined by Lessor, of all such charges jointly metered.
12. Assignment and Subletting.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively, "assign or
assignment") or sublet all or any part of Lessee's interest in this Lease or in
the Premises without Lessor's prior written consent.
(b) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation of this Lease or Lessee's assets occurs, which
results or will result in a reduction of the Net Worth of Lessee by an amount
greater than twenty-five percent (25%) of such Net Worth as it was represented
at the time of the execution of this Lease or at the time of the most recent
assignment to which Lessor has consented, or as it exists immediately prior to
said transaction or transactions constituting such reduction, whichever was or
is greater, shall be 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.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of 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
twenty-five percent (25%) of such Net Worth as it was represented at the time of
the execution of this Lease or at the time of the most recent assignment to
which Lessor has consent, or as it exists immediately prior to said transaction
or transactions constituting such reduction, whichever was or is grater, shall
be 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 be a Default
curable after notice per Paragraph 13.1(c).
(e) Lessee's remedy for any breach of this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief. See Addendum.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease as may be
incorporated therein, (ii) release Lessee of any obligations hereunder, or (iii)
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 any rent for performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the 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 the Lessee's obligations under this Lease, including any
assignee or sublessee, without first exhausting Lessor's remedies against any
other person or entity responsible therefor to Lessor, or any security held by
Lessor.
(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's 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. Lessee agrees to provide Lessor
with such other or additional information and/or documentation as may be
reasonably requested.
(f) Any assignee of, or sublessee 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 in writing.
12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all 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
provision 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 sublessee, upon receipt of a written
notice from Lessor stating that a Breach exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor all Rent due and to become due
under the sublease. Sublessee 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 Breach by Lessee, Lessor may, at its option
require sublessee to attorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any other prior defaults or breaches of such
sublessor.
(c) Any matter or thing 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 prior written consent.
Page 7 of 13
(e) Lessor shall deliver a copy of any notice of Default or Breach
by Lessee to the sublessee, who shall have the right to cure the Default of
Lessee within the grace period, if any, specified in such notice. The sublessee
shall have a right of reimbursement and offset from and against Lessee for any
such Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. A "Default is defined as a failure by the Lessee to
comply with or perform any of the terms, covenants, conditions or rules 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 Premises; 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 continue for a period of three
(3) business days following written notice to Lessee.
(c) The failure by Lessee to provide (i) reasonable written evidence
of compliance with Applicable Requirements, (ii) the service contracts, (iii)
the rescission of an unauthorized assignment or subletting, (iv) a Tenancy
Statement, (v) a requested subordination, (vi) evidence concerning any guaranty
and/or Guarantor, (vii) any document requested under Paragraph 42 (easements),
or (viii) any other documentation or information which Lessor may reasonably
require of Lessee under the terms of this Lease, where any such failure
continues for a period of ten (10) days following written notice to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in Subparagraphs 13.1 (a), (b) or (c), above, where
such Default continues for a period of thirty (30) days after written notice;
provided, however, that if the nature of Lessee's Default is such that more than
thirty (30) days are reasonably required for its cure, then it shall not be
deemed to be a Breach if Lessee commences such cure within said thirty (30) day
period and thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making of
any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "debtor" as defined in 11 U.S. Code (S) 101 or any successor statute
thereto (unless, in the case of a petition filed against Lessee, the same is
dismissed within sixty (60) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where possession is not
restored to Lessee within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where such seizure is not
discharged within thirty (30) days; provided, however, in the event that any
provision of this Subparagraph 13.1 (e) is contrary to any applicable law, such
provision shall be of no force or effect, and shall not affect the validity of
the remaining provisions.
(f) The discovery that any financial statement of Lessee or of any
Guarantor, given to Lessor.
(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 breach basis,
and Lessee's failure, within sixty (60) days following written notice of any
such event, to provide written alternative assurances of security, which, when
coupled with the then existing resources of Lessee, equals or exceeds the
combined financial resources of Lessee and the Guarantors that existed at the
time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any of its affirmative duties or
obligations, within ten (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 to Lessor upon receipt of invoice therefor. If any
check given to Lessor by Lessee shall not be honored by the bank upon which it
is drawn, Lessor, at its own option, may require all future payments to be made
by Lessee to be by cashier's check. In the event of a Breach, Lessormay, 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 Premises 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; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of the District within which the Premises are located
at the time of award plus one percent (1%). Efforts by Lessor to mitigate
damages caused by Lessee's Breach of this Lease shall not waive Lessor's right
to recover damages under this 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
Subparagraph 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 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 appliable 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
constitute both an unlawful detainer and a Breach of this Lease entitling Lessor
to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in effect
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 the Premises, or the appointment of a receiver to protect the Lessor's
interest under this Lease, shall not constitute a termination of the Lessee's
right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located. The expiration or termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's occupancy of the Premises.
Page 8 of 13
13.3 Inducement Recapture. Any agreement for free or abated rent or other
charges for the giving or paying by Lessor to or for Lessee of any cash or other
bonus, inducement or consideration for Lessee's entering into this Lease, all of
which concessions are hereinafter referred to as "Inducement Provisions" shall
be deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease. Upon the Breach of this Lease by
Lessee, any such Inducement Provision shall automatically be deemed deleted from
this Lease and of no further force or effect, and any rent, other charge, bonus,
inducement or consideration theretofore abated, given or paid by Lessor under
such an Inducement Provision shall be immediately due and payable by Lessee to
Lessor, and recoverable by Lessor, 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 stated in
writing by Lessor at the time of such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late 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 and accounting charges, and late
charges which may be imposed upon Lessor by the Lender. Accordingly, if any Rent
shall not be received by Lessor within five (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 five percent (5%) of each such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of 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 and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of Base Rent, then notwithstanding any
provision of this Lease to the contrary, Base Rent shall, at Lessor's 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 thirty (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 thirty-first (31st) day after it was due as to non-scheduled
payments. The interest ("Interest") charged shall be equal to prime rate
reported in the Wall Street Journal as published closest prior to the date when
due plus four percent (4%), but shall not exceed the maximum allowed by law.
Interest is payable in addition to the potential late 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 thirty (30) clays after receipt by Lessor,
and any Lender whose name and address shall have been furnished to Lessee in
writing for such purpose, of written notice specifying wherein such obligation
of Lessor has not been performed; provided, however, that if the nature of
Lessor's obligation is such that more than thirty (30) days are reasonably
required for its performance, then Lessor shall not be in breach of this Lease
if performance is commenced within such thirty (30) day period and thereafter
diligently pursued to completion.
(b) Performance by Lessee on Behalf of Lessor. In the event that
neither Lessor nor Lender cures said breach within thirty (30) days after
receipt of said notice, or if having commenced said cure they do not diligently
pursue it to completion, then Lessee may elect to cure said breach at Lessee's
expense and 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 ten percent (10%) of any building portion of the
Premises, or more than twenty-five percent (25%) of the land area portion of the
Premises not occupied by any building, is taken by Condemnation, Lessee may, at
Lessee's option, to be exercised in writing within ten (10) days after Lessor
shall have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession.
If Lessee does not terminate this Lease in accordance with the foregoing,
this Lease shall remain in full force and effect as to the portion of the
Premises remaining, except that the Base Rent shall be reduced in the same
proportion to the reduction in utility of the Premises caused by such
Condemnation. Condemnation award and/or payments shall be the property of
Lessor, whether such award shall be made as compensation for diminution of value
of the 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. At Lessee shall be entitled to any and all
compensation 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 cause by such Condemnation.
15. Brokers' Fees.
15.1 See Addendum.
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. Each Broker shall be a third party beneficiary of the provisions of
Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to a Broker any amounts
due as and for commissions pertaining to this Lease when due, then such amounts
shall accure Interest.
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 than said named Broker(s) is
entitled to any commission or finder's fee in connection herewith. Lessee and
Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any costs,
expenses, and/or attorneys' fees reasonably incurred with respect thereto.
15.4 See Addendum.
16. Estoppel Certificates.
(a) Each Party (as "Responding Party") shall within ten (10) days
after written notice from the other Party (the "Requesting Party") execute,
acknowledge and deliver to the Requesting Party a statement in writing in a form
similar to the then most current "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 Responsing Party shall fail to execute or deliver the
Estoppel Certificate within such ten 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 dedaults in the Requesting Party's performance,
and (iii) if Lessor is the Requesting party, not more than one month's Rent
Page 9 of 13
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.
(c) If Lessor desires to finance, refinance, or sell the Premises or
any part thereof, Lessee and all Guarantors shall deliver to 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 three (3) years. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. Definition of Lessor. The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, or, if
this is a sublease, of the Lesse's interest in the prior lease. In the event of
a transfer of Lessor's title or interest in the Premises or in this Lease,
Lessor shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Lessor. 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 be 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 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 mean 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 consitute 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 Lessork 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,
director, 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.
22. No Prior or other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. 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 an 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 appliable to any gross negligence or
willful misconduct of such Broker.
23. Notices.
23.1 Notice Requirements. All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by courier
service) or may be sent by regular, certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid, or by facsimile transmission, and
shall be deemed sufficiently given if served in a manner specified in this
Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease
shall be that Party's address for delivery or mailing of notice. 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 required 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 date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail, the notice shall be deemed given forty-eight (48) hours after
the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantees next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the United States Postal Service or courier. Notices
transmitted by facsimile transmission or similar means shall be deemed delivered
upon telephone or facsimile confirmation of receipt, provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday or a Sunday
or a legal holiday, it shall be deemed received on the next business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any such act shall not be deemed to render
unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent
or similar act by Lessee, or be construed as the basis of an estoppel to enforce
the provision or provisions of this Lease requiring such consent. The acceptance
of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee.
Any payment by Lessee may be accepted by Lessor on account of monies or damages
due Lessor, notwithstanding any qualifying statements or conditions made by
Lessee in connection therewith, which such statements and/or conditions shall be
of no force or effect whatsoever unless specifically agreed to in writing by
Lessor at or before the time of deposit of such payment.
25. Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees applicable thereto.
26. No Right to Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. In the event that Lessee holds over, then the Base Rent shall be
increased to one hundred fifty percent (150%) of the Base Rent applicable during
month immediately preceding the expiration or earlier 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. All provisions of this Lease to be observed or
performed are both covenants and conditions. In construing this Lease, all
headings and titles are for the covenience 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 if both Parties had prepared it.
Page 10 of 13
29. Binding Effect; Choice of Law. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed 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 "Lessor's 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. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one (1) month's rent.
30.3 Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving 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 sixty (60) days after 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 event that Lessor is unable to provide the Non-
Disturbance Agreement within said sixty (60) days, then Lessee may, at Lessee's
option, directly contact Lessor's 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, attornment and/or Non-Disturbance Agreement provided for herein.
31. Attorneys' Fees. If any Party or Broker brings an action or proceeding
involving the Premise to enforce the terms hereof or declare rights hereunder,
the Prevailing Party (as hereafter defined) in any such proceeding, action, or
appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may
be awarded in the same suit or recovered in a separate suit, whether or not such
action or proceeding is pursued to decision or judgment. The term "Prevailing
Party" shall include, without limitation, a Party or Broker who substantially
obtains or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party or Broker of its
claim or defense. The attorneys' fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorneys' fees reasonably incurred. In addition, Lessor shall be entitled to
attorneys' fees, costs and expenses incurred in preparation and service of
notices of Default and consultations in connection therewith, whether or not a
legal action is subsequently commenced in connection with such Default or
resulting Breach.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or lessees, 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 six (16) months of the term hereof place on or about
the Premises any ordinary "For Lease" signs. Lessee may at any time place on or
about 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, Lessee shall not palce any
sign upon the Premises without Lessor's prior written consent. All signs must
comply with all Applicable Requirements. See Addendum.
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor may elect to continue any one or all
existing subtenancies. Lessor's failure within ten (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 to an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs
and expenses (including but not limited to architects', attorneys', engineers'
and other consultants' fees) incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent including, but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee to Lessor upon receipt of an invoice and supporting
documentation therefor. Lessor's consent to any act, assignment of this Lease
or subletting of the Premises by Lessee shall not constitute an acknowledgment
that no Default or Breach by Lessee of this Lease exists, nor shall such consent
be deemed a waiver of any then existing Default or Breach, except as may be
otherwise specifically stated in writing by Lessor at the time of such consent.
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 determination party shall furnish its
reasons in writing and in reasonable detail within ten (10) business days
follows 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 Real Estate
Association, and each such Guarantor shall have the same obligations as Lessee
under this Lease.
37.2 Default. It shall constitute a Default of the Lessee any Guarantor
fails or refuses, upon request to provide: (a) evidence of the execution of the
guaranty, including the authority of the party signing on Guarantor's behalf to
obligate such Guarantor, and in the case 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) a Tenancy Statement, or (d)
written confirmation that the guaranty is still in effect,
38. Quiet Possession. Subject to payment by Lessee of the Rent and the
performance of all of the covenants, conditions and provisions on Lessee's part
to be observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during the term hereof.
Page 11 of 13
39. Options.
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 Lessee. Each 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 Permitted Transferee
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, or (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), or (iii) during the
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has
been given three (3) or more notices of separate Default, whether or not the
Defaults are cured, during any twelve (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(a)
(c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term, (i) Lessee fails to
pay Rent for a period of thirty (30) days after such Rent becomes due (without
any necessity of Lessor to give notice thereof), or (ii) Lessor gives to Lessee
three (3) or more notices of separate Default during any twelve (12) month
period, whether or not the Defaults are cured, or (iii) if Lessee commits a
Breach of this Lease.
40. [Deleted]
41. Security Measures. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
42. Reservations. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights and dedications
that Lessor deems necessary, and to cause the recordation of parcel maps and
restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.
43. Performance under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay.
44. 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 on its behalf. Each party shall,
within thirty (30) days after request, deliver to the other Party satisfactory
evidence of such authority.
45. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
46. Offer. Preparation of this Lease by either Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease.
This Lease is not intended to be binding until executed and delivered by all
Parties hereto.
47. Amendments. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's rights and obligations hereunder, Lessee agrees to
make such reasonable non-monetary modifications to this Lease as may be
reasonably required by Lender in connection with the obtaining of normal
financing or refinancing of the property of which the Premises are a part.
48. 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.
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 [ ] is [ ] is not attached to this Lease.
Page 12 of 13
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 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 ADVIVCE 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, AND THE SUITABILITY
OF THE PREMISES FOR LESSE'S INTENDED USE.
WARNING: IF THE PREMISES IS 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 IS LOCATED.
--------------------------------------------------------------------------------
The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.
Executed at: Los Angeles, California Executed at: Los Angeles, California
------------------------------------------------- --------------------------------------------------
On: August , 1999 On: September 13, 1999
---------------------------------------------------------- ---------------------------------------------------------
By LESSOR: By LESSEE:
Xxxxxxxxx Trust, Xxxx X. Xxxxxxx, Trustee US XXXXXX.xxx, Inc. a Delaware corporation
--------------------------------------------------------------- ----------------------------------------------------------------
--------------------------------------------------------------- ----------------------------------------------------------------
By: /s/ Xxxx X. Xxxxxxx By: /s/ C. Xxxxxxxx Xxxxxxx
---------------------------------------------------------- -----------------------------------------------------------
Name Printed: Xxxx X. Xxxxxxx Name Printed: C. Xxxxxxxx Xxxxxxx, Xx.
------------------------------------------------- --------------------------------------------------
Title: Trustee Title: President and CEO
------------------------------------------------------- --------------------------------------------------------
By: By:
---------------------------------------------------------- -----------------------------------------------------------
Name Printed: Name Printed:
------------------------------------------------- -------------------------------------------------
Title: Title:
-------------------------------------------------------- --------------------------------------------------------
Address: Address:
----------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------- ----------------------------------------------------------------
Telephone: ( ) Telephone: ( )
-------------------------------------------- ---------------------------------------------
Facsimile: ( ) Facsimile: ( )
-------------------------------------------- ---------------------------------------------
Federal ID No. Federal ID No.
----------------------------------------------- ------------------------------------------------
Note: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the most
current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000 (000) 000-0000. Fax No. (213) 687-
8616.
RBUCKLEY\1-800-US-SEARCH
Page 13 of 13
OPTION(S) TO EXTEND
STANDARD LEASE ADDENDUM
Dated August 17, 1999
----------------------------------------------------------
By and Between (Lessor) Xxxxxxxxx Trust, Xxxx X. Xxxxxxx,
---------------------------------------
Trustee
---------------------------------------
(Lessee) US XXXXXX.xxx, Inc., a Delaware
---------------------------------------
corporation
---------------------------------------
The term "Lessee" includes a Permitted
Transferee.
Address of Premises: 0000 Xxxxxxxxx Xxxxxx
-------------------------------------------
Xxx Xxxxxxx, Xxxxxxxxxx
-------------------------------------------
Paragraph 53
------
A. OPTION(S) TO EXTEND:
Lessor hereby grants to Lessee the option to extend the term of this Lease for
one (1) additional sixty (60) month period(s) commencing when
------------- ----------------
the prior term expires upon each and all of the following terms and conditions:
(i) In order to exercise an option to extend, Lessee must given written
notice of such election to Lessor and Lessor must receive the same at least
9 months prior to the date that the option period would commence, time
-------
being of the essence. If proper notification of the exercise of an option is not
given and/or received, such option shall automatically expire. Options (if there
be more than one) may only be exercised consecutively.
(ii) The provisions of paragraph 39, including those relating to Lessee's
Default set forth in paragraph 39.4 of this Lease, are conditions of this
Option.
(iii) Except for the provisions of this Lease granting an option or
options to extend the term, all of the terms and conditions of this Lease except
where specifically modified by this option shall apply.
(iv) This Option is personal to the original Lessee, and cannot be
assigned or exercised by anyone other than said original Lessee and any
Permitted Transferee.
(v) The monthly rent for each month of the option period shall be
calculated as follows, using the method(s) indicated below:
(Check Method(s) to be Used and Fill In Appropriately)
[X] II. Market Rental Value Adjustment(s) (MRV)
a. On (Fill In MRV Adjustment Date(s)) December 1, 2004, with 3% annual
-----------------------------------
increases
-----------------
the Base Rent shall be adjusted to the "Market Rental Value" of the property as
follows:
1) Four months prior to each Market Rental Value Adjustment Date
described above, the Parties shall attempt to agree upon what the new MRV will
be on the adjustment date. If agreement cannot be reached, within thirty days,
then:
(a) Lessor and Lessee shall immediately appoint a mutually acceptable
appraiser or broker to establish the new MRV within the next thirty days. Any
associated costs will be split equally between the Parties, or
(b) Both Lessor and Lessee shall each immediately make a reasonable
determination of the MRV and submit such determination, in writing, to
arbitration in accordance with the following provisions:
(i) Within fifteen days thereafter, Lessor and Lessee shall each
select an appraiser or broker ("Consultant" - check one) of the choice to act as
an arbitrator. The two arbitrators so appointed shall immediately select a third
mutually acceptable Consultant to act as a third arbitrator.
(ii) The three arbitrators shall within thirty days of the
appointment of the third arbitrator reach a decision as to what the actual MRV
for the premises is, and whether Lessor's or Lessee's submitted MRV is the
closest thereto. The decision of a majority of the arbitrators shall be binding
on the Parties. The submitted MRV which is determined to be closest to the
actual MRV shall thereafter to be used by the Parties.
(iii) If either of the Parties fails to appoint an arbitrator
within the specified fifteen days, the arbitrator timely appointed by one of
them shall reach a decision on his or her own, and said decision shall be
binding on the parties.
(iv) The entire cost of such arbitration shall be paid by the party
whose submitted MRV is not selected, ie. the one that is NOT the closest to the
actual MRV.
2) Notwithstanding the foregoing, the new MRV shall not be less than the
rent payable for the month immediately preceding the rent adjustment.
b. Upon the establishment of each New Market Rental Value:
1) the new MRV will become the new "Base Rent" for the purpose of
calculating any further Adjustments; and
2) the first month of each market Rental Value term shall become the new
"Base Month" for the purpose of calculating any further Adjustments.
Page 1 of 2
B. NOTICE:
Unless specified otherwise herein, notice of any rental adjustments, other
than Fixed Rental Adjustments, shall be made as specified in paragraph 23 of the
Lease.
RBUCKLEY\1-800-US-SEARCH_OTE
Page 2 of 2
ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET DATED AS OF
SEPTEMBER 9, 1999 BY AND BETWEEN XXXXXXXXX TRUST, XXXX X. XXXXXXX, TRUSTEE, AS
LESSOR, AND US- SEARCH. COM, INC., A DELAWARE CORPORATION, AS LESSEE
This Addendum is dated as of September 9, 1999 and modifies and supplements the
Lease referenced above. In the event of any inconsistency between the terms of
the Addendum and the terms of the Lease to which it is attached, the terms of
this Addendum shall control.
1.2 Premises: The "Premises" shall consist of the entirety of the building
commonly known as 0000 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxx (Marina del Rey),
California and the land underlying such budding as more fully described on
Exhibit A attached to this Lease (such building, together with the land
described in Exhibit "A," hereinafter referred to as the "Building").
Initial Premises: The "Initial Premises" shall be defined as the second
floor office space of approximately 19,500 square feet and the first floor
"high bay" area of approximately 13,500 square feet (including small
portion of second floor space), as well as any portion of the first floor
that is mutually agreed to by the parties [subject to the rights of the
existing Lessee (Novocom)].
Expansion Premises: The "Expansion Premises" shall be defined as the first
floor office space of approximately 19,500 square feet (less any first
floor space previously occupied by Lessee).
1.3 Term: Five (5) years ("Original Term") commencing on the earlier of (i)
the date Lessee occupies any portion of the premises after mutual
execution of this Lease for the purpose of conducting business therein; or
(ii) December 1, 1999 ("Commencement Date") and ending five (5) years
after the Commencement Date or on the last day of the last Option Term
validly exercised by Lessee ("Expiration Date"). Lessee shall be entitled
to occupy the Premises upon mutual lease execution and receipt of an
Irrevocable Letter of Credit as outlined in paragraph 50 for the purposes
of constructing Lessee's Work and preparing to open for business; such
occupancy shall be upon all of the terms and conditions of this Lease,
except that Lessee's rental obligations shall be subject to Section 3 of
the Lease. Within thirty (30) days of the Commencement Date, the parties
shall execute and deliver an amendment to the Lease which shall set forth
the Commencement Date for the Initial Premises, the square footage of the
Premises, Base Rent and such other matters as may be reasonably requested
by either of the parties.
The commencement date for the "Expansion Premises" or any portion thereof,
shall be thirty (30) days after "delivery" of the Expansion Premises.
Lessor will use commercially reasonable efforts to have the existing first
floor Lessee (Novocom, Inc.) relocated from the Premises as quickly as
possible, but in no event later than March 1, 2000.
During this period of early possession and shared occupancy, Lessee
covenants to work with the existing Lessee (Novocom) to develop a mutually
acceptable occupancy plan to
1.
address parking, access to the building, hours of operation, areas of
construction and other issues, etc.
During this period of early possession and shared occupancy, in addition
to Base Rent, Lessee shall pay its pro-rata share of all utilities,
insurance, real estate taxes and other occupancy costs. These costs shall
be determined by Lessor using good faith estimates based on historical
operating costs.
1.5 Base Rent: Payable on the first day of each month commencing on the
Commencement Date, pursuant to the following schedule ("Base Rent").
Monthly Base Rent Monthly Annual
Lease Years Per Square Foot Base Rent Base Rent
------------- ---------------------- --------------------- ---------------------
1 $1.59875 $83,925.00 $1,007,100.00
2 $1.64653 $86,442.75 $1,037,313.00
3 $1.69592 $89,036.03 $1,068,432.36
4 $1.74680 $91,707.11 $1,100,485.32
5 $1.79921 $94,458.33 $1,133,499.96
Notwithstanding any provision in this agreement to the contrary, the
Lessee shall only be required to pay rent to Lessor for such space as has
been delivered by Lessor to Lessee for use and occupancy. Both parties
hereby agree to use their respective best efforts and good faith to
determine the square footage of the space within the Premises that is
delivered for use and occupancy by Lessor to Lessee during the period
that Lessor's existing tenant (Novocom) is vacating the premises.
2.1 Notwithstanding the fact that the second sentence of paragraph 2.1 is
crossed out in the body of the Lease, that sentence is hereby reinserted
into the Lease.
2.2 Condition: The Premises are being leased in "As-Is" condition. No
warranties or representations by Lessor or Lessor's brokers or agents are
expressed or implied. Lessee has conducted a thorough examination of the
Premises and accepts the Premises in its "As-Is" condition.
2.3 Compliance: The Premises are being leased in "As-Is" condition. No
warranties or representations by Lessor or Lessor's brokers or agents are
expressed or implied. Lessee shall bear any and all costs associated with
any non-compliance.
6.2(f) Investigations and Remediation: Notwithstanding the provisions of
Paragraph 6.2(f), Lessor shall use its best efforts to provide Lessee
with at least 24 hours prior actual notice before entering the Premises.
In the event of an emergency, the determination of which shall require
Lessor to be reasonable, Lessor shall use its best efforts to provide
Lessee with notice reasonable in such situation. In the event of any
entry by Lessor onto the Premises, Lessor shall use its best efforts not
to interfere with the conduct of Lessee's business.
6.4 Inspection; Compliance: Notwithstanding the provisions of Paragraph 6.4,
Lessor shall use its best efforts to provide Lessee with at least 24
hours' prior actual notice before
2.
entering the Premises. In the event of an emergency, the determination of
which shall require Lessor to be reasonable, Lessor shall use its best
efforts to provide Lessee with notice reasonable in such situation. In
the event of any entry by Lessor onto the Premises, Lessor shall use its
best efforts not to interfere with the conduct of Lessee's business.
7.2 Lessor's Obligations: Lessor shall, at Lessor's sole cost and expense,
repair and maintain the foundation, roof structure, structural walls and
structural columns of the building (unless such repair or maintenance is
proximately caused by Lessee's action or negligence). Except as otherwise
expressly stated herein, it is intended by the Parties hereto that Lessor
have no obligation, in any manner whatsoever, to repair or maintain the
Premises, or the equipment therein, all of which obligations are intended
to be that of Lessee. It is the intention of the Parties that the terms
of this Lease govern the respective obligations of the Parties as to
maintenance and repair of the Premises, and they expressly waive the
benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease.
7.4 Ownership: The following language shall be[added to Paragraph 7.4. (d)
Upon completion of the term or any extended term, the Lessee shall
peacefully and quietly surrender possession of the Premises to the
Lessor. Provided Lessee is not then in default beyond applicable notice
and cure periods specified in this Lease Lessee shall have the right to
remove all equipment, trade fixtures, decorations, antiques, artifacts
and inventory, installed by Lessee from the Premises and shall repair any
damage occasioned thereby. The building, improvements and any personal
property remaining on the Premises ten (10) days after the expiration of
the term and vacation of the premises shall be deemed to have been
abandoned and will become the property of the Lessor. Lessor shall have
the right to require Lessee to remove all trash, inventory, hazardous
materials or caustic chemicals caused by Lessee or its agents from the
Premises at the expiration of the term upon written notice to Lessee.
(e) Lessee shall not be required to remove any improvements and fixtures
installed by Lessee in, on or about the Premises pursuant to Lessee's
repair obligation under this Lease, and Lessee shall not be required to
remove any alterations, improvements, additions, or Utility Installations
for which Lessee has obtained Lessor's consent, unless Lessor has
indicated, at the time of granting such consent, that such removal will
be required.
(f) In addition, all of Lessee's telecommunications equipment and
computer equipment is deemed to be trade fixtures, and Lessee shall be
entitle to remove such items at the expiration of the term, prodded
Lessee repairs all damage caused by such removal.
8.3(a) The language ($1000 per occurrence) formerly set out in the last two
lines of (P)8.3(a) is hereby replaced with "a commercially reasonably
deductible".
8.9 Earthquake Insurance: Tenant shall be required during the term of the
Lease and all extensions to reimburse Lessor for the premium (and any
subsequent increases) associated with Lessor's Earthquake Insurance. In
addition, Lessee shall be further
3.
responsible for paying the amount of any and all cash deductibles called
for under the term of the earthquake, and all other insurance policies
for which Lessee reimburses the Lessor under the terms of this lease.
9.6(c) Abatement of Rent; Lessee's Remedies: Notwithstanding anything to the
contrary contained herein, if Lessee's use of the Premises is
substantially impaired for a period of more than 90 days after the date
of casualty, Lessee shall have the right to terminate this Lease by
written notice to Lessor if given within 120 days of such casualty.
10.2(e) Lessee's Right to Contest Taxes: Lessee, at its cost, shall have the
right at any time to seek a reduction in or otherwise contest any Taxes
for which it is obligated to reimburse Lessor pursuant to this Article,
by action or proceeding against the entity with authority to assess or
impose the same.
Lessor shall not be required to join in any proceeding or action brought
by Lessee unless the provisions of applicable Regulations require that
such proceeding or action be brought by or in the name of Lessor, in
which event Lessor shall join in such proceeding or action or permit it
to be brought in Lessor's name, provided that Lessee protect, indemnify,
and hold Lessor free and harmless from and against any liability, cost
or expense in connection with such proceeding or contest.
Lessee shall continue, during the pendency of such proceeding or
action, to pay the Taxes due as determined by Lessor pursuant to this
Section 10. If Lessee is successful in such action or proceeding, Lessor
shall reimburse to Lessee Lessee's Share of the reduction in Taxes
realized by Lessee in such contest or proceeding within ten (10) days
after the amount of such reduction has been determined and received by
Lessor.
Insert 12.1(b) Permitted Transfers.
Notwithstanding anything to the contrary contained in this Lease,
provided that the net worth of the succeeding entity is not less than
75% of the net worth of Lessee, Lessee may assign this Lease or sublet
the Premises, or any portion thereof; without Lessor's consent, to any
entity which controls, is controlled by, or is under common control with
Lessee; to any entity which results from a merger of; reorganization of,
or consolidation with Lessee; to any entity engaged in a joint venture
with Lessee; or to any entity which acquires substantially all of the
stock or assets of Lessee, as a going concern, with respect to the
business that is being conducted in the Premises (hereinafter each a
"Permitted Transfer"). In addition, a sale or transfer of the capital
stock of Lessee shall be deemed a Permitted Transfer if (1) such sale or
transfer occurs in connection with any bona fide financing or
capitalization for the benefit of Lessee, or (2)Lessee is or becomes a
publicly traded corporation. Lessor shall have no right to terminate the
Lease in connection with, and shall have no right to any sums or other
economic consideration resulting from any Permitted Transfer.
4.
12.1 Lessor's Consent Required:
(f) Except as provided herein to the contrary, no assignment or
subletting by Lessee shall affect or diminish the obligation of
Lessee to perform all of the covenants required to be performed by
Lessee under the terms of the Lease.
(g) Notwithstanding anything to the contrary contained in the Lease,
Lessee shall have the right, without Lessor's consent, to assign
this Lease and/or sublet the Premises to any corporation, person or
entity which is (i) Lessee's parent corporation; (ii) a wholly-owned
subsidiary of Lessee or of Lessee's parent corporation; (iii) the
surviving entity in the event of any merger, consolidation or
reorganization involving Lessee and/or Lessee's parent corporation;
and/or (iv) the buyer in one transaction of all or substantially all
of Lessee's assets and/or outstanding corporate stock (a "Related
Entity"); provided that:
(A) Lessee shall give the Lessor written notice and a true and
correct copy of any such assignment and/or sublease within
thirty (30) days after the effective date thereof.
(B) Such assignee shall expressly assume in writing the obligations
of Lessee under the Lease;
(C) Except as otherwise expressly herein permitted, the Premises
shall continue to be operated for the use specified in this
Lease; and
(D) with regard to an assignment or sublet under the provision of
subsections 12.1 (g) (ii), (iii) or (iv) above, such assignee
shall have a net worth of the date of such assignment equal to
or greater than the net worth of Lessee at the date of execution
of this Lease.
(h) Lessor shall have the right to assign this Lease to any party
acquiring title to the Premises and shall thereafter be relieved of
all liability under the Lease accruing from and after the date of
closing provided such successor or assignee shall assume Lessor's
obligation hereunder.
12.4 Sublease Income: Lessee and Lessor shall share equally any profit on any
Sublease income. Profit shall be calculated as any mount in excess of
Lessee's rent then in effect.
15.4 Broker's Fee: Both Lessor and Lessee understand and agree that CB Xxxxxxx
Xxxxx, Inc. represents both Lessor and Lessee in the Lease transaction
and that they were informed of such dual representation in a timely
fashion and consent thereto. Upon execution and delivery of this Lease by
both parties, Lessor shall pay Broker (CBRE) a fee equal to six percent
(6%) of the total rent payable (including increases) by Lessee during the
initial Lease Term. Said fee shall be payable one-half (1/2) at Lease
execution and the remaining balance to be paid in three (3) equal
installments from rent received. In the event there is a remaining
balance, it shall be paid in full at the conclusion of the third (3rd)
month, in which rent is received.
5.
32. Lessor's Access; Showing Premises; Repairs: Notwithstanding the provisions
of Paragraph 32, Lessor shall use its best efforts to provide Lessee with
at least 24 hours' prior actual notice before entering the Premises. In
the event of an emergency, the determination of which shall require Lessor
to be reasonable, Lessor shall use its best efforts to provide Lessee with
notice reasonable in such situation. In the event of any entry by Lessor
onto the Premises, Lessor shall use its best efforts not to interfere with
the conduct of Lessee's business.
34. Signs (Continued): The following language shall be added to Paragraph 34
of the Lease:
During any period of shared occupancy, the existing Lessee (Novocom) shall
retain its existing signage. Lessee shall have the right with Lessor's
consent, which shall not be unreasonably withheld, to install signage on
the exterior of the Premises so long as such signage is in a size, design
and location reasonably approved by Lessor and comply with applicable
codes, laws, ordinances, etc.
50. Irrevocable Letter of Credit: As a condition precedent to entering into
this Lease Agreement, Lessee shall deposit with Lessor upon execution
hereof an Irrevocable Letter of Credit, from a financial institution
reasonably acceptable to Lessor in a form reasonably acceptable to Lessor,
as security for Lessee's faithful performance of its obligations under this
Lease. If Lessee fails to pay Rent, or otherwise Defaults under this
Lease, Lessor may use, apply or retain such portion of said Irrevocable
Letter of Credit, as may be necessary, 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 said Irrevocable Letter of
Credit, Lessee shall within ten (10) days after written request therefor
deposit monies with Lessor sufficient to restore said Irrevocable Letter of
Credit to the full amount required by the Lease. 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 Irrevocable Letter of Credit to the extent necessary, in
Lessor's reasonable judgement, to account for any increased wear and tear
that the Premises may suffer as a result thereof. No part of the
Irrevocable Letter of Credit shall be considered to be held in trust, to
bear interest or be prepayment for any monies to be paid by Lessee under
thin Lease. The Irrevocable Letter of Credit in effect shall be Two
Million Dollars ($2,000.000) for the initial twelve (12) months of the
Lease Term, then reduced to One Million Dollars ($1,000,000) for the next
twelve (12) months, then at the beginning of the third (3rd) year of the
term, the amount shall be reduced by 1/12th for each consecutive month
thereafter.
51. Landlord's Work: Prior to Lease Commencement, Lessor agrees to patch or
repair the roof membrane on the approximately 39,000 square foot office
building. Thereafter, Lessee shall be responsible for maintaining all
roofing surfaces for the Premises.
52. Access, Parking and Delivery of Entire Premises.
During the period of Lessee's shared occupancy with Novocom, the Lessee
shall have access to that portion of the premises that have been delivered
on a 24 hours per day and
6.
7 days per week basis; provided, the Lessee uses the entry way that is
situated closest to the rear parking lot for purposes of such access.
During the period of shared occupancy the Lessee shall be entitled to the
use of no less than 75 parking spaces situated in the rear of the premises.
Notwithstanding anything to the contrary herein, the entire premises shall
be delivered to Lessee no later than March l, 2000.
This Addendum is entered into as of the date first above written
"LESSOR"
Xxxxxxxxx Trust, Xxxx X. Xxxxxxx, Trustee
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Title: Trustee
---------------------------
"LESSEE"
US XXXXXX.xxx, Inc., a Delaware corporation
By: /s/ C. Xxxxxxxx Xxxxxxx, Xx.
------------------------------
Title: President and CEO
---------------------------
By:
------------------------------
Title:
---------------------------
7.
