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Exhibit 10.2
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET
(Do not use this form for Multi-Tenant Property)
1. Basic Provisions ("Basic Provisions")
1.1 Parties: This Lease ("Lease"), dated for reference purposes
only, October 9, 1996, is made by and between Xxxxxx X. Xxxxxx
and Xxxxxx X. Xxxxxx, Trustees of the Xxxxxx Family Trust U/D/T
dated December 7, 1995 ("Lessor") and ATL Products, Inc., a
California corporation, a wholly owned subsidiary of ODETICS,
Inc., a California corporation ("Lessee"), (collectively the
"Parties," or individually a "Party").
1.2 Premises: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this
Lease, and commonly known by the street address of 0000 Xxxxxx
Xxxxxx, Xxxxxx, located in the county of Orange, State of
California, and generally described as (describe briefly the
nature of the property) an approximate 123,412 square foot
industrial building, together with a separate parking area, more
particularly described on Exhibit "A" attached hereto and
incorporated herein by this reference ("Premises"). (See
Paragraph 2 for further provisions.)
1.3 Term: Seven (7) years and -0- months ("Original Term")
commencing November 1, 1996 ("Commencement Date") and ending
October 31, 2003 ("Expiration Date"). (See Paragraph 3 for
further provisions.)
1.4 Early Possession: Upon mutual execution of this Lease ("Early
Possession Date"). (See Paragraphs 3.2 and 3.3 for further
provisions.)
1.5 Base Rent: $65,408.36 per month ("Base Rent"), payable on the
first day of each month commencing November 1, 1996, subject to
the terms of the Addendum attached hereto. (See Paragraph 4 for
further provisions.)
/X/ 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: $65,408.36 as Base Rent for the
period November 1 through November 30, 1996.
1.7 Security Deposit: $65,408.36 ("Security Deposit"). (See
Paragraph 5 for further provisions.)
1.8 Permitted Use: Electronic assembly, warehousing and other
related uses. (See Paragraph 6 for further provisions.)
1.9 Insuring Party: Lessee is the "Insuring Party" unless otherwise
stated herein. (See Paragraph 8 for further provisions.)
1.10 Real Estate Brokers: The following real estate brokers
(collectively, the "Brokers") and brokerage relationships exist
in this transaction and are consented to by the Parties (check
applicable boxes):
Xxx & Associates, c/o Xxxx Xxxxx and Xxxxxx Highland represents
/X/ Lessor exclusively ("Lessor's Broker");
/ / both Lessor and Lessee, and
CB Commercial, c/o Xxx Xxxxxxxxx represents
/X/ Lessee exclusively ("Lessee's Broker");
/ / both Lessee and Lessor.
(See Paragraph 15 for further provisions.)
1.11 Guarantor. The obligations of the Lessee under this Lease are to
be guaranteed by ODETICS, Inc., a California corporation
("Guarantor"). (See Paragraph 37 for further provisions.)
1.12 Addenda. Attached hereto is an Addendum or Addenda consisting of
Paragraphs 49 through 57 and Exhibits "A" and "B" all of which
constitute a part of this Lease.
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2. Premises.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises, for the term, at the rental,
and upon all of the terms, covenants and conditions set forth in
this Lease. Unless otherwise provided herein, any statement of
square footage set forth in this Lease, or that may have been
used in calculating rental, is an approximation which Lessor and
Lessee agree is reasonable and the rental based thereon is not
subject to revision whether or not the actual square footage is
more or less.
2.2 Condition. Lessor shall deliver the Premises to Lessee clean and
free of debris on the Commencement Date and warrants to Lessee
that the existing plumbing, fire sprinkler system, lighting, air
conditioning, heating, and loading doors, if any, in the
Premises, other than those constructed by Lessee, shall be in
good operating condition on the Commencement Date. If a
non-compliance with said warranty exists as of the Commencement
Date, Lessor shall, except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting
forth with specificity the nature and extent of such
non-compliance, rectify same at Lessor's expense. If Lessee does
not give Lessor written notice of a of non-compliance with this
warranty within thirty (30) days after the Commencement Date,
correction of that non-compliance shall be the obligation of
Lessee at Lessee's sole cost and expense.
2.3 Compliance with Covenants, Restrictions and Building Code.
Lessor warrants to Lessee that the improvements on the Premises
comply with all applicable covenants or restriction of record
and applicable building codes, regulations and ordinances in
effect on the Commencement Date (See Addendum). Said warranty
does not apply to the use to which Lessee will put the Premises
or to any Alterations or Utility Installations (as defined in
Paragraph 7.3(a)) made or to be made by Lessee. If the Premises
do not comply with said warranty, Lessor shall, except as
otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specifically the
nature and extent of such non-compliance, rectify the same at
Lessor's expense. If Lessee does not give Lessor written notice
of a non-compliance with this warranty with six (6) months
following the Commencement Date, correction of that
non-compliance shall be the obligation of Lessee at Lessee's
sole cost and expense.
2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it
has been advised by the Brokers to satisfy itself with respect
to the condition of the Premises (including but not limited to
the electrical and fire sprinkler systems, security,
environmental aspects, compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability
of the Premises for Lessee's intended use, (b) that Lessee has
made such investigation as it deems necessary with reference to
such matters and accepts the Premises in their "as is" condition
(except as otherwise provided in the Lease), and (c) that
neither Lessor, nor any of Lessor's agents, has made any oral
or written representations or warranties with respect to the
said matters other than as set forth in this Lease.
2.5 Lessee Prior Owner/Occupant. The warranties made by Lessor in
this Paragraph 2 shall be of no force or effect if immediately
prior to the date set forth in Paragraph 1.1 Lessee was the
owner or occupant of the Premises. In such event, Lessee shall,
at Lessee's sole cost and expense, correct any non-compliance of
the Premises with said warranties.
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, however, (including
but not limited to the obligations to pay Real Property Taxes
and insurance premiums and to maintain the Premises) shall be in
effect during such period. Any such early possession shall not
affect nor advance the Expiration Date of the Original Term.
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3.3 Delay in Possession. If for any reason Lessor cannot deliver
possession of the Premises to Lessee as agreed herein by the
Early Possession Date, if one is specified in Paragraph 1.4, or,
if no Early Possession Date is specified, by the Commencement
Date, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease, or the
obligations of Lessee hereunder, or extend the term hereof, but
in such case, Lessee shall not, except as otherwise provided
herein, be obligated to pay rent or perform any other obligation
of Lessee under the terms of this Lease until Lessor delivers
possession of the Premises to Lessee. If possession of the
Premises is not delivered to Lessee within sixty (60) days after
the Commencement Date, Lessee may, at its option, by notice in
writing to Lessor within ten (10) days thereafter, cancel this
Lease, in which event the Parties shall be discharged from all
obligations hereunder; provided, however, that if such written
notice by Lessee is not received by Lessor within said ten (10)
day period, Lessee's right to cancel this Lease shall terminate
and be of no further force or effect. Except as may be otherwise
provided, and regardless of when the term actually commences, if
possession is not tendered to Lessee when required by this Lease
and Lessee does not terminate this Lease, as aforesaid, the
period free of the obligation to pay Base Rent, if any, that
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, changes or omissions
of Lessee.
4. Rent
4.1 Base Rent. Lessee shall cause payment of Base Rent and other
rent or charges, as the same may be adjusted from time to time,
to be received by Lessor in lawful money of the United States,
without offset or deduction, on or before the day on which it is
due under the terms of this Lease. Base Rent and all other rent
and charges 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 the calendar month involved.
Payment of Base Rent and other charges shall be made to Lessor
at its address stated herein or to such other persons or at such
other addresses as Lessor may from time to time designate in
writing to Lessee.
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease. If Lessee
fails to pay Base Rent or other rent or charges due hereunder, or otherwise
Defaults under this Lease (as defined in Paragraph 13.1), Lessor may use,
apply or retain all or any portion of said Security Deposit for the payment
of any amount due Lessor or to reimburse or compensate Lessor for any
liability, cost, expense, loss or damage (including attorneys' fees) which
Lessor may suffer or incur by reason thereof. If Lessor properly uses or
applies all or any portion of said Security Deposit, Lessee shall within
ten (10) days after written request therefor deposit moneys with Lessor
sufficient to restore said Security Deposit to the full amount required by
this Lease. Lessor shall not be required to keep all or any part of the
Security Deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, or Lessee's interest herein), that portion of the
Security Deposit not used or applied by Lessor. Unless otherwise expressly
agreed in writing by Lessor, no part of the Security Deposit shall be
considered to be held in trust, to bear interest or other increment for its
use, or to be prepayment for any moneys to be paid by Lessee under this
Lease.
6. Use
6.1 Use. Lessee shall use and occupy the Premises only for the
purposes set forth in Paragraph 1.8, or any other use which is
comparable thereto, and for no other purpose. Lessee shall not
use or permit the use of the Premises in a manner that creates
waste or a nuisance, or that disturbs owners and/or occupants
of, or causes damage to, neighboring premises or properties.
Lessor hereby agrees to not unreasonably withhold or delay its
consent to any written request by Lessee, Lessees assignees or
subtenants, and by prospective assignees and subtenants of the
Lessee, its assignees and subtenants, for a modification of said
permitted purpose for which the premises may be used or
occupied, so long as the same will not impair the structural
integrity of the improvements on the Premises, the mechanical or
electrical systems therein, is not significantly more burdensome
to the Premises and
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the improvements thereon, and is otherwise permissible pursuant
to this Paragraph 6. If Lessor elects to withhold such consent,
Lessor shall within five (5) business days give a written
notification of same, which notice shall include an explanation
of Lessor's reasonable objections to the change in use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous
Substance" as used in this Lease shall mean any product,
substance, chemical, material or waste whose presence,
nature, quantity and/or intensity of existence, use
manufacture, disposal, transportation, spill, release or
effect, either by itself or in combination with other
materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or
welfare, the environment or the Premises, (ii) regulated or
monitored by any governmental authority, or (iii) a basis
for liability of Lessor to any governmental agency or third
party under any applicable statute or common law theory.
Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil or any
products, by-products or fractions thereof. Lessee shall not
engage in any activity in, on or about the Premises which
constitutes a Reportable Use (as hereinafter defined) of
Hazardous Substances without the express prior written
consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Law (as
defined in Paragraph 6.3). "Reportable Use" shall mean (i)
the installation or use of any above or below ground storage
tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that
requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be
filed with, any governmental authority. Reportable Use shall
also include Lessee's being responsible for the presence in,
on or about the Premises of a Hazardous Substance with
respect to which any Applicable Law requires that a notice
be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing,
Lessee may, without Lessor's prior consent, but in
compliance with all Applicable Law, use any ordinary and
customary materials reasonably required to be used by Lessee
in the normal course of Lessee's business permitted on the
Premises, so long as such use is not a Reportable Use and
does not expose the Premises or neighboring properties to
any meaningful risk of contamination or damage or expose
Lessor to any liability therefor. In addition, Lessor may
(but without any obligation to do so) condition its consent
to the use or presence of any Hazardous Substance, activity
or storage tank by Lessee upon Lessee's giving Lessor such
additional assurances as Lessor, in its reasonable
discretion, deems necessary to protect itself, the public,
the Premises and the environment against damage,
contamination or injury and/or liability therefrom or
therefor, including but not limited to, the installation
(and removal on or before Lease expiration or earlier
termination) of reasonably necessary protective
modifications to the Premises (such as concrete encasements)
and/or the deposit of an additional Security Deposit under
Paragraph 5 hereof.
(b) Duty to Inform Lessor. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance, or a condition
involving or resulting from same, 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. Lessee shall also
immediately give Lessor a copy of any statement, report,
notice, registration, application, permit, business plan,
license, claim, action or proceeding given to, or received
from, any governmental authority or private party, or
persons entering or occupying the Premises, concerning the
presence, spill, release, discharge of, or exposure to, any
Hazardous Substance or contamination in, on, or about the
Premises, including but not limited to all such documents as
may be involved in any Reportable Uses involving the
Premises.
(c) Indemnification. Lessee shall indemnify, protect, defend and
hold Lessor, its agents, employees, lenders and ground
lessor, if any, and the Premises, harmless from and against
any and all loss of rents and/or damages, liabilities,
judgments, costs, claims, liens, expenses, penalties,
permits and attorney's and consultant's fees arising out of
our involving any Hazardous Substance or storage tank
brought onto the Premises by or for Lessee or under Lessee's
control. Lessee's obligations under this Paragraph 6 shall
include, but not be limited
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to, the effects of any contamination or injury to person,
property or the environment created or suffered by Lessee,
and the cost of investigation (including consultant's and
attorney's fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any
contamination therein involved, and shall survive the
expiration or earlier termination of this Lease. No
termination, cancellation or release agreement entered into
by Lessor and Lessee shall release Lessee from its
obligations under this Lease with respect to Hazardous
Substances or storage tanks, unless specifically so agreed
by Lessor in writing at the time of such agreement.
6.3 Lessee's Compliance with Law. Except as otherwise provided in
this Lease, Lessee, shall, at Lessee's sole cost and expense,
fully, diligently and in a timely manner, comply with all
"Applicable Law," which term is used in this Lease to include
all laws, rules, regulations, ordinances, directives, covenants,
easements and restrictions of record, permits, the requirements
of any applicable fire insurance underwriter or rating bureau,
and the recommendations of Lessor's engineers and/or
consultants, relating in any manner to the Premises (including
but not limited to matter pertaining to (i) industrial hygiene,
(ii) environmental conditions on, in, under or about the
Premises, including soil and groundwater conditions, and (iii)
the use, generation, manufacture, production, installation,
maintenance, removal, transportation, storage, spill or release
of any Hazardous Substance or storage tank), now in effect or
which may hereafter come into effect, and whether or not
reflecting a change in policy from any previously existing
policy. Lessee shall, within five (5) days after receipt of
Lessor's written request, provide Lessor with copies of all
documents and information, including, but not limited to,
permits, registrations, manifests, applications, reports and
certificates, evidencing Lessee's compliance with any Applicable
Law 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,
compliant or report pertaining to or involving failure by Lessee
or the Premises to comply with any Applicable Law.
6.4 Inspection; Compliance, Lessor and Lessor's Lender(s) (as
defined in Paragraph 8.3 (a)) shall have the right to enter the
Premises at any time, in the case of an emergency, and otherwise
at reasonable times, upon reasonable prior notice to Lessee, for
the purpose of inspecting the condition of the Premises and for
verifying compliance by Lessee with this Lease and all
Applicable Laws (as defined in Paragraph 6.3), and to employ
experts and/or consultants in connection therewith and/or to
advise Lessor with respect to Lessee's activities, including but
not limited to the installation, operation, use, monitoring,
maintenance, or removal of any Hazardous Substance or storage
tank on or from the Premises. The costs and expenses of any such
inspections shall be paid by the party requesting same, unless a
Default or Breach of this Lease, violation of Applicable Law, or
a contamination, caused or materially contributed to by Lessee
is found to exist or be imminent, or unless the inspection is
requested or ordered by a governmental authority as the result
of any such existing or imminent violation or contamination. In
any such case, Lessee shall upon request reimburse Lessor or
Lessor's Lender, as the case may be, for the costs and expenses
of such inspections.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures and
Alterations.
7.1 Lessee's Obligations.
(a) Subject to the provisions of Paragraphs 2.2 (Lessor's
warranty as to condition), 2.3 (Lessor's warranty as to
compliance with covenants, etc.).
7.2 (Lessor's obligations to repair), 9 (damage and destruction),
and 14 (condemnation), and except as otherwise provided in the
Addendum. Lessee shall, at Lessee's sole cost and expense and at
all times, keep the Premises and every part thereof in good
order, condition and repair, structural and non-structural
whether or not such portion of the Premises requiring repairs,
or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such
repairs occurs as a result of Lessee's use, any prior use, the
elements or the age of such portion of the Premises) including,
without limiting the generality of the foregoing, all equipment
or facilities serving the Premises, such as plumbing, heating,
air conditioning, ventilating, electrical, lighting facilities,
boilers, fired or unfired pressure vessels, fire sprinkler
and/or standpipe and hose
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or other automatic fire extinguishing system, including fire
alarm and/or smoke detection systems and equipment, fire
hydrants, fixtures, walls (interior and exterior), foundations,
ceilings, roofs, floor, windows, doors, plate glass, skylights
landscaping, driveways, parking lots, fences, retaining walls,
signs, sidewalks and parkways located in, on, about, or adjacent
to the Premises. 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 of required, for the cleanup of
any contamination of, and for the maintenance, security, and/or
monitoring of the Premises, the elements surrounding same, or
neighboring properties, that was caused or materially
contributed to by Lessee, or pertaining to or involving any
Hazardous Substance and/or storage tank brought onto the
Premises by or for Lessee or under its control. Lessee, in
keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices. Lessee's
obligations shall include restorations, replacements or renewals
when necessary to keep the Premises and all improvements thereon
or a part thereof in good order, condition and state of repair.
If Lessee occupies the Premises for seven (7) years or more,
Lessor may require Lessee to repaint the exterior of the
buildings on the Premises as reasonably required, but not more
frequently than once every seven (7) years.
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain contracts, with copies to Lessor, in customary form
and substance for, and with contractors specializing and
experienced in, the inspection, maintenance and service of
the following equipment and improvements, if any, located on
the Premises: (i) heating, air conditioning and ventilation
equipment, (ii) boiler, fired or unfired pressure vessels,
(iii) fire sprinkler and/or standpipe and hose or other
automatic fire extinguishing systems, including fire alarm
and/or smoke detection, (iv) landscaping and irrigation
systems, (v) roof covering and drain maintenance and (vi)
asphalt and parking lot maintenance.
7.2 Lessor's Obligations. Except for the warranties and agreements
of Lessor contained in Paragraphs 2.2 (relating to condition of
the Premises), 2.3 (relating to compliance with covenants,
restrictions and building code), 9 (relating to destruction of
the Premises) and 14 (relating to condemnation of the Premises),
and except as otherwise provided in the Addendum. It is intended
by the Parties hereto that Lessor have no obligation, in any
manner whatsoever, to repair and maintain the Premises, the
improvements located thereon, or the equipment therein, whether
structural or non structural, all of which obligations are
intended to be that of the Lessee under paragraph 7.1 hereof. 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. Lessee and Lessor
expressly waive the benefit of any statue now or hereafter in
effect to the extent it is inconsistent with the terms of this
Lease with respect to, or which affords Lessee the right to make
repairs at the expense of Lessor or to terminate this Lease by
reason of any needed repairs.
This section 7.3 shall not apply to the "Lessee Improvements",
which shall be handled as provided in the Addendum.
7.3 Utility installations; Trade Fixtures; Alterations.
(a) Definitions; Consent Required. The term "Utility
Installations" is used in Lease to refer to all carpeting,
window coverings, air lines, power panels, electrical
distribution, security, fire protection systems,
communication systems, lighting fixtures, heating,
ventilating, and air conditioning equipment, plumbing and
fencing in, on or about the Premises. The term "Trade
Fixtures" shall mean Lessee's machinery and equipment that
can be removed without doing material damage to the
Premises. The term "Alterations" shall mean any modification
of the improvements on the Premises from that which are
provided by Lessor under the terms of this Lease, other than
Utility Installations or Trade Fixtures, whether by addition
or deletion. "Lessee Owned Alterations and/or Utility
Installations" are defined as Alterations and/or Utility
Installations made by lessee that are not yet owned by
Lessor as defined in Paragraph 7.4(a). Lessee shall not make
any Alterations or Utility Installations in, on, under or
about the Premises
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without Lessor's prior written consent. Lessee may, however,
make non-structural Utility Installations to the interior of
the Premises (excluding the roof), 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 $25,000.
(b) Consent. Any Alterations or Utility Installations that
Lessee shall desire to make and which require the consent of
the Lessor shall where appropriate be presented to Lessor in
written form with proposed detailed plans. All consents
given by Lessor, whether by virtue of Paragraph 7.3(a) or by
subsequent specific consent, shall be deemed conditioned
upon: (i) Lessee's acquiring all applicable permits required
by governmental authorities, (ii) the furnishing of copies
of such permits together with a copy of the plans and
specifications for the Alteration or Utility Installation to
Lessor prior to commencement of the work thereon, and (iii)
the compliance by Lessee with all conditions of said permits
in a prompt and expeditious manner. Any Alterations or
Utility Installations by Lessee during the term of this
Lease shall be done in a good and workmanlike manner, with
good and sufficient materials, and in compliance with all
Applicable Law. Lessee shall promptly upon completion
thereof furnish Lessor with as-built plans and
specifications therefor. Lessor may (but without obligation
to do so) condition its consent to any requested Alteration
or Utility Installation that costs $10,000 or more upon
Lessee's providing Lessor with a lien and completion bond in
an amount equal to the estimated cost of such Alteration or
Utility Installation and/or upon Lessee's posting an
additional Security Deposit with Lessor under Paragraph 36
hereof.
(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 no less than ten (10)
day's notice prior to the commencement of any work in, on or
about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as
provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee
shall, at its sole expense defend and protect itself, Lessor
and the Premises against the same and shall pay and satisfy
any such adverse judgment that may be rendered thereon
before the enforcement thereof against the Lessor or the
Premises. If Lessor shall require, Lessee shall furnish to
Lessor a surety bond satisfactory to Lessor in an amount
equal to one and one-half times the amount of such contested
lien claim or demand, indemnifying Lessor against liability
for the same, as required by law for the holding of the
Premises free from the effect of such lien or claim. In
addition, Lessor may require Lessee to pay Lessor's
attorney's fees and costs in participating in such action if
Lessor shall decide it is to its best interest to do so.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require their
removal or become the owner thereof as hereinafter provided
in this Paragraph 7.4, all Alterations and Utility Additions
made to the Premises by Lessee shall be the property of and
owned by Lessee, but considered a part of the Premises.
Lessor may, at any time and at its option, elect in writing
to Lessee to be the owner of all or any specified part of
the Lessee Owned Alterations and Utility Installations.
Unless otherwise instructed per subparagraph 7.4(b) hereof,
all Lessee Owned Alterations and Utility Installations
shall, at the expiration or earlier termination of this
Lease, become the property of Lessor and remain upon and be
surrendered by Lessee with the Premises.
(b) Removal. Unless otherwise agreed in writing, Lessor may
require at the time of and as a condition to the giving of
its consent to a proposed Alteration or Utility Installation
that any or all Lessee Owned Alterations or Utility
Installations be removed by the expiration or earlier
termination of this Lease, notwithstanding their
installation may have been consented to by Lessor. Lessor
may require the removal at any time of all or any part of
any Lessee Owned Alterations or Utility Installation made
without the required consent of Lessor.
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(c) Surrender/Restoration. Lessee shall surrender the Premises
by the end of the last day of the Lease term or any earlier
termination date, with all of the improvements, parts and
surfaces thereof clean and free of debris and in good
operating order, condition and state of repair, ordinary
wear and tear excepted. "Ordinary wear and tear" shall not
include any damage or deterioration that would have been
prevented by good maintenance practice or by Lessee
performing all of its obligations under this Lease. Except
as otherwise agreed or specified in writing by Lessor, the
Premises, as surrendered, shall include the Utility
installations. The obligations of Lessee shall include the
repair of any damage occasioned by the installation,
maintenance or removal of Lessee's Trade Fixtures,
furnishings, equipment, and Alterations and/or Utility
Installations, as well as the removal of any storage tank
installed by or for Lessee, and the removal, replacement, or
remediation of any soil, material or ground water
contaminated by Lessee, all as may then be required by
Applicable Law and/or good service practice. Lessee's Trade
Fixtures shall remain the property of Lessee and shall be
removed by Lessee subject to its obligation to repair and
restore the Premises per this Lease.
8. Insurance; Indemnity.
8.1 Payment for Insurance. Lessee is the Insuring Party, Lessee
shall pay for all insurance required under this Paragraph 8.
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 for any amount due.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force
during the term Lease a Commercial General Liability policy
of insurance protecting Lessee (as an additional insured)
against claims for bodily injury, personal injury, and
property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto. Such insurance shall be on an
occurrence basis providing single limit coverage in an
amount not less than $1,000,000 per occurrence with an
"Additional Insured-Managers or Lessors of Premises"
Endorsement and contain the "Amendment of the Pollution
Exclusion" for damage caused by heat, smoke or fumes from a
hostile fire. The policy shall not contain any intra-insured
exclusions as between insured persons or organizations, but
shall include coverage for liability assumed under this
Lease as an "insured contract" for the performance of
Lessee's indemnity obligations under this Lease. The limits
of said insurance required by this Lease or as carried by
Lessee shall not, however, limit the liability of Lessee nor
relieve Lessee of any obligation hereunder. All insurance to
be carried by Lessee shall be primary to and not
contributory with any similar insurance carried by Lessor,
whose insurance shall be considered excess insurance only.
8.3 Property Insurance - Building, Improvements and Rental Value.
(a) Building and Improvements. The Insuring Party shall obtain
and keep in force during the term of this Lease a policy or
policies in the name of Lessor, with loss payable to Lessor
and to the holders of any mortgages, deeds of trust or
ground leases on the Premises ("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 Lenders, but in no event more than the
commercially reasonable and available insurable value
thereof if, by reason of the unique nature or age of the
improvements involved, such latter amount is less than full
replacement cost. Lessee Owned Alterations and Utility
Installations shall be insured by Lessee under Paragraph. If
the coverage is available and commercially appropriate, such
policy or policies shall insure against all risks or direct
physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage
for any additional costs resulting from debris removal and
reasonable amounts of coverage for the enforcement of any
ordinance or law regulating the reconstruction or
replacement of any undamaged sections of the Premises
required to be demolished or
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removed by reason of the enforcement of any building,
zoning, safety or land use laws as the result of a covered
cause of loss. Said policy or policies shall also contain an
agreed valuation provision in lieu of any coinsurance
clause, waiver of subrogation, and inflation guard
protection causing an increase in the annual property
insurance coverage amount by a factor of not less 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
deductible clause, the deductible amount shall not exceed
$1,000 per occurrence, and Lessee shall be liable for such
deductible amount in the event of an Insured Loss, as
defined in Paragraph 9.1 (c).
(b) Rental Value. The Insuring Party shall, in addition, obtain
and keep in force during the term of this Lease a policy or
policies in the name of Lessor, with loss payable to Lessor
and Lender(s), insuring the loss of full rental and other
charges payable by Lessee to Lessor under this Lease for one
(1) year (including all real estate taxes, insurance costs,
and any scheduled rental increases). 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 rental revenues from the date of any
such loss. Said insurance shall contain an agree valuation
provision in lieu of any coinsurance clause, and the amount
of coverage shall be adjusted annually to reflect the
projected rental income, property taxes, insurance premium
costs and other expenses, if any, 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.
(c) Adjacent Premises. If the Premises are part of a larger
building, or if the Premises are part 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 the Lessee's acts,
omissions, use or occupancy of the Premises.
(d) Tenant's Improvements. Lessee is the Insuring Party, the
policy carried by Lessee under this Paragraph 8.3 shall
insure Lessee Owned Alterations and Utility Installations.
8.4 Lessee's Property Insurance. Subject to the requirements of
Paragraph 8.5, Lessee at its cost shall either by separate
policy or, at Lessor's option, by endorsement to a policy
already carried, maintain insurance coverage on all of Lessee's
personal property, Lessee Owned Alterations and Utility
installations in, on, or about the Premises similar in coverage
to that carried by the Insuring Party under Paragraph 8.3. 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 or the restoration of Lessee
Owned Alterations and Utility Installations. Lessee shall be the
Insuring Party with respect to the insurance required by this
Paragraph 8.4 and shall proved Lessor with written evidence that
such insurance is in force.
8.5 Insurance Policies. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where
the Premises are located, and maintaining during the policy term
a "General Policyholders Rating" of at least B+, V, or such
other rating as may be required by a Lender having a lien on the
Premises, as set forth in the most current issue of "Best's
Insurance Guide." Lessee shall not do or permit to be done
anything which shall invalidate the insurance policies referred
to in this Paragraph 8. Lessee shall cause to be delivered to
Lessor at the execution of Lease and prior to Lessee's taking
occupancy of the Premises, certified copies of policies of such
insurance or certificates evidencing the existence and amounts
of such insurance with the insureds and loss payable clauses as
required by this Lease. No such policy shall be cancellable or
subject to modification except after thirty (30) days prior
written notice to Lessor. Lessee shall at least thirty (30) days
prior to the expiration of such policies, furnish Lessor with
evidence of renewals or "insurance binders" evidencing renewal
thereof, or Lessor may order such insurance and charge the cost
thereof to Lessee, which amount shall be payable by Lessee to
Lessor upon demand. If the Insuring Party shall fail to procure
and maintain the insurance required to be carried by the
Insuring Party under this Paragraph 8, the other Party may, but
shall not be required to, procure and maintain the same, but at
Lessee's expense.
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8.6 Waiver of Subrogation. Without affecting any other rights or
remedies, Lessee and Lessor ("Waiving Party") each hereby
release and relieve the other, and waive their entire right to
recover damages (whether in contract or in tort) against the
other, for loss of or damage to the Waiving Party's property
arising out of or incident to the perils required to be insured
against under Paragraph 8. The effect of such releases and
waivers of the right to recover damages shall not be limited by
the amount of insurance carried or required, or by any
deductibles applicable thereto.
8.7 Indemnity. Except for Lessor's negligence and/or breach of
express warranties, Lessee shall indemnify, protect, defend and
hold harmless the Premises, Lessor and its agents, Lessor's
master or ground lessor, partners and Lenders, from and against
any and all claims, loss of rents and/or damages, costs, liens,
judgments, penalties, permits, attorney's and consultant's fees,
expenses and/or liabilities arising out of, involving, or in
dealing with, the occupancy of the Premises by Lessee, the
conduct of Lessee's business, any act, omission or neglect of
Lessee, its agent, contractors, employees or invitees, and out
of any Default or Breach by Lessee in the performance in a
timely manner of any obligation on Lessee's part to be performed
under this Lease. The foregoing shall include, but not be
limited to, the defense or pursuit of any claim or any action or
proceeding involved therein, and whether or not (in the case of
claims made against Lessor) litigated and/or reduced to
judgement, and whether well founded or not. In case any action
or proceeding be brought against Lessor by reason of any of the
foregoing matters, Lessee upon notice from Lessor shall defend
the same at Lessee's expense by counsel reasonably satisfactory
to Lessor and Lessor shall cooperate with Lessee in such
defense. Lessor need not have first paid any such claim in order
to be so indemnified.
8.8 Exemption of Lessor from Liability. Lessor shall not be liable
for injury or damage to the person or goods, wares, merchandise
or other property of Lessee, Lessee's employees, contractors,
invitees, customers, or any other person in or about the
Premises, whether such damage or injury is caused by or results
from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, fire
sprinklers, wires , appliances, plumbing, air conditioning or
lighting fixtures, or from any other cause, whether the 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, and
regardless of whether the cause of such damage or injury or the
means of repairing the same is accessible or not. Lessor shall
not be liable for any damages arising from any act or neglect of
any other 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.
9. Damage or Destruction
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction
to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations, the repair cost of
which damage or destruction is less than 50% of the then
Replacement Cost of the Premises immediately prior to such
damage or destruction, excluding from such calculation the
value of the land and Lessee Owned Alterations and Utility
Installations.
(b) "Premises Total Destruction" shall mean damage or
destruction to the Premises, other than Lessee Owned
Alterations and Utility Installations the repair cost of
which damage or destruction is 50% or more of the then
Replacement Cost of the Premises immediately prior to such
damage or destruction, excluding from such calculation the
value of the land and Lessee Owned Alterations and Utility
Installations.
(c) "Insured Loss" shall mean damage or destruction to
improvement on the Premises, other than Lessee Owned
Alterations and Utility Installations, 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.
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(d) "Replacement Cost" shall mean the cost to repair or rebuild
the improvements owned by Lessor at the time of the
occurrence to their condition existing immediately prior
thereto, including demolition, debris removal and upgrading
required by the operation of applicable building codes,
ordinances or laws, and without deduction for deprecation.
(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 the 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 such said
repairs. In the event, however, the shortage in proceeds 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 Lessor does
not receive such funds or assurance within said period, Lessor
may nevertheless elect by written notice to Lessee within ten
(10) days thereafter to make such restoration and repair as is
commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force
and effect. If in such case Lessor does not so elect, then this
Lease shall terminate sixty (60) days following the occurrence
of the damage or destruction. Unless otherwise agreed, Lessee
shall in no event have any right to reimbursement from Lessor
for any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake
shall be subject to Paragraph 9.3 rather than Paragraph 9.2,
notwithstanding that there may be some insurance coverage, but
the net proceeds of any such insurance shall be made available
for the repairs if made by either Party.
9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage
that is not an Insured Loss occurs, unless caused by a negligent
or willful act of Lessee (in which event Lessee shall make the
repairs at Lessee's expense and this Lease shall continue in
full force and effect, but subject to Lessor's rights under
Paragraph 13), Lessor may at Lessor's option, either: (i) repair
such damage as soon as reasonably possible at Lessor's expense,
in which event this Lease shall continue in full force and
effect, or (ii) give written notice to Lessee within thirty (30)
days after receipt by Lessor of knowledge of the occurrence of
such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the
event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessee shall have the right within ten
(10) days after the receipt of such notice to give written
notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without
reimbursement from Lessor. Lessee shall provide Lessor with the
required funds or satisfactory assurance thereof within thirty
(30) days following Lessee's said commitment. In such event this
Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and
the required funds are available. If Lessee does not give such
notice and provide the funds or assurance thereof within the
times specified above, this Lease shall terminate as of the date
specified in Lessor's notice of termination.
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9.4 Total Destruction. Notwithstanding any other provision hereof,
if a Premises Total Destruction occurs (including any
destruction required by any authorized public authority), this
Lease shall terminate sixty (60) days following the date of
such Premises Total Destruction, whether or not the damage or
destruction is an Insured Loss or was caused by a negligent or
willful act of Lessee. In the event, however, that the damage
or destruction was caused by Lessee, Lessor shall have the
right to recover Lessor's damages from Lessee except as
released and waived in Paragraph 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 exceed two (2) month's Base Rent, whether or not
an Insured Loss, Lessor may, at Lessor's option, terminate this
Lease effective sixty (60) days following the date of
occurrence of such damage by giving written notice to Lessee of
Lessor's election to do so within thirty (30) days after the
date of occurrence of such damage. Provided, however, if Lessee
at that time has an exercisable option to extend this Lease or
to purchase the Premises, then Lessee may preserve this Lease
by, within twenty (20) days following the occurrence of the
damage, or before the expiration of the time provided in such
option for its exercise, whichever is earlier ("Exercise
Period"), (i) exercising such option and (ii) providing Lessor
with any shortage in insurance proceeds (or adequate assurance
thereof) needed to make the repairs. If Lessee duly exercises
such option during said Exercise Period and provides Lessor
with funds (or adequate assurance thereof) to cover any
shortage in insurance proceeds, Lessor shall, at Lessor's
expense repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. If Lessee
fails to exercise such option and provide such funds or
assurance during said Exercise Period, then Lessor may at
Lessor's option terminate this Lease as the expiration of said
sixty (60) day period following the occurrence of such damage
by giving written notice to Lessee of Lessor's election to do
so within ten (10) days after the expiration of the Exercise
Period, notwithstanding any term or provision in the grant of
option to the contrary.
9.6 Abatement of Rent; Lessee's Remedies.
(a) In the event of damage described in Paragraph 9.2 (Partial
Damage-Insured) or 9.3 or 9.4 whether or not Lessor or
Lessee repairs or restores the Premises, the Base Rent, Real
Property Taxes, insurance premiums, and other charges, if
any, payable by Lessee hereunder for the period during which
such damage, its repair of the restoration continues shall
be abated in proportion to the degree to which Lessee's use
of the Premises is impaired. Except for abatement of Base
Rent, Real Property Taxes, insurance premiums, and other
charges, if any, as aforesaid, all other obligations of
Lessee hereunder shall be performed by Lessee, and Lessee
shall have no claim against Lessor for any damage suffered
by reason of any such repair or restoration.
(b) If Lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9 and shall
not commence, in a substantial and meaningful way, the
repair or restoration of the Premises within (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 to Lessor
and such Lenders and such repair or restoration is not
commenced within thirty (30) days after receipt of such
notice, this Lease shall terminate as of the date specified
in said notice. If Lessor or a Lender commences the repair
or restoration of the Premises within thirty (30) days after
receipt of such notice, this Lease shall continue in full
force and effect. "Commence" as used in this Paragraph shall
mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the
actual work on the Premises, whichever first occurs.
9.7 Hazardous Substance Conditions. If a Hazardous Substance
Condition occurs, unless Lessee is legally responsible therefor
(in which case Lessee shall make the investigation and
remediation thereof required by Applicable Law and this Lease
shall continue in full force and effect, but subject to Lessor's
rights under 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
13
Lessor's expense, in which event this Lease shall continue in
full force in effect, or (ii) if the estimated cost to
investigate and remediate such condition exceeds twelve (12)
times the then monthly Base Rent or $100,000, whichever is
greater, give written notice to Lessee within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition of Lessor's desire to terminate
this Lease as of the date sixty (60) days following the giving
of such notice. In the event Lessor elects to give such notice
of Lessor's intention to terminate this Lease, Lessee shall have
the right within ten (10) days after the receipt of such notice
to give written notice to Lessor of Lessee's commitment to pay
for the investigation and remediation of such Hazardous
Substance Condition totally at Lessee's expense and without
reimbursement from Lessor except to the extent of an amount
equal to twelve (12) times the then monthly Base Rent or
$100,000, whichever is greater. Lessee shall provide Lessor with
the funds required of Lessee or satisfactory assurance thereof
within thirty (30) days following Lessee's said commitment. In
such event this Lease shall continue in full force and effect,
and Lessor shall proceed to make such investigation and
remediation as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and
provide the required funds or assurance thereof within the times
specified above, this Lease shall terminate as of the date
specified in Lessor's notice of termination. If a Hazardous
Substance Condition occurs for which Lessee is not legally
responsible, there shall be abatement of Lessee's obligations
under this Lease to the same extent as provided in Paragraph
9.6(a) for a period of not to exceed twelve (12) months.
9.8 Termination-Advance Payments. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be
made concerning advance Base Rent and any other advance payments
made by Lessee to Lessor. Lessor shall, in addition, return to
Lessee so much Lessee's Security Deposit as has not been, or is
not then required to be, used by Lessor under the terms of this
Lease.
9.9 Waive Statutes. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of
the Premises with respect to the termination of this Lease and
hereby waive the provisions of any present or future statute to
the extent inconsistent herewith.
10. Real Property Taxes.
10.1 (a) Payment of Taxes. Lessee shall pay the Real Property
Taxes, as defined in Paragraph 10.2, applicable to the
Premises during the term of this Lease. Subject to Paragraph
10.1(b), all such payments shall be made at least ten (10)
days prior to the delinquency date of the applicable
installment. Lessee shall promptly furnish Lessor with
satisfactory evidence that such taxes have been paid. If any
such taxes to be paid by Lessee shall cover any period of
time prior to or after the expiration of earlier termination
of the term hereof, Lessee's share of such taxes shall be
equitably prorated to cover only the period of time within
the tax fiscal year this Lease is in effect, and Lessor
shall reimburse Lessee for any overpayment after such
proration. If Lessee shall fail to pay any Real Property
Taxes required by this Lease to be paid by Lessee, Lessor
shall have the right to pay the same, and Lessee shall
reimburse Lessor therefor upon demand.
(b) Advance Payment. In order to insure payment when due and
before delinquency of any or all Real Property Taxes, Lessor
reserves the right, at Lessor's option, to estimate the
current Real Property Taxes applicable to the Premises, and
to require such current year's Real Property Taxes to 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 that equal monthly amount which,
over the number of months remaining before the month in
which the applicable tax installment would become delinquent
(and without interest thereon), would provide a fund large
enough to fully discharge before delinquency the estimated
installment of taxes to be paid. When the actual amount of
the applicable tax xxxx is known, the amount of such equal
monthly advance payment shall be adjusted as required to
provide the fund needed to pay the applicable taxes before
delinquency. If the amounts paid to Lessor by Lessee under
the provisions of this Paragraph are insufficient to
discharge the obligations of Lessee to pay such Real
Property Taxes as the same become due, Lessee shall pay to
Lessor, upon Lessor's demand, such additional sums as are
14
necessary to pay such obligations. All moneys paid to Lessor
under this Paragraph may be intermingled with other moneys
of Lessor and shall not bear interest. In the event of a
Breach by Lessee in the performance of the obligations of
Lessee under this Lease, then any balance of funds paid to
Lessor under the provisions of this Paragraph may, subject
to proration as provided in Paragraph 10.1(a), at the option
of Lessor, be treated as an additional Security Deposit
under Paragraph 5.
10.2 Definition of "Real Property Taxes." As used herein, the term
"Real Property Taxes" shall include any form of real estate tax
or assessment, general, special, ordinary or extraordinary, and
any license fee, commercial rental tax, improvement bond or
bonds, levy or tax (other than inheritance, personal income or
estate taxes) imposed upon the Premises by any authority having
the direct or indirect power to tax, including any city, state
or federal government, or any school, agricultural, sanitary,
fire, street, drainage or other improvement district thereof,
levied against any legal or equitable interest of Lessor in the
Premises or in the real property or which the Premises are a
part, Lessor's right to rent or other income therefrom, and/or
Lessor's business of leasing the Premises. The term "Real
Property Taxes" shall also include any tax, fee, levy,
assessment or charge, or any increase therein, imposed by reason
of events occurring, or changes in applicable law taking effect,
during the term of this Lease, including but not limited to a
change in the ownership of the Premises or in the improvements
thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated
by the Parties.
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 that tax parcel assessed, such proportion to be
determined by Lessor from the respective valuations assigned in
the assessor's work sheets or such other information as may be
reasonably available. Lessor's reasonable determination thereof,
in good faith, shall be conclusive.
10.4 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 contained in the
Premises or elsewhere. When possible, Lessee shall cause its
Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real
property of Lessor. If any of Lessee's said personal property
shall be assessed with Lessor's real property, Lessee shall pay
Lessor the taxes attributable to Lessee within ten (10) days
after receipt of a written statement setting forth the taxes
applicable to Lessee's property or, at Lessor's option, as
provided in Paragraph 10.1(b).
11. Utilities. Lessee shall pay 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 charges jointly metered with other
premises.
12. Assignment and Subletting.
12.1 Lessor's Consent Required. See Addendum.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber
(collectively, "assignment") or sublet all or any part of
Lessee's interest in this Lease or in the Premises without
Lessor's Prior written consent given under and subject to
the terms of Paragraph 36.
(b) A change in the control of Lessee shall constitute an
assignment requiring Lessor's consent. The transfer, on a
cumulative basis, of twenty-five percent (25%) or more of
the voting control of Lessee shall constitute a change in
control for this purpose.
(c) The involvement of Lessee or its assets in any transaction,
or series of transactions (by way of merger, sale,
acquisition, financing, refinancing, transfer, leveraged
buy-out or otherwise), whether or not a formal assignment or
hypothecation of the Lease or Lessee's
15
assets occurs, which results or will result in a reduction
of the New Worth of Lessee, as hereinafter defined, by an
amount equal to or greater than twenty-five (25%) of such
Net Worth of Lessee as it was represented to Lessor at the
time of the execution by Lessor of this Lease or at the time
of the most recent assignment to which Lessor has consented,
or as it exists immediately prior to said transaction or
transactions constituting such reduction, at whichever time
said Net Worth of Lessee was or is greater, shall be
considered an assignment of this Lease by Lessee to which
Lessor may reasonably withhold its consent. "Net Worth of
Lessee" for purposes of this Lease shall be the net worth of
Lessee (excluding any guarantors) established under
generally accepted accounting principles consistently
applied.
(d) An assignment or subletting of Lessee's interest in this
Lease without Lessor's specific prior written consent shall,
at Lessor's option, be a Default curable after notice per
Paragraph 13.1(c), or a noncurable Breach without the
necessity of any notice and grace period. If lessor elects
to treat such unconsented to assignment or subletting as a
noncurable Breach, Lessor shall have the right to either:
(i) terminate this Lease, or (ii) upon thirty (30) days
written notice ("Lessor's Notice"), increase the monthly
Base Rent to fair market rental value or one hundred ten
percent (110%) of the Base Rent then in effect, whichever is
greater. Pending determination of the new fair market rental
value, if disputed by Lessee, Lessee shall pay the amount
set forth in Lessor's Notice, with any overpayment credited
against the next installment(s) of Base Rent coming due, and
any underpayment for the period retroactively to the
effective date of the adjustment being due and payable
immediately upon the determination thereof. Further, in the
event of such Breach and market value adjustment, (i) the
purchase price of any option to purchase the Premises held
by Lessee shall be subject to similar adjustment to the then
fair market value (without the Lease being considered an
encumbrance or any deduction for depreciation or
obsolescence, and considering the Premises at its highest
and best use and in good condition), or one hundred ten
percent (110%) of the price previously in effect, whichever
is greater, (ii) any index-oriented rental or price
adjustment formulas contained in this Lease shall be
adjusted to require that the base index be determined with
reference to the index applicable to the time of such
adjustment, and (iii) any fixed rental adjustments scheduled
during the remainder of the Lease term shall be increased in
the same ratio as the new market rental bears to the Base
Rent in effect immediately prior to the market value
adjustment.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by
Lessor shall be limited to compensatory damages and
injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written
assumption by such assignee of sublessee of the obligations
of Lessee under this Lease, (ii) release Lessee of any
obligations hereunder, or (iii) alter the primary liability
of Lessee for the payment of Base Rent and other sums due
Lessor hereunder or for the performance of any other
obligations to be performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending
approval or disapproval of an assignment. Neither a delay in
the approval or disapproval of such assignment nor the
acceptance of any rent or performance shall constitute a
waiver or estoppel of Lessor's right to exercise its
remedies for the Default or Breach by Lessee of any of the
terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall
not constitute a consent to any subsequent assignment or
subletting by Lessee or to any subsequent or successive
assignment or subletting by the sublessee. However, Lessor
may consent to subsequent sublettings and assignments of the
sublease or any amendments or modifications thereto without
notifying Lessee or anyone else liable on the Lease or
sublease and without
16
obtaining their consent, and such action shall not relieve
such persons from liability under this Lease or sublease.
(d) In the event of any Default or Breach of Lessee's
obligations under this Lease, Lessor may proceed directly
against Lessee, any Guarantors or any one else responsible
for the performance of the Lessee's obligations under this
Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity
responsible therefor to Lessor, or any security held by
Lessor or Lessee.
(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 modifications of the Premises, if any,
together with a non-refundable deposit of $1000 or ten
percent (10%) of the current monthly Base Rent, whichever is
greater, as reasonable consideration for Lessor's
considering and processing the request for consent. Lessee
agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably
requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such
sublease, be deemed, for the benefit of Lessor, to have
assumed and agreed to conform and comply with each and every
term, covenant, condition and obligation herein to be
observed or performed by Lessee during the term of said
assignment or sublease other than such obligations as are
contrary to or inconsistent with provisions of an assignment
or sublease to which Lessor has specifically consented in
writing.
(g) The occurrence of a transaction described in Paragraph
12.1(c) shall give Lessor the right (but not the obligation)
to require that the Security Deposit be increased to an
amount equal to six (6) times the then monthly Base Rent,
and Lessor may make the actual receipt by Lessor of the
amount required to establish such Security Deposit a
condition to Lessor's consent to such transaction.
(h) Lessor, as a condition to giving its consent to any
assignment or subletting, may require that the amount and
adjustment structure of the rent payable under this Lease be
adjusted to what is then the market value and/or adjustment
structure for property similar to the Premises as then
constituted.
12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by
Lessee of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not
expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any
sublease of all or a portion of the Premises heretofore or
hereafter made by Lessee, and Lessor may collect such rent
and income and apply same toward Lessee's obligations under
this Lease; provided, however, that until a Breach (as
defined in Paragraph 13.1) shall occur in the performance of
Lessee's obligations under this Lease, Lessee may, except as
otherwise provided in the Lease, receive, collect and enjoy
the rents accruing under such sublease. Lessor shall not, by
reason of this or any other assignment of such sublease to
Lessor, nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure
of Lessee to perform and comply with any of Lessee's
obligations to such sublessee under such sublease. Lessee
hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor
stating that a Breach exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor the rents and
other charges due and to become due under the sublease.
Sublessee shall rely upon any such statement and request
from Lessor and shall pay such rents and other charges to
Lessor without any obligation or right to inquire as to
whether such Breach exists and notwithstanding any notice
from or claim from Lessee to the
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contrary. Lessee shall have no right or claim against said
sublessee, or, until the Breach has been cured, against
Lessor, for any such rents and other charges so paid by said
sublessee to Lessor.
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and
without any obligation to do so, may require any sublessee
to attorn to Lessor, in which event Lessor shall undertake
the obligations of the sublessor under such sublease from
the time of the exercise of said option to the expiration of
such sublease; provided, however, Lessor shall not be liable
for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any other prior Defaults
or Breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor
under a sublease shall also require the consent of Lessor
herein.
(d) No sublessee shall further assign or sublet all or any part
of the Premises without lessor's prior written consent.
(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. Lessor and Lessee agree that if an attorney
is consulted by Lessor in connection with a bonafide Lessee
Default or Breach (as hereinafter defined), $350.00 is a
reasonable minimum sum per such occurrence for legal
services and costs in the preparation and service of a
notice of Default, and that Lessor may include the cost of
such services and costs in said notice as rent due and
payable to cure said Default. A "default" is defined as a
failure by the Lessee to observe, comply with or perform any
of the terms, covenants, conditions or rules applicable to
Lessee under this Lease. A "Breach" is defined as the
occurrence of any one or more of the following Defaults,
and, where a grace period for cure after notice is specified
herein, the failure by Lessee to cure such Default prior to
the expiration of the applicable grace period, shall entitle
Lessor to pursue the remedies set forth in Paragraphs 13.2
and/or 13.3:
(b) Except as expressly otherwise provided in this Lease, the
failure by lessee to make any payment of Base Rent as and
when due, or any other monetary payment required to be made
by Lessee hereunder, whether to lessor or to a third party,
within 10 days of the due date for such other monetary
payment, the failure by Lessee to provide Lessor with
reasonable evidence of insurance or surety bond required
under this lease, or the failure of Lessee to fulfill any
obligation under this Lease which endangers or threatens
life or property, where such failure continues for a period
of three (3) days following written notice thereof by or on
behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in the Lease, the
failure by Lessee to provide Lessor with reasonable written
evidence (in duly executed original form, if applicable) of
(i) compliance with Applicable Law per Paragraph 6.3, (ii)
the inspection, maintenance and service contracts required
under Paragraph 7.1 (b), (iii) the rescission of an
unauthorized assignment or subletting per Paragraph 12.1
(b), (iv) a Tenancy Statement per Paragraphs 16 or 37, (v)
the subordination or non-subordination of this Lease per
Paragraph 30, (vi) the guaranty of the performance of
Lessee's obligations under this Lease if required under
Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any
other documentation or information which Lessor may
reasonably require of lessee under the terms of this Lease,
where any such failure continues for a period of ten (10)
days following written notice by or on behalf of Lessor to
Lessee.
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(d) A Default by Lessee as to the terms, covenants, conditions
or provisions of this Lease, or of the rules adopted under
Paragraph 40 hereof, that are to be observed, complied with
or performed by Lessee, other than those described in
subparagraphs (a), (b) or (c), above, where such Default
continues for a period of thirty (30) days after written
notice thereof by or on behalf of Lessor to Lessee;
provided, however, that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably required
for its cure, then it shall not be deemed to be a Breach of
this lease by Lessee if Lessee commences such cure within
said thirty (30) day period and thereafter diligently
prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) The
making by lessee of any general arrangement or assignment
for the benefit of creditors; (ii) Lessee's becoming a
"debtor" as defined in 11 U.S.C. Section 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 (e) is contrary to any
applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining
provisions.
(f) The discovery by Lessor that any financial statement given
to Lessor by Lessee or any Guarantor of Lessee's obligations
hereunder was materially false.
(g) If the performance of Lessee's obligations under this Lease
is guaranteed: (i) the death of a guarantor, (ii) the
termination of a guarantor's liability with respect to this
Lease other than in accordance with the terms of such
guaranty, (iii) a guarantor's becoming insolvent or the
subject of a bankruptcy filing, or (iv) a guarantor's
refusal to honor the guaranty, and Lessee's failure, within
sixty (60) days following written notice by or on behalf of
Lessor to Lessee of any such event, to provide Lessor with
written alternative assurance or security, which, when
coupled with the then existing resources of Lessee, equals
or exceeds the combined financial resources of lessee and
the guarantors that existed at the time of execution of this
Lease.
13.2 Remedies. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days
after written notice of Lessee (or in case of an emergency,
without notice), Lessor may at its option (but without
obligation to do so), perform such duty or obligation on
Lessee's behalf, including but not limited to the obtaining of
reasonably required bonds, insurance policies, or governmental
licenses, permits or approvals. The costs and expenses of any
such performance by Lessor shall be due and payable by Lessee to
Lessor upon invoice therefor. If any check given to Lessor by
Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its option, may require all future payments to be
made under this Lease by Lessee to be made only by cashier's
check. In the event of a Breach of this Lease by Lessee, as
defined in Paragraph 13.1, with or without further notice or
demand, and without limiting Lessor in the exercise of any right
or remedy which Lessor may have by reason of such Breach, Lessor
may:
(a) Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease and the term
hereof shall terminate and Lessee shall immediately
surrender possession of the Premises to Lessor. In such
event lessor shall be entitled to recover from Lessee: (i)
the worth at the time of the award of the unpaid rent which
had been earned at the time of termination; (ii) the worth
at the time of award of the amount by which the unpaid rent
which would have been earned after termination until the
time of award exceeds the amount of such rental loss that
the Lessee proves could have been reasonably avoided; (iii)
the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee
proves could be reasonably avoided; and (iv) any other
amount necessary to compensate Lessor for all the detriment
proximity caused by the Lessee's failure to perform its
obligations under this Lease or which in
19
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 alternation of
the Premises, reasonable attorney's fees, and that portion
of the leasing commission paid by Lessor 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 prior
sentence shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%). Efforts by
lessor to mitigate damages causes by Lessee's Default or
Breach of this Lease shall not waive Lessor's right to
recover damages under this Paragraph. If termination of this
Lease is obtained through the provisional remedy of unlawful
detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable
therein, or Lessor may reserve therein the right to recover
all or any part thereof in a separate suit for such rent
and/or damages. If a notice and grace period required under
subparagraphs 13.1 (b), (c) or (d) was not previously given,
a notice to pay rent or quit, or to perform or quit, as the
case may be, given to Lessee under any statute authorizing
the forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes
required by subparagraphs 13.1 (b), (c) or (d). In such
case, the applicable grace under subparagraphs 13.1 (b), (c)
or (d) and under the unlawful detainer statute shall run
concurrently after the one such statutory notice, and the
failure of Lessee to cure the Default within the greater of
the two such grace periods shall constitute both an unlawful
detainer and a Breach of the Lease entitling Lessor to the
remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in
effect (in California under California Civil Code Section
1951.4) after Lessee's Breach and abandonment and recover
the rent as it becomes due, provided Lessee has the right to
sublet or assign, subject only to reasonable limitations.
See Paragraphs 12 and 36 for the limitations on assignment
and subletting which limitations Lessee and Lessor agree are
reasonable. Acts of maintenance or preservation, efforts to
relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not
constitute a termination of the Lessee's right to
possession.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein
the Premises are located.
(d) The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not
relieve Lessee from liability under any indemnity provisions
of this lease as to matters occurring or accruing during the
term hereof or by reason of Lessee's occupancy of the
Premises.
13.3 Inducement Recapture In Event Of Breach. Any agreement by Lessor
for free or abated rent or other charges applicable to the
Premises, or for the giving or paying by lessor to or for Lessee
of any cash or other bonus, inducement or consideration for
Lessee's entering into this Lease, all of which concessions are
hereinafter referred to as "Inducement Provisions," shall be
deemed conditioned upon Lessee's full and faithful performance
of all of the terms, covenants and conditions of this Lease to
be performed or observed by Lessee during the term hereof as the
same may be extended. Upon the occurrence of a Breach of this
Lease by Lessee, as defined in Paragraph 13.1, any such
inducement Provision shall automatically be deemed deleted from
this Lease and of no further force or effect, and the
unamortized portion of any rent, other charge, bonus, inducement
or consideration theretofore abated, given or paid by Lessor
under such an Inducement Provision shall be immediately due and
payable by Lessee to Lessor, and recoverable by lessor as
additional rent due under this Lease, notwithstanding any
subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the
operation of this Paragraph 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 to Lessor of rent and other sums due hereunder will cause
Lessor to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to,
20
processing and accounting charges, and late charges which may be
imposed upon Lessor by the terms of any ground lease, mortgage
or trust deed covering the Premises. Accordingly, if any
installment of rent or any other sum due from Lessee shall not
be received by Lessor or Lessor's designee within ten (10) days
after such amount shall be due, then, without any requirement
for notice to Lessee, Lessee shall pay to Lessor a late charge
equal to four percent (4%) of such overdue amount. The parties
hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of
late payment by Lessee. Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee's Default or
Breach with respect to such overdue amount, nor prevent Lessor
from exercising any of the other rights and remedies granted
hereunder.
13.5 Breach by Lessor. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an
obligation required to be performed by Lessor. For purposes of
this Paragraph 13.5, a reasonable time shall in no event be less
than thirty (30) days after receipt by Lessor, and by the
holders of any ground lease, mortgage or deed of trust covering
the Premises whose name and address shall have been furnished
Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed;
provided, however, that if the nature of Lessor's obligation is
such that more than thirty (30) days after such notice are
reasonably required for its performance, then Lessor shall not
be in breach of this Lease if performance is commenced within
such thirty (30) day period and thereafter diligently pursued to
completion.
14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said
power (all of which are herein called "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority
takes title or possession, whichever first occurs. If more than ten percent
(10%) of the floor areas of the Premises or more than twenty-five percent
(25%) of the land area 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 as the rentable floor area of the Premises taken bears to the
total rentable floor area of the building located on the Premises. No
reduction of Base Rent shall occur if the only portion of the Premises
taken is land on which there is no building. Any award for the taking of
all or any part of the Premises under the power of eminent domain of any
payment made under threat of the exercise of such power shall be the
property of Lessor, whether such award shall be made as compensation for
diminution in value of the leasehold or for the taking of the fee, or as
severance damages; provided, however, that Lessee shall be entitled to any
compensation separately awarded to Lessee for Lessee's relocation expenses
and/or loss of Lessee's Trade Fixtures. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent of
its net severance damages received, over and above the legal and other
expenses incurred by Lessor in the condemnation matter, repair any damage
to the Premises caused by such condemnation, except to the extent that
Lessee has been reimbursed therefor by the condemning authority. Lessee
shall be responsible for the payment of any amount in excess of such net
severance damages required to complete such repair.
15. Broker's Fee.
15.1 The Brokers named in Paragraph 1.10 are the procuring causes of
this Lease.
15.2 Upon execution of this Lease by both Parties, Lessor shall pay
to said Brokers jointly, or in such separate shares as they may
mutually designated in writing, a fee as set forth in a separate
written agreement between Lessor and said Brokers for brokerage
services rendered by said Brokers to Lessor in this transaction.
PARAGRAPHS 15.3 AND 15.4 HAVE BEEN DELETED.
15.5 Lessee and Lessor each represent and warrant to the other that
it has had no dealings with any
21
person, firm, broker or finder (other than the Brokers, if any
named in Paragraph 1.10) in connection with the negotiation of
this Lease and/or the consummation of the transaction
contemplated hereby, and that no broker or other person, firm or
entity other than said named Brokers is entitled to any
commission or finder's fee in connection with said transaction.
Lessee and Lessor do each hereby agree to indemnify, protect,
defend and hold the other harmless from and against liability
for compensation or charges which may be claimed by any such
unnamed broker, finder or other similar party by reason of any
dealings or actions of the indemnifying Party, including any
costs, expenses, attorney's fees reasonably incurred with
respect thereto.
15.6 Lessor and Lessee hereby consent to and approve all agency
relationships, including any dual agencies, indicated in
Paragraph 1.10.
16. Tenancy Statement.
16.1 Each Party (as "Responding Party") shall within ten (10) days
after written notice form the other Party (the "Requesting
Party") execute, acknowledge and deliver to the Requesting Party
a statement in writing in form similar to the then most current
"Tenancy Statement" form published by the American Industrial
Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested
by the Requesting Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises,
any part thereof, or the building of which the Premises are a
part, Lessee and all Guarantors of Lessee's performance
hereunder shall deliver to any potential lender or purchaser
designated by Lessor such financial statements of Lessee and
such Guarantors as may be reasonably required by such lender or
purchaser. All such financial statements shall be received by
Lessor and such lender or purchaser in confidence and shall be
used only for the purposes herein set forth.
17. Lessor's Liability. The term "Lessor" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if
this is a sublease, of the Lessee's interest in the prior lease. In the
event of a transfer of Lessor's title or interest in the Premises or in
this Lease, Lessor shall deliver to the transferee or assignee (in cash or
by credit) any unused Security Deposit held by Lessor at the time of such
transfer or assignment. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid,
the prior Lessor shall be relieved of all liability with respect to the
obligations and/or covenants under this Lease thereafter to be performed by
the Lessor. Subject to the foregoing, the obligations and/or covenants in
this Lease to be performed by the Lessor shall be binding only upon the
Lessor as hereinabove defined.
18. Severability. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity
of any other provision hereof.
19. Interest on Past-Due Obligations. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within thirty
(30) days following the date on which it was due, shall bear interest from
the thirty-first (31st) day after it was due at the rate of 12% per annum,
but not exceeding the maximum rate allowed by law, in addition to the late
charge provided for in Paragraph 13.4.
20. Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this
Lease.
21. Rent Defined. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein,
and no other prior or contemporaneous agreement or understanding shall be
effective. Lessor and Lessee each represents and warrants to the Brokers
that it has made, and is relying solely upon, its own investigation as to
the nature, quality, character and financial responsibility of the other
Party to this Lease and as to the nature, quality and character of the
Premises. Brokers have no responsibility with respect thereto or with
respect to any default or breach hereof by either Party.
22
23. Notices.
23.1 All notices required or permitted by this Lease shall be in
writing and may be delivered in person (by hand or by messenger
or courier service) or may be sent by regular, certified or
registered mail or U.S. Postal Service Express Mail, with
postage prepaid, or by facsimile transmission, and shall be
deemed sufficiently given if served in a manner specified in
this Paragraph 23. The addresses noted adjacent to a Party's
signature on this Lease shall be that Party's address for
delivery or mailing of notice purposes. Either Party may by
written notice to the other specify a different address for
notice purposes, except that upon Lessee's taking possession of
the Premises, the Premises shall constitute Lessee's address for
the purpose of mailing or delivering notices to Lessee. A copy
of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or
parties at such addresses as Lessor may from time to time
hereafter designate by written notice to Lessee.
23.2 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. If any notice is transmitted
by facsimile transmission or similar means, the same shall be
deemed served or delivered upon telephone confirmation of
receipt of the transmission thereof, provided a copy is also
delivered via delivery or mail. If notice is received on a
Sunday or legal holiday, it shall be deemed received on the next
business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or of any other term, covenant or condition hereof.
Lessor's consent to, or approval of, any act shall not be deemed to render
unnecessary the obtaining of Lessor's consent to, or approval of, any
subsequent or similar act by Lessee, or be construed as the basis of an
estoppel to enforce the provision or provisions of the Lease requiring such
consent. Regardless of Lessor's knowledge of a Default or Breach at the
time of accepting rent, the acceptance of rent by Lessor shall not be a
waiver of any preceding Default or Breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so
accepted. Any payment given Lessor by Lessee may be accepted by Lessor on
account of moneys or damages due lessor, notwithstanding any qualifying
statements or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect whatsoever
unless specifically agreed to in writing by Lessor at or before the time of
deposit of such payment.
25. Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of
this Lease for recording purposes. The Party requesting recordation shall
be responsible for payment of any fees or taxes applicable thereto.
26. No Right to Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination
of this Lease.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
28. Covenants and Conditions. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any
litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.
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30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. Subject to Paragraph 30.3 below, this Lease and
any Option granted hereby shall be subject and subordinate to
any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security
Device"), now or hereafter placed by Lessor upon the real
property of which the Premises are a part, to any and all
advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions
thereof. Lessee agrees that the Lenders holding any such
Security Device shall have no duty, liability or obligation to
perform any of the obligations of Lessor under this Lease prior
to the date on which such party or its nominee takes title to
the premises, but that in the event of Lessor's default with
respect to any such obligation, Lessee will give any Lender
whose name and address have been furnished Lessee in writing for
such purpose notice of Lessor's default and allow such Lender
thirty (30) days following receipt of such notice for the cure
of said default before invoking any remedies Lessee may have by
reason thereof. If any Lender shall elect to have this Lease
and/or any Option granted hereby superior to the lien of its
Security Device and shall give written notice thereof to Lessee,
this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.
30.2 Attornment. Subject to the non-disturbance provision 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, Lessee's subordination of this Lease shall be subject
to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's possession and this Lease, including any
options to extend the term hereof, will not be disturbed so long
as Lessee is not in Breach hereof and attorns to the record
owner of the Premises.
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 such subordination or non-subordination,
attornment and/or non-disturbance agreement as is provided for
herein.
31. Attorney's Fees. If any Party brings an action or proceeding to enforce the
terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) in any such proceeding, action, or appeal thereon, shall
be entitled to reasonable attorney's fees. Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not such action or
proceeding is pursued to decision or judgment. The term, "Prevailing Party"
shall include, without limitation, a Party who substantially obtains or
defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party of its claim or
defense. The attorney's fees award shall not be computed in accordance with
any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably incurred. Lessor shall be entitled to attorney's
fees, costs and expenses incurred in the preparation and service of notices
of Default and consultations in connection therewith, whether or not a
legal action is subsequently commenced in connection with such Default or
resulting Breach.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times upon reasonable prior notice
to Lessee for the purpose of showing the same prospective purchasers,
lender, or lessees, and making such alterations, repairs, improvements or
additions to the Premises or to the building of which they are a part, as
Lessor may reasonably deem necessary. Lessor may at any time place on or
about the Premises or building any ordinary "For Sale" signs and Lessor may
at any time during the last one hundred twenty (120) days of the
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term hereof place on or about the Premises any ordinary "For Lease" signs.
All such activities of Lessor shall be without abatement of rent or
liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be concluded, either
voluntarily, or involuntarily, any auction upon the Premises without first
having obtained Lessor's prior written consent. Notwithstanding anything to
the contrary in this Lease, Lessor shall not be obligated to exercise any
standard of reasonableness in determining whether to grant such consent.
34. Signs. Lessee shall not place any sign upon the Premises, except that
Lessee may, with Lessor's prior written consent, install (but not on the
roof) such signs as are reasonably required to advertise Lessee's own
business. The installation of any sign on the Premises by or for Lessee
shall be subject to the provisions of Paragraph 7 (Maintenance, Repairs,
Utility Installations, Trade Fixtures and Alterations) and adherence to any
City ordinance or regulations and/or any covenants, conditions and
restrictions of record against the Premises. Unless otherwise expressly
agreed herein, Lessor reserves all rights to the use of the roof and the
right to install, and all revenues from the installation of, such
advertising signs on the Premises, including the roof, as do not
unreasonably interfere with the conduct of Lessee's business.
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the
mutual termination or cancellation hereof, or a termination hereof by
Lessor for Breach by Lessee, shall automatically terminate any sublease or
lesser estate in the premises; provided, however, Lessor shall, in the
event of any such surrender, termination or cancellation, have the option
to continue any one or all of any existing subtenancies. Lessor's failure
within ten (10) days following any such event to make a written election to
the contrary by written notice to the holder of any such lesser interest,
shall constitute Lessor's election to have such event constitute the
termination of such interest.
36. Consents.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a Party
is required to an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Lessor's actual
reasonable costs and expenses (including but not limited to
architect's, attorney's, engineer's or other consultants' fees)
incurred in the consideration of, or response to, a request by
Lessee for any Lessor consent pertaining to this Lease or the
Premises, including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous
Substance, practice or storage tank, shall be paid by Lessee to
Lessor upon receipt of an invoice and supporting documentation
therefor. Subject to Paragraph 12.2(e) (applicable to assignment
or subletting), Lessor may, as a condition to considering any
such request by Lessee, require that Lessee deposit with Lessor
an amount of money (in addition to the Security Deposit held
under Paragraph 5) reasonably calculated by Lessor to represent
the cost Lessor will incur in considering and responding to
Lessee's request. Except as otherwise provided, any unused
portion of said deposit shall be refunded to Lessee without
interest. Lessor's consent to any act, assignment of this Lease
or subletting of the Premises by Lessee shall not constitute an
acknowledgement that no Default or Breach by Lessee of this
Lease exists, nor shall such consent be deemed a waiver of any
then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such
consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to
specify herein any particular condition to Lessor's consent
shall not preclude the 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.
37. Guarantor.
37.1 If there are to be any Guarantors of this Lease per Paragraph
1.11, and each said Guarantor shall have the same obligations as
Lessee under this Lease, including but not limited to the
obligation to provide the Tenancy Statement and information
called for by Paragraph 16.
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37.2 It shall constitute a Default of the Lessee under this Lease if
any such Guarantor fails or refuses, upon reasonable request by
Lessor to give: (a) evidence of the due execution of the
guaranty called for by this Lease, including the authority of
the Guarantor (and of the party signing on Guarantor's behalf)
to obligate such Guarantor on said guaranty, and including in
the case of a corporate Guarantor, a certified copy of a
resolution of its board of directors authorizing the making of
such guaranty, together with a certificate of incumbency showing
the signature of the persons authorized to sign on its behalf,
(b) current financial statements of Guarantor as may from time
to time be requested by Lessor, (c) a Tenancy Statement, or (d)
written confirmation that the guaranty is still effect.
38. Quiet Possession. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term here
of subject to all of the provisions of this Lease.
39. Options.
39.1 Definition. As used in this Paragraph 39 the word "Option" has
the following meaning: (a) the right to extend the term of the
Lease or to renew this Lease as provided in the Addendum.
PARAGRAPHS 39.2 AND 39.3 HAVE BEEN DELETED.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise the Option,
notwithstanding any provision in the grant of Option to the
contrary: (i) during the period commencing with the giving
of any notice of Default under Paragraph 13.1 and continuing
until the noticed Default is cured, or (ii) during the
period of time any monetary obligation due Lessor from
Lessee is unpaid (without regard to whether notice thereof
is given Lessee), or (iii) during the time Lessee is in
Breach of this Lease.
(b) The period of time within which the Option may be exercised
shall not be extended or enlarged by reason of Lessee's
inability to exercise the Option because of the provisions
of Paragraph 39.4 (a).
41. Security Measures. Lessee hereby acknowledges that the rental Payable to
Lessor hereunder does include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide
the same. Lessee assumes all responsibility for the protection of the
Premises, Lessee, its agents and invitees and their property from acts of
third parties.
42. Reservations. Lessor reserves to itself 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 a sum or any part thereof, said Party
shall be entitled to recover such sum or so much thereof as it was not
legally required to pay under the provisions of this Lease.
44. Authority. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute
and deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty
26
(30) days after request by Lessor, deliver to Lessor evidence satisfactory
to Lessor of such authority.
45. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the type
written or handwritten provisions.
46. Offer. Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed and offer to lease to Lessee. This
Lease is not intended to be binding until executed by all Parties hereto.
47. Amendments. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. The parties shall
amend this Lease from time to time to reflect any adjustments that are made
to the Base Rent or other rent payable under this Lease. As long as they do
not materially change Lessee's obligations hereunder, Lessee agrees to make
such reasonable non-monetary modifications to this Lease as may be
reasonably required by an institutional, insurance company, or pension plan
Lender in connection with the obtaining of normal financing or refinancing
of the property of which the Premises are part.
48. Multiple Parties. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such Multiple Parties shall be the joint and several
responsibility of all persons of entities named herein as such Lessor or
Lessee.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION
TO YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
TO EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE
OF ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION
OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR
EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE
PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO
THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY
IS LOCATED IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE
WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place on the dates specified
above to their respective signatures.
Executed at _________________________________ Executed at Anaheim, CA
on _________________________________________ on November 6, 1996
by LESSOR: Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, by LESSEE: ATL Products, Inc., a California
Trustees of the Xxxxxx Family Trust U/D/T corporation, a wholly owned subsidiary
dated December 7, 1995 of ODETICS, Inc.
By /s/ XXXXXX X. XXXXXX By /s/ XXXXXXX X. XXXXX
------------------------------- -------------------------------
Name Printed: Xxxxxx X. Xxxxxx Name Printed: Xxxxxxx X. Xxxxx
Title: Trustee Title: V.P. & CFO
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By /s/ XXXXXX X. XXXXXX By
------------------------------- ---------------------------------------------
Name Printed: Xxxxxx X. Xxxxxx Name Printed: ______________________________
Title: Trustee Title: _____________________________________
Address: 00000 Xx Xxxxx, Xxxxx 000 Address: ___________________________________
Xxxx Xxxxx, Xxxxxxxxxx 00000 _____________________________________________
Tel. No. (000) 000-0000 Fax No. (000) 000-0000 Tel. No. ( )________ Fax No. ( )________
NOTICE: 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
Xxxxxxxx Xxxxxx, Xxxxx X-0, Xxx Xxxxxxx, XX 00000. (000) 000-0000. Fax. No.
(000) 000-0000.
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ADDENDUM TO
STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-TENANT LEASE - NET
This Addendum to Standard Industrial/Commercial Single-Tenant Lease -
Net (the "Addendum") is made by and between Xxxxxx X. Xxxxxx and Xxxxxx X.
Xxxxxx, as Trustees of the Xxxxxx Family Trust, U/D/T dated December 7, 1995
("Lessor"), and ATL Products, Inc., a California corporation ("Lessee"), a
wholly-owned subsidiary of Odetics, Inc., a California corporation.
The purpose of this Addendum is to supplement and modify the terms and
provisions of that certain Standard Industrial/Commercial Single-Tenant Lease -
Net entered into effective as of October 9, 1996, between Lessor and Lessee (the
"Lease"), relating to the approximate one hundred twenty-three thousand four
hundred twelve (123,412) square foot industrial building located at 0000 Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxx, and the parking area depicted in Exhibit "A" to the
Lease (collectively, the "Premises"). The terms and provisions of this Addendum
are hereby incorporated into, and made a part of, the Lease.
49. Early Possession.
Upon the mutual execution of this Lease, Lessor shall provide Lessee
with early possession of the Premises for the purpose of planning and
fixturization, provided (a) Lessee has paid the Base Rent to be paid upon
execution pursuant to paragraph 1.6 of the Lease, (b) Lessee has paid the
Security Deposit pursuant to paragraph 1.7 of the Lease, and (c) Lessee has
delivered to Lessor certificates of the insurance required to be carried by
Lessee as provided pursuant to paragraph 8.5 of the Lease.
50. Condition of Premises and Lessor Improvements.
Notwithstanding the provisions of Article 2 of the Lease, Lessor agrees
to perform and complete, at Lessor's sole cost and expense, the following
improvements to the Premises:
a. Lessor shall remove all asbestos found inside the building of the
Premises and in the roofing system of the building as described in the Phase I
Report - Environmental Site Assessment, prepared by ERM/West, Inc., in
compliance with all applicable laws and regulations, and shall repair those
areas where asbestos has been removed.
x. Xxxxxx shall remove the clean rooms (but not the offices) in the
locations in the building of the Premises depicted in Exhibit "B" attached
hereto and incorporated herein by this reference.
x. Xxxxxx shall paint the exterior of the building a color mutually
agreed upon between Lessor and Lessee.
x. Xxxxxx shall repair the crack in the parapet on the exterior wall
facing Jamboree.
51. Additional Lessor Obligations
In addition to the obligations of Lessor set forth in paragraph 50
above, Lessor agrees to repair, at its own cost and expense, the parking lot
portion of the Premises depicted on Exhibit "A" attached to the Lease, including
installing new landscaping, repairing the sprinkler systems such that they are
in good working condition, and repairing the exterior lighting such that it is
in good working condition. Lessor shall also repair and replace as necessary the
asphalt in such parking lot such that it is in good condition and shall restripe
the entire parking lot to be in compliance with City Code, at Lessor's cost and
expense. The parking lot improvements shall be diligently prosecuted to
completion, but such work shall not be a condition to Lessee's occupancy of the
Premises nor shall it affect the Commencement Date under the Lease or the date
Base Rent becomes payable under the Lease.
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52. Base Rent.
Subject to the provisions of paragraph "50" above and the provisions of
paragraph "53" below, commencing on the Commencement Date under the Lease, and
continuing through the original term of this Lease, Lessee shall pay to Lessor
Base Rent in the amounts and for the periods set forth immediately below, which
Base Rent shall be payable by Lessee on or before the first (1st) day of each
month, without any deduction or setoff whatsoever:
Base Rent Per Square
Months of Lease Term Foot Per Month Base Rent Per Month
-------------------- -------------------- -------------------
1 - 12 $.53 $65,408.36
13 - 24 $.56 $69,110.72
25 - 36 $.59 $72,813.08
37 - 48 $.62 $76,515.44
49 - 60 $.65 $80,217.80
61 - 72 $.68 $83,920.16
73 - 84 $.71 $87,622.52
53. Lessee Improvement Allowance.
53.1. Lessee Improvements. Lessor shall provide Lessee an improvement
allowance of Seven Hundred Thousand Dollars ($700,000.00) (the "Improvement
Allowance") to be used for the construction of improvements to the Premises (the
"Lessee Improvements"). The Lessee Improvements shall be constructed by Lessee
pursuant to the following terms and conditions:
a. Lessee shall prepare and deliver to Lessor for Lessor's approval,
which approval shall not be unreasonably withheld or delayed, one copy of plans
and working drawings for the Lessee improvements desired to be constructed by
Lessee in the Premises. Upon Lessor's approval of such plans and working
drawings, Lessee shall proceed diligently to complete the Lessee Improvements in
accordance with the approved plans and working drawings.
b. Lessee shall obtain such governmental permits and/or licenses as are
required by applicable laws to enable Lessee legally to construct the Lessee
Improvements and to conduct its business for the uses permitted hereunder from
the Premises. Lessee shall, at Lessee's expense, initiate, diligently pursue and
use its best efforts to obtain each permit and/or license.
c. Lessee's contractor shall provide evidence of California
contractor's license, certificate of insurance, labor and material releases as
appropriate, and shall provide opportunity to Lessor to post a notice of
nonresponsibility of Lessor as required pursuant to the terms of the Lease.
Lessee shall hold Lessor free and harmless and shall indemnify and defend Lessor
from and against any mechanic's liens or lawsuits from any subcontractors,
material suppliers, contractors, or others relating to or arising out of the
planning and construction of the Lessee Improvements.
d. All costs incurred in constructing the Lessee Improvements in excess
of the Improvement Allowance shall be the sole responsibility of and shall be
paid by Lessee. Upon payment of the Improvement Allowance, Lessor shall be
deemed to be the owner of all Lessee Improvements installed in the Premises by
Lessee.
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53.2. Disbursement of Improvement Allowance. Lessor shall make
disbursements of the Improvement Allowance to Lessee in accordance with the
following provisions: Upon receipt of applications for payment, including all
supporting documentation, submitted to Lessor by Lessee and not disputed by
Lessor in good faith, Lessor shall make disbursements of the Improvement
Allowance on a no more frequent basis than monthly. Disbursements of the
Improvement Allowance shall be made based on actual costs incurred by Lessee in
constructing the Lessee Improvements and, accordingly, each application for
payment shall be accompanied by appropriate invoices, payrolls and other
evidence showing actual costs incurred by Lessee in constructing the Lessee
Improvements. Disbursement of amounts requested in an application for payment
that has been approved by Lessor shall be paid by Lessor within ten (10) days
after Lessee's submission of the application for payment, together with all
required documentation. Such required documentation shall include appropriate
lien releases from Lessee's contractor and from all subcontractors, and such
other documentation and information as may be reasonably requested by Lessor.
All disbursements made to Lessee of any portion of the Improvement Allowance
may, at Lessor's option, be made by joint check made payable to Lessee and
Lessee's contractor.
53.3. Unused Improvement Allowance. In the event the cost to Lessee of
constructing the Lessee Improvements is less than the amount of the Improvement
Allowance, Lessee shall have the right to apply the unused portion of the
Improvement Allowance, up to a maximum amount of Three Hundred Thousand Dollars
($300,000.00) (the "Lessee Improvement Credit") against Lessee's obligation to
pay Base Rent during the first year of the term of this Lease. In no event may
the Lessee Improvement Credit exceed $300.000.00 and any portion of the Lessee
Improvement Credit not used within the first year of the Term of this Lease
shall expire at the end of the first year of the Term.
54. Assignment and Subletting.
54.1. Assignment to Controlling Entity. Notwithstanding the provisions
of subparagraph 12.1(b) of the Lease, Lessee may, with prior notice to Lessor,
but without the necessity of Lessor's consent and without resulting in a default
under this Lease, assign this Lease to any entity which controls, is controlled
by, or is under common control with Lessee, to any entity resulting from a
merger or consolidation with Lessee, or to any person or entity that acquires
all of the assets of Lessee as a going concern of the business that is being
conducted on the Premises or of the assets of any corporation that controls, is
controlled by, or is under common control with Lessee.
54.2. Lessee's Continuing Liability. Notwithstanding the provisions of
subparagraph 54.1 above, no subletting or assignment shall release or alter
Lessee's obligation or primary liability to pay the rental and perform all other
obligations under this Lease. The acceptance of rental by Lessor from any other
person or entity shall not be deemed a waiver by Lessor of any provision of this
Lease. In the event of default by any assignee or successor of Lessee in the
performance of any of the terms of this Lease, Lessor may proceed directly
against Lessee without the necessity of exhausting remedies against the assignee
or successor.
55. Option to Extend the Lease.
55.1 Option to Extend. Provided Lessee is not then in default under any
of the provisions or covenants of this Lease, Lessee shall have the option of
renewing the Term of the Lease for one period of sixty (60) additional months
(the "Option") by giving written notice to Lessor of Lessee's intent to renew
the Lease Term no less than one hundred eighty (180) days nor more than three
hundred sixty-five (365) days prior to the expiration of the initial Lease Term.
If the Option is duly exercised, the Lease Term shall be automatically extended
upon all of the same terms, conditions and covenants as are set forth in the
Lease, except that the Base Rent payable by Lessee for the Premises during the
term of the Option shall be equal to the "Prevailing Market Rental", as
hereinafter defined, to be determined as of the date of expiration of the
initial Term of the Lease ("Expiration Date"). Anything contained herein to the
contrary notwithstanding, if Lessee is in default under any of the terms,
covenants or conditions of this Lease either at the time Lessee exercises the
Option or any time thereafter prior to the commencement date of the term of the
Option, and such default is not cured within the applicable cure period, Lessor
shall have, in addition to all of Lessor's other rights and remedies provided in
the Lease, the right to terminate the Option already exercised by Lessee upon
notice to Lessee, in which event the expiration date of this Lease shall be and
remain the Expiration Date.
31
55.2 Prevailing Market Rental. As used herein, the term "Prevailing
Market Rental" for the Premises shall mean the rental and all other monetary
payments and escalations, including, without limitation, consumer price
indexing, that Lessor could obtain from a third party desiring to lease the
Premises for the Option term taking into account the size and location of the
Premises, the rental then being obtained for new leases of space comparable to
the Premises, and all other factors that would be relevant to a third party
desiring to lease the Premises for the Option term in determining the rental
such party would be willing to pay therefor; provided, however, no allowance for
the construction of tenant improvements shall be taken into account in
determining the Prevailing Market Rental. If Lessee exercises the Option, Lessor
shall send to Lessee a notice setting forth the Prevailing Market Rental for the
Option term determined by Lessor at least one hundred twenty (120) days prior to
the Expiration Date.
55.3 Appraisal Procedures. If Lessee objects to Lessor's determination
of the Prevailing Market Rental for the Premises, Lessee shall notify Lessor
within thirty (30) days of its receipt of the notice setting forth the
Prevailing Market Rental. If Lessee fails to notify Lessor within such thirty
(30) day period, Lessee shall be deemed to have approved Lessor's determination
of the Prevailing Market Rental. If Lessee objects to Lessor's determination,
Lessor and Lessee shall each appoint its own qualified MAI appraiser to appraise
the Premises within forty-five (45) days of Lessee's objection (the "Lessor's
Appraisal" and "Lessee's Appraisal," respectively) for the purpose of
determining the Prevailing Market Rental. The Lessor's Appraisal shall be the
Prevailing Market Rental for the purpose of determining the Base Rent during the
Option term if Lessee does not employ and pay an MAI appraiser to determine the
Prevailing Market Rental for the Premises and submit to Lessor within said
forty-five (45) day period Lessee's Appraisal, together with a written summary
of the methods used and data collected to make such determination. If Lessor's
Appraisal and Lessee's Appraisal differ by (i) less than six percent (6%), the
greater of the two shall be the Prevailing Market Rental for the Premises, or
(ii) more than six percent (6%), then Lessor and Lessee shall promptly instruct
its respective appraiser to jointly appoint a third MAI appraiser, who shall
appraise the Premises within forty-five (45) days of this appointment in order
to determine the Prevailing Market Rental for the Premises (the "Third
Appraisal"). Lessor and Lessee shall each pay for the cost of its own appraisal
and for one-half (1/2) of the expenses of the Third Appraisal. The appraisal
among the three (3) that is furthest from the medium of all of the appraisals
shall be disregarded and the average of the other two (2) shall be the
Prevailing Market Rental for the Premises and shall be binding upon Lessor and
Lessee. In the event the Appraisal procedures continue past the commencement of
the Option term, until such appraisal procedures are final, Lessee shall pay to
Lessor Base Rent in the amount set forth in Lessor's notice setting forth
Lessor's determination of Prevailing Market Rental and upon completion of the
foregoing appraisal procedure, if the Prevailing Market Rental is greater than
the Base Rent being paid by Lessee, Lessee shall forthwith pay to Lessor the
difference between said Base Rent and the Prevailing Market Rental calculated on
a monthly basis, multiplied by the number of months or partial months elapsed
since the commencement of the Option term. If Lessee overpaid during such
period, then the excess payments shall be credited against the next
installment(s) of Base Rent.
55.4 Time of Essence. Time is of the essence regarding all of the
periods set forth above, including the time for the exercise of the Option and
the time for Lessee's objection to Lessor's determination of the Prevailing
Market Rental for the Premises. The failure of Lessee to timely exercise the
Option shall cause the Option to automatically cease and terminate and, in such
event, the Lease shall terminate on the Expiration Date without extension. If
Lessee fails to timely comply with the provisions regarding determination of the
Prevailing Market Rental for the Premises, Lessee shall be deemed to have
accepted the Prevailing Market Rental as determined by Lessor or Lessor's
Appraisal, as the case may be.
32
56. Separate Parking Area.
In connection with Lessee's obligation to repair and maintain the
separate parking area depicted on page 4 of Exhibit "A" to the Lease, Lessee
shall also, at its sole cost and expense, repair and maintain the access
easement area used by Lessee to access the separate parking area made necessary
by reason of Lessee's use of such easement area. Furthermore, Lessee agrees to
cooperate with Lessor and the owner of the real property that includes the
access easement area to enter into an agreement or arrangement with respect to
the reasonable use by Lessor and Lessee of the access easement area, taking into
account the security needs of such owner with respect to its property and also
the reasonable requirements of Lessee's business to access the separate parking
area.
57. Conflict or Inconsistency.
In the event of any conflict or inconsistency between the terms and
provisions of this Addendum and the terms and provisions of the Lease to which
this Addendum is attached, the terms and provisions of this Addendum shall
control and govern the rights, duties and obligations of the parties.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum to Lease as of
October ___, 1996.
"Lessee" "Lessor"
ATL PRODUCTS, INC., a California XXXXXX X. XXXXXX AND
corporation XXXXXX X. XXXXXX, Trustees of the
Xxxxxx Family U/D/T dated
December 7, 1995
By: /s/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx By: /s/ XXXXXX X. XXXXXX
---------------------------------
Title: V.P. & CFO Xxxxxx X. Xxxxxx, Trustee
By: ______________________________ By: /s/ XXXXXX X. XXXXXX
---------------------------------
Name: ____________________________ Xxxxxx X. Xxxxxx, Trustee
Title: ___________________________
33
LEGAL DESCRIPTION OF PREMISES
NOT INCLUDING PARKING LOT
ALTA PLAIN
LANGUAGE COMMITMENT OR-1505156
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE,
CITY OF IRVINE, DESCRIBED AS FOLLOWS:
PARCEL 2, AS SHOWN ON A PARCEL MAP FILED IN BOOK 78, PAGES 12 AND 13 OF PARCEL
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS, NATURAL GAS, NATURAL GAS
RIGHTS, AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN THAT MAY BE WITHIN OR
UNDER THE PARCEL OF LAND HEREINABOVE DESCRIBED, TOGETHER WITH THE PERPETUAL
RIGHT OF: DRILLING, MINING, EXPLORING AND OPERATING THEREFOR AND REMOVING THE
SAME FROM SAID LAND OR ANY OTHER LAND, INCLUDING THE RIGHT TO WHIPSTOCK OR
DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN THOSE HEREINABOVE DESCRIBED,
OIL OR GAS XXXXX, TUNNELS AND SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF
THE LAND HEREINABOVE DESCRIBED, AND TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY
DRILLED XXXXX, TUNNELS, AND SHAFTS UNDER AND BENEATH OR BEYOND THE EXTERIOR
LIMITS THEREOF, AND TO REDRILL, RETUNNEL, EQUIP, MAINTAIN, REPAIR, DEEPEN, AND
OPERATE ANY SUCH XXXXX OR MINES, WITHOUT HOWEVER, THE RIGHT TO DRILL, MINE,
EXPLORE AND OPERATE THROUGH THE SURFACE OR THE UPPER FIVE HUNDRED (500) FEET OF
THE SUBSURFACE OF THE LAND HEREINABOVE DESCRIBED, AS RESERVED BY THE IRVINE
COMPANY, A CORPORATION, IN THE DEED RECORDED IN BOOK 9277 PAGE 256, OFFICIAL
RECORDS.
ALSO EXCEPT ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS, NATURAL GAS, NATURAL
GAS RIGHTS, AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN THAT MAY BE: WITHIN
OR UNDER THE PARCEL OF LAND HEREINABOVE DESCRIBED, TOGETHER WITH THE PERPETUAL
RIGHT OF DRILLING, MINING, EXPLORING AND OPERATING THEREFOR AND STORING IN AND
REMOVING THE SAME FROM SAID LAND OR ANY OTHER LAND, INCLUDING THE RIGHT TO
WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN THOSE
HEREINABOVE DESCRIBED, OIL OR GAS XXXXX, TUNNELS AND SHAFTS INTO, THROUGH OR
ACROSS THE SUBSURFACE OF THE LAND HEREINABOVE DESCRIBED, AND TO BOTTOM SUCH
WHIPSTOCKED OR DIRECTIONALLY DRILLED XXXXX, TUNNELS, AND SHAFTS UNDER AND
BENEATH OR BEYOND THE EXTERIOR LIMITS THEREOF, AND TO REDRILL, RETUNNEL, EQUIP,
MAINTAIN, REPAIR, DEEPEN, AND OPERATE ANY SUCH XXXXX OR MINES, WITHOUT HOWEVER,
THE RIGHT TO DRILL, MINE, STORE, EXPLORE AND OPERATE THROUGH THE SURFACE OR THE
UPPER FIVE HUNDRED (500) FEET OF THE SUBSURFACE OF THE LAND HEREINABOVE
DESCRIBED, AS RESERVED IN THE DEED FROM THE IRVINE COMPANY, A MICHIGAN
CORPORATION, SUCCESSOR BY MERGER WITH IRVINE INDUSTRIAL COMPLEX, A CALIFORNIA
CORPORATION, RECORDED SEPTEMBER 21, 1977.
34
ALTA PLAIN OR-1505156
LANGUAGE COMMITMENT
EXCEPT ALL WATER RIGHTS OR INTERESTS IN WATER RIGHTS NO MATTER HOW ACQUIRED AND
OWNED OR USED IN CONNECTION WITH OR WITH RESPECT TO SAID LAND, WHETHER SUCH
WATER RIGHTS SHALL BE RIPARIAN, OVERLYING, APPROPRIATE, PERCOLATING,
PRESCRIPTIVE OR CONTRACTUAL, PROVIDED, HOWEVER, THAT THE EXCEPTION AND
RESERVATION MADE HEREIN SHALL NOT RESERVE ANY RIGHT TO ENTER UPON THE SURFACE OF
SAID LAND, IN THE EXERCISE OF SUCH RIGHTS, AS RESERVED IN THE DEED FROM THE
IRVINE COMPANY, A MICHIGAN CORPORATION, SUCCESSOR BY MERGER WITH IRVINE
INDUSTRIAL COMPLEX, A CALIFORNIA CORPORATION, RECORDED SEPTEMBER 21, 1977.
35
ALTA PLAIN
LANGUAGE COMMITMENT OR-1505157
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE,
CITY OF IRVINE, DESCRIBED AS FOLLOWS:
PARCEL A:
PARCEL 2, AS SHOWN ON A MAP FILED IN BOOK 184, PAGE 43 OF PARCEL MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA.
EXCEPT ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS, NATURAL GAS, NATURAL GAS
RIGHTS, AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN, THAT MAY BE WITHIN OR
UNDER THE PARCEL OF LAND HEREINABOVE DESCRIBED, TOGETHER WITH THE PERPETUAL
RIGHT OF DRILLING, MINING, EXPLORING, AND OPERATING THEREFOR, AND STORING IN AND
REMOVING THE SAME FROM SAID LAND OR ANY OTHER LAND, INCLUDING THE RIGHT TO
WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN THOSE
HEREINABOVE DESCRIBED, AND TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED
XXXXX, TUNNELS, AND SHAFTS UNDER AND BENEATH OR BEYOND THE EXTERIOR LIMITS
THEREOF, AND TO REDRILL, RETUNNEL EQUIP, MAINTAIN, REPAIR, DEEPEN AND OPERATE
ANY SUCH XXXXX OR MINES, WITHOUT, HOWEVER, THE RIGHT TO DRILL, MINE, STORE,
EXPLORE AND OPERATE THROUGH THE SURFACE OR THE UPPER 500 FEET OF THE SUBSURFACE
OF THE LAND HEREINABOVE DESCRIBED, AS RESERVED BY THE IRVINE COMPANY, A
CORPORATION, IN THE DEED RECORDED IN BOOK 9277, PAGE 256, OFFICIAL RECORDS.
PARCEL B:
AN EASEMENT FOR INGRESS AND EGRESS OVER THAT PORTION OF PARCEL 1 AS SHOWN ON A
MAP FILED IN BOOK 194, PAGE 43 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF ORANGE COUNTY, CALIFORNIA, INCLUDED WITHIN THAT CERTAIN STRIP
DELINEATED ON SAID MAP AS "PROPOSED EASEMENT FOR INGRESS AND EGRESS PURPOSES FOR
PARCEL 2".
36
GUARANTY OF LEASE
WHEREAS, a certain Lease of even date herewith (the "Lease") has been,
or will be, executed by and between Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, as
Trustees of the Xxxxxx Family Trust, U/D/T dated December 7, 1995 (hereinafter
referred to as "Lessor"), and ATL Products, Inc., a California corporation
(hereinafter referred to as "Lessee"), concerning the premises commonly known as
0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx, and a parking lot across the street
therefrom, (the "Premises"), wherein Lessor will lease the Premises to Lessee,
and
WHEREAS, Odetics, Inc. (hereinafter referred to as "Guarantor") has a
financial interest in Lessee, and
WHEREAS, Lessor requires as a condition to its execution of the Lease
that Guarantor execute and deliver to Lessor this Guaranty of Lease (the
"Guaranty"), guaranteeing the full performance of the obligations of Lessee
under the Lease, and
WHEREAS, Guarantor is desirous that Lessor enter into the Lease with
Lessee,
NOW, THEREFORE, for and in consideration of the execution of the Lease
by Lessor and as a material inducement to Lessor to execute said Lease,
Guarantor unconditionally and irrevocably guarantees the prompt payment by
Lessee of all rentals and all other sums payable by Lessee under said Lease and
the faithful, prompt and full performance by Lessee of each and every one of the
terms, conditions and covenants of the Lease to be kept and performed by Lessee.
Guarantor further agrees as follows:
It is specifically agreed and understood that the terms of the
foregoing Lease may be altered, modified, extended or changed by agreement
between Lessor and Lessee, or by a course of conduct, and no alteration,
modification, extension or change shall in any manner release or discharge
Guarantor, and that Guarantor shall thereupon and thereafter guarantee the
performance of the Lease as so altered, modified, extended or changed.
Lessor may, without notice, assign the Lease and this Guaranty in whole
or in part and no assignment or transfer shall operate to extinguish or diminish
the liability of Guarantor hereunder.
This Guaranty shall not be released, modified or affected by failure or
delay on the part of Lessor to enforce any of the rights or remedies of the
Lessor under said Lease whether pursuant to the terms thereof or at law or in
equity.
No notice of default need be given to Guarantor, it being specifically
agreed and understood that the liability of Guarantor is primary and the
Guaranty is a continuing guarantee under which Lessor may proceed forthwith and
immediately against Lessee or against Guarantor following any breach or default
by Lessee or for the enforcement of any rights which Lessor may have as against
Lessee pursuant to or under the terms of the Lease or at law or in equity.
Lessor shall have the right to proceed against Guarantor hereunder
following any breach or default by Lessee without first proceeding against
Lessee and without previous notice to or demand upon either Lessee or Guarantor.
Guarantor shall pay Lessor's reasonable attorneys' fees and all costs and other
expenses incurred in any collection or attempted collection or enforcement
relative to the obligations under the Lease or relative to enforcing this
Guaranty.
Guarantor hereby waives (a) notice of acceptance of this Guaranty, (b)
demand of payment, presentation and protest, (c) all right to assert or plead
any statute of limitations as to or relating to this Guaranty and the Lease, (d)
any right to require the Lessor to proceed against the Lessee or any other
Guarantor or any other person or entity liable to Lessor, (e) any right to
require Lessor to apply to any default any security deposit or other security it
may hold under the Lease, (f) any right to require Lessor to proceed under any
other remedy Lessor may have before proceeding against Guarantor, and (g) any
right of subrogation.
37
Guarantor does hereby subrogate all existing or future indebtedness of
Lessee to Guarantor to the obligations owed to Lessor under the Lease and this
Guaranty.
The obligations of Lessee under the Lease to execute and deliver
estoppel statements and financial statements, as therein provided, shall be
deemed to also require the Guarantor hereunder to do and provide the same
relative to Guarantor.
The term "Lessor" whenever hereinabove used refers to and means the
Lessor in the foregoing Lease specifically named and also any assignee of said
Lessor, whether by outright assignment or by assignment for security, and also
any successor to the interest of said Lessor or of any assignee in such Lease or
any part thereof, whether by assignment or otherwise.
The term "Lessee" whenever hereinabove used refers to and means the
Lessee in the foregoing Lease specifically named and also any assignee or
sublessee of said Lease and also any successor to the interests of said Lessee,
assignee or sublessee of such Lease or any part thereof, whether by assignment,
sublease or otherwise.
This Guaranty will continue unchanged by any bankruptcy, reorganization
or insolvency of Lessee or any successor or assignee thereof or by any
disaffirmance or abandonment of the Lease by a trustee of Lessee.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be executed as
of the date of execution of the Lease.
"Guarantor"
ODETICS, INC., a California corporation
By: /s/ XXXXXXX X. XXXXX
Its: V.P. & CFO
By: ___________________________________
Its: ___________________________________
The authorized officers must sign on behalf of the corporation and
indicate the capacity in which they are signing. This Guaranty must be executed
by the president or vice president and the secretary or assistant secretary
unless the by-laws or a resolution of the board of directors shall otherwise
provide, in which event the by-laws or a certified copy of the resolution, as
the case may be, must be attached to this Lease. Also, the appropriate corporate
seal must be affixed.
