Exhibit 10.32
* any partial month at the commencement of the Lease Term
** at midnight on the last day of the thirty-sixth (36th) full calendar month
following the Commencement Date, subject to extension as described in the
attached Addendum, and to earlier termination as described in the Lease
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE-MODIFIED NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
AIR
1. BASIC PROVISIONS ("BASIC PROVISIONS")
1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only,
__________________________, 19__, is made by and between R&S, LLC, a
California limited liability company ("LESSOR") and Quark Biotech, Inc., a
California corporation ("LESSEE"), (collectively the "PARTIES," or
individually a "PARTY").
1.2(a) PREMISES: That certain portion of the Building, including all
improvements therein or to be provided by Lessor under the terms of this
Lease, commonly known by the street address of 0000 Xxxxxxxxxx Xxxx, located
in the City of Pleasanton , County of Alameda, State of California, with zip
code _________ , as outlined on Exhibit A attached hereto ("PREMISES").
The "BUILDING" is that certain building containing the Premises and generally
described as (describe briefly the nature of the Building): that certain
approximately 9,600 square foot building located on the Premises. In
addition to Xxxxxx's rights to use and occupy the Premises as hereinafter
specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have
any rights to the roof, exterior walls or utility raceways of the Building or
to any other buildings in the Industrial Center. The Premises, the Building,
the Common Areas, the land upon which they are located, along with all other
buildings and improvements thereon, are herein collectively referred to as
the "INDUSTRIAL CENTER." (Also see Paragraph 2.)
1.2(b) PARKING: _______________________________ unreserved vehicle parking
spaces ("UNRESERVED PARKING SPACES"); and N/A reserved vehicle parking
spaces ("RESERVED PARKING SPACES"). (Also see Paragraph 2.6.)
1.3 TERM: Three (3) years and * months ("ORIGINAL TERM") commencing See
attached Addendum. ("COMMENCEMENT DATE") and ending ** ("EXPIRATION DATE").
(Also see Paragraph 3.)
1.4 EARLY POSSESSION: N/A ("EARLY POSSESSION DATE"). (Also see Paragraphs
3.2 and 3.3.)
1.5 BASE RENT: $ 3,287 per month ("BASE RENT"), payable on the first
(1st) day of each month commencing on the Commencement Date. (Also see
Paragraph 4.)
[X] If this box is checked, this Lease provides for the Base Rent to be
adjusted per Addendum One , attached hereto.
1.6(a) BASE RENT PAID UPON EXECUTION: $ 3,287 as Base Rent for the period
first month of the Term.
1.6(b) LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: Thirty-Four &
24/100 percent (34.24%) ("LESSEE'S SHARE").
1.7 SECURITY DEPOSIT: $ 3,287 ("SECURITY DEPOSIT"). (Also see Paragraph 5.)
1.8 PERMITTED USE: general office, administrative and permitted
laboratory uses. ("PERMITTED USE"). (Also see Paragraph 6.)
1.9 INSURING PARTY. Lessor is the "INSURING PARTY." (Also see Paragraph 6.)
1.10 ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 1 through 13, and Exhibits A through B, all of which
constitute a part of this Lease.
2. PREMISES, PARKING AND COMMON AREAS.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in 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 and/or Common Area Operating
Expenses, is an approximation which Lessor and Lessee agree is reasonable and
the rental and Lessee's Share (as defined in Paragraph 1.6(b)) based thereon
is not subject to revision whether or not the actual square footage is more
or less.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee clean and free
of debris on the Commencement Date and warrants to Lessee that the existing
plumbing, electrical systems, fire sprinkler system, lighting, air
conditioning and heating systems and loading doors, if any, in the Premises,
other than those constructed by Lessee, shall be in good operating condition
on the Commencement Date. If a noncompliance 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 noncompliance, rectify same at
Lessor's expense. If Lessee does not give Lessor written notice of a
noncompliance with this warranty within thirty (30) days after the
Commencement Date, correction of that noncompliance shall be the obligation
of Lessee at Lessee's sole cost and expense.
2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE. Lessor
warrants that any improvements (other than those constructed by Lessee or at
Lessee's direction) on or in the Premises which have been constructed or
installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement
Date. Lessor further warrants to Lessee that Lessor has no knowledge of any
claim having been made by any governmental agency that a violation or
violations of applicable building codes, regulations, or ordinances exist
with regard to the Premises as of the Commencement Date. Said warranties
shall not apply to any Alterations or Utility Installations (defined in
Paragraph 7.3(a)) made or to be made by Lessee. If the Premises do not comply
with said warranties, Lessor shall, except as otherwise provided in this
Lease, promptly after receipt of written notice from Lessee given within six
(6) months following the Commencement Date and setting forth with specificity
the nature and extent of such noncompliance, take such action, at Lessor's
expense, as may be reasonable or appropriate to rectify the noncompliance.
Lessor makes no warranty that the Permitted Use in Paragraph 1.8 is permitted
for the Premises under Applicable Law (as defined in Paragraph 2.4).
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has
been advised by the Broker(s) to satisfy itself with respect to the condition
of the Premises (including but not limited to the electrical and fire
sprinkler systems, security, environmental aspects, seismic and earthquake
requirements, and compliance with the Americans with Disabilities Act and
applicable zoning, municipal, county, state and federal laws, ordinances and
regulations and any covenants or restrictions of record (collectively,
"APPLICABLE LAWS") and the present and future suitability of the Premises for
Xxxxxx's intended use; (b) that Xxxxxx has made such investigation as it
deems necessary with reference to such matters, is satisfied with reference
thereto, and assumes all responsibility therefore as the same relate to
Xxxxxx's occupancy of the Premises and/or the terms of this Lease; and (c)
that neither Lessor, nor any of Lessor's agents, has made any oral or written
representations or warranties with respect to said matters other than as set
forth in this Lease.
2.5 LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in
this Paragraph 2 shall be of no force or effect if immediately prior to the
date set forth in Paragraph 1.1 Lessee was the owner or occupant of the
Premises. In such event, Lessee shall, at Xxxxxx's sole cost and expense,
correct any non-compliance of the Premises with said warranties.
2.6 VEHICLE PARKING. Lessee shall be entitled to use the number of
Unreserved Parking Spaces specified in Paragraph 1.2(b) on those portions of
the Common Areas designated from time to time by Lessor for parking. Lessee
shall not use more parking spaces than said number. Said parking spaces shall
be used for parking by vehicles no larger than full-size passenger
automobiles or pick-up trucks, herein called "PERMITTED SIZE VEHICLES."
Vehicles other than Permitted Size Vehicles shall be parked and loaded or
unloaded as directed by Xxxxxx in the Rules and Regulations (as defined in
Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)
(a) Lessee shall not permit or allow any vehicles that belong to or
are controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, contractors or invites to be loaded, unloaded, or parked in areas
other than those designated by Lessor for such activities.
(b) If Lessee permits or allows any of the prohibited activities
described in this Paragraph 2.6, then Lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.
(c) Lessor shall at the Commencement Date of this Lease, provide
the parking facilities required by Applicable Law.
2.7 COMMON AREAS - DEFINITION. The term "COMMON AREAS" is defined as all
areas and facilities outside the Premises and within the exterior boundary
line of the Industrial Center and interior utility raceways within the
Premises that are provided and designated by the Lessor from time to time for
the general non-exclusive use of Lessor, Lessee and other lessees of the
Industrial Center and their respective employees, suppliers, shippers,
customers, contractors and invites, including parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways and landscaped areas.
2.8 COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby grants to Lessee, for
the benefit of Lessee and its employees, suppliers, shippers, contractors,
customers and invites, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges
reserved by Lessor under the terms hereof or under the terms of any rules and
regulations or restrictions governing the use of the Industrial Center. Under
no circumstances shall the right herein granted to use the Common Areas be
deemed to include the right to store any property, temporarily or
permanently, in the Common Areas. Any such storage shall be permitted only by
the prior written consent of Lessor or Xxxxxx's designated agent, which
consent may be revoked at any time. In the event that any unauthorized
storage shall occur then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove the
property and charge the cost to Lessee, which cost shall be immediately
payable upon demand by Lessor.
2.9 COMMON AREAS - RULES AND REGULATIONS. Lessor or such other person(s)
as Lessor may appoint shall have the exclusive control and management of the
Common Areas and shall have the right, from time to time, to establish,
modify, amend and enforce reasonable Rules and Regulations with respect
thereto in accordance with Paragraph 40. Xxxxxx agrees to abide by and
conform to all such Rules and Regulations, and to cause its employees,
suppliers, shippers, customers, contractors and invites to so abide and
conform. Lessor shall not be responsible to Lessee for the noncompliance with
said rules and regulations by other lessees of the Industrial Center.
2.10 COMMON AREAS - CHANGES. Lessor shall have the right, in Xxxxxx's
sole discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas,
ingress, egress, direction of traffic, landscaped areas, walkways and utility
raceways; .
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the
Industrial Center to be a part of the Common Areas;
(d) To add additional buildings and improvements to the Common
Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any portion
thereof; and
(f) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas and Industrial Center as Lessor
may, in the exercise of sound business judgment, deem to be appropriate.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If an Early Possession Date is specified in
Paragraph 1.4 and if Lessee totally or partially occupies the Premises after
the Early Possession Date but prior to the Commencement Date, the obligation
to pay Base Rent shall be abated for the period of such early occupancy. All
other terms of this Lease, however, (including but not limited to the
obligations to pay Xxxxxx's Share of Common Area Operating Expenses and to
carry the insurance required by Paragraph 8) shall be in effect during such
period. Any such early possession shall not affect nor advance the Expiration
Date of the Original Term.
3.3 DELAY IN POSSESSION. If for any reason Lessor cannot deliver
possession of the Premises to Lessee by the Early Possession Date, if one is
specified in Paragraph 1.4, or if no Early Possession Date is specified, by
the Commencement Date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease, or the obligations
of Lessee hereunder, or extend the term hereof, but in such case, Lessee
shall not, except as otherwise provided herein, be obligated to pay rent or
perform any other obligation of Lessee under the terms of this Lease until
Xxxxxx delivers possession of the Premises to Lessee. If possession of the
Premises is not delivered to Lessee within sixty (60) days after the
Commencement Date, Lessee may, at its option, by notice in writing to Lessor
within ten (10) days after the end of said sixty (60) day period, cancel this
Lease, in which event the parties shall be discharged from all obligations
hereunder; provided further, however, that if such written notice of Lessee
is not received by Lessor within said ten (10) day period, Xxxxxx's right to
cancel this Lease hereunder shall terminate and be of no further force or
effect. Except as may be otherwise provided, and regardless of when the
Original Term 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, it any, that
Lessee would otherwise have enjoyed shall run from the date of delivery of
possession and continue for a period equal to the period during which the
Lessee would have otherwise enjoyed under the terms hereof, but minus any
days of delay caused by the acts, changes or omissions of Lessee.
4. RENT.
4.1 BASE RENT. Lessee shall pay Base Rent and other rent or charges, as
the same may be adjusted from time to time, to Lessor in lawful money of the
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 full
month shall be prorated based upon the actual number of days of the month
involved. Payment of Base Rent and other charges shall be made to Lessor at
its address stated herein or to such other persons or at such other addresses
as Lessor may from time to time designate in writing to Lessee.
4.2 COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor during
the term hereof, in addition to the Base Rent, Xxxxxx's Share (as specified
in Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter
defined, during each calendar year of the term of this Lease, in accordance
with the following provisions:
(a) "COMMON AREA OPERATING EXPENSES" are defined, for purposes of
this Lease, as all costs incurred by Lessor relating to the ownership and
operation of the Industrial Center, including, but not limited to, the
following:
(i) The operation, repair and maintenance, in neat, clean,
good order and condition, of the following:
(aa) The Common Areas, including parking areas, loading
and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, striping, bumpers, irrigation systems, Common
Area lighting facilities, fences and gates, elevators and roof.
(bb) Exterior signs and any tenant directories.
(cc) Fire detection and sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to
service the Common Areas.
(iii) Trash disposal, property management and security
services and the costs of any environmental inspections.
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(iv) Reserves set aside for maintenance and repair of Common
Areas.
(v) Real Property Taxes (as defined in Paragraph 10.2) to be
paid by Lessor for the Building and the Common Areas under Paragraph 10
hereof.
(vi) The cost of the premiums for the insurance policies
maintained by Lessor under Paragraph 8 hereof.
(vii) Any deductible portion of an insured loss concerning the
Building or the Common Areas.
(viii) Any other services to be provided by Lessor that are
stated elsewhere in this Lease to be a Common Area Operating Expense.
(b) Any Common Area Operating Expenses and Real Property Taxes that
are specifically attributable to the Building or to any other building in the
Industrial Center or to the operation, repair and maintenance thereof, shall
be allocated entirely to the Building or to such other building. However,
any Common Area Operating Expenses and Real Property Taxes that are not
specifically attributable to the Building or to any other building or to the
operation, repair and maintenance thereof, shall be equitably allocated by
Lessor to all buildings in the Industrial Center.
(c) The inclusion of the improvements, facilities and services set
forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon
Lessor to either have said improvements or facilities or to provide those
services unless the Industrial Center already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to
provide the same or some of them.
(d) Xxxxxx's Share of Common Area Operating Expenses shall be
payable by Lessee within ten (10) days after a reasonably detailed statement
of actual expenses is presented to Lessee by Lessor. At Lessor's option,
however, an amount may be estimated by Lessor from time to time of Xxxxxx's
Share of annual Common Area Operating Expenses and the same shall be payable
monthly or quarterly, as Lessor shall designate, during each 12-month period
of the Lease term, on the same day as the Base Rent is due hereunder. Lessor
shall deliver to Lessee within sixty (60) days after the expiration of each
calendar year a reasonably detailed statement showing Xxxxxx's Share of the
actual Common Area Operating Expenses incurred during the preceding year. If
Xxxxxx's payments under this Paragraph 4.2(d) during said preceding year
exceed Xxxxxx's Share as indicated on said statement, Lessor shall be
credited the amount of such over-payment against Xxxxxx's Share of Common
Area Operating Expenses next becoming due. If Xxxxxx's payments under this
Paragraph 4.2(d) during said preceding year were less than Xxxxxx's Share as
indicated on said statement, Lessee shall pay to Lessor the amount of the
deficiency within ten (10) days after delivery by Lessor to Lessee of said
statement.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon Xxxxxx's execution
hereof the Security Deposit set forth in Paragraph 1.7 as security for
Xxxxxx's faithful performance of Xxxxxx's obligations under this Lease. If
Lessee fails to pay Bass Rent or other rent or charges due hereunder, or
otherwise Defaults under this Lease (as defined in Paragraph 13.1), Lessor
may use, apply or retain all or any portion of said Security Deposit for the
payment of any amount due Lessor or to reimburse or compensate Lessor for any
liability, cost, expense, loss or damage (including attorneys' fees) which
Lessor may suffer or incur by reason thereof. If Lessor uses or applies all
or any portion of said Security Deposit, Lessee shall within ten (10) days
after written request therefore deposit monies with Lessor sufficient to
restore said Security Deposit to the full amount required by this Lease. Any
time the Base Rent increases during the term of this Lease, Lessee shall,
upon written request from Lessor, deposit additional monies with Lessor as an
addition to the Security Deposit so that the total amount of the Security
Deposit shall at all times bear the same proportion to the then current Base
Rent as the initial Security Deposit bears to the initial Base Rent set forth
in Paragraph 1.5. 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 Xxxxxx has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, of Xxxxxx's interest herein), that portion of the Security
Deposit not used or applied by Lessor. Unless otherwise expressly agreed in
writing by Xxxxxx, no part of the Security Deposit shall be considered to be
held in trust, to bear interest or other increment for its use, or to be
prepayment for any monies to be paid by Lessee under this Lease.
6. USE.
6.1 PERMITTED USE.
(a) Lessee shall use and occupy the Premises only for the Permitted
Use set forth in Paragraph 1.8, or any other legal use which is reasonably
comparable thereto, and for no other purpose. Lessee shall not use or permit
the use of the Premises in a manner that is unlawful, creates waste or a
nuisance, or that disturbs owners and/or occupants of, or causes damage to
the Premises or neighboring premises or properties.
(b) Lessor hereby agrees to not unreasonably withhold or delay its
consent to any written request by Xxxxxx, Xxxxxx's assignees or subtenants,
and by prospective assignees and subtenants of Lessee, its assignees and
subtenants, for a modification of said Permitted Use, so long as the same
will not impair the structural integrity of the improvements on the Premises
or in the Building or the mechanical or electrical system therein, does not
conflict with uses by other lessees, is not significantly more burdensome to
the Premises or the Building and 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 after such request give a
written notification of same, which notice shall include an explanation of
Lessor's reasonable objections to the change in use.
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS
SUBSTANCE" as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or
effect, either by itself or in combination with other materials expected to
be on the Premises, is either: (i) potentially injurious to the public
health, safety or welfare, the environment, or the Premises; (ii) regulated
or monitored by any governmental authority; or (iii) a basis for potential
liability of Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substance shall include,
but not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any
products or by-products thereof. Lessee shall not engage in any activity in
or about the Premises which constitutes a Reportable Use (as hereinafter
defined) of Hazardous Substances without the express prior written consent of
Lessor and compliance in a timely manner (at Lessee's sole cost and expense)
with all Applicable Requirements (as defined in Paragraph 6.3). "REPORTABLE
USE" shall mean (i) the installation or use of any above or below ground
storage tank, (ii) the generation, possession, storage, use, transportation,
or disposal of a Hazardous Substance that requires a permit from, or with
respect to which a report, notice, registration or business plan is required
to be filed with, any governmental authority, and (iii) the presence in, on
or about the Premises of a Hazardous Substance with respect to which any
Applicable Laws require that a notice be given to persons entering or
occupying the Premises or neighboring properties. Notwithstanding the
foregoing, Lessee may, without Lessor's prior consent, but upon notice to
Lessor and in compliance with all Applicable Requirements, use any ordinary
and customary materials reasonably required to be used by Lessee in the
normal course of the Permitted Use, so long as such use is not a Reportable
Use and does not expose the Premises or neighboring properties to any
meaningful risk of contamination or damage or expose Lessor to any liability
therefor. In addition, Lessor may (but without any obligation to do so)
condition its consent to any Reportable Use of any Hazardous Substance by
Lessee upon Lessee's giving Lessor such additional assurances as Lessor, in
its reasonable discretion, deems necessary to protect itself, the public, the
Premises and the environment against damage, contamination or injury and/or
liability therefor, including but not limited to the installation (and, at
Lessor's option, removal on or before Lease expiration or earlier
termination) at reasonably necessary protective modifications to the Premises
(such as concrete encasements) and/or the deposit of an additional Security
Deposit under Paragraph 5 hereof.
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance has come to be located in, on,
under or about the Premises or the Building, other than as previously
consented to by Lessor, Lessee shall immediately give Lessor written notice
thereof, together with a copy of any statement, report notice, registration,
application, permit, business plan, license, claim, action, or proceeding
given to, or received from, any governmental authority or private party
concerning the presence, spill, release, discharge of, or exposure to, such
Hazardous Substance including but not limited to all such documents as may be
involved in any Reportable Use involving the Premises. Lessee shall not cause
or permit any Hazardous Substance to be spilled or released in, on, under or
about the Premises (including, without limitation, through the plumbing or
sanitary sewer system).
(c) INDEMNIFICATION. Lessee shall indemnify, protect, defend and
hold Lessor, its agents, employees, lenders and ground lessor, if any, and
the Premises, harmless from and against any and all damages, liabilities,
judgments, costs, claims, liens, expenses, penalties, loss of permits and
attorneys' and consultants' fees arising out of or involving any Hazardous
Substance brought onto the Premises by or for Lessee or by anyone under
Lessee's control. Lessee's obligations under this Paragraph 6.2(c) shall
include, but not be limited to, the effects of any contamination or injury to
person, property or the environment created or suffered by Xxxxxx, and the
cost of investigation (including consultants' and attorneys' fees and
testing), removal, remediation, restoration and/or abatement thereof, or of
any contamination therein involved, and shall survive the expiration or
earlier termination of this Lease. No termination, cancellation or release
agreement entered into by
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Lessor and Lessee shall release Lessee from its obligations under this Lease
with respect to Hazardous Substances, unless specifically so agreed by Xxxxxx
in writing at the time of such agreement.
6.3 LESSEE'S COMPLIANCE WITH REQUIREMENTS. Lessee shall, at Lessee's
sole cost and expense, fully, diligently and in a timely manner, comply with
all "APPLICABLE REQUIREMENTS," which term is used in this Lease to mean all
laws, rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor's
engineers and/or consultants, relating in any manner to the Premises
(including but not limited to matters pertaining to (i) industrial hygiene,
(ii) environmental conditions on, in, under or about the Premises, including
soil and groundwater conditions, and (iii) the use, generation, manufacture,
production, installation, maintenance, removal, transportation, storage,
spill, or release of any Hazardous Substance), now in effect or which may
hereafter come into effect. Lessee shall, within five (5) days after receipt
of Lessor's written request, provide Lessor with copies of all documents and
information, including but not limited to permits, registrations, manifests,
applications, reports and certificates, evidencing Lessee's compliance with
any Applicable Requirements specified by Lessor, and shall immediately upon
receipt, notify Lessor in writing (with copies of any documents involved) of
any threatened or actual claim, notice, citation, warning, complaint or
report pertaining to or involving failure by Lessee or the Premises to comply
with any Applicable Requirements.
6.4 INSPECTION; COMPLIANCE WITH LAW. Lessor, Lessor's agents,
employees, contractors and designated representatives, and the holders of any
mortgages, deeds of trust or ground leases on the Premises ("LENDERS") shall
have the right to enter the Premises at any time in the case of an emergency,
and otherwise at reasonable times, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with this
Lease and all Applicable Requirements (as defined in Paragraph 6.3). and
Lessor shall be entitled to employ experts and/or consultants in connection
therewith to advise Lessor with respect to Xxxxxx's activities, including but
not limited to Lessee's installation, operation, use, monitoring,
maintenance, or removal of any Hazardous Substance on or from the Premises.
The costs and expenses of any such inspections shall be paid by the party
requesting same, unless a Default or Breach of this Lease by Lessee or a
violation of Applicable Requirements or a contamination, caused or materially
contributed to by Lessee, is found to exist or to be imminent, or unless the
inspection is requested or ordered by a governmental authority as the result
of any such existing or imminent violation or contamination. In such case,
Xxxxxx shall upon request reimburse Lessor or Xxxxxx's Lender, as the case
may be, for the costs and expenses of such inspections.
7. MAINTENANCE, REPAIRS, UTILITY INSTALLATIONS, TRADE FIXTURES AND
ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessor's
Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall,
at Lessee's sole cost and expense and at all times, keep the Premises and
every part thereof in good order, condition and repair (whether or not such
portion of the Premises requiring repair, or the means of repairing the same,
are reasonably or readily accessible to Lessee, and whether or not the need
for such repairs occurs as a result of Lessee's use, any prior use, the
elements or the age of such portion of the Premises), including, without
limiting the generality of the foregoing, all equipment or facilities
specifically serving the Premises, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting facilities, boilers, fired or
unfired pressure vessels, fire hose connections if within the Premises,
fixtures, interior walls, interior surfaces of exterior walls, ceilings,
floors, windows, doors, plate glass, and skylights, but excluding any items
which are the responsibility of Lessor pursuant to Paragraph 7.2 below.
Lessee, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices. Lessee's obligations shall
include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order,
condition and state of repair.
(b) If Lessee fails to perform Lessee's obligations under this
Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days' prior
written notice to Lessee (except in the case of an emergency, in which case
no notice shall be required), perform such obligations on Xxxxxx's behalf,
and put the Premises in good order, condition and repair, in accordance with
Paragraph 13.2 below.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance with Covenants, Restrictions and Building Code),
4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9
(Damage or Destruction) and 14 (Condemnation), Lessor, subject to
reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition
and repair the foundations, exterior walls, structural condition of interior
bearing walls, exterior roof, fire sprinkler and/or standpipe and hose (if
located in the Common Areas) or other automatic fire extinguishing system
including fire alarm and/or smoke detection systems and equipment, fire
hydrants, parking lots, walkways, parkways, driveways, landscaping, fences,
signs and utility systems serving the Common Areas and all parts thereof, as
well as providing the services for which there is a Common Area Operating
Expense pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the
exterior or interior surfaces of exterior walls nor shall Lessor be obligated
to maintain, repair or replace windows, doors or plate glass of the Premises.
Lessee expressly waives the benefit of any statute now or hereafter in
effect which would otherwise afford Lessee the right to make repairs at
Lessor's expense or to terminate this Lease because of Lessor's failure to
keep the Building, Industrial Center or Common Areas in good order, condition
and repair.
7.3 UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY
INSTALLATIONS" is used in this Lease to refer to all air lines, power panels,
electrical distribution, security, fire protection systems, communications
systems, lighting fixtures, heating, ventilating and air conditioning
equipment, plumbing, and fencing in, on or about the Premises. The term
"TRADE FIXTURES" shall mean Lessee's machinery and equipment which can be
removed without doing material damage to the Premises. The term
"ALTERATIONS" shall mean any modification of the improvements on the Premises
which are provided by Lessor under the terms of this Lease, other than
Utility Installations or Trade Fixtures. "LESSEE-OWNED ALTERATIONS AND/OR
UTILITY INSTALLATIONS" are defined as Alterations and/or Utility
Installations made by Lessee that are not yet owned by Lessor pursuant to
Paragraph 7.4(a). Lessee shall not make nor cause to be made any Alterations
or Utility Installations in, on, under or about the Premises without Xxxxxx's
prior written consent. Lessee may, however, make non-structural Utility
Installations to the interior of the Premises (excluding the roof) without
Lessor's consent but upon notice to Lessor, so long as they are not visible
from the outside of the Premises, do not involve puncturing, relocating or
removing the roof or any existing walls, or changing or interfering with the
fire sprinkler or fire detection systems and the cumulative cost thereof
during the term of this Lease as extended does not exceed $2,500.00.
(b) CONSENT. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. All consents given
by Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific
consent, shall be deemed conditioned upon: (i) Lessee's acquiring all
applicable permits required by governmental authorities; (ii) the furnishing
of copies of such permits together with a copy of the plans and
specifications for the Alteration or Utility Installation to Lessor prior to
commencement of the work thereon; and (iii) the compliance by Lessee with all
conditions of said permits in a prompt and expeditious manner. Any
Alterations or Utility Installations by Lessee during the term of this Lease
shall be done in a good and workmanlike manner, with good and sufficient
materials, and be in compliance with all Applicable Requirements. Lessee
shall promptly upon completion thereof furnish Lessor with as-built plans and
specifications therefor. Lessor may, (but without obligation to do so)
condition its consent to any requested Alteration or Utility Installation
that costs $2,500.00 or more upon Xxxxxx's providing Lessor with a lien and
completion bond in an amount equal to one and one-half times the estimated
cost of such Alteration or Utility Installation.
(c) LIEN PROTECTION. Lessee shall pay when due all claims for labor
or materials furnished or alleged to have been furnished to or for Lessee at
or for use on the Premises, which claims are or may be secured by any
mechanic's or materialmen's lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (10) days' notice prior
to the commencement of any work in, on, or about the Premises, and Lessor
shall have the right to post notices of non-responsibility in or on the
Premises as provided by law. If Xxxxxx shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense, defend and protect itself, Lessor and the Premises against the same
and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof against the Lessor or the Premises.
If Lessor shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to one and one-half times the
amount of such contested lien claim or demand, indemnifying Lessor against
liability for the same, as required by law for the holding of the Premises
free from the effect of such lien or claim. In addition, Lessor may require
Lessee to pay Lessor's attorneys' fees and costs in participating in such
action if Lessor shall decide it is to its best interest to do so.
7.4 OWNERSHIP, REMOVAL, SURRENDER, AND RESTORATION.
(a) OWNERSHIP. Subject to Lessor's right to require their removal
and to cause Lessee to become the owner thereof as hereinafter provided in
this Paragraph 7.4, all Alterations and Utility Installations made to the
Premises by Lessee shall be the property of and owned by Xxxxxx, 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
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Installations. Unless otherwise instructed per Subparagraph 7.4(b) hereof,
all Lessee-Owned Alterations and Utility Installations shall, at the
expiration or earlier termination of this Lease, become the property of
Lessor and remain upon the Premises and be surrendered with the Premises by
Xxxxxx.
(b) REMOVAL. Unless otherwise agreed in writing, Lessor may
require that any or all Lessee-Owned Alterations or Utility Installations be
removed by the expiration or earlier termination of this Lease,
notwithstanding that their installation may have been consented to by Xxxxxx.
Lessor may require the removal at any time of all or any part of any
Alterations or Utility Installations made without the required consent of
Lessor.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by
the end of the last day of the Lease term or any earlier termination date,
clean and free of debris and in good operating order, condition and state of
repair, ordinary wear and tear excepted. Ordinary wear and tear shall not
include any damage or deterioration that would have been prevented by good
maintenance practice or by Lessee performing all of its obligations under
this Lease. Except as otherwise agreed or specified herein, the Premises, as
surrendered, shall include the Alterations and Utility Installations. The
obligation of Lessee shall include the repair of any damage occasioned by the
installation, maintenance or removal of Lessee's Trade Fixtures, furnishings,
equipment, and Lessee-Owned Alterations and Utility Installations, as well as
the removal of any storage tank installed by or for Lessee, and the removal,
replacement, or remediation of any soil, material or groundwater contaminated
by Lessee, all as may then be required by Applicable Requirements and/or good
practice. Lessee's Trade Fixtures shall remain the property of Xxxxxx and
shall be removed by Lessee subject to its obligation to repair and restore
the Premises per this Lease.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT OF PREMIUMS. The cost of the premiums for the insurance
policies maintained by Lessor under this Paragraph 8 shall be a Common Area
Operating Expense pursuant to Paragraph 4.2 hereof. Premiums for policy
periods commencing prior to, or extending beyond, the term of this Lease
shall be prorated to coincide with the corresponding Commencement Date or
Expiration Date.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY XXXXXX. Lessee shall obtain and keep in force during
the term of this Lease a Commercial General Liability policy of insurance
protecting Xxxxxx, Lessor and any Lender(s) whose names have been provided to
Lessee in writing (as additional insureds) against claims for bodily injury,
personal injury and property damage based upon, involving or arising out of
the ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $1,000,000 per
occurrence with an "Additional Insured-Managers or Lessors of Premises"
endorsement and contain the "Amendment of the Pollution Exclusion"
endorsement for damage caused by heat, smoke or fumes from a hostile fire.
The policy shall not contain any intra-insured exclusions as between insured
persons or organizations, but shall include coverage for liability assumed
under this Lease as an "insured contract" for the performance of Xxxxxx'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 Xxxxxx of any obligation hereunder. All
insurance to be carried by Lessee shall be primary to and not contributory
with any similar insurance carried by Lessor, whose insurance shall be
considered excess insurance only.
(b) CARRIED BY XXXXXX. Lessor shall also maintain liability
insurance described in Paragraph 8.2(a) above, in addition to and not in lieu
of, the insurance required to be maintained by Lessee. Lessee shall not be
named as an additional insured therein.
8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep in
force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and to any Lender(s), insuring against
loss or damage to the Premises. Such insurance shall be for full replacement
cost, as the same shall exist from time to time, or the amount required by
any Lender(s), but in no event more than the commercially reasonable and
available insurable value thereof if, by reason of the unique nature or age
of the improvements involved, such latter amount is less than full
replacement cost. Lessee-Owned Alterations and Utility Installations, Trade
Fixtures and Xxxxxx's personal property shall be insured by Lessee pursuant
to Paragraph 8.4. If the coverage is available and commercially appropriate,
Lessor's policy or policies shall insure against all risks of direct physical
loss or damage, including coverage for any additional costs resulting from
debris removal and reasonable amounts of coverage for the enforcement of any
ordinance or law regulating the reconstruction or replacement of any
undamaged sections of the Building required to be demolished or removed by
reason of the enforcement of any building, zoning, safety or land use laws as
the result of a covered loss, but not including plate glass insurance. Said
policy or policies shall also contain an agreed valuation provision in lieu
of any co-insurance clause, waiver of subrogation, and inflation guard
protection causing an increase in the annual property insurance coverage
amount by a factor of not less than the adjusted U.S. Department of Labor
Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located.
(b) RENTAL VALUE. Lessor shall also obtain and keep in force during
the term of this Lease a policy or policies in the name of Lessor, with loss
payable to Lessor and any Lender(s), insuring the loss of the full rental and
other charges payable by all lessees of the Building to Lessor for one year
(including all Real Property Taxes, insurance costs, all Common Area
Operating Expenses and any scheduled rental increases). Said insurance may
provide that in the event the Lease is terminated by reason of an insured
loss, the period of indemnity for such coverage shall be extended beyond the
date of the completion of repairs or replacement of the Premises, to provide
for one full year's loss of rental revenues from the date of any such loss.
Said insurance shall contain an agreed valuation provision in lieu of any
co-insurance clause, and the amount of coverage shall be adjusted annually to
reflect the projected rental income, Real Property Taxes, insurance premium
costs and other expenses, if any, otherwise payable, for the next 12-month
period. Common Area Operating Expenses shall include any deductible amount
in the event of such loss.
(c) ADJACENT PREMISES. Lessee shall pay for any increase in the
premiums for the property insurance of the Building and for the Common Areas
or other buildings in the Industrial Center it said increase is caused by
Xxxxxx's acts, omissions, use or occupancy of the Premises.
(d) LESSEE'S IMPROVEMENTS. Since Lessor is the Insuring Party,
Lessor shall not be required to insure Lessee-Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.
8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessor's option, by endorsement to a policy already carried, maintain
insurance coverage on all of Lessee's personal property, Trade Fixtures and
Lessee-Owned Alterations and Utility Installations in, on, or about the
Premises similar in coverage to that carried by Lessor as the Insuring Party
under Paragraph 8.3(a). Such insurance shall be full replacement cost
coverage. The proceeds from any such insurance shall be used by Lessee for
the replacement of personal property and the restoration of Trade Fixtures
and Lessee-Owned Alterations and Utility Installations. Upon request from
Lessor, Lessee shall provide Lessor with written evidence that such insurance
is in force.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, or such other rating as may be required by a
Lender, as set forth in the most current issue of "Best's Insurance Guide."
Lessee shall not do or permit to be done anything which shall invalidate the
insurance policies referred to in this Paragraph 8. Lessee shall cause to be
delivered to Lessor, within seven (7) days after the earlier of the Early
Possession Date or the Commencement Date, certified copies of, or
certificates evidencing the existence and amounts of, the insurance required
under Paragraph 8.2(a) and 8.4. No such policy shall be cancelable or the
coverage thereunder reduced except after thirty (30) days' prior written
notice to Lessor. Lessee shall at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with evidence of renewals or
"insurance binders" evidencing renewal thereof, or Lessor may order such
insurance and charge the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or
remedies, Xxxxxx and Xxxxxx each hereby release and relieve the other, and
waive their entire right to recover damages (whether in contract or in tort)
against the other, for loss or damage to their property arising out of or
incident to the perils required to be insured against under Paragraph 8. The
effect of such releases and waivers of the right to recover damages shall not
be limited by the amount of insurance carried or required, or by any
deductibles applicable thereto. Lessor and Lessee agree to have their
respective insurance companies issuing property damage insurance waive any
right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated thereby.
8.7 INDEMNITY. Except for Xxxxxx's negligence and/or breach of express
warranties, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners
and Lenders, from and against any and all claims, loss of rents and/or
damages, costs, liens, judgments, penalties, loss of permits, attorneys' and
consultants' fees, expenses and/or liabilities arising out of, involving, or
in connection with, the occupancy of the Premises by Xxxxxx, the conduct of
Xxxxxx's business, any act, omission or neglect of Lessee, its agents,
contractors, employees or invites, and out of any Default or Breach
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by Xxxxxx in the performance in a timely manner of any obligation on Xxxxxx's
part to be performed under this Lease. The foregoing shall include, but not
be limited to, the defense or pursuit of any claim or any action or
proceeding involved therein, and whether or not (in the case of claims made
against Lessor) litigated and/or reduced to judgment. In case any action or
proceeding be brought against Lessor by reason at any of the foregoing
matters, Lessee upon notice from Xxxxxx shall defend the same at Xxxxxx's
expense by counsel reasonably satisfactory to Lessor and Xxxxxx 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, invites, customers, or any other
person in or about the Premises, whether such damage or injury is caused by
or results from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, air conditioning or lighting fixtures, or from
any other cause, whether said injury or damage results from conditions
arising upon the Premises or upon other portions of the Building of which the
Premises are a part, from other sources or places, and regardless of whether
the cause of such damage or injury or the means of repairing the same is
accessible or not. Lessor shall not be liable for any damages arising from
any act or neglect of any other lessee of Lessor nor from the failure by
Lessor to enforce the provisions of any other lease in the Industrial Center.
Notwithstanding Lessor's negligence or breach of this Lease, Lessor shall
under no circumstances be liable for injury to Xxxxxx's business or for any
loss of income or profit therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to
the Premises, other than Lessee-Owned Alterations and Utility Installations,
the repair cost of which damage or destruction is less than fifty percent
(50%) of the then Replacement Cost (as defined in Paragraph 9.1(d)) of the
Premises (excluding Lessee-Owned Alterations and Utility Installations and
Trade Fixtures) immediately prior to such damage or destruction.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction
to the Premises, other than Lessee-Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is fifty
percent (50%) or more of the then Replacement Cost of the Premises (excluding
Lessee-Owned Alterations and Utility Installations and Trade Fixtures)
immediately prior to such damage or destruction. In addition, damage or
destruction to the Building, other than Lessee-Owned Alterations and Utility
Installations and Trade Fixtures of any lessees of the Building, the cost of
which damage or destruction is fifty percent (50%) or more of the then
Replacement Cost (excluding Lessee-Owned Alterations and Utility
Installations and Trade Fixtures of any lessees of the Building) of the
Building shall, at the option of Lessor, be deemed to be Premises Total
Destruction.
(c) "INSURED LOSS" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a) irrespective of any deductible
amounts or coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of applicable building codes, ordinances
or laws, and without deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 PREMISES PARTIAL DAMAGE - INSURED LOSS. If Premises Partial Damage
that is an Insured Loss occurs, then Lessor shall, at Lessor's expense,
repair such damage (but not Lessee's Trade Fixtures or Lessee-Owned
Alterations and Utility Installations) as soon as reasonably possible and
this Lease shall continue in full force and effect. In the event, however,
that there is a shortage of insurance proceeds and such shortage is due to
the fact that, by reason of the unique nature of the improvements in the
Premises, full replacement cost insurance coverage was not commercially
reasonable and available, Lessor shall have no obligation to pay 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. It Lessor receives said funds
or adequate assurance thereof within said ten (10) day period, Lessor shall
complete them as soon as reasonably possible and this Lease shall remain in
full force and effect. If Lessor does not receive such funds or assurance
within said period, Lessor may nevertheless elect by written notice to Lessee
within ten (10) days thereafter to make such restoration and repair as is
commercially reasonable with Lessor paying any shortage in proceeds, in which
case this Lease shall remain in full force and effect. If Lessor does not
receive such funds or assurance within such ten (10) day period, and if
Lessor does not so elect to restore and repair, then this Lease shall
terminate sixty (60) days following the occurrence of the damage or
destruction. Unless otherwise agreed, Xxxxxx 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 Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect), Lessor may at Lessor's
option, either (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) give written notice to Lessee within thirty (30) days after
receipt by Xxxxxx of knowledge of the occurrence of such damage of Xxxxxx's
desire to terminate this Lease as of the date sixty (60) days following the
date of such notice. In the event Lessor elects to give such notice of
Xxxxxx'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 Xxxxxx's commitment to pay for the repair of such damage totally
at Xxxxxx's expense and without reimbursement from Lessor. Lessee shall
provide Lessor with the required funds or satisfactory assurance thereof
within thirty (30) days following such commitment from Lessee. In such event
this Lease shall continue in full force and effect, and Lessor shall proceed
to make such repairs as soon as reasonably possible after the required funds
are available. If Lessee does not give such notice and provide the funds or
assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the
damage or destruction is an Insured Loss or was caused by a negligent or
willful act of Lessee. In the event, however, that the damage or destruction
was caused by Xxxxxx, Lessor shall have the right to recover Xxxxxx's damages
from Xxxxxx 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
exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may, at
Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage 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 (a) exercising such option, and (b)
providing Lessor with any shortage in insurance proceeds (or adequate
assurance thereof) needed to make the repairs on or before the earlier of (i)
the date which is ten (10) days after Xxxxxx's receipt of Lessor's written
notice purporting to terminate this Lease, or (ii) the day prior to the date
upon which such option expires. If Lessee duly exercises such option during
such period and provides Lessor with funds (or adequate assurance thereof) to
cover any shortage in insurance proceeds, Lessor shall, at Lessor's expense
repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option
and provide such funds or assurance during such period, then this Lease shall
terminate as of the date set forth in the first sentence of this Paragraph
9.5.
9.6 ABATEMENT OF RENT; XXXXXX'S REMEDIES.
(a) In the event of (i) Premises Partial Damage or (ii) Hazardous
Substance Condition for which Lessee is not legally responsible, the Base
Rent, Common Area Operating Expenses and other charges, if any, payable by
Lessee hereunder for the period during which such damage or condition, its
repair, remediation or restoration continues, shall be abated in proportion
to the degree to which Xxxxxx's use of the Premises is impaired, but not in
excess of proceeds from insurance required to be carried under Paragraph
8.3(b). Except for abatement of Base Rent, Common Area Operating Expenses
and other charges, it any, as aforesaid, all other obligations of Lessee
hereunder shall be performed by Xxxxxx, and Lessee shall have no claim
against Lessor for any damage suffered by reason of any such damage,
destruction, repair, remediation or restoration.
-6-
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises
within ninety (90) days after such obligation shall 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 Lessees election to terminate this Lease on a date not less than sixty
(60) days following the giving of such notice. It 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 the receipt of such notice, this Lease shall continue in full force and
effect. "COMMENCE" as used in this Paragraph 9.6 shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever occurs first.
9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable
Requirements and this Lease shall continue in full force and effect, but
subject to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor
may at Lessor's option either (i) investigate and remediate such Hazardous
Substance Condition, if required, as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect,
or (ii) if the estimated cost to investigate and remediate such condition
exceeds twelve (12) times the then monthly Bass Rent or $100,000, whichever
is greater, give written notice to Lessee within thirty (30) days after
receipt by Lessor of knowledge of the occurrence of such Hazardous Substance
Condition of Lessor's desire to terminate this Lease as of the date sixty
(60) days following the date of such notice. In the event Lessor elects to
give such notice of Xxxxxx'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 Xxxxxx's commitment to pay for the excess costs
of (a) investigation and remediation of such Hazardous Substance Condition to
the extent required by Applicable Requirements, over (b) an amount equal to
twelve (12) times the then monthly Base Rent or $100,000, whichever is
greater. Lessee shall provide Lessor with the funds required of Lessee or
satisfactory assurance thereof within thirty (30) days following said
commitment by Xxxxxx. In such event this Lease shall continue in full force
and effect, and Lessor shall proceed to make such investigation and
remediation as soon as reasonably possible after the required funds are
available. If Lessee does not give such notice and provide the required
funds or assurance thereof within the time period specified above, this Lease
shall terminate as of the date specified in Lessor's notice of termination.
9.8 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Paragraph 9, Lessor shall return to Lessee any advance
payment made by Lessee to Lessor and so much of Xxxxxx's Security Deposit as
has not been, or is not then required to be, used by Lessor under the terms
of this Lease.
9.9 WAIVER OF STATUTES. Xxxxxx and Xxxxxx agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
and the Building with respect to the termination of this Lease and hereby
waive the provisions of any present or future statute to the extent it is
inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes, as
defined in Paragraph 10.2, applicable to the Industrial Center, and except as
otherwise provided in Paragraph 10.3, any such amounts shall be included in
the calculation of Common Area Operating Expenses in accordance with the
provisions of Paragraph 4.2.
10.2 REAL PROPERTY TAX DEFINITION. As used herein, the term "REAL
PROPERTY TAXES" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed upon the Industrial Center by any
authority having the direct or indirect power to tax, including any city,
state or federal government, or any school, agricultural, sanitary, fire,
street, drainage, or other improvement district thereof, levied against any
legal or equitable interest of Lessor in the Industrial Center or any portion
thereof, Lessor's right to rent or other income therefrom, and/or Lessor's
business of leasing the Premises. The term "REAL PROPERTY TAXES" shall also
include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring, or changes in Applicable Law taking
effect, during the term of this Lease, including but not limited to a change
in the ownership of the Industrial Center or in the improvements thereon, the
execution of this Lease, or any modification, amendment or transfer thereof,
and whether or not contemplated by the Parties. In calculating Real Property
Taxes for any calendar year, the Real Property Taxes for any real estate tax
year shall be included in the calculation of Real Property Taxes for such
calendar year based upon the number of days which such calendar year and tax
year have in common.
10.3 ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Industrial
Center by other lessees or by Lessor for the exclusive enjoyment of such
other lessees. Notwithstanding Paragraph 10.1 hereof, Lessee shall, however,
pay to Lessor at the time Common Area Operating Expenses are payable under
Paragraph 4.2, the entirety of any increase in Real Property Taxes if
assessed solely by reason of Alterations, Trade Fixtures or Utility
Installations placed upon the Premises by Lessee or at Xxxxxx's request.
10.4 JOINT ASSESSMENT. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of
the Real Property Taxes for all of the land and improvements included within
the tax parcel assessed, such proportion to be determined by Lessor from the
respective valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Lessor's reasonable
determination thereof, in good faith, shall be conclusive.
10.5 LESSEE'S PROPERTY TAXES. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal
property of Lessee contained in the Premises or stored within the Industrial
Center. When possible, Lessee shall cause its Lessee-Owned Alterations and
Utility Installations, Trade Fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property
of Lessor. If any of Xxxxxx's said property shall be assessed with Xxxxxx's
real property, Lessee shall pay Lessor the taxes attributable to Xxxxxx's
property within ten (10) days after receipt of a written statement setting
forth the taxes applicable to Xxxxxx's property.
11. UTILITIES. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity,
telephone, security, gas and cleaning of the Premises, together with any
taxes thereon. If any such utilities or services are not separately metered
to the Premises or separately billed to the Premises, Lessee shall pay to
Lessor a reasonable proportion to be determined by Lessor of all such charges
jointly metered or billed with other premises in the Building, in the manner
and within the time periods set forth in Paragraph 4.2(d).
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively, "assign")
or sublet all or any part of Xxxxxx'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 Xxxxxx's consent. The transfer, on a cumulative basis,
of fifty percent (50%) or more of the voting control of Lessee shall
constitute a change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise), whether or not a
formal assignment or hypothecation of this Lease or Lessee's assets occurs,
which results or will result in a reduction of the Net Worth of Lessee, as
hereinafter defined, by an amount equal to or greater than twenty-five
percent (25%) of such Net Worth of Lessee as it was represented to Lessor at
the time of full execution and delivery of this Lease or at the time of the
most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such
reduction, at whichever time said Net Worth of Lessee was or is greater,
shall be considered an assignment of this Lease by Lessee to which Lessor may
reasonably withhold its consent. "NET WORTH OF LESSEE" for purposes of this
Lease shall be the net worth of Lessee (excluding any Guarantors) established
under generally accepted accounting principles consistently applied.
(d) An assignment or subletting of Xxxxxx's interest in this Lease
without Xxxxxx's specific prior written consent shall, at Lessor's option, be
a Default curable after notice per Paragraph 13.1, or a non-curable Breach
without the necessity of any notice and grace period. If Lessor elects to
treat such unconsented to assignment or subletting as a non-curable Breach,
Lessor shall have the right to either: (i) terminate this Lease, or (ii) upon
thirty (30) days' written notice ("Lessor's Notice"), increase the monthly
Base Rent for the Premises to the greater of the then fair market rental
value of the Premises, as reasonably determined by Lessor, or one hundred ten
percent (110%) of the Base Rent then in effect. Pending determination of the
new fair market rental value, if disputed by Lessee, Lessee shall
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pay the amount set forth in Lessor's Notice, with any overpayment credited
against the next installment(s) of Base Rent coming due, and any underpayment
for the period retroactively to the effective date of the adjustment being
due and payable immediately upon the determination thereof. Further, in the
event of such Breach and rental adjustment, (i) the purchase price of any
option to purchase the Premises held by Lessee shall be subject to similar
adjustment to the then fair market value as reasonably determined by Lessor
(without the Lease being considered an encumbrance or any deduction for
depreciation or obsolescence, and considering the Premises at its highest and
best use and in good condition) or one hundred ten percent (110%) of the
price previously in effect, (ii) any index-oriented rental or price
adjustment formulas contained in this Lease shall be adjusted to require that
the base index be determined with reference to the index applicable to the
time of such adjustment, and (iii) any fixed rental adjustments scheduled
during the remainder of the Lease term shall be increased in the same ratio
as the new rental bears to the Base Rent in effect immediately prior to the
adjustment specified in Lessor's Notice.
(e) Xxxxxx's remedy for any breach of this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Xxxxxx's consent, any assignment or subletting
shall not (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, nor (iii) after 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 Xxxxxx's
obligations from any person other than Lessee pending approval or disapproval
of an assignment. Neither a delay in the approval or disapproval of such
assignment nor the acceptance of any rent for performance shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for the Default
or Breach by Xxxxxx 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 Xxxxxx
or to any subsequent or successive assignment or subletting by the assignee
or sublessee. However, Lessor may consent to subsequent sublettings and
assignments of the sublease or any amendments or modifications thereto
without notifying Lessee or anyone else liable under this Lease or the
sublease and without obtaining their consent, and such action shall not
relieve such persons from liability under this Lease or the sublease.
(d) In the event of any Default or Breach of Xxxxxx's obligation
under this Lease, Lessor may proceed directly against Lessee, any Guarantors
or anyone else responsible for the performance of the Lessee's obligations
under this Lease, including any sublessee, without first exhausting Lessor's
remedies against any other person or entity responsible therefor to Lessor,
or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall
be in writing, accompanied by information relevant to Lessor's determination
as to the financial and operational responsibility and appropriateness of the
proposed assignee or sublessee, including but not limited to the intended use
and/or required modification of the Premises, if any, together with a
non-refundable deposit of $1,000 or ten percent (10%) of the monthly Base
Rent applicable to the portion of the Premises which is the subject of the
proposed assignment or sublease, whichever is greater, as reasonable
consideration for Lessor's considering and processing the request for
consent. Xxxxxx agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested by Xxxxxx.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be
deemed, for the benefit of Lessor, to have assumed and agreed to conform and
comply with each and every term, covenant, condition and obligation herein to
be observed or performed by Lessee during the term of said assignment or
sublease, other than such obligations as are contrary to or inconsistent with
provisions of an assignment or sublease to which Lessor has specifically
consented in writing.
(g) The occurrence of a transaction described in Paragraph 12.2(c)
shall give Lessor the right (but not the obligation) to require that the
Security Deposit be increased by an amount equal to six (6) times the then
monthly Bass Rent, and Lessor may make the actual receipt by Lessor of the
Security Deposit increase 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 schedule of the
rent payable under this Lease be adjusted to what is then the market value
and/or adjustment schedule for property similar to the Premises as then
constituted, as determined by Lessor.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all
or any part of the Premises and shall be deemed included in all subleases
under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a
portion of the Premises heretofore or hereafter made by Lessee, and Lessor
may collect such rent and income and apply same toward Lessee's obligations
under this Lease; provided, however, that until a Breach (as defined in
Paragraph 13.1) shall occur in the performance of Lessee's obligations under
this Lease, Lessee may, except as otherwise provided in this Lease, receive,
collect and enjoy the rents accruing under such sublease. Lessor shall not,
by reason of the foregoing provision or any other assignment of such sublease
to Lessor, nor by reason of the collection of the rents from a sublessee, be
deemed liable to the sublessee for any failure of Lessee to perform and
comply with any of Lessee's obligations to such sublessee under such
Sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Xxxxxx stating that a Breach
exists in the performance of Xxxxxx's obligations under this Lease, to pay to
Lessor the rents and other charges due and to become due under the sublease.
Sublessee shall rely upon any such statement and request from Lessor and
shall pay such rents and other charges to Lessor without any obligation or
right to inquire as to whether such Breach exists and notwithstanding any
notice from or claim from Lessee to the contrary. Lessee shall have no right
or claim against such sublessee, or, until the Breach has been cured, against
Lessor, for any such rents and other charges so paid by said sublessee to
Lessor.
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any
obligation to do so, may require any sublessee to attorn to Lessor, in which
event Lessor shall undertake the obligations of the sublessor under such
sublease from the time of the exercise of said option to the expiration of
such sublease; provided, however, Lessor shall not be liable for any prepaid
rents or security deposit paid by such sublessee to such sublessor or for any
other prior defaults or breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor
under a sublease shall also require the consent of Lessor herein.
(d) No sublessee under a sublease approved by Lessor shall further
assign or sublet all or any part of the Premises without Lessor's prior
written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach
by Xxxxxx 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
Xxxxxx 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 Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in
said notice as rent due and payable to cure said default. A "DEFAULT" by
Xxxxxx is defined as a failure by Xxxxxx to observe, comply with or perform
any of the terms, covenants, conditions or rules applicable to Lessee under
this Lease. A "BREACH" by Xxxxxx is defined as the occurrence of any one or
more of the following Defaults, and, where a grace period for cure after
notice is specified herein, the failure by Lessee to cure such Default prior
to the expiration of the applicable grace period, and shall entitle Lessor to
pursue the remedies set forth in Paragraphs 13.2 and/or 13.3:
(a) The vacating of the Premises without the intention to reoccupy
same, or the abandonment of the Premises.
(b) Except as expressly otherwise provided in this Lease, the
failure by Lessee to make any payment of Base Rent, Xxxxxx's Share of Common
Area Operating Expenses, or any other monetary payment required to be made by
Lessee hereunder as and when due, the failure by Lessee to provide Lessor
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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 five (5) days following written notice thereof by or on
behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the
failure by Lessee to provide Lessor with reasonable written evidence (in duly
executed original form, if applicable) of (i) compliance with Applicable
Requirements per Paragraph 6.3, (ii) the inspection, maintenance and service
contracts required under Paragraph 7.1(b), (iii) the rescission of an
unauthorized assignment or subletting per Paragraph 12.1, (iv) a Tenancy
Statement per Paragraphs 16 or 37, (v) the subordination or non-subordination
of this Lease per Paragraph 30, (vi) the guaranty of the performance of
Lessee's obligations under this Lease if required under Paragraphs 1.11 and
37, (vii) the execution of any document requested under Paragraph 42
(easements), or (viii) any other documentation or information which Lessor
may reasonably require of Lessee under the terms of this lease, where any
such failure continues for a period of ten (10) days following written notice
by or on behalf of Lessor to Xxxxxx.
(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 Xxxxxx, other than
those described in Subparagraphs 13.1(a), (b) or (c), above, where such
Default continues for a period of thirty (30) days after written notice
thereof by or on behalf of Lessor to Lessee; provided, however, that if the
nature of Xxxxxx'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 Xxxxxx of any general arrangement or assignment for the benefit of
creditors; (ii) Xxxxxx's becoming a "debtor" as defined in 11 U.S. Code
Section 101 or any successor statute thereto (unless, in the case of a
petition filed against Lessee, the same is dismissed within 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 Xxxxxx's assets located at the Premises or of
Xxxxxx's interest in this Lease, where such seizure is not discharged within
thirty (30) days; provided, however, in the event that any provision of this
Subparagraph 13.1(e) is contrary to any applicable law, such provision shall
be of no force or effect, and shall not affect the validity of the remaining
provisions.
(f) The discovery by Lessor that any financial statement of Lessee
or of any Guarantor, given to Lessor by Lessee or any Guarantor, was
materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor's liability with respect to this Lease other than in accordance
with the terms of such guaranty, (iii) a Guarantor's becoming insolvent or
the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the
guaranty, or (v) a Guarantor's breach of its guaranty obligation on an
anticipatory breach basis, and Lessee's failure, within sixty (60) days
following written notice by or on behalf of Lessor to Lessee of any such
event, to provide Lessor with written alternative assurances of security,
which, when coupled with the then existing resources of Lessee, equals or
exceeds the combined financial resources of Lessee and the Guarantors that
existed at the time of execution of this Lease.
13.2 REMEDIES. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written
notice to Lessee (or in case of an emergency, without notice), Lessor may at
its option (but without obligation to do so), perform such duty or obligation
on Lessee's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Lessor shall be
due and payable by Lessee to Lessor upon invoice therefor. If any check given
to Lessor by Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its own option, may require all future payments to be made under
this Lease by Lessee to be made only by cashier's check. In the event of a
Breach of this Lease by Xxxxxx (as defined in Paragraph 13.11), 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 Xxxxxx's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate
and Xxxxxx shall immediately surrender possession of the Premises to Lessor.
In such event Lessor shall be entitled to recover from Lessee: (i) the worth
at the time of the award of the unpaid rent which had been earned at the time
of termination; (ii) the worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the time
of award exceeds the amount of such rental loss that the Lessee proves could
have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by the Lessee's failure to perform
its obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom, including but not limited to the cost of
recovering possession of the Premises, expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys'
fees, and that portion of any leasing commission paid by Lessor in connection
with this Lease applicable to the unexpired term of this Lease. The worth at
the time of award of the amount referred to in provision (iii) of the
immediately preceding sentence shall be computed by discounting such amount
at the discount rate of the Federal Reserve Bank of San Francisco or the
Federal Reserve Bank District in which the Premises are located at the time
of award plus one percent (1%). Efforts by Lessor to mitigate damages caused
by Xxxxxx's Default or Breach of this Lease shall not waive Lessor's right to
recover damages under this Paragraph 13.2. If termination of this Lease is
obtained through the provisional remedy of unlawful detainer, Lessor shall
have the right to recover in such proceeding the unpaid rent and damages as
are recoverable therein, or Lessor may reserve the right to recover all or
any part thereof in a separate suit for such rent and/or damages. If a
notice and grace period required under Subparagraph 13.1 (b), (c) or (d) was
not previously given, a notice to pay rent or quit, or to perform or quit, as
the case may be, given to Lessee under any statute authorizing the forfeiture
of leases for unlawful detainer shall also constitute the applicable notice
for grace period purposes required by Subparagraph 13.1(b), (c) or (d). In
such case, the applicable grace period under the unlawful detainer statue
shall run concurrently after the one such statutory notice, and the failure
of Lessee to cure the Default within the greater of the two (2) such grace
periods shall constitute both an unlawful detainer and a Breach of this Lease
entitling Lessor to the remedies provided for in this Lease and/or by said
statute.
(b) Continue the Lease and Xxxxxx's right to possession in effect
(in California under California Civil Code Section 1951.4) after Xxxxxx's
Breach and recover the rent as it becomes due, provided Xxxxxx has the right
to sublet or assign, subject only to reasonable limitations. Xxxxxx and
Xxxxxx agree that the limitations on assignment and subletting in this Lease
are reasonable. Acts of maintenance or preservation, efforts to relet the
Premises, or the appointment of a receiver to protect the Lessor's interest
under this Lease, shall not constitute a termination of the Lessee's right to
possession.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located.
(d) The expiration or termination of this Lease and/or the
termination of Xxxxxx'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 Xxxxxx'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 Xxxxxx'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 Xxxxxx during the term hereof as the same may be extended. Upon
the occurrence of a Breach (as defined in Paragraph 13.1) of this Lease by
Xxxxxx, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other
charge, bonus. inducement or consideration theretofore abated, given or paid
by Lessor under such an Inducement Provision shall be immediately due and
payable by Lessee to Lessor, and recoverable by Xxxxxx, as additional rent
due under this Lease, notwithstanding any subsequent cure of said Breach by
Xxxxxx. The acceptance by Lessor of rent or the cure of the Breach which
initiated the operation of this Paragraph 13.3 shall not be deemed a waiver
by Lessor of the provisions of this Paragraph 13.3 unless specifically so
stated in writing by Lessor at the tine of such acceptance.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Xxxxxx to Lessor of rent and other sums due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited
to, processing and accounting charges, and late charges which may be imposed
upon Lessor by the terms of any ground lease, mortgage or deed of trust
covering the Premises. Accordingly, if any installment of rent or other sum
due from Lessee shall not be received by Lessor or Lessor's designee within
ten (10) days after such amount shall be due, then, without any requirement
for notice to Lessee, Lessee shall pay to Lessor a late charge equal to six
percent (6%) of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Lessor will
incur by reason of late payment by Xxxxxx. Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Xxxxxx's Default or Breach
with respect to such overdue amount, nor prevent Lessor from exercising any
of the other rights and
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remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive installments
of Base Rent, then notwithstanding Paragraph 4.1 or any other provision of
this Lease to the contrary, Base Rent shall, at Lessor's option, become due
and payable quarterly in advance.
13.5 BREACH BY XXXXXX. 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 Xxxxxx. For purposes of this Paragraph 13.5, a
reasonable time shall in no event be less than thirty (30) days after receipt
by Lessor, and by any Lender(s) whose name and address shall have been
furnished to Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however,
that if the nature of Lessor's obligation is such that more than thirty (30)
days after such notice are reasonably required for its performance, then
Lessor shall not be in breach of this Lease if performance is commenced
within such thirty (30) day period and thereafter diligently pursued to
completion.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said
power (all of which are herein called "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority
takes title or possession, whichever first occurs. If more than ten percent
(10%) of the floor area of the Premises, or more than twenty-five percent
(25%) of the portion of the Common Areas designated for Lessee's parking, is
taken by condemnation, Lessee may, at Lessee's option, to be exercised in
writing within ten (10) days after Lessor shall have given Lessee written
notice of such taking (or in the absence of such notice, within ten (10) days
after the condemning authority shall have taken possession) terminate this
Lease as of the date the condemning authority takes such possession. If
Xxxxxx does not terminate this Lease in accordance with the foregoing, this
Lease shall remain in full force and effect as to the portion of the Premises
remaining, except that the Base Rent shall be reduced in the same proportion
as the rentable floor area of the Premises taken bears to the total rentable
floor area of the Premises. No reduction of Base Rent shall occur it the
condemnation does not apply to any portion of the Premises. Any award for
the taking of all or any part of the Premises under the power of eminent
domain or any payment made under threat of the exercise of such power shall
be the property of Lessor, whether such award shall be made as compensation
for diminution of value of the leasehold or for the taking of the fee, or as
severance damages; provided, however, that Lessee shall be entitled to any
compensation, separately awarded to Lessee for Lessee's relocation expenses
and/or loss of Xxxxxx'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 Xxxxxx's Share of the legal
and other expenses incurred by Xxxxxx in the condemnation matter, repair any
damage to the Premises caused by such condemnation authority. Lessee shall
be responsible for the payment of any amount in excess of such net severance
damages required to complete such repair.
15. BROKERS' FEES.
15.1 REPRESENTATIONS AND WARRANTIES. Lessee and Xxxxxx each represent
and warrant to the other that it has had no dealings with any person, firm,
broker or finder 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 is entitled to any commission or finder's fee in
connection with said transaction. Xxxxxx and Xxxxxx do each hereby agree to
indemnify, protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any such
unnamed broker, finder or other similar party by reason of any dealings or
actions of the indemnifying Party, including any costs, expenses, and/or
attorneys' fees reasonably incurred with respect thereto.
16. TENANCY AND FINANCIAL STATEMENTS.
16.1 TENANCY STATEMENT. Each Party (as "RESPONDING PARTY") shall within
ten (10) days after written notice from the other Party (the "Requesting
Party") execute, acknowledge and deliver to the Requesting Party a statement
in writing in a form similar to the then most current "Tenancy Statement"
form published by the American Industrial Real Estate Association, plus such
additional information, confirmation and/or statements as may be reasonably
requested by the Requesting Party.
16.2 FINANCIAL STATEMENT. If Lessor desires to finance, refinance, or
sell the Premises or the Building, or any part thereof, Lessee and all
Guarantors shall deliver to any potential lender or purchaser designated by
Lessor such financial statements of Lessee and such Guarantors as may be
reasonably required by such lender or purchaser, including but not limited to
Lessee's financial statements for the past three (3) years. All such
financial statements shall be received by Lessor and such lender or purchaser
in confidence and shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises. In
the event of a transfer of Xxxxxx's title or interest in the Premises or in
this Lease, Lessor shall deliver lo the transferee or assignee (in cash or by
credit) any unused Security Deposit held by Xxxxxx at the time of such
transfer or assignment. Except as provided in Paragraph 15.3, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid,
the prior Lessor shall be relieved of all liability with respect to the
obligations and/or covenants under this Lease thereafter to be performed by
the Lessor. Subject to the foregoing, the obligations and/or covenants in
this Lease to be performed by the Lessor shall be binding only upon the
Lessor as hereinabove defined.
18. SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. INTEREST ON POST-DUE OBLIGATIONS. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within ten (10)
days following the date on which it was due, shall bear interest from the
date due at the prime rate charged by the largest state chartered bank in the
state in which the Premises are located plus two percent (2%) per annum, but
not exceeding the maximum rate allowed by law, in addition to the potential
late charge provided for in Paragraph 13.4.
20. TIME OF ESSENCE. Time is of the essence with respect to the performance
of all obligations to be performed or observed by the Parties under this
Lease.
21. RENT DEFINED. All monetary obligations of Lessee to Lessor under the
terms of this Lease are deemed to be rent.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein,
and no other prior or contemporaneous agreement or understanding shall be
effective. Lessor and Lessee each represents and warrants to the Brokers
that it has made, and is relying solely upon, its own investigation as to the
nature, quality, character and financial responsibility of the other Party to
this Lease and as to the nature, quality and character of the Premises.
Brokers have no responsibility with respect thereto or with respect to any
default or breach hereof by either Party. Each Broker shall be an intended
third party beneficiary of the provisions of this Paragraph 22.
23. NOTICES.
23.1 NOTICE REQUIREMENTS. All notices required or permitted by this
Lease shall be in writing and may be delivered in person (by hand or by
messenger or courier service) or may be sent by regular, certified or
registered mail or U.S. Postal Service Express Mail, with postage prepaid, or
by facsimile transmission during normal business hours, and shall be deemed
sufficiently given if served in a manner specified in this Paragraph 23. The
addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notice purposes. Either Party may
by written notice to the other specify a different address for notice
purposes, except that upon Xxxxxx's taking possession of the Premises, the
Premises shall constitute Xxxxxx'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 Xxxxxx.
23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown
on the receipt card, or if no delivery date is shown, the postmark thereon.
If sent by regular mail, the notice shall be deemed given three business days
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 or
facsimile confirmation of receipt of the transmission thereof, provided a
copy is also delivered via delivery or mail. If notice is received on a
Saturday or a Sunday or a legal holiday, it shall be deemed received on the
next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any such act shall not be deemed to render
unnecessary the obtaining of Lessor's consent to, or approval of, any
subsequent or similar act by Lessee, or be construed as the basis of an
estoppel to enforce the provision or provisions of this Lease requiring such
consent. Regardless of Xxxxxx's knowledge of a Default or Breach at the time
of accepting rent, the acceptance of rent by Lessor shall not be a waiver of
any Default or Breach by Lessee of any provision hereof. Any payment given
Lessor by Lessee may be accepted by Lessor on account of moneys or damages
due Lessor, notwithstanding any qualifying statements or conditions made by
Lessee in connection
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therewith, which such statements and/or conditions shall be of no force or
effect whatsoever unless specifically agreed to in writing by Xxxxxx at or
before the time of deposit of such payment.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. In the event that Xxxxxx holds over in violation of this
Paragraph 26 then the Base Rent payable from and after the time of the
expiration or earlier termination of this Lease shall be increased to one
hundred fifty percent (150%) of the Base Rent applicable during the month
immediately preceding such expiration or earlier termination. Nothing
contained herein shall be construed as a consent by Lessor to any holding
over by Xxxxxx.
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. 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.
29. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
29.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "SECURITY DEVICE"), now
or hereafter placed by Lessor upon the real property of which the Premises
are a part, to any and all advances made on the security thereof, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Xxxxxx agrees that the Lenders holding any such Security Device shall have
no duty, liability or obligation to perform any of the obligations of Lessor
under this Lease, but that in the event of Lessor's default with respect to
any such obligation, Lessee will give any Lender whose name and address have
been furnished Lessee in writing for such purpose notice of Lessor's default
pursuant to Paragraph 13.5. If any Lender shall elect to have this Lease
and/or any Option granted hereby superior to the lien of its Security Device
and shall give written notice thereof to Lessee, this Lease and such Options
shall be deemed prior to such Security Device, notwithstanding the relative
dates of the documentation or recordation thereof.
29.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
30.3, Xxxxxx agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device,
and that in the event of such foreclosure, such new owner shall not: (i) be
liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership, (ii) be subject to any offsets
or defenses which Lessee might have against any prior lessor, or (iii) be
bound by prepayment of more than one month's rent.
29.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this lease, Xxxxxx's subordination of this
Lease shall be subject to receiving assurance (a "non-disturbance agreement")
from the Lender that Xxxxxx'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.
29.4 SELF-EXECUTING. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents; provided,
however, that upon written request from Lessor or a Lender in connection with
a sale, financing or refinancing of Premises, Lessee and Xxxxxx 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.
30. ATTORNEYS' FEES. If any Party or Broker brings an action or proceeding
to enforce the terms hereof or declare rights hereunder, the Prevailing Party
(as hereafter defined) in any such proceeding, action, or appeal thereon,
shall be entitled to reasonable attorneys' fees. Such fees may be awarded in
the same suit or recovered in a separate suit, whether or not such action or
proceeding is pursued to decision or judgment. The term "PREVAILING PARTY"
shall include, without limitation, a Party or Broker who substantially
obtains or defeats the relief sought, as the case may be, whether by
compromise, settlement, judgment, or the abandonment by the other Party or
Broker of its claim or defense. The attorneys' fee award shall not be
computed in accordance with any court fee schedule, but shall be such as to
fully reimburse all attorneys' fees reasonably incurred. Lessor shall be
entitled to attorneys' fees, costs and expenses incurred in preparation and
service of notices of Default and consultations in connection therewith,
whether or not a legal action is subsequently commenced in connection with
such Default or resulting Breach. Broker(s) shall be intended third party
beneficiaries of this Paragraph 31.
31. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Xxxxxx's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the
same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
Building, as Lessor may reasonably deem necessary. Lessor may at any time
place on or about the Premises or Building any ordinary "For Sale" signs and
Lessor may at any time during the last one hundred eighty (180) days of the
term hereof place on or about the Premises any ordinary "For Lease" signs.
All such activities of Lessor shall be without abatement of rent or liability
to Lessee.
32. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first
having obtained Xxxxxx'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.
33. SIGNS. Lessee shall not place any sign upon the exterior of the Premises
or the Building, except that Lessee may, with Xxxxxx's prior written consent,
install (but not on the roof) such signs as are reasonably required to
advertise Lessee's own business so long as such signs are in a location
designated by Lessor and comply with Applicable Requirements and the signage
criteria established for the Industrial Center by Lessor. The installation
of any sign on the Premises by or for Lessee shall be subject to the
provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations, Trade
Fixtures and Alterations). Unless otherwise expressly agreed herein, Lessor
reserves all rights to the use of the roof of the Building, and the right to
install advertising signs on the Building, including the roof, which do not
unreasonably interfere with the conduct of Xxxxxx's business; Lessor shall be
entitled to all revenues from such advertising signs.
34. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Xxxxxx, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for
Breach by Xxxxxx, 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.
35. CONSENTS.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a Party is required to
an act by or for the other Party, such consent shall not be unreasonably
withheld or delayed. Lessor's actual reasonable costs and expenses
(including but not limited to architects', attorneys', engineers' and other
consultants' fees) incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent pertaining to this Lease or the
Premises, including but not limited to consents to an assignment, a
subletting or the presence or use of a Hazardous Substance, shall be paid by
Lessee to Lessor upon receipt of an invoice and supporting documentation
therefor. In addition to the deposit described in Paragraph 12.2(e), Lessor
may, as a condition to considering any such request by 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 Xxxxxx's request.
Any unused portion of said deposit shall be refunded to Lessee without
interest. Xxxxxx's consent to any act, assignment of this Lease or
subletting of the Premises by Lessee shall not constitute an acknowledgment
that no Default or Breach by Lessee of this Lease exists, nor shall such
consent be deemed a waiver of any then existing Default or Breach, except as
may be otherwise specifically stated in writing by Lessor at the time of such
consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Xxxxxx as being reasonable. The failure to specify herein
any particular condition to Xxxxxx's consent shall not preclude the
impositions by Lessor at the time of consent of such further or other
conditions as are then reasonable with reference to the particular matter for
which consent is being given.
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36. GUARANTOR.
36.1 FORM OF GUARANTY. If there are to be any Guarantors of this Lease
per Paragraph 1.11, the form of the guaranty to be executed by each such
Guarantor shall be in the form most recently published by the American
Industrial Real Estate Association, and each such Guarantor shall have the
same obligations as Lessee under this lease, including but not limited to the
obligation to provide the Tenancy Statement and information required in
Paragraph 16.
36.2 ADDITIONAL OBLIGATIONS OF GUARANTOR. It shall constitute a Default
of the Lessee under this Lease if any such Guarantor fails or refuses, upon
reasonable request by Lessor to give: (a) evidence of the due execution of
the guaranty called for by this Lease, including the authority of the
Guarantor (and of the party signing on Guarantor's behalf) to obligate such
Guarantor on said guaranty, and resolution of its board of directors
authorizing the making of such guaranty, together with a certificate of
incumbency showing the signatures of the persons authorized to sign on its
behalf, (b) current financial statements of Guarantor as may from time to
time be requested by Xxxxxx, (c) a Tenancy Statement, or (d) written
confirmation that the guaranty is still in effect.
37. QUIET POSSESSION. Upon payment by Xxxxxx of the rent for the Premises
and the performance of all of the covenants, conditions and provisions on
Xxxxxx's part to be observed and performed under this Lease, Lessee shall
have quiet possession of the Premises for the entire term hereof subject to
all of the provisions of this Lease.
38. OPTIONS.
38.1 DEFINITION. As used in this Lease, the word "OPTION" has the
following meaning: (a) the right to extend the term of this Lease or to
renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (b) the right of first refusal to lease the Premises or
the right of first offer to lease the Premises or the right of first refusal
to lease other property of Lessor or the right of first offer to lease other
property of Lessor; (c) the right to purchase the Premises, or the right of
first refusal to purchase the Premises, or the right of first offer to
purchase the Premises, or the right to purchase other property of Lessor, or
the right of first refusal to purchase other property of Lessor, or the right
of first offer to purchase other property of Lessor.
38.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to Lessee
in this Lease is personal to the original Lessee named in Paragraph 1.1
hereof, and cannot be voluntarily or involuntarily assigned or exercised by
any person or entity other than said original Lessee while the original
Lessee is in full and actual possession of the Premises and without the
intention of thereafter assigning or subletting. The Options, if any, herein
granted to Lessee are not assignable, either as a part of an assignment of
this Lease or separately or apart therefrom, and no Option may be separated
from this Lease in any manner, by reservation or otherwise.
38.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple
Options to extend or renew this Lease, a later option cannot be exercised
unless the prior Options to extend or renew this Lease have been validly
exercised.
38.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary: (i)
during the period commencing with the giving of any notice of Default under
Paragraph 13.1 and continuing until the noticed Default is cured, or (ii)
during the period of time any monetary obligation due Lessor from Lessee is
unpaid (without regard to whether notice thereof is given Lessee), or (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that
Lessor has given to Lessee three (3) or more notices of separate Defaults
under Paragraph 13.1 during the twelve (12) month period immediately
preceding the exercise of the Option, whether or not the Defaults are cured.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Xxxxxx's inability to exercise
an Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due
and timely exercise of the Option, if, after such exercise and during the
term of this Lease, (i) Lessee fails to pay to Lessor a monetary obligation
of Lessee for a period of thirty (30) days after such obligation becomes due
(without any necessity of Lessor to give notice thereof to Lessee), or (ii)
Lessor gives to Lessee three (3) or more notices of separate Defaults under
Paragraph 13.1 during any twelve (12) month period, whether or not the
Defaults are cured, or (iii) if Lessee commits a Breach of this Lease.
39. RULES AND REGULATIONS. Xxxxxx agrees that it will abide by, and keep
and observe all reasonable rules and regulations ("Rules and Regulations")
which Lessor may make from time to time for the management, safety, care, and
cleanliness of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as for the convenience of other occupants
or tenants of the Building and the Industrial Center and their invites.
40. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable
to Lessor hereunder does not include the cost of guard service or other
security measures, and that Lessor shall have no obligation whatsoever to
provide same. Lessee assumes all responsibility for the protection of the
Premises, Lessee, its agents and invites and their property from the acts of
third parties.
41. RESERVATIONS. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way,
utility raceways, and dedications that Lessor deems necessary, and to cause
the recordation of parcel maps and restrictions, so long as such easements,
rights of way, utility raceways, dedications, maps and restrictions do not
reasonably interfere with the use of the Premises by Xxxxxx. Xxxxxx agrees
to sign any documents reasonably requested by Lessor to effectuate any such
easement rights, dedication, map or restrictions.
42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such
payment shall not be regarded as a voluntary payment and there shall survive
the right on the part of said Party to institute suit for recovery of such
sum. If it shall be adjudged that there was no legal obligation on the part
of said Party to pay such sum or any part thereof, said Party shall be
entitled to recover such sum or so much thereof as it was not legally
required to pay under the provisions of this Lease.
43. AUTHORITY. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute
and deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Xxxxxx,
deliver to Lessor evidence satisfactory to Lessor of such authority.
44. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
45. OFFER. Preparation of this Lease by either Lessor or Lessee or Xxxxxx's
agent or Xxxxxx's agent and submission of same to Lessee or Lessor shall not
be deemed an offer to lease. This Lease is not intended to be binding until
executed and delivered by all Parties hereto.
46. 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 Xxxxxx's obligations hereunder, Xxxxxx agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional insurance company or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the
property of which the Premises are a part.
47. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or
Lessee.
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XXXXXX AND XXXXXX HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW
THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE
THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND
LESSEE WITH RESPECT TO THE PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR
ATTORNEY'S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE
CONSULTED TO EVALUATE THE CONDITION OF THE PROPERTY FOR THE
POSSIBLE PRESENCE OF ASBESTOS, UNDERGROUND STORAGE TANKS OR
HAZARDOUS SUBSTANCES. NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY
THE REAL ESTATE BROKERS OR THEIR CONTRACTORS, AGENTS OR
EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR
OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
IF THE SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN
ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE
CONSULTED.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: Executed at:
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on: on:
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By LESSOR: By LESSEE:
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By: By:
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Name Printed: Name Printed:
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Title: Title:
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By: By:
Name Printed: Name Printed:
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Title: Title:
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Address: Address:
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Telephone: ( ) Telephone: ( )
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Facsimile: ( ) Facsimile: ( )
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BROKER: BROKER:
Executed at: Executed at:
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on: on:
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By: By:
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Name Printed: Name Printed:
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Title: Title:
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Address: Address:
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Telephone: ( ) Telephone: ( )
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Facsimile: ( ) Facsimile: ( )
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NOTE: These forms are often modified to meet changing requirements of
law and needs of the industry. Always write or call to make
sure you are utilizing the most current form: AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION, 345 So. Xxxxxxxx St., M-0,
Xxx Xxxxxxx, XX 00000. (000) 000-0000.
EXHIBIT A
Depiction of Premises
(To be inserted)
EXHIBIT B
Interior Improvement Agreement
This Interior Improvement Agreement (this "Agreement") is made part
of that certain Standard Industrial/Commercial Multi-Lessee Lease of
even date herewith (the "Lease") by and between R&S, LLC, a California
limited liability company ("Lessor"), and QUARK BIOTECH, INC., a
California corporation ("Lessee"). Xxxxxx and Xxxxxx agree that the
following terms are part of the Lease:
1. DEFINITIONS: As used in this Agreement, the following terms
shall have the following meanings, and terms which are not defined
below, but which are defined in the Lease and which are used in this
Agreement, shall have the meanings ascribed to them by the Lease:
A. COMMON AREA IMPROVEMENT COSTS. The term "Common Area
Improvement Costs" shall mean the following: (i) the total amount due
pursuant to the general construction contract entered into by Lessor to
construct the Common Area Improvements; (ii) the cost of all
governmental approvals required as a condition to the construction of
the Common Area Improvements or in connection with the issuance of a
building permit for the Common Area Improvements; (iii) all utility
connection or use fees; and (iv) the cost of payment and performance
bonds obtained by Lessor or general contractor to assure completion of
the Common Area Improvements.
B. COMMON AREA IMPROVEMENTS. The term "Common Area
Improvements" shall mean all interior improvements to be constructed by
Lessor in the Common Areas in accordance with the terms of this
Agreement.
C. ENGINEERING AND DESIGN COSTS: The term "Engineering and
Design Costs" shall mean all architecture, design and engineering costs
in connection with the construction by Lessor of the Lessee
Improvements, the Common Area Improvements and the Lessor Improvements.
D. GENERAL CONTRACTOR: The term "General Contractor" shall
mean the general contractor selected by Xxxxxx to construct the Interior
Improvements and Lessor Improvements.
E. INTERIOR IMPROVEMENTS. The term "Interior Improvements"
shall mean collectively the Lessee Improvements and the Common Area
Improvements.
F. LESSEE IMPROVEMENT COSTS. The term "Lessee Improvement
Costs" shall mean the following: (i) the total amount due pursuant to
any construction contract(s) entered into by Lessor to construct the
Lessee Improvements; (ii) the cost of all governmental approvals
required as a condition to the construction of the Lessee Improvements
or in connection with the issuance of a building permit for the Lessee
Improvements; (iii) all utility connection or use fees; and (iv) the
cost of payment and performance bonds obtained by Lessor or general
contractor to assure completion of the Lessee Improvements.
X. XXXXXX IMPROVEMENTS: The term "Lessee Improvements"
shall mean all interior improvements to be constructed by Lessor in the
Premises in accordance with the terms of this Agreement.
X. XXXXXX IMPROVEMENTS: The term "Lessor Improvements"
shall mean all interior improvements to be constructed by Lessor in the
portion of the Building dedicated exclusively to Lessor.
I. SUBSTANTIAL COMPLETION AND SUBSTANTIALLY COMPLETE: The
terms "Substantial Completion" and "Substantially Complete" shall each
mean the date when all of the following have occurred with respect to
the Interior Improvements: (i) the construction of the Interior
Improvements has been substantially completed in accordance with the
requirement of the Lease; (ii) the architect responsible for preparing
the plans shall have executed a certificate or statement representing
that the Interior Improvements in question have been substantially
completed in accordance with the plans and specifications therefor; and
(iii) the building department of the City of Pleasanton has completed
its final inspection of such improvements and has "signed off" the
building inspection card approving such work as complete.
2. CONSTRUCTION OF INTERIOR IMPROVEMENTS: Lessor shall construct
the Interior Improvements in accordance with the following:
[A. DEVELOPMENT AND APPROVAL OF PLANS:
(1) PRELIMINARY PLANS: A floor plan for the Interior
Improvements approved by both Lessor and Lessee is attached to this
Agreement as SCHEDULE 1 ("Approved Floor Plan"). On or before that date
that is five (5) business days after both parties have executed the
Lease, Lessee shall furnish to Lessor all other information reasonably
required by Lessor to complete preliminary plans for the Interior
Improvements shown on the Approved Floor Plan. Within ten (10) days
after Xxxxxx has delivered all of the required information to Lessor,
Lessor shall prepare and deliver to Lessee for its review and approval
preliminary plans for the Interior Improvements with conform to the
Approved Floor Plan (the "Preliminary Plans"). Within five (5) business
days after Xxxxxx's delivery of the
-1-
Preliminary Plans, Lessee shall either approve such plans or notify Lessor in
writing of its specific objections to the Preliminary Plans. If Lessee so
objects, Lessor shall revise the Preliminary Plans to address such objections
in a manner consistent with the parameters for the Interior Improvements set
forth in this Agreement and the Approved Floor Plan and shall resubmit such
revised Preliminary Plans as soon as reasonably practicable to Lessee for its
approval. When such revised Preliminary Plans are resubmitted to Lessee, it
shall either approve such plans or notify Lessor of any further objections in
writing within five (5) business days after receipt thereof. If Xxxxxx has
further objections to the revised Preliminary Plans, the parties shall meet
and confer to develop Preliminary Plans that are acceptable to both Lessor
and Lessee within five (5) business days after Lessee has notified Lessor of
its second set of objections. In the event Lessee and Lessor do not resolve
all of Xxxxxx's objections within such five (5) business day period, Lessor
and Lessee shall immediately cause Xxxxxx's architect to meet and confer with
Xxxxxx's architect or construction consultant, who shall apply the standards
set forth in this Agreement to resolve Lessee's objections and incorporate
such resolution into the Preliminary Plans, which process Lessor and Lessee
shall cause to be completed within five (5) business days after the
conclusion of the five (5) business day period referred to in the immediately
preceding sentence.
(2) FINAL PLANS: Once the Preliminary Plans have been
approved by Xxxxxx and Xxxxxx (including changes made to resolve
Xxxxxx's objections approved by Xxxxxx's architect and Xxxxxx's
architect or construction consultant, if any), Xxxxxx shall complete and
submit to Lessee for its approval final working drawings for the
Interior Improvements. Lessee shall approve the final plans for the
Interior Improvements or notify Lessor in writing of its specific
objections within five (5) business days after their submission by
Lessor. If Lessee so objects, the parties shall confer and reach
agreement upon final working drawings for the Interior Improvements
within five (5) business days after Lessee has notified Lessor of its
objections. If Lessee and Lessor do not resolve all of Lessee's
objections within such five (5) business day period, Lessor and Lessee
shall immediately cause Lessor's architect to meet and confer with
Xxxxxx's architect or construction consultant, who shall apply the
standards set forth in this Agreement to resolve Lessee's objections and
incorporate such resolution into the Final Plans, which process Lessor
and Lessee shall cause to be completed within five (5) business days
after the conclusion of the five (5) business day period referred to in
the immediately preceding sentence. The final working drawings so
approved by Xxxxxx and Xxxxxx (including all changes made to resolve
Xxxxxx's objections approved by Xxxxxx's architect, Xxxxxx's architect
or construction consultant) are referred to herein as the "Final
Plans."]
B. CONSTRUCTION CONTRACT: Lessor and Lessee shall cooperate
to cause the Interior Improvements to be constructed by General
Contractor pursuant to a construction contract entered into by Lessor
and General Contractor.
C. COMMENCEMENT OF INTERIOR IMPROVEMENTS: Promptly
following approval of the Final Plans and Lessor obtaining all required
governmental approvals and permits, Lessor shall commence construction
of the Interior Improvements and shall diligently prosecute such
construction to completion. Lessor shall use reasonable efforts to
achieve Substantial Completion of the Interior Improvements as soon as
reasonably practicable.
3. PAYMENT OF INTERIOR IMPROVEMENT COSTS: Lessee shall have the
following obligations with respect to the payment of costs for the
Interior Improvements:
A. Lessee shall be responsible for and shall pay to Lessor
the following: (i) the entire amount of Lessee Improvement Costs; (ii)
Lessee's Share of Common Area Improvement Costs, provided, however, that
Lessee shall pay fifty percent (50%) of all costs arising in connection
with the purchase and installation of backup power generators ; (iii)
Lessee's Share of Engineering and Design Costs incurred by Lessor; (iv)
the entire amount of costs incurred by Lessor due to Xxxxxx Xxxxxx (as
defined hereinafter); and (v) a management fee in the amount of five
percent (5%) of all of the costs set forth in the preceding clauses (i)
through (iv). Upon execution of this Lease, Lessee shall pay to Lessor
One Hundred Thousand Dollars ($100,000) ("Lessee's Prepayment"), which
amount shall be applied by Lessor towards Lessee's payment obligations
under this Agreement. If any of the foregoing costs exceed the amount
of Xxxxxx's Prepayment, then Xxxxxx shall reimburse any such excess
costs to Lessor within five (5) days after Xxxxxx's receipt of a written
request by Xxxxxx; each such request shall include reasonable supporting
backup documentation. If upon the completion of and final payment by
Lessor with respect to the Interior Improvements there remains any
unused portion of Xxxxxx's Prepayment, then such unused portion shall
thereafter promptly be refunded by Lessor to Lessee.
4. CHANGES TO APPROVED PLANS: Once the Final Plans have been
approved by Xxxxxx and Xxxxxx, neither shall have the right to order
extra work or change orders with respect to the construction of the
Interior Improvements without the prior written consent of the other,
which consent shall not be unreasonably withheld provided that there is
a reasonable basis for such change. All extra work or change orders
requested by either Lessor or Lessee shall be made in writing, shall
specify any added or reduced cost and/or construction time resulting
therefrom, and shall become effective and a part of the Final Plans once
approved in writing by both parties. If a change order requested by
Xxxxxx results in an increase in the cost of constructing the Interior
Improvements, Lessee shall pay the amount of such increase caused by the
change order requested by Xxxxxx at the time the change order is
approved by both Lessor and Xxxxxx.
-2-
5. DELAY IN COMPLETION CAUSED BY LESSEE: The parties hereto
acknowledge that the date on which Xxxxxx's obligation to pay rent would
otherwise commence may be delayed because of (i) Lessee's failure to
submit necessary information to Lessor when required or to promptly
review and approve the plans for the Interior Improvements in accordance
with the Schedule for Performance, (ii) any act by Lessee which
interferes with or delays the completion of the plans for the Interior
Improvements or Lessor's construction work, (iii) change orders
requested by Xxxxxx and approved by Lessor, or (iv) special materials or
equipment ordered or specified by Lessee that cannot be obtained by
Lessor at normal cost within a reasonable period of time because of
limited availability (collectively, "Lessee Delays"). It is the intent
of the parties hereto that the commencement of Xxxxxx's obligation to
pay Base Rent and all other charges under the Lease not be delayed by
any of such causes or by any other act of Lessee, and in the event it is
so delayed, Xxxxxx's obligation to pay the Base Rent and all other
charges under the Lease shall commence as of the date it would otherwise
have commenced absent delay caused by Lessee.
6. DELIVERY OF POSSESSION, PUNCH LIST, AND ACCEPTANCE AGREEMENT:
As soon as the Interior Improvements are Substantially Completed, Lessor
and Lessee shall together walk through the Premises and inspect all
Interior Improvements so completed, using reasonable efforts to discover
all uncompleted or defective construction in the Interior Improvements.
After such inspection has been completed, each party shall sign an
acceptance agreement in the form attached to this Agreement as SCHEDULE
2, which shall (i) include a list of all "punch list" items which the
parties agree are to be corrected by Lessor and (ii) shall state the
Commencement Date and the initial Base Rent. As soon as such inspection
has been completed and such acceptance agreement executed, Lessor shall
deliver possession of the Premises to Lessee. Lessor shall use
reasonable efforts to complete and/or repair such "punch list" items
within thirty (30) days after executing the acceptance agreement.
Lessor shall have no obligation to deliver possession of the Premises to
Lessee until such procedures regarding the preparation of a punch list
and the execution of the acceptance agreement have been completed.
Xxxxxx's taking possession of any part of the Premises shall be deemed
to be an acceptance by Xxxxxx of Lessor's work of improvement in such
part as complete and in accordance with the terms of the Lease except
for the punch list times noted and latent defects that could not
reasonably have been discovered by Lessee during its inspection of the
Interior Improvements prior to completion of the acceptance agreement.
Notwithstanding anything contained herein, Xxxxxx's obligation to pay
Base Rent and all other charges under the Lease shall commence as
provided in the Lease, regardless of whether Lessee completes such
inspection or executes such acceptance agreement.
7. STANDARD OF CONSTRUCTION AND WARRANTY: Lessor hereby warrants
that the Interior Improvements shall be constructed substantially in
accordance with the Final Plans (as modified by change orders approved
by Lessor and Lessee), in a good and workmanlike manner, and all
materials and equipment furnished shall conform to such final plans and
shall be new and otherwise of good quality. The foregoing warranty
shall be subject to, and limited by, the following: (i) once Lessor is
notified in writing of any breach of the above-described warranty,
Lessor shall as soon as is reasonably practicable commence the cure of
such breach and complete such cure with diligence at Lessor's cost; (ii)
Lessor's liability pursuant to such warranty shall be limited to the
cost of correcting the defect or other matter in question, and in no
event shall Lessor be liable to Lessee for any damages or liability
incurred by Lessee as a result of such defect or other matter, including
without limitation damages resulting from any loss of business by Lessee
or other consequential damages; and (iii) notwithstanding anything
contained herein, Lessor shall not be liable for any defect in design,
construction, or equipment furnished which is discovered and of which
Lessor receives written notice from Lessee after the end of the first
six (6) full calendar months following the Commencement Date. With
respect to defects for which Lessor is not responsible pursuant to this
paragraph, Lessee shall have the benefit of any construction or
equipment warranties existing in favor of Lessor that would assist
Lessee in correcting such defect and in discharging its obligations
regarding the repair and maintenance of the Premises. Upon request by
Xxxxxx, Lessor shall inform Xxxxxx of all written construction and
equipment warranties existing in favor of Lessor which affect the
Interior Improvements. Lessor shall cooperate with Lessee in enforcing
such warranties and in bringing any suit that may be necessary to
enforce liability with regard to any defect for which Lessor is not
responsible pursuant to this paragraph so long as Lessee pays all costs
reasonably incurred by Lessor in so acting. Lessor makes no other
express or impled warranty with respect to the design, construction or
operation of the Interior Improvements except as set forth in this
paragraph 7.
8. CONDITION TO LESSOR'S PERFORMANCE: Lessor's obligations under
the Lease are subject to the satisfaction or waiver of the condition
that Lessor obtain all building permits and other governmental approvals
required in order to commence construction of the Interior Improvements.
If Lessor, using its good faith efforts, is unable to obtain such
permits or approvals within sixty (60) days after Lessor and Xxxxxx's
approval of the Final Plans, Lessor shall have the option of terminating
the Lease; provided, however, that Lessor shall have the right to extend
the time period for the satisfaction of such condition for a period of
up to sixty (60) additional days to enable Lessor to continue its
efforts to cause such condition to be satisfied. If any such option to
extend the time for satisfaction of this condition is exercised, (i)
Lessor shall continue to use reasonable efforts to cause the condition
to be satisfied; and (ii) such extension shall not constitute a delay
caused by Lessee pursuant to paragraph 5 hereof, nor shall Lessor in any
may be penalized for exercising such option to obtain additional time to
cause the condition satisfied. If Xxxxxx becomes entitled to and elects
to so terminate the Lease, the Lease shall terminate on the date notice
is so given to Lessee. Lessor shall be under an obligation of good
faith to use its reasonable efforts to cause the condition to be
satisfied.
-3-
9. EFFECT OF AGREEMENT: Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings ascribed to them
in the Lease. In the event of any inconsistency between this Agreement
and the Lease, the terms of this Agreement shall prevail.
LESSOR: LESSEE:
------ ------
R&S, LLC, QUARK BIOTECH, INC.,
a California limited liability company a California corporation
By By
------------------------------------ ------------------------------
Name Name
---------------------------------- ----------------------------
Its Its
----------------------------------- -----------------------------
Dated Dated
--------------------------------- ---------------------------
-4-
SCHEDULE 1
Final Plans
(To be inserted)
-5-
SCHEDULE 2
Acceptance Agreement
THIS ACCEPTANCE AGREEMENT, is made as of _____________, 199_, by
and between the parties hereto with regard to that lease (the "Lease")
dated __________________, 1997, by and between R & S, LLC, a California
limited liability company, ("Lessor"), and QUARK BIOTECH, INC., a
California corporation ("Lessee"), affecting those premises commonly
known as 0000 Xxxxxxxxxx Xxxx, Pleasanton, California. The parties
hereto agree as follows:
1. All Lessee Improvements and Common Area Improvements required
to be constructed pursuant to the Interior Improvement Agreement have
been completed in accordance with the terms of the Lease, subject to the
completion of punchlist items identified on ATTACHMENT "A" attached
hereto.
2. Possession of the Premises has been delivered to Lessee and
Xxxxxx has accepted and taken possession of the Premises.
3. The Commencement Date of the Lease Term is ___________, 199_,
and the Lease Term shall expire on the last day of the thirty-sixth
(36th) full calendar month following the Commencement Date, unless
sooner terminated or extended according to the terms of the Lease.
4. The Lease is in full force and effect, neither party is in
default of its obligations under the Lease, and Xxxxxx has no setoffs,
claims, or defenses to the enforcement of the Lease.
LESSOR: LESSEE:
------ ------
R & S, LLC, a California QUARK BIOTECH, INC., a California
limited liability company corporation
By: By:
--------------------------- ----------------------------
Printed Printed
Name: Name:
------------------------- --------------------------
Title: Title:
------------------------ -------------------------
Date: Date:
------------------------- --------------------------
-6-
ATTACHMENT "A" TO ACCEPTANCE AGREEMENT
PUNCHLIST
[to be attached]
-7-
FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM TO LEASE (this "Addendum") is made by and between
R&S, LLC, a California limited liability company ("Lessor"), and QUARK
BIOTECH, INC., a California corporation ("Lessee"), to be a part of that
certain Standard Industrial/Commercial Multi-Lessee Lease of even date
herewith between Lessor and Lessee (the "Lease Form") concerning
approximately 3,287 square feet of space (the "Premises") located at 0000
Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxx (the "Building"). Xxxxxx and Xxxxxx
agree that, notwithstanding anything to the contrary in the Lease Form, the
Lease Form is hereby modified and supplemented as set forth below.
1. DEFINITIONS. Unless otherwise defined in this Addendum, all the terms
used in this Addendum shall have the same meaning and definition given them
in the Lease Form. As used in this Addendum, the term "Lease Form" shall
mean the printed lease form, together with all exhibits and attachments
thereto, to which this Addendum is attached. As used herein, the term "Lease"
shall mean the Lease Form, this Addendum, and all other addenda, exhibits,
and attachments to the Lease Form referred to in the Lease Form or in this
Addendum.
2. TERM. The Lease shall commence (the "Commencement Date") on the date
by which all of the following have occurred: (i) Lessor has "Substantially
Completed" the "Lessee Improvements" as defined in EXHIBIT B to the Lease;
and (ii) Lessee has delivered possession of the Premises to Lessee.
3. COMMON AREA OPERATING EXPENSES. "Common Area Operating Expenses"
shall not include the following: (i) costs for which Landlord has a right of
reimbursement from others, (ii) costs to comply with any Applicable Law on
the Commencement Date; (iii) costs which would properly be capitalized under
generally accepted accounting principles ("GAAP") except to the extent that
Lessee's Share of such cost during any twelve-month period of the Lease is
amortized (with interest at twelve percent (12%) or the highest amount
allowed by Applicable Law, whichever is less) over the useful life of the
capital item in question determined in accordance with GAAP; or (iv) reserves
set aside for maintenance and repair of Common Areas.
4. COMPLIANCE WITH LAWS. Lessee shall not be required to comply with or
cause the Premises to comply with any Applicable Laws requiring improvements
or alterations unless such compliance is necessitated by reason of (i)
Xxxxxx's particular use or occupancy of the Premises, or (ii) alterations
constructed in the Premises by, or at the request of, Lessee.
Notwithstanding the foregoing, all expenses incurred by Lessor in regard to
compliance with Applicable Laws shall be a Common Area Operating Expense of
which Lessee must pay Lessee's Share as set forth in the Lease.
5. HAZARDOUS SUBSTANCES. Without limiting the generality of Xxxxxx's
obligations set forth in Section 6 of the Lease Form:
(a) Prior to executing the Lease, Xxxxxx has completed, executed and
delivered to Lessor the Hazardous Substances Questionnaire (the
"Questionnaire"), a copy of which is attached to this Addendum as SCHEDULE 1.
Lessee represents and warrants to Lessor that the information contained in
the Questionnaire is true and correct and accurately describes the use(s) of
Hazardous Substances which will be made or used on the Premises by Xxxxxx.
Lessee shall commencing with the date which is one (1) year from the
Commencement Date and continuing every year thereafter during the Lease Term,
complete, execute and deliver to Lessor a Questionnaire (in the form set
forth in SCHEDULE 1), describing Xxxxxx's present use of Hazardous Substances
on the Premises, and any other reasonably necessary documents as requested by
Xxxxxx. Lessee shall not cause or permit any Hazardous Substance to be
brought upon, kept, stored or used on or about the Industrial Center without
the prior written consent of Lessor. Lessor hereby consents to Xxxxxx's use
of the substances described on SCHEDULE 1.
(b) Any handling, transportation, storage, treatment, disposal or use
of Hazardous Substances by Lessee or its agents, contractors, licensees or
invitees in or about the Industrial Center shall strictly comply with all
Applicable Requirements. Lessee shall protect, indemnify, defend upon demand
with counsel reasonably acceptable to Lessor, and hold harmless Lessor from
and against any liabilities, losses, claims, damages, lost profits,
consequential damages, interest, penalties, fines, monetary sanctions,
attorneys' fees, experts' fees, court costs, remediation costs, investigation
costs, and other expenses which result from or arise in any manner whatsoever
out of the use, storage, treatment, transportation, release or disposal of
Hazardous Substances on or about the Premises or the Industrial Center by
Lessee or its agents, contractors, licensees or invitees.
(c) If the presence of Hazardous Substances on the Industrial Center
caused by Lessee or its agents, contractors, licensees or invitees results in
contamination or deterioration of water or soil resulting in a level of
contamination greater than the levels established as acceptable by any
governmental agency having jurisdiction over such contamination, then Lessee
shall promptly take any and all action necessary to investigate and remediate
such contamination and comply with all Applicable Requirements in connection
therewith. Lessee shall further be solely responsible for, and shall
protect, defend, indemnify and hold Lessor and its agents and employees
harmless from and against, all claims, costs and liabilities, including
attorneys' fees and costs, arising out of or in connection
-1-
with any investigation or remediation required hereunder to return the
Industrial Center to its condition existing prior to the appearance of such
Hazardous Substances.
(d) The provisions of this Paragraph 5 shall survive the termination
of the Lease.
6. MAINTENANCE, REPAIRS. Lessor shall perform and construct any
necessary repairs or maintenance to the heating, ventilating, air
conditioning, electrical, water, sewer, and plumbing systems serving the
Premises and the Building, and to any portion of the Building outside of the
demising walls of the Premises, except for damage occasioned by the acts or
omissions of Lessee, its employees, agents, contractors or invitees, which
damage shall promptly be repaired by Lessee at Lessee's expense, subject to
the waiver of subrogation rights set forth in Section 8.6 of the Lease Form.
Notwithstanding the foregoing, all expenses incurred by Lessor in regard to
the foregoing shall be a Common Area Operating Expense of which Lessee must
pay Lessee's Share as set forth in the Lease Form and this Addendum.
7. INDEMNITY. Lessor shall not be released or indemnified by Lessee from
any losses, damages, liabilities, judgments, actions, claims, attorneys'
fees, consultants' fees, payments, costs and expenses arising from the gross
or active negligence or willful misconduct of Lessor or its employees,
authorized agents or contractors.
8. BASE RENT ADJUSTMENT. Commencing as of the first day of the
thirteenth (13th) full calendar month following the Commencement Date, and
continuing on each annual anniversary of such day throughout the remainder of
the Lease Term (each such day being referred to as a "Rent Adjustment Date",
and including any extension options), the Base Rent shall be adjusted to
equal the product of the Base Rent in effect for the calendar month
immediately preceding the Rent Adjustment Date multiplied by a fraction, the
numerator of which is the Consumer Price Index published for the month
immediately preceding the Rent Adjustment Date in question and the
denominator of which is the Consumer Price Index published for the month
immediately preceding the Commencement Date (with respect to the first rent
adjustment) or the immediately preceding Rent Adjustment Date (with respect
to each other rent adjustment); provided, however, that in no event shall the
Base Rent on a Rent Adjustment Date be less than one hundred two percent
(102%), nor more than one hundred six percent (106%) of the Base Rent due for
the immediately preceding period. The term "Consumer Price Index" shall mean
the Consumer Price Index, for All Urban Consumers, Subgroup "All Items", for
the San Francisco-Oakland-San Xxxx Metropolitan Area (Base Year 1982-84=100),
which is currently being published by the United States Department of Labor,
Bureau of Labor Statistics. If, however, this Consumer Price Index is
changed so that the base year is altered from that used as of the
Commencement Date, then the Consumer Price Index shall be converted in
accordance with the conversion factor published by the United States
Department of Labor, Bureau of Labor Statistics, to obtain the same results
that would have been obtained had the base year not been changed. If no
conversion factor is available or if the Consumer Price Index is otherwise
changed, revised or discontinued for any reason, there shall be substituted
in lieu thereof and the term "Consumer Price Index" shall thereafter refer to
the most nearly comparable official price index of the United States
Government to obtain substantially the same result as would have been
obtained had the original Consumer Price Index not been changed, revised or
discontinued, which alternative index shall be selected by Lessor and shall
be subject to Lessee's approval, which approval will not be unreasonably
withheld or delayed.
9. OPTION TO RENEW. Lessee shall have the option (the "Option") to
extend the Lease Term for an additional term of thirty-six (36) months,
commencing when the initial Lease Term expires, upon the terms and conditions
set forth in this paragraph. Lessee may exercise such option only by giving
Lessor written notice of its intention on or before the one hundred eightieth
day (180th) day prior to the end of the initial Lease Term. Notwithstanding
the foregoing, if either (i) Lessee is in default under the Lease (beyond any
applicable cure period) on the date that Lessee gives its written Option
notice to Lessor, (ii) Lessee is in default under the Lease (beyond any
applicable cure period) on the date the Option term is to commence, or (iii)
Lessor fails to receive a written Option notice from Lessee on or before the
expiration of the foregoing 180-day time period, then the Option term shall
not commence, any such Option notice given by Lessee shall be deemed
ineffective, and the Lease shall expire at the end of the initial Lease Term.
If the Option is timely and properly exercised, Base Rent during the Option
term shall be the Base Rent for the initial Lease Term as adjusted under
Section 8 of this Addendum. All other terms and conditions contained in the
Lease, as the same may be amended from time to time by the parties in
accordance with the provisions of the Lease, shall remain in full force and
effect and shall apply during the Option term.
10. APPROVALS. Whenever the Lease requires an approval, consent,
designation, determination, selection or judgment by either Lessor or Lessee,
such approval, consent, designation, determination, selection or judgment and
any conditions imposed thereby shall, except as otherwise expressly set forth
in the Lease Form, be reasonable and shall not be unreasonably withheld or
delayed and, in exercising any right or remedy hereunder, each party shall at
all times act reasonably and in good faith.
11. REAL PROPERTY TAXES. Lessee shall not be required to pay any portion
of any tax or assessment expense in excess of the amount which would be
payable if such tax or assessment expense were paid in installments over the
longest possible term.
-2-
12. ASSIGNMENT AND SUBLETTING. For the purpose of the Lease, any private
or public offering of Lessee's capital stock shall not be deemed an
assignment, subletting or other transfer of the Lease or the Premises
requiring Lessor's consent.
13. EFFECT OF ADDENDUM. In the event of any inconsistency between this
Addendum and the Lease, the terms of this Addendum shall prevail.
IN WITNESS WHEREOF, the parties have executed this Addendum.
LESSOR: LESSEE:
------- -------
R&S, LLC, QUARK BIOTECH, INC., a California
limited liability company a California corporation
By By
------------------------------ -------------------------------
Name Name
---------------------------- ----------------------------
Its Its
----------------------------- -----------------------------
Dated Dated
--------------------------- ----------------------------
-3-
SCHEDULE 1
Hazardous Substances Questionnaire
Address of Subject Property: 0000 Xxxxxxxxxx Xxxx,
---------------------
Pleasanton, CA (the "Subject
----------------------------
Property")
----------
Proposed Use of Subject Property: Laboratory & Office
-----------------------------
GENERAL INSTRUCTIONS: Please provide information as it relates to your past
uses and proposed use of Hazardous Substances at the Subject Property. If
there is insufficient space, please attach a separate page as needed. We
appreciate your assistance.
List the person who completed this questionnaire and who will be
available for questions concerning this questionnaire.
Name: XXXXXX X. XXXXX
--------------------------------------------------------
Position: ACTING CONTROLLER
----------------------------------------------------
Company Name: QUARK BIOTECH, INC.
------------------------------------------------
Address: 0000 XXXXXXXXXX XXXX
-----------------------------------------------------
Telephone #:
-------------------------------------------------
Date: Nov. 2, 1997
--------------------------------------------------------
------------------------------------------------------------------------------
1. GENERAL DESCRIPTION OF OPERATIONS:
*1.1 Please describe on Schedule 1 (attached) the general nature
of the business and specific activities that will be conducted at the
Subject Property.
*1.2 Please identify the person responsible for environmental compliance
and the length of time that person has held the position.
2. HAZARDOUS SUBSTANCES PRODUCTION AND USAGE:
*2.1 Will your company use, store or manufacture Hazardous
Substances at the Subject Property? "Hazardous Substances" means any
substance or any material containing such a substance that could be
considered toxic or hazardous under federal or state law including
solvents, petroleum, pesticides, paints, asbestos containing materials,
lead based batteries, radioactive materials and PCB containing
transformers.
Yes _______ No ________
*2.2 If the answer to 2.1 was yes, please list on attached Schedule 1 all
Hazardous Substances that will be used, stored or manufactured at the
Subject Property and the quantities of each.
3. HAZARDOUS SUBSTANCES STORAGE:
*3.1 Will Hazardous Substances be stored at the Subject Property?
Yes _______ No ________
*3.2 If the answer to 3.1 was yes, please indicate the proposed
location of each storage area within the Subject Property by
attaching a floor plan.
*3.3 Please identify the proposed locations within the Subject Property
of any storage lockers, underground tanks, sumps, storage
cabinets, etc.
*SEE ATTACHED RESPONSE
-1-
4. WASTES AND EMISSIONS:
4.1 Has the company at any previous location ever discharged waste to any
body of water or stream or to any sanitation system or otherwise been
required to obtain a NPDES Permit or any other permit or approval from
a governmental agency concerning waste water discharges?
Yes _______ No ___X____
4.2 Has the company at any previous location ever emitted any air
contaminant (including, but not limited to, reactive hydrocarbons,
sulfur oxides, carbon monoxide, nitrogen oxides, lead, particulate
matter, beryllium, mercury, asbestos, vinyl chloride, benzene, and
radionuclides) or has it ever been required to obtain an air
emissions permit or other permit or approval from a governmental
agency concerning air emissions in order to conduct its business?
Yes _______ No ___X____
4.3 Has the company in the past transported waste off-site for disposal?
Yes _______ No ___X____
If the answer is yes, please describe the circumstances of the
disposal and the site to which the waste was taken. Please also
indicate whether a permit was required in order to dispose of the
waste or if further remediation was necessary before the waste was
disposed of.
4.4 Has the company in the past transported waste off-site for recycling?
Yes _______ No ___X____
4.5 Does the company currently possess any permits or approvals from a
governmental agency with respect to its Hazardous Substances
activities?
Yes _______ No ___X____
If the answer is yes, please indicate the permits you currently
possess.
*4.6 Does the company require any permit or approval not presently in full
force and effect from any governmental agency in order to conduct its
Hazardous Substances activities?
Yes _______ No ________
*SEE ATTACHED RESPONSE
-2-
5. REPORTING REQUIREMENTS:
5.1 Has the company received notice that any of its operations or
facilities are subject to the Air Toxics Hot Spot Act or any other
law?
Yes _______ No ___X____
5.2 Has any of the company's previous operations fallen within the
reporting requirements for emissions, discharges or inventory pursuant
to Title III of XXXX or any other law?
Yes _______ No ___X____
5.3 Has the company filed a Hazardous Substances Management Plan? If so,
please attach a copy of the plan to this questionnaire.
Yes _______ No ___X____
5.4 Has the company ever notified employees of the presence of Hazardous
Substances at the work place? If so, please attach a copy of the
notice.
Yes _______ No ___X____
The above information is accurate and current as of the below referenced date.
Company Name: QUARK BIOTECH, INC.
--------------------------------------------
By: /s/ XXXXXX X. XXXXX
----------------------------------
(Signature)
XXXXXX X. XXXXX
---------------------------------------
(Type/Print Name)
ACTING CONTROLLER
---------------------------------------
(Title)
Date: Nov. 2, 1997
--------------------------------
-3-
QUARK BIOTECH, INC.
Responses to Hazardous Substances Questionnaire
November 2, 1997
Response to question 1.1
The Company is engaged in the research and development of diagnostic and
therapeutic products utilizing gene discovery techniques and protein
expression technologies.
Response to questions 1.2, 2.1, 2.2, 3.1, 3.2, 3.3, and 4.6
The Company has not completed the development of its scientific plan for
operations in the United States at this time. Accordingly, neither the
staffing, equipment or chemical requirements have been defined to date and
the Company is unable to definitively answer these questions at this time.
SCHEDULE 1
DESCRIPTION OF ACTIVITIES
Subject Property Address: 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxxxx, XX
1. GENERAL DESCRIPTION OF OPERATIONS:
A. THE ACTIVITIES THAT WILL BE CONDUCTED AT THE SUBJECT PROPERTY WILL BE:
B. THE PRODUCTS THAT WILL BE PRODUCED OR ASSEMBLED AT THE SUBJECT
PROPERTY ARE:
BRIEFLY DESCRIBE ASSEMBLY OR
PRODUCT DESCRIPTION MANUFACTURING PROCESS
------------------- -----------------------------
2. HAZARDOUS SUBSTANCES THAT WILL BE USED, STORED OR MANUFACTURED AT THE
SUBJECT PROPERTY ARE:
3. FLOOR PLAN OF THE SUBJECT PROPERTY AND PROPOSED HAZARDOUS SUBSTANCES
STORAGE AREAS:
4. WASTE STREAMS:
AIR EMISSIONS: SOURCE(S) VOLUME EMITTED CONTROL DEVICES
------------- --------- -------------- ----------------
WATER DISCHARGE: SOURCE(S) CONSTITUENTS PRETREATMENT
---------------- --------- -------------- ----------------
SOLID WASTE: SOURCE(S) CONSTITUENTS DISPOSAL METHOD
------------- --------- -------------- ----------------
