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EXHIBIT 10.8
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET
(Do not use this form for Multi-Tenant Property)
1. BASIC PROVISIONS ("BASIC PROVISIONS")
1.1 PARTIES: This Lease ("LEASE" ), dated for reference purposes only,
November 1, 1996, is made by and between Makena Properties, a California
corporation ("LESSOR") and Ansys, Inc. , a California corporation ("LESSEE"),
(collectively the "PARTIES," or individually a "PARTY").
1.2 PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known by the street address of See Addendum Section 1.2, located in the County
of Orange State of California and generally described as (describe briefly the
nature of the property) ______________________________________________
_________________________________________________________________("PREMISES").
(See Paragraph 2 for further provisions.)
1.3 TERM: _____________________ years and ______________ months ("ORIGINAL
TERM") commencing See Addendum Section 1.3 ("COMMENCEMENT DATE") and ending
___________________ ("EXPIRATION DATE"). (See Paragraph 3 for further
provisions.)
1.4 EARLY POSSESSION: See Addendum Section 1.4 ("EARLY POSSESSION DATE").
(See Paragraphs 3.2 and 3.3 for further provisions.)
1.5 BASE RENT: $47,945 per month ("BASE RENT"), payable on the 1st day of
each month commencing See Addendum Section 3.4 (See Paragraph 4 for further
provisions.) If this box is checked, there are provisions in this Lease for the
Base Rent to be adjusted.
1.6 BASE RENT PAID UPON EXECUTION: $47,945 as Base rent for the period See
Addendum Section 1.6
1.7 SECURITY DEPOSIT: $47,945 ("Security Deposit"). (See Paragraph 5 for
further provisions.)
1.8 PERMITTED USE: See Addendum Section 1.8 (See Paragraph 6 for further
provisions.)
1.9 INSURING PARTY: Lessor is the "INSURING PARTY" unless otherwise stated
herein. (See Paragraph 8 for further provisions.)
1.10 REAL ESTATE BROKERS: The following real estate brokers (collectively,
the "BROKERS") and brokerage relationships exist in this transaction and are
consented to by the Parties (check applicable boxes): Xxxxxxx & Xxxxxxxxx
represents X Lessor exclusively ("LESSOR'S BROKER"); both Lessor and Lessee, and
Xxxx Commercial Brokerage represents X Lessee exclusively ("LESSEE'S BROKER");
both Lessor and Lessee. (See Paragraph 15 for further provisions.)
1.11 GUARANTOR. The obligations of the Lessee under this Lease are to be
guaranteed by None ("GUARANTOR"). (See Paragraph 37 for further provisions.)
1.12 ADDENDUMS. Attached hereto is an Addendum or Addenda consisting of
Paragraphs _____ through _____ and Exhibits Addendum with Exhibits A-C attached
thereto all of which constitute a part of this Lease.
2. PREMISES.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental is an approximation which Lessor and Lessee
agree is reasonable and the rental based thereon is not subject to revision
whether or not the actual square footage is more or less.
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2.2 CONDITION. Lessor shall deliver the Premises to Lessee clean and free
of debris on the Commencement Date and warrants to Lessee that the existing
plumbing, fire sprinkler system, lighting, air conditioning, heating, and
loading doors, if any, in the Premises, other than those constructed by Lessee,
shall be in good operating condition on the Commencement Date. If a
non-compliance with said warranty exists as of the Commencement Date, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, rectify same at Lessor's expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within thirty
(30) days after the Commencement Date, correction of that non-compliance shall
be the obligation of Lessee at Lessee's sole cost and expense.
2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE. Lessor
warrants to Lessee that the improvements on the Premises comply with all
applicable covenants or restrictions of record and applicable building codes,
regulations and ordinances in effect on the Commencement Date. Said warranty
does not apply to the use to which Lessee will put the Premises or to any
Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to
be made by Lessee. If the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, rectify the same at Lessor's expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within six (6)
months following the Commencement Date, correction of that non-compliance shall
be at the obligation of Lessee at Lessees sole cost and expense.
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has
been advised by the Brokers to satisfy itself with respect to the condition of
the Premises (including but not limited to electrical and fire sprinkler
systems, security, environmental aspects. compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's intended use, (b) that Lessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to Lessee's occupancy of the Premises and/or the
term 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 the said
matters other than as set forth in this Lease.
2.5 LESSEE PRIOR OWNER/OCCUPANT. The warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In such
event, Lessee shall, at Lessee's sole cost and expense, correct any
non-compliance of the Premises with said warranties.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession. All other terms of this Lease, however,
(including but not limited to the obligations to pay Real Property Taxes and
insurance premiums and to maintain the Premises) shall be in effect during such
period. Any such early possession shall not affect nor advance the Expiration
Date of the Original Term.
3.3 DELAY IN POSSESSION. If for any reason Lessor cannot deliver possession
of the Premises to Lessee as agreed herein by the Early Possession Date, if one
is specified in Paragraph 1.4, or, if no Early Possession Date is specified, by
the Commencement Date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease, or the obligations of
Lessee hereunder, or extend the term hereof, but in such case, Lessee shall not,
except as otherwise provided herein, be obligated to pay rent or perform any
other obligation of Lessee under the terms of this Lease until Lessor delivers
possession of the Premises to Lessee. If possession of the Premises is not
delivered to Lessee within sixty (60) days after the Commencement Date, Lessee
may, at its option, by notice in writing to Lessor within ten (10) days
thereafter, cancel this Lease, in which event the Parties shall be discharged
from all obligations hereunder; provided, however, that if such written notice
by Lessee is not received by Lessor within said ten (10) day period. Lessee's
right to cancel this Lease shall terminate and be of no further force or effect.
Except as may be otherwise provided, and regardless of when the term actually
commences, if possession is not tendered to Lessee when required by this Lease
and Lessee does not terminate this Lease, as aforesaid, the period free of the
obligation to pay Base Rent, if any, that Lessee would otherwise have enjoyed
shall run from the date of delivery of possession and continue for a period
equal to what Lessee would otherwise have enjoyed under the terms hereof, but
minus any days of delay caused by the acts, changes or omissions of Lessee.
4. RENT.
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4.1 BASE RENT. Lessee shall cause payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time, to be received by Lessor
in lawful money of the United States, without offset or deduction, on or before
the day on which it is due under the terms of this Lease. Base Rent and all
other rent and charges for any period during the term hereof which is for less
than one (1) full calendar month shall be prorated based upon the actual number
of days of the calendar month involved. Payment of Base Rent and other charges
shall be made to Lessor at its address stated herein or to such other persons or
at such other addresses as Lessor may from time to time designate in writing to
Lessee.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease. If Lessee fails
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under this Lease (as defined in Paragraph 13.1), Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for any liability, cost, expense,
loss or damage (including attorneys' fees) which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefor
deposit moneys with Lessor sufficient to restore said Security Deposit to the
full amount required by this Lease. Any time the Base Rent increases during the
term of this Lease, Lessee shall, upon written request from Lessor, deposit
additional moneys with Lessor sufficient to maintain the same ratio between the
Security Deposit and the Base Rent as those amounts are specified in the Basic
Provisions. Lessor shall not be required to keep all or any part of the Security
Deposit separate from its general accounts. Lessor shall, at the expiration or
earlier termination of the term hereof and after Lessee has vacated the
Premises, return to Lessee (or, at Lessor's option, to the last assignee, if
any, of Lessees interest herein), that portion of the Security Deposit not used
or applied by Lessor. Unless otherwise expressly agreed in writing by Lessor, no
part of the Security Deposit shall be considered to be held in trust, to bear
interest or other increment for its use, or to be prepayment for any moneys to
be paid by Lessee under this Lease.
6. USE.
6.1 USE. Lessee shall use and occupy the Premises only for the purposes set
forth in Paragraph 1.8, or any other use which is comparable thereto, and for no
other purpose. Lessee shall not use or permit the use of the Premises in a
manner that creates waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to, neighboring premises or properties. Lessor
hereby agrees to not unreasonably withhold or delay its consent to any written
request by Lessee, Lessees assignees or subtenants, and by prospective assignees
and subtenants of the Lessee, its assignees and subtenants, for a modification
of said permitted purpose for which the premises may be used or occupied, so
long as the same will not impair the structural integrity of the improvements on
the Premises, the mechanical or electrical systems therein, is not significantly
more burdensome to the Premises and the improvements thereon, and is otherwise
permissible pursuant to this Paragraph 6. If Lessor elects to withhold such
consent, Lessor shall within five (5) business days give a written notification
of same, which notice shall include an explanation of Lessor's reasonable
objections to the change in use.
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE" as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safely or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for liability of Lessor to any governmental agency
or third party under any applicable statute or common law theory. Hazardous
Substance shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil or any products, by-products or fractions thereof. Lessee
shall not engage in any activity in, on or about the Premises which constitutes
a Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Law (as defined in Paragraph
6.3). "REPORTABLE USE" shall mean (i) the installation or use of any above or
below ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority. Reportable Use shall
also include Lessee's being responsible for the presence in, on or about the
Premises of a Hazardous Substance with respect to which any Applicable Law
requires that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Lessee may, without
Lessor's prior consent, but in compliance with all Applicable Law, use any
ordinary and customary materials reasonably required to be used by Lessee in the
normal course of Lessee's business permitted on the Premises, so long as such
use is not a Reportable Use and does not expose the Premises or neighboring
properties to any meaningful risk of contamination or damage or expose Lessor to
any liability therefor. In addition, Lessor may (but without any obligation to
do so) condition its consent to the use or presence of any Hazardous Substance,
activity or storage tank by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the
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environment against damage, contamination or injury and/or liability therefrom
or therefor, including, but not limited to, the installation (and removal on or
before Lease expiration or earlier termination) of reasonably necessary
protective modifications to the Premises (such as concrete encasements) and/or
the deposit of an additional Security Deposit under Paragraph 5 hereof.
(b) DUTY TO INFORM LESSOR. If Lessee knows or has reasonable cause to
believe, that a Hazardous Substance, or a condition involving or resulting from
same, has come to be located in, on, under or about the Premises, other than as
previously consented to by Lessor, Lessee shall immediately give written notice
of such fact to Lessor. Lessee shall also immediately give Lessor a copy of any
statement, report, notice, registration, application, permit, business plan,
license, claim, action or proceeding given to, or received from, any
governmental authority or private party, or persons entering or occupying the
Premises, concerning the presence, spill, release, discharge of, or exposure to,
any Hazardous Substance or contamination in, on, or about the Premises,
including but not limited to all such documents as may be involved in any
Reportable Uses involving the Premises.
(c) INDEMNIFICATION. Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, costs, claims, liens, expenses, penalties, permits and
attorney's and consultant's fees arising out of or involving any Hazardous
Substance or storage tank brought onto the Premises by or for Lessee or under
Lessee's control. Lessee's obligations under this Paragraph 6 shall include, but
not be limited to, the effects of any contamination or injury to person,
property or the environment created or suffered by Lessee, and the cost of
investigation (including consultant's and attorney's fees and testing), removal,
remediation, restoration and/or abatement thereof, or of any contamination
therein involved, and shall survive the expiration or earlier termination of
this Lease. No termination, cancellation or release agreement entered into by
Lessor and Lessee shall release Lessee from its obligations under this Lease
with respect to Hazardous Substances or storage tanks, unless specifically so
agreed by Lessor in writing at the time of such agreement.
6.3 LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in this
Lease, Lessee, shall, at Lessee's sole cost and expense, fully, diligently and
in a timely manner, comply with all "APPLICABLE LAW," which term is used in this
Lease to include all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating in any manner
to the Premises (including but not limited to 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 or storage
tank), now in effect or which may hereafter come into effect, and whether or not
reflecting a change in policy from any previously existing policy. Lessor shall,
within five (5) days after receipt of Lessor's written request, provide Lessor
with copies of all documents and information, including, but not limited to,
permits, registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with any Applicable Law specified by Lessor, and
shall immediately upon receipt, notify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving failure by Lessee or the
Premises to comply with any Applicable Law.
6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's Lender(s) (as defined in
Paragraph 8.3(a)) shall have the right to enter the Premises, at any time, in
the case of an emergency, and otherwise at reasonable times, for the purpose of
inspecting the condition of the Premises and for verifying compliance by Lessee
with this Lease and all Applicable Laws (as defined in Paragraph 6.3), and to
employ experts and/or consultants in connection therewith and/or to advise
Lessor with respect to Lessee's activities, including but not limited to the
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance or storage tank on or from the Premises. The costs and
expenses of any such inspections shall be paid by the party requesting same,
unless a Default or Breach of this Lease, violation of Applicable Law, or a
contamination, caused or materially contributed to by Lessee is found to exist
or be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In any such case, Lessee shall upon request reimburse Lessor
or Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.
7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of Paragraphs 2.2 (Lessor's warranty as
to condition), 2.3 (Lessor's warranty as to compliance with covenants, etc.) 7.2
(Lessor's obligations to repair), 9 (damage and destruction), and 14
(condemnation), Lessee shall, at Lessee's sole cost and expense and at all
times, keep the Premises and every part thereof in good order, condition and
repair, structural and non-structural (whether or not such portion of the
Premises requiring repairs, or the means of repairing the same, are reasonably
or readily accessible to Lessee, and whether or not the need for such repairs
occurs as a result of Lessee's use, any prior use, the elements or the age of
such portion of the Premises), including, without limiting the
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generality of the foregoing, all equipment or facilities serving the Premises,
such as plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities, boilers, fired or unfired pressure vessels, fire sprinkler and/or
standpipe and hose or other automatic fire extinguishing system, including fire
alarm and/or smoke detection systems and equipment, fire hydrants, fixtures,
walls (interior and exterior), foundations, ceilings, roofs, floors, windows,
doors, plate glass, skylights landscaping, driveways, parking lots, fences,
retaining walls, signs, sidewalks and parkways located in, on, about, or
adjacent to the Premises. Lessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under or about the Premises
(including through the plumbing or sanitary sewer system) and shall promptly, at
Lessee's expense, take all investigatory and/or remedial action reasonably
recommended, whether or not formally ordered or required, for the cleanup of any
contamination of, and for the maintenance, security and/or monitoring of the
Premises, the elements surrounding same, or neighboring properties, that was
caused or materially contributed to by Lessee, or pertaining to or involving any
Hazardous Substance and/or storage tank brought onto the Premises by or for
Lessee or under its control. Lessee, in keeping the Premises in good order,
condition and repair, shall exercise and perform good maintenance practices.
Lessee's obligations shall include restorations, replacements or renewals when
necessary to keep the Premises and all improvements thereon or a part thereof in
good order, condition and state of repair. If Lessee occupies the Premises for
seven (7) years or more, Lessor may require Lessee to repaint the exterior of
the buildings on the Premises as reasonably required, but not more frequently
than once every seven (7) years.
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain contracts, with copies to Lessor, in customary form and substance for,
and with contractors specializing and experienced in, the inspection,
maintenance and service of the following equipment and improvements, if any,
located on the Premises: (i) heating, air conditioning and ventilation
equipment, (ii) boiler, fired or unfired pressure vessels, (iii) fire sprinkler
and/or standpipe and hose or other automatic fire extinguishing systems,
including fire alarm and/or smoke detection, (iv) landscaping and irrigation
systems, (v) roof covering and drain maintenance and (vi) asphalt and parking
lot maintenance.
7.2 LESSOR'S OBLIGATIONS. Except for the warranties and agreements of
Lessor contained in Paragraphs 2.2 (relating to condition of the Premises), 2.3
(relating to compliance with covenants, restrictions and building code), 9
(relating to destruction of the Premises) and 14 (relating to condemnation of
the Premises), it is intended by the Parties hereto that Lessor have no
obligation, in any manner whatsoever, to repair and maintain the Premises, the
improvements located thereon, or the equipment therein, whether structural or
non structural, all of which obligations are intended to be that of the Lessee
under Paragraph 7.1 hereof. It is the intention of the Parties that the terms of
this Lease govern the respective obligations of the Parties as to maintenance
and repair of the Premises. Lessee and Lessor expressly waive the benefit of any
statute now or hereafter in effect to the extent it is inconsistent with the
forms of this Lease with respect to, or which affords Lessee the right to make
repairs at the expense of Lessor or to terminate this Lease by reason of any
needed repairs.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY INSTALLATIONS"
is used in this Lease to refer to all carpeting, window coverings, air lines,
power panels, electrical distribution, security, fire protection systems,
communication systems, lighting fixtures, heating, ventilating, and air
conditioning equipment, plumbing, and fencing in, on or about the Premises. The
term "TRADE FIXTURES" shall mean Lessee's machinery and equipment that can be
removed without doing material damage to the Premises. The term "ALTERATIONS"
shall mean any modification of the improvements on the Premises from that which
are provided by Lessor under the terms of this Lease, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. "LESSEE OWNED
ALTERATIONS AND/OR UTILITY INSTALLATIONS" are defined as Alterations and/or
Utility Installations made by lessee that are not yet owned by Lessor as defined
In Paragraph 7.4(a). Lessee shall not make any Alterations or Utility
Installations in, on, under or about the Premises without Lessor's prior written
consent. Lessee may, however, make non-structural Utility Installations to the
interior of the Premises (excluding the roof), as long as they are not visible
from the outside, do not involve puncturing, relocating or removing the roof or
any existing walls, and the cumulative cost thereof during the term of this
Lease as extended does not exceed $25,000.
(b) CONSENT. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with proposed detailed plans. All consents
given by Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific
consent, shall be deemed conditioned upon: (i) Lessee's acquiring all applicable
permits required by governmental authorities, (ii) the furnishing of copies of
such permits together with a copy of the plans and specifications for the
Alteration or Utility Installation to Lessor prior to commencement of the work
thereon; and (iii) the compliance by Lessee with all conditions of said permits
in a prompt and expeditious manner. Any Alterations or Utility Installations by
Lessee during the term of this Lessee shall be done in a good and workmanlike
manner, with good and sufficient materials, and in compliance with all
Applicable Law. Lessee shall promptly upon completion thereof furnish Lessor
with as-built plans and specifications therefor. Lessor may (but without
obligation to do so) condition its consent to any requested Alteration or
Utility Installation that costs $10,000 or more upon Lessee's providing Lessor
with a lien and
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completion bond in an amount equal to one and one-half times the
estimated cost of such Alteration or Utility Installation and/or upon Lessees
posting an additional Security Deposit with Lessor under Paragraph 36 hereof.
(c) INDEMNIFICATION. Lessee shall pay, when due, all claims for labor
or materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense defend and protect itself, Lessor
and the Premises against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises. If Lessor shall require, Lessee shall furnish to Lessor
a surety bond satisfactory to Lessor in an amount equal to one and one-half
times the amount of such contested lien claim or demand, indemnifying Lessor
against liability for the same, as required by law for the holding of the
Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Lessor's attorney's fees and costs in participating in
such action if Lessor shall decide it is to its best interest to do so.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to Lessor's right to require their removal or
become the owner thereof as hereinafter provided in this Paragraph 7.4, all
Alterations and Utility Additions made to the Premises by Lessee shall be the
property of and owned by Lessee, but considered a part of the Premises. Lessor
may, at any time and at its option, elect in writing to Lessee to be the owner
of all or any specified part of the Lessee Owned Alterations and Utility
installations. Unless otherwise instructed per subparagraph 7.4(b) hereof, all
Lessee Owned Alterations and Utility Installations shall, at the expiration or
earlier termination of this Lease, become the property of Lessor and remain upon
and be surrendered by Lessee with the Premises.
(b) REMOVAL. Unless otherwise agreed in writing, Lessor may require
that any or all Lessee Owned Alterations or Utility Installations be removed by
the expiration or earlier termination of this Lease, notwithstanding their
installation may have been consented to by Lessor. Lessor may require the
removal at any time of all or any part of any Lessee Owned Alterations or
Utility 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 form or any earlier termination date, with all
of the improvements, parts and surfaces thereof clean and free of debris and in
good operating order, condition and state of repair, ordinary wear and tear
excepted. "ORDINARY WEAR AND TEAR" shall not include any damage or deterioration
that would have been prevented by good maintenance practice or by Lessee
performing all of its obligations under this Lease. Except as otherwise agreed
or specified in writing by Lessor, the Premises, as surrendered, shall include
the Utility Installations. The 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 Alterations and/or Utility
Installations, as well as the removal of any storage tank installed by or for
Lessee, and the removal, replacement, or remediation of any soil, material or
ground water contaminated by Lessee, all as may then be required by Applicable
Law and/or good service practice. Lessee's Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee subject to its obligation to
repair and restore the Premises per this Lease.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT FOR INSURANCE. Regardless of whether the Lessor or Lessee is
the Insuring Party, Lessee shall pay for all insurance required under this
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $1,000,000 per occurrence. Premiums for policy
periods commencing prior to or extending beyond the Lease term shall be prorated
to correspond to the Lease term. Payment shall be made by Lessee to Lessor
within ten (10) days following receipt of an invoice for any amount due.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force during
the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee and Lessor (as an additional insured) against claims for
bodily injury, personal injury and property damage based upon, involving or
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $1,000,000 per
occurrence with an "Additional Insured-managers or Lessors of Premises"
Endorsement and contain the "Amendment of the Pollution Exclusion" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured exclusions as between insured persons or organizations, but
shall
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include coverage for liability assumed under this Lease as an "Insured
Contract" for the performance of Lessee's indemnity obligations under this
Lease. The limits of said insurance required by this Lease or as carried by
Lessee shall not, however, limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All insurance to be carried by Lessee shall be primary
to and not contributory with any similar insurance carried by Lessor, whose
insurance shall be considered excess insurance only.
(b) CARRIED BY LESSOR. In the event Lessor is the insuring Party,
Lessor shall also maintain liability insurance described in Paragraph 8.2(a)
above, in additional to, and not in lieu of, the insurance required to be
maintained by Lessee. Lessee shall not be named an additional insured therein.
8.3 PROPERTY INSURANCE -- BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain and
keep in force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and to the holders of any mortgages, deeds
of trust or ground leases on the Premises ("Lendor(s)"), insuring loss or damage
to the Premises. The amount of such insurance shall be equal to the full
replacement cost of the Premises, as the same shall exist from time to time, or
the amount required by Lenders, but in no event more than the commercially
reasonable and available insurable value thereof if, by reason of the unique
nature or age of the improvements involved, such latter amount is less than full
replacement cost. If Lessor is the Insuring Party, however, Lessees Owned
Alterations and Utility Installations shall be insured by Lessee under Paragraph
8.4 rather than by Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct
physical loss or damage (except the perils of flood and/or earthquake unless
required by a Lender), including coverage for any additional costs resulting
from debris removal and reasonable amounts of coverage for the enforcement of
any ordinance or law regulating the reconstruction or replacement of any
undamaged sections of the Premises required to be demolished or removed by
reason of the enforcement of any building, zoning, safety or land use laws as
the result of a covered cause of loss. Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance clause, waiver
of subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed $1,000 per occurrence,
and Lessee shall be liable for such deductible amount in the event of an Insured
Loss, as defined in Paragraph 9.1 (c).
(b) RENTAL VALUE. The Insuring Party shall, in addition, obtain and
keep in force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and Lender(s), insuring the loss of the full
rental and other charges payable by Lessee to Lessor under this Lease for one
(1) year (including all real estate taxes, insurance costs, and any scheduled
rental increases). Said Insurance shall provide that in the event the Lease is
terminated by reason of an insured loss, the period of indemnity for such
coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one full year's loss of rental
revenues from the date of any such loss. Said Insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental income,
property taxes, insurance" premium costs and other expenses, if any, otherwise
payable by Lessee, for the next twelve (12) month period. Lessee shall be liable
for any deductible amount in the event of such loss.
(c) ADJACENT PREMISES. If the Premises are part of a larger building,
or if the Premises are part of a group of buildings owned by Lessor which are
adjacent to the Premises, the Lessee shall pay for any increase in the premiums
for the property insurance of such building or buildings if said increase is
caused by Lessee's acts, omissions, use or occupancy of the Premises.
(d) TENANT'S IMPROVEMENTS. If the Lessor is the Insuring Party, the
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. If Lessee is the Insuring Party, the policy
carried by Lessee under this Paragraph 8.3 shall insure Lessee Owned Alterations
and Utility Installations.
8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option,
by endorsement to a policy already carried, maintain insurance coverage on all
of Lessee's personal property, Lessee Owned Alterations and Utility
Installations in, on, or about the Premises similar in coverage to that carried
by the Insuring Party under Paragraph 8.3. Such insurance shall be full
replacement cost coverage with a deductible of not to exceed $ 1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal property or the restoration of Lessee Owned Alterations
and Utility Installations. Lessee shall be the Insuring Party with respect to
the insurance required by this Paragraph 8.4 and shall 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
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such other rating as may be required by a Lender having a lien on the Premises,
as set forth in the most current issue of "Best's Insurance Guide." Lessee shall
not do or permit to be done anything which shall invalidate the insurance
policies referred to in this Paragraph 8. If Lessee is the Insuring Party,
Lessee shall cause to be delivered to Lessor certified copies of policies of
such insurance or certificates evidencing the existence and amounts of such
insurance with the insureds and loss payable clauses as required by this Lease.
No such policy shall be cancelable or subject to modification except after
thirty (30) days prior written notice to Lessor. Lessee shall at least thirty
(30) days prior to the expiration of such policies, furnish Lessor with evidence
of renewals or "insurance binders" evidencing renewal thereof, or Lessor may
order such insurance and charge the cost thereof to Lessee, which amount shall
be payable by Lessee to Lessor upon demand. If the Insuring Party shall fail to
procure and maintain the insurance required to be carried by the Insuring Party
under this Paragraph 8, the other Party may, but shall not be required to
procure and maintain the same, but at Lessee's expense.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessee and Lessor ("WAIVING PARTY") each hereby release and relieve the other,
and waive their entire right to recover damages (whether in contract or in tort)
against the other, for loss of or damage to the Waiving Party's property arising
out of or incident to the perils required to be insured against under Paragraph
8. The effect of such releases and waivers of the right to recover damages shall
not be limited by the amount of insurance carried or required, or by any
deductibles applicable thereto.
8.7 INDEMNITY. Except for Lessor's negligence and/or breach of express
warranties, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents. Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, permits, attorney's and consultant's fees,
expenses and/or liabilities arising out of, involving, or in dealing with, the
occupancy of the Premises by Lessee, the conduct of Lessee's business, any act,
omission or neglect of Lessee, its agents, contractors, employees or invitees,
and out of any Default or Breach by Lessee in the performance in a timely manner
of any obligation on Lessee's part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit of any
claim or any action or proceeding involved therein, and whether or not (in the
case of claims made against Lessor) litigated and/or reduced to judgment, and
whether well founded or not. In case any action or proceeding be brought against
Lessor by reason of any of the foregoing matters, Lessee upon notice from Lessor
shall defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not
have first paid any such claim in order to be so indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether the said injury or damage results from conditions arising upon
the Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
Lessor shall not be liable for any damages arising from any act or neglect of
any other tenant of Lessor. Notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to Lessee's
business or for any loss of income or profit therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is less than 50%
of the then Replacement Cost of the Premises immediately prior to such damage or
destruction, excluding from such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility Installations the
repair cost of which damage or destruction is 50% or more of the then
Replacement Cost of the Premises immediately prior to such damage or
destruction, excluding from such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.
(c) "INSURED LOSS" shall mean damage or destruction to improvements
on the Premises, other than Lessee Owned Alterations and Utility Installations,
which was caused by an event required to be covered by the insurance described
in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits
involved.
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(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of applicable building codes, ordinances or
laws, and without deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 PARTIAL DAMAGE--INSURED LOSS. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect: provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and , in such event, Lessor shall make the
insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs.
In the event, however, the shortage in proceeds was due to the fact that, by
reason of the unique nature of the improvements, full replacement cost insurance
coverage was not commercially reasonable and available, Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within ten (10) days following
receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said ten (10) day
period, the party responsible for making the repairs shall complete them as soon
as reasonably possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect. If in such case Lessor does not so elect, then this Lease
shall terminate sixty (60) days following the occurrence of the damage or
destruction. Unless otherwise agreed, Lessee shall in no event have any right to
reimbursement from Lessor for any funds contributed by Lessee to repair any such
damage or destruction. Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.
9.3 PARTIAL DAMAGE--UNINSURED LOSS. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option, either: (i) repair
such damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 8.6.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6) months
of the term of this Lease there is damage for which the cost to repair exceeds
one (1) 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 data of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by, within twenty (20) days following the occurrence of the damage, or
before the expiration of the time provided in such option for its exercise,
whichever is earlier ("EXERCISE PERIOD"), (i) exercising such option and (ii)
providing Lessor with any shortage in insurance proceeds (or adequate assurance
thereof) needed to make the repairs. If Lessee duly exercises such option during
said Exercise Period and provides Lessor with funds (or adequate assurance
thereof) to cover any shortage in
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insurance proceeds, Lessor shall, at Lessor's expense repair such damage as soon
as reasonably possible and this Lease shall continue in full force and effect.
If Lessee fails to exercise such option and provide such funds or assurance
during said Exercise Period, then Lessor may at Lessor's option terminate this
Lease as of the expiration of said sixty (60) day period following the
occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within ten (10) days after the expiration of the Exercise
Period, notwithstanding any term or provision in the grant of option to the
contrary.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event of damage described in Paragraph 9.2 (Partial
Damage--Insured), whether or not Lessor or Lessee repairs or restores the
Premises, the Base Rent, Real Property Taxes, insurance premiums, and other
charges, if any, payable by Lessee hereunder for the period during which such
damage, its repair or the restoration continues (not to exceed the period for
which rental value insurance is required under Paragraph 8.3(b)), shall be
abated in proportion to the degree to which Lessee's use of the Premises is
impaired. Except for abatement of Base Rent, Real Property Taxes, insurance
premiums, and other charges, if any, as aforesaid, all other obligations of
Lessee hereunder shall be performed by Lessee, and Lessee shall have no claim
against Lessor for any damage suffered by reason of any such repair or
restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises within
ninety (90) days after such obligation shall accrue, Lessee may, at any time
prior to the commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice of Lessee's election
to terminate this Lease on a date not less than sixty (60) days following the
giving of such notice. If Lessee gives such notice to Lessor and such Lenders
and such repair or restoration is not commenced within thirty (30) days after
receipt of such notice, this Lease shall terminate as of the date specified in
said notice. If Lessor or a Lender commences the repair or restoration of the
Premises within thirty (30) days after receipt of such notice, this Lease shall
continue in full force and effect. "COMMENCE" as used in this Paragraph shall
mean either the unconditional authorization of the preparation of the required
plans, or the beginning of the actual work on the Premises, whichever first
occurs.
9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable Law
and this Lease shall continue in full force and effect; but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and remediate such Hazardous Substance Condition, if required, as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) it the estimated cost to investigate
and remediate such condition exceeds twelve (12) times the then monthly Base
Rent or $100,000, whichever is greater, give written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition of Lessor's desire to terminate this Lease as of
the date sixty (60) days following the giving of such notice. In the event
Lessor elects to give such notice of Lessor's intention to terminate this Lease,
Lessee shall have the right within ten (10) days after the receipt of such
notice to give written notice to Lessor of Lessee's commitment to pay for the
investigation and remediation of such Hazardous Substance Condition totally at
Lessee's expense and without reimbursement from Lessor except to the extent of
an amount equal to twelve (12) times the then monthly Base Rent or $100,000.
whichever is greater. Lessee shall provide Lessor with the funds required of
Lessee or satisfactory assurance thereof within thirty (30) days following
Lessee's said commitment. In such event this Lease shall continue in full force
and affect, and Lessor shall proceed to make such investigation and remediation
as soon as reasonably possible and the required funds are available. If Lessee
does not give such notice and provide the required funds or assurance thereof
within the times specified above, this Lease shall terminate as of the date
specified in Lessor's notice of termination. If a Hazardous Substance Condition
occurs for which Lessee is not legally responsible, there shall be abatement of
Lessee's obligations under this Lease to the same extent as provided in
Paragraph 9.6(a) for a period of not to exceed twelve (12) months.
9.8 TERMINATION -- ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be made concerning
advance Base Rent and any other advance payments made by Lessee to Lessor.
Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit
as has not been, or is not then required to be, used by Lessor under the terms
of this Lease.
9.9 WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.
10. REAL PROPERTY TEXAS.
10.1 (a) PAYMENT OF TAXES. Lessee shall pay the Real Property Taxes, as
defined in Paragraph 10.2. applicable to the Premises during the term of this
Lease. Subject to Paragraph 10. 1 (b), all such payments shall be made at least
ten (10) days prior to the delinquency date of the applicable installment.
Lessee shall promptly furnish Lessor with satisfactory evidence that
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such taxes have been paid. If any such taxes to be paid by Lessee shall cover
any period of time prior to or after the expiration or earlier termination of
the term hereof, Lessee's share of such taxes shall be equitably prorated to
cover only the period of time within the tax fiscal year this Lease is in
effect, and Lessor shall reimburse Lessee for any overpayment after such
proration. If Lessee shall fail to pay any Real Property Taxes required by this
Lease to be paid by Lessee, Lessor shall have the right to pay the same, and
Lessee shall reimburse Lessor therefor upon demand.
(b) ADVANCE PAYMENT. In order to insure payment when due and before
delinquency of any or all Real Property Taxes, Lessor reserves the right, at
Lessor's option, to estimate the current Real Property Taxes applicable to the
Premises, and to require such current year's Real Property Taxes to be paid in
advance to Lessor by Lessee, either: (i) in a lump sum amount equal to the
installment due, at least twenty (20) days prior to the applicable delinquency
date, or (ii) monthly in advance with the payment of the Base Rent. If Lessor
elects to require payment monthly in advance, the monthly payment shall be that
equal monthly amount which, over the number of months remaining before the month
in which the applicable tax installment would become delinquent (and without
interest thereon), would provide a fund large enough to fully discharge before
delinquency the estimated installment of taxes to be paid. When the actual
amount of the applicable tax xxxx is known, the amount of such equal monthly
advance payment shall be adjusted as required to provide the fund needed to pay
the applicable taxes before delinquency. If the amounts paid to Lessor by Lessee
under the provisions of this Paragraph are insufficient to discharge the
obligations of Lessee to pay such Real Property Taxes as the same become due,
Lessee shall pay to Lessor, upon Lessor's demand, such additional sums as are
necessary to pay such obligations. All moneys paid to Lessor under this
Paragraph may be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a Breach by Lessee in the performance of the
obligations of Lessee under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may, subject to proration as provided in
Paragraph 10.1 (a), at the option of Lessor, be treated as an additional
Security Deposit under Paragraph 5.
10.2 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term "REAL
PROPERTY TAXES" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed upon the Premises by any authority
having the direct or indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage or
other improvement district thereof, levied against any legal or equitable
interest of Lessor in the Premises or in the real property of which the Premises
are a part, Lessor's right to rent or other income therefrom, and/or Lessor's
business of leasing the Premises. The term "REAL PROPERTY TAXES" shall also
include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring, or changes in applicable law taking
effect, during the term of this Lease, including but not limited to a change in
the ownership of the Premises or in the improvements thereon, the execution of
this Lease, or any modification, amendment or transfer thereof, and whether or
not contemplated by the Parties.
10.3 JOINT ASSESSMENT. If the Premises are not separately assessed,
lessee's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within 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.
10.4 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or elsewhere. When possible, Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Lessee's property or, at Lessor's option, as provided in Paragraph 10.1(b).
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered with other premises.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively,
"ASSIGNMENT") or sublet all or any part of Lessee's interest in this Lease or in
the Premises without Lessor's prior written consent given under and subject to
the terms of Xxxxxxxxx 00.
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(x) A change in the control of Lessee shall constitute an assignment
requiring Lessor's consent. The transfer, on a cumulative basis, of twenty-five
percent (25%) or more of the voting control of Lessee shall constitute a change
in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation of 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 the execution
by Lessor of this Lease or at the time of the most recent assignment to which
Lessor has consented, or as it exists immediately prior to said transaction or
transactions constituting such reduction, at whichever time said Net Worth of
Lessee was or is greater, shall be considered an assignment of this Lease by
Lessee to which Lessor may reasonably withhold its consent. "NET WORTH OF
LESSEE" for purposes of this Lease shall be the net worth of Lessee (excluding
any guarantors) established under generally accepted accounting principles
consistently applied.
(d) An assignment or subletting of Lessee's interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unconsented to assignment or Subletting as a noncurable Breach, Lessor
shall have the right to either: (i) terminate this Lease or (ii) upon thirty
(30) days written notice ("Lessor's Notice"), increase the monthly Base Rent to
fair market rental value or one hundred ten percent (110%) of the Base Rent then
in effect, whichever is greater. Pending determination of the new fair market
rental value, if disputed by Lessee, Lessee shall pay the amount set forth in
Lessor's Notice, with any overpayment credited against the next installment(s)
of Base Rent coming due, and any underpayment for the period retroactively to
the effective date of the adjustment being due and payable immediately upon the
determination thereof. Further, in the event of such Breach and market value
adjustment, (i) the purchase price of any option to purchase the Premises held
by Lessee shall be subject to similar adjustment to the then fair market value
(without the Lease being considered an encumbrance or any deduction for
depreciation or obsolescence, and considering the Premises at its highest and
best use and in good condition), or one hundred ten percent (110%) of the price
previously in effect, whichever is greater, (ii) any index-oriented rental or
price adjustment formulas contained in this Lease shall be adjusted to require
that the base index be determined with reference to the index applicable to the
time of such adjustment, and (iii) any fixed rental adjustments scheduled during
the remainder of the Lease form shall be increased in the same ratio as the new
market rental bears to the Base Rent in effect immediately prior to the market
value adjustment.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease. (ii)
release Lessee of any obligations hereunder, or (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 or Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent, and such
action shall not relieve such persons from liability under this Lease or
sublease.
(d) In the event of any Default or Breach of Lessee's obligations
under this Lease, Lessor may proceed directly against Lessee, any Guarantors or
any one else responsible for the performance of the Lessee's obligations under
this Lease, including the sublessee, without first exhausting Lessor's remedies
against any other person or entity responsible therefor to Lessor, or any
security held by Lessor or Lessee.
(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness or 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 current monthly Base Rent,
whichever is greater, as reasonable consideration for Lessors considering and
processing the request for consent. Lessee agrees to provide Lessor with such
other or additional information and/or documentation as may be reasonably
requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed, for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or
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sublease, other than such obligations as are contrary to or inconsistent with
provisions of an assignment or sublease to which Lessor has specifically
consented in writing.
(g) The occurrence of a transaction described in Paragraph 12.1(c)
shall give Lessor the right (but not the obligation) to require that the
Security Deposit be increased to an amount equal to six (6) times the then
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the
amount required to establish such Security Deposit a condition to Lessor's
consent to such transaction.
(h) Lessor, as a condition to giving its consent to any assignment or
subletting, may require that the amount and adjustment structure of the rent
payable under this Lease be adjusted to what is then the market value and/or
adjustment structure for property similar to the Premises as then constituted.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a portion
of the Premises heretofore or hereafter made by Lessee, and Lessor may collect
such rent and income and apply same toward Lessee's obligations under this
Lease; provided, however, that until a Breach (as defined in Paragraph 13.1)
shall occur in the performance of Lessee's obligations under this Lease. Lessee
may, except as otherwise provided in this Lease, receive, collect and enjoy the
rents accruing under such sublease. Lessor shall not, by reason of this or any
other assignment or such sublease to Lessor, nor by reason of the collection of
the rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such sublessee
under such sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a Breach
exists in the performance of Lessee's obligations under this Lease, to pay to
Lessor the rents and other charges due and to become due under the sublease.
Sublessee shall rely upon any such statement and request from Lessor and shall
pay such rents and other charges to Lessor without any obligation or right to
inquire as to whether such Breach exists and notwithstanding any notice from or
claim from Lessee to the contrary. Lessee shall have no right or claim against
said sublessee, or, until the Breach has been cured, against Lessor, for any
such rents and other charges so paid by said sublessee to Lessor.
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior Defaults
or Breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor under
a sublease shall also require the consent of Lessor herein.
(d) No sublessee shall further assign or sublet all of any part of
the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable sum per such occurrence for legal
services and costs in the preparation and service of a notice of Default, and
that Lessor may include the cost of such services and costs in said notice as
rent due and payable to cure said Default. A "DEFAULT" is defined as a failure
by the Lessee to observe, comply with or perform any of the terms, covenants,
conditions or rules applicable to Lessee under this Lease. A "BREACH" is defined
as the occurrence of any one or more of the following Defaults, and, where a
grace period for cure after notice is specified herein, the failure by Lessee to
cure such Default prior to the expiration of the applicable grace period, shall
entitle Lessor to pursue the remedies set forth in Paragraphs 13.2 and/or 13.3:
(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 or any other monetary payment
required to be made by Lessee hereunder, whether to Lessor or to a third party,
as and when due, the failure by Lessee to provide Lessor with reasonable
evidence of insurance or surety bond required under this Lease, or the failure
of Lessee to fulfill any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of three
(3) days following written notice thereof by or on behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the failure
by Lessee to provide Lessor with reasonable written evidence (in duly executed
original form, if applicable) of (i) compliance with Applicable Law per
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required
under Paragraph 7.1(b), (iii) the recission of an unauthorized assignment or
subletting per Paragraph 12.1(b), (iv) a Tenancy Statement per Paragraphs 16 or
37, (v) the subordination or
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non-subordination of this Lease per Paragraph 30, (vi) the guaranty of the
performance of Lessee's obligations under this Lease if required under
Paragraphs 1.11 and 37, (vii) the execution of any document requested under
Paragraph 42 (easements), or (viii) any other documentation or information which
Lessor may reasonably require of Lessee under the terms of this Lease, where any
such failure continues for a period of ten (10) days following written notice by
or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
that are to be observed, complied with or performed by Lessee, other than those
described in subparagraphs (a), (b) or (c), above, where such Default continues
for a period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee; provided, however that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably required for its cure, then
it shall not be deemed to be a Breach of this Lease by Lessee if Lessee
commences such cure within said thirty (30) days period and thereafter
diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) The making by
lessee of any general arrangement or assignment for the benefit of creditors;
(ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. Section 101 or any
successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of
a trustee or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where possession
is not restored to Lessee within thirty (30) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days; provided, however, in the
event that any provision of this subparagraph (e) is contrary to any applicable
law, such provision shall be of no force or effect, and not affect the validity
of the remaining provisions.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee or any Guarantor of Lessee's obligations hereunder was
materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a guarantor, (ii) the termination of a guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a guarantor's becoming insolvent or the subject 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 assurance or security, which, when coupled with the then existing
resources of Lessee, equals or exceeds the combined financial resources of
Lessee and the guarantors that existed at the time of execution of this Lease.
13.2 REMEDIES. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
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 option,
may require all future payments to be made under this Lease by Lessee to be made
only by cashier's check. In the event of a Breach of this Lease by Lessee, as
defined in Paragraph 13.1, with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the worth at the time
of the award of the unpaid rent which had been earned at the time of
termination; (ii) the worth of 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 the leasing commission paid by Lessor applicable to the unexpired
term of this Lease. The worth at the time of award of the amount referred to in
provision (iii) of the prior sentence shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1 %). Efforts by Lessor to mitigate damages
caused by Lessee's Default or Breach of this Lease shall not waive Lessor's
right to recover damages under this Paragraph. If termination of this Lease is
obtained through the provisional remedy of unlawful detainer, Lessor shall have
the right to recover in such proceeding the unpaid rent and damages as are
recoverable therein, or Lessor may reserve therein the right to recover all or
any part thereof in a separate suit for such rent and/or damages. If a notice
and grace period required under subparagraphs 13.1 (b), (c) or (d) was not
previously given, a notice to pay rent or quit, or to perform or quit, as the
case may be, given to Lessee under any statute authorizing the forfeiture of
leases for unlawful detainer shall also constitute the applicable notice for
grace period purposes required by subparagraphs 13.1 (b), (c) or (d). In such
case, the applicable grace period under subparagraphs 13.1 (b), (c) or (d) and
under the unlawful detainer statute shall run concurrently after the one such
statutory notice, and the failure of Lessee to cure the Default within the
greater of the
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two such grace periods shall constitute both an unlawful detainer and a Breach
of this Lease entitling Lessor to the remedies provided for in this Lease and/or
by said statute.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment and recover the rent as it becomes due, provided Lessee has the
right to sublet or assign, subject only to reasonable limitations. See
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not constitute a
termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located.
(d) The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the term hereof or by reason of Lessee's occupancy of the
Premises.
13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "INDUCEMENT PROVISIONS," shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of a Breach of this Lease by Lessee, as defined in Paragraph 13.1, any such
inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
Inducement Provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor as additional rent due under this Lease,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
Paragraph shall not be deemed a waiver by Lessor of the provisions of this
Paragraph unless specifically so stated in writing by Lessor at the time of such
acceptance.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within five (5) 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
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of Base Rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.
13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of the Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in no event be less than thirty (30) days after receipt by Lessor,
and by the holders of any ground lease, mortgage or deed of trust covering the
Premises whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor has
not been performed; provided, however, that if the nature of Lessor's obligation
is such that more than thirty (30) days after such notice are reasonably
required for its performance, then Lessor shall not be in breach of this Lease
if performance is commenced within such thirty (30) day period and thereafter
diligently pursued to completion.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "CONDEMNATION"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the land area
not occupied by any building, is taken by condemnation, Lessee may, at Lessee's
option, to be exercised in writing within ten (10) days after Lessor shall have
given Lessee written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in the same
proportion as the rentable floor area
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of the Premises taken bears to the total rentable floor area of the building
located on the Premises. No reduction of Base Rent shall occur if the only
portion of the Premises taken is land on which there is no building. Any award
for the taking of all or any part of the Premises under the power of eminent
domain 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 in value of the leasehold or for the taking of the fee, or as
severance damages: provided, however, that Lessee shall be entitled to any
compensation separately awarded to Lessee for Lessee's relocation expenses
and/or loss of Lessee's Trade Fixtures. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent of its net
severance damages received, over and above the legal and other expenses incurred
by Lessor in the condemnation matter, repair any damage to the Premises caused
by such condemnation, except to the extent that Lessee has been reimbursed
therefor by the condemning authority. Lessee shall be responsible for the
payment of any amount in excess of such net severance damages required to
complete such repair.
15. BROKER'S FEE.
15.1 The Brokers named in Paragraph 1.10 are the procuring causes of this
Lease.
15.2 Upon execution of this Lease by both Parties, Lessor shall pay to
said Brokers jointly, or in such separate shares as they may mutually designate
in writing, a fee as set forth in a separate written agreement between Lessor
and said Brokers (or in the event there is no separate written agreement between
Lessor and said Brokers, the sum of $______________ ) for brokerage services
rendered by said Brokers to Lessor in this transaction.
15.3 Unless Lessor and Brokers have otherwise agreed in writing, Lessor
further agrees that: (a) if Lessee exercises any Option (as defined in Paragraph
39.1) or any Option subsequently granted which is substantially similar to an
Option granted to Lessee in this Lease, or (b) if Lessee acquires any rights to
the Premises or other premises described in this Lease which are substantially
similar to what Lessee would have acquired had an Option herein granted to
Lessee been exercised, or (c) if Lessee remains in possession of the Premises,
with the consent of Lessor, after the expiration of the term of this Lease after
having failed to exercise an Option, or (d) if said Brokers are the procuring
cause of any other lease or sale entered into between the Parties pertaining to
the Premises and/or any adjacent property in which Lessor has an interest, or
(e) if Base Rent is increased, whether by agreement or operation of an
escalation clause herein, then as to any of said transactions, Lessor shall pay
said Brokers a fee in accordance with the schedule of said Brokers in effect at
the time of the execution of this Lease.
15.4 Any buyer or transferee of Lessor's interest in this Lease, whether
such transfer is by agreement or by operation of law, shall be deemed to have
assumed Lessor's obligation under this Paragraph 15. Each Broker shall be a
third party beneficiary of the provisions of this Paragraph 15 to the extent of
its interest in any commission arising from this Lease and may enforce that
right directly against Lessor and its successors.
15.5 Lessee and Lessor each represent and warrant to the other that it has
had no dealings with any person, firm, broker or finder (other than the Brokers,
if any named in Paragraph 1.10) in connection with the negotiation of this Lease
and/or the consummation of the transaction contemplated hereby, and that no
broker or other person, firm or entity other than said named Brokers is entitled
to any commission or finder's fee in connection with said transaction. Lessee
and Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.
15.6 Lessor and Lessee hereby consent to and approve all agency
relationships, including any dual agencies, indicated in Paragraph 1.10.
16. TENANCY STATEMENT.
16.1 Each Party (as "RESPONDING PARTY") shall within ten (10) days after
written notice from the other Party (the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "Tenancy Statement" form published by the
American Industrial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises, any
part thereof, or the building of which the Premises are a part, Lessee and all
Guarantors of Lessee's performance hereunder shall deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such Guarantors as may be reasonably required by such lender or purchaser,
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.
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17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or in this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor at the time of such transfer or assignment.
Except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.
18. SEVERABILITY. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within thirty (30)
days following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per annum, but not
exceeding the maximum rate allowed by law, in addition to the late charge
provided for in Paragraph 13.4.
20. TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
21. RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party.
23. NOTICES.
23.1 All notices required or permitted by this Lease shall be in writing
and may be delivered in person (by hand or by messenger or courier service) or
may be sent by regular, certified or registered mail or U.S. Postal Service
Express Mail, with postage prepaid, or by facsimile transmission, and shall be
deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notice purposes. Either Party may by
written notice to the other specify a different address for notice purposes,
except that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for the purpose of mailing or delivering notices to
Lessee. A copy of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate by written notice
to Lessee.
23.2 Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier. It any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served or
delivered upon telephone confirmation of receipt of the transmission thereof,
provided a copy is also delivered via delivery or mail. If notice is received on
a Sunday or legal holiday, it shall be deemed received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting rent, the acceptance
of rent by Lessor shall not be a waiver of any preceding Default or Breach by
Lessee of any provision hereof, other than the failure of Lessee to pay the
particular rent so accepted. Any payment given Lessor by Lessee may be accepted
by Lessor on account of moneys or damages due Lessor,
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notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, with such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. COVENANTS AND CONDITIONS. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease, but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default and
allow such Lender thirty (30) days following receipt of such notice for the cure
of said default before invoking any remedies Lessee may have by reason thereof.
If any Lender shall elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device and shall give written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one (1) month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "NON-DISTURBANCE AGREEMENT") from the
Lender that Lessee's possession and this Lease, including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.
30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any such
subordination or non-subordination, attornment and/or non-disturbance agreement
as is provided for herein.
31. ATTORNEY'S FEES. If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) or Broker in any such proceeding, action, or appeal thereon,
shall be entitled to reasonable attorney's fees. Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not such action or
proceeding is pursued to decision or judgment. The term, "PREVAILING PARTY"
shall include, without limitation, a Party 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 attorney's fees award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably
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incurred. Lessor shall be entitled to attorney's fees, costs and expenses
incurred in the preparation and service of notices of Default and consultations
in connection therewith, whether or not a legal action is subsequently commenced
in connection with such Default or resulting Breach.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times 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 of which
they are a part, as Lessor may reasonably deem necessary. Lessor may at any time
place on or about the Premises or building any ordinary "For Sale" signs and
Lessor may at any time during the last one hundred twenty (120) days of the term
hereof place on or about the Premises any ordinary "For Lease" signs. All such
activities of Lessor shall be without abatement of rent or liability to Lessee.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. SIGNS. Lessee shall not place any sign upon the Premises, except that Lessee
may, with Lessor's prior written consent, install (but not on the roof) such
signs as are reasonably required to advertise Lessee's own business. The
installation of any sign on the Premises by or for Lessee shall be subject to
the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations,
Trade Fixtures and Alterations). Unless otherwise expressly agreed herein,
Lessor reserves all rights to the use of the roof and the right to install, and
all revenues from the installation of, such advertising signs on the Premises,
including the roof, as do not unreasonably interfere with the conduct of
Lessee's business.
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lessor interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. CONSENTS.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by
or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor's actual reasonable costs and expenses (including but not
limited to architects', attorneys', engineers' or other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, practice or storage tank, shall be paid by Lessee to Lessor
upon receipt of an invoice and supporting documentation therefor. Subject to
Paragraph 12.2(e) (applicable to assignment or subletting), Lessor may, as a
condition to considering any such request by Lessee, require that Lessee deposit
with Lessor an amount of money (in addition to the Security Deposit held under
Paragraph 5) reasonably calculated by Lessor to represent the cost Lessor will
incur in considering and responding to Lessee's request. Except as otherwise
provided, any unused portion of said deposit shall be refunded to Lessee without
interest. Lessor's consent to any act, assignment of this Lease or subletting of
the Premises by Lessee shall not constitute an acknowledgement that no Default
or Breach by Lessee of this Lease exists, nor shall such consent be deemed a
waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the imposition by
Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
37. GUARANTOR.
37.1 If there are to be any Guarantors of this Lease per Paragraph 1.11,
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 said Guarantor shall have the same obligations as Lessee under this
Lease, including but not limited to the obligation to provide the Tenancy
Statement and information called for by Paragraph 16.
37.2 It shall constitute a Default of the Lessee under this Lease if any
such Guarantor fails or refuses, upon reasonable request by Lessor to give: (a)
evidence of the due execution of the guaranty called for by this Lease,
including the authority of the Guarantor (and of the party signing on
Guarantor's behalf) to obligate such Guarantor on said guaranty, and including
in the
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case of a corporate Guarantor, a certified copy of a resolution of its board of
directors authorizing the making of such guaranty, together with a certificate
of incumbency showing the signature of the persons authorized to sign on its
behalf, (b) current financial statements of Guarantor as may from time to time
be requested by Lessor, (c) a Tenancy Statement, or (d) written confirmation
that the guaranty is still in effect.
38. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessees 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.
39. OPTIONS.
39.1 DEFINITION. As used in this Paragraph 39 the word "OPTION" has the
following meaning: (a) the right to extend the terms of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on the property of
Lessor; (b) the right of first refusal to lease the Premises or the right of
first offer to lease the Premises or the right of first refusal to lease other
property of Lessor or the right of first offer to lease other property of
Lessor; (c) the right to purchase the Premises, or the right of first refusal to
purchase the Premises, or the right of first offer to purchase the Premises, or
the right to purchase other property of Lessor, or the right of first refusal to
purchase other property of Lessor, or the right of first offer to purchase other
property of Lessor.
39.2. OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be voluntarily or involuntarily assigned or exercised by any person or
entity other than said original Lessee while the original Lessee is in full and
actual possession of the Premises and without the intention of thereafter
assigning or subletting. The Options, if any, herein granted to Lessee are not
assignable, either as a part of an assignment of this Lease or separately or
apart therefrom, and no Option may be separated from this Lease in any manner,
by reservation or otherwise.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any Multiple Options to
extend or renew this Lease, a later Option cannot be exercised unless the prior
Options to extend or renew this Lease have been validly exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary: (i) during the period
commencing with the giving of any notice of Default under Paragraph 13.1 and
continuing until the noticed Default is cured, or (ii) during the period of time
any monetary obligation due Lessor from Lessee is unpaid (without regard to
whether notice thereof is given Lessee), or (iii) during the time Lessee is in
Breach of this Lease, or (iv) in the event that Lessor has given to Lessee three
(3) or more notices of Default under Paragraph 13.1, whether or not the Defaults
are cured, during the twelve (12) month period immediately preceding the
exercise of the Option.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) 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 Default under Paragraph 13.1 during any
twelve (12) month period, whether or not the Defaults are cured, or (iii) if
Lessee commits a Breach of this Lease.
40. MULTIPLE BUILDINGS. If the Premises are part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by, keep and observe all
reasonable 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 such other buildings and their
invitees, and that Lessee will pay its fair share of common expenses incurred in
connection therewith.
41. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
42. RESERVATIONS. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
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Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.
43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this
Lease.
44. AUTHORITY. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
45. CONFLICT. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
46. OFFER. Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease to Lessee. This Lease is
not intended to be binding until executed by all Parties hereto.
47. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. The parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessees obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional, insurance company, or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.
48. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such Multiple Parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO
EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE OF
ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES AS TO THE
LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE
ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE. IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE
CONSULTED.
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The parties hereto have executed this Lease at the place on the dates specified
above to their respective signatures.
Executed at IRVINE, CA. NET
-------------------------- Executed at
on FEB. 27, 1997 -----------------------------
---------------------------------- on
by LESSOR: --------------------------------------
Makena Properties, a California by LESSEE:
corporation Ansys, Inc., a California corporation
---------------------------------- ----------------------------------------
By By
----------------------------------- --------------------------------------
Name Printed: Xxxxxx X. Xxxxxx Name Printed:
----------------------- --------------------------
Title: President Title:
------------------------------ ---------------------------------
By
----------------------------------- By
Name Printed: --------------------------------------
------------------------ Name Printed:
Title: --------------------------
------------------------------- Title:
Address: 00000 Xxxxxxxxx Xxxx., ---------------------------------
Suite 101
---------------------------- Address:
Xxxx Xxxxxx XX 00000
---------------------------- ----------------------------
Tel. No. (000)000-0000
---------------------------- ----------------------------
Fax No. (000)000-0000 Tel. No.
---------------------------- ----------------------------
Fax No.
----------------------------
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ADDENDUM TO
STANDARD INDUSTRIAL/COMMERCIAL SINGLE TENANT LEASE-NET
(AIREA 1990)
This Addendum is made as of November 1, 1996 by and between Ansys, Inc., a
California corporation ("Lessee") and Makena Properties, a California
corporation ("Lessor"), with respect to the Standard Industrial/Commercial
Single Tenant Lease - Net (American Industrial Real Estate Association (1990))
between Lessor and Lessee dated concurrently herewith ("AIREA Lease"). The AIREA
Lease, as amended hereby is hereafter referred to as the "Lease". To the extent
that the provisions of this Addendum are inconsistent with the terms and
conditions of the AIREA Lease, such inconsistencies shall take priority as
follows: (i) printed or written inserts to this Addendum, (ii) typed, printed or
written inserts to the AIREA Lease, (iii) this Addendum, and (iv) the printed
form AIREA Lease. References to "Paragraphs" below means paragraphs in the AIREA
Lease, and references to "Sections" below means the sections of this Addendum.
All capitalized terms not otherwise defined herein shall have the meaning set
forth in the AIREA Lease.
1.2 PREMISES. The Premises consist of Xxxxx 00000, Xxx 00, Xxxxxx Xxxxxx
("Xxxxxx"), Xxxxxxxxxx ("Xxxx"), and the improvements ("Improvements") to be
constructed thereon pursuant to Section 51.
1.3 TERM. The period commencing on the Commencement Date and ending the ten
(10) calendar years after: (i) the Commencement Date, or (ii) if the
Commencement Date is other than on the first day of a calendar months ("Starting
Stub Month"), then the end of the month in which the Commencement Date occurred
(the "Term").
1.4 Lessee shall be entitled up to 30 days early occupancy as provided in
Section 3.4.
1.5 Initially, the Base Rent shall equal $47,945.
1.6 $47,945, to be applied to the first full calendar month after the
Commencement Date, shall be paid within 5 days after notice from Lessor that it
has acquired the Land. Upon the Commencement Date, Lessee shall pay the Base
Rent for the remainder of the calendar month in which the Commencement Date
occurs.
1.7 Initially $47,945, and thereafter maintained at one month's Base Rent.
1.8 Production and sales (provided that such sales are limited to wholesale
transactions which do not be violate applicable zoning and covenants, conditions
and restrictions of record) of substance abuse testing kits and other medical
kits; and all other operations incident to the conduct of such business which is
not in violation of law or covenants, conditions and restrictions of record.
1.9 Lessee is the Insuring Party.
2.4 Lease Section 2.4 is deleted. Lessee shall accept the Improvements when
and as provided in Section 51.4(b). Except as provided in the Lease or this
Addendum, Lessee acknowledges that Lessor and its brokers and agents have made
no representations or warranties to Lessee whatsoever.
3.2 Deleted. Except as provided in Section 3.4, Lessee shall not be
entitled to occupy the Premises prior to the Commencement Date.
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3.3 Deleted.
3.4 COMMENCEMENT DATE. The Commencement Date shall be the earlier of (i)
occupancy of the Premises, or (ii) the later of (A) 30 days after the
Substantial Completion Date, as defined in Section 51.4(b) or (B) January 1,
1998. After the Substantial Completion Date and before the Commencement Date,
and provided Lessee complies with all insurance requirements in this Lease,
Lessee may enter the Premises for utility installations, set-up and
fixturization purposes, but not operating of Lessee's business, without being
deemed to be in occupancy. Upon the Commencement Date, the parties shall execute
the Commencement Date Memorandum in the form attached hereto as Exhibit A.
3.5 OPTION TO EXTEND. Lessee shall have one option ("Extension Option") to
extend the Term of this Lease for a period of five years. The Extension Option
may be exercised only in the event that Lessee is not in default under this
Lease upon the date of exercise. The Extension Option must be exercised by
notice in writing of such exercise, delivered by Lessee to Lessor, not later
than 6 months prior to the end of the Term. The Base Rent for the Option Term
shall be the greater of (i) the Base Rent then in effect (as periodically
adjusted pursuant to the Section 4.1), or (ii) 95% of the "FRV". The "FRV" means
the then fair rental value being charged for similar premises in the vicinity of
the Premises, presuming all terms and conditions of this Lease, such FRV being
determined commencing at the beginning of the month which is two (2) months
prior to the commencement of the Option Term, whereupon Lessor and Lessee shall
attempt to agree upon the FRV. If the parties are unable to agree upon the FRV
prior to the end of such month, then within ten (10) days thereafter each party,
at its cost and by giving notice to the other party, shall appoint a real estate
appraiser with at least ten (10) years full-time industrial appraisal experience
in the Central and Southern Orange County area to appraise and determine such
FRV. If a party does not appoint an appraiser within ten (10) days after the
other party has given notice of the name of its appraiser, the single appraiser
appointed shall be the sole appraiser and shall set the FRV. If there are two
appraisers appointed by the parties as stated in this paragraph, they shall met
promptly and attempt to set the FRV. If the two appraisers are unable to agree
within fifteen (15) days after the second appraiser has been appointed, they
shall attempt to elect a third appraiser meeting the qualifications stated in
this section within ten (10) days after the last day the two appraisers are
given to set the FRV. If the two appraisers are unable to agree on the third
appraiser, either of the parties to this Lease, by giving ten (10) days notice
to the other party, can apply to the then president of the County Real Estate
Board, or to the presiding judge of the Superior Court of the County, for the
selection of a third appraiser meeting the qualifications stated in this
section. Each of the parties shall bear one-half of the cost of appointing the
third appraiser and of paying the third appraiser's fee. The third appraiser,
however selected, shall be a person who has not previously acted in any capacity
for either party. Within fifteen (15) days after the selection of the third
appraiser, a majority of the appraisers shall set the FRV. If a majority of the
appraisers are unable to set the FRV, the FRV shall be the two closest
appraisals (unless the appraisals are equidistant, in which case, the middle
appraisal shall be the FRV).
4.4 CPI. The Base Rent shall adjust as set forth herein on the beginning of
the 30th, 60, 90 and 150th months after the Commencement Date or, if applicable,
the end of the Starting Stub Month (each an "adjustment date"). On each
adjustment date, the Base Rent shall be increased, but not decreased, to a sum
equal to the initial Base Rent multiplied by a fraction, the numerator of which
is the Index for the third calendar month prior to the adjustment date and the
denominator of which is the Index for the third calendar month prior to the
Commencement Date. Notwithstanding the foregoing, the increase in the Base Rent
on each adjustment date shall be not less than 10.24% nor more than 20.48%. The
"Index" means the Consumer Price Index - All Urban Consumers (Los Angeles - Long
Beach; Anaheim Area: Base 1967 = 100), as published by the United States
Department of Labor, Bureau of Labor Statistics. Should the Bureau discontinue
the publication of the Index, or publish the same less frequently, or alter the
same in
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some other manner, then Lessor and Lessee shall adopt a substitute index
or procedure which is most similar to the Index (as of the date of execution of
this Lease) in reflecting consumer prices. In the event Lessor and Lessee cannot
agree on such alternative index, then the adjustment as of each adjustment date
shall be 15.36%.
6.2(a) The definition in Lease Section 6.2(a) of "Hazardous Substances" is
deleted and replaced by the following: (A) any hazardous or toxic materials,
pollutants, effluents, contaminants, radioactive materials, flammable
explosives, chemicals known to cause cancer or reproductive toxicity, emissions
or wastes including, without limitation: asbestos, petroleum and petroleum
by-products, urea formaldehyde foam insulation, polychlorinated biphenyl
("Material"); (B) substances defined as "hazardous substances", "hazardous
materials", "toxic substances" or "hazardous wastes" or the like in any
Hazardous Substances Laws; (C) any Material 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 a basis for liability of Lessor to
any governmental agency or third party under any applicable statute or common
law theory; and (D) all substances now or hereafter designated by the Governor
of the State of California pursuant to the Safe Drinking Water and Toxic
Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity.
6.2(c) Add to the end of the first sentence: "or otherwise deposited or
released in, on or under the Premises on or after the Commencement Date by any
person other than Lessor, its employees and agents; provided that Lessor shall
reasonably cooperate with Lessee's prosecution of third parties who have
deposited Hazardous Substances on the Premises."
6.2(d) The term "Hazardous Substances Laws" mean any federal, state or
local law.
3.3 Condition Failure. If Buyer timely disapproves any condition in Section
3.2 or Section 4 in writing, this Agreement shall automatically terminate, and
thereafter the parties shall have no further obligation or liability under this
Agreement, except as provided in this subsection. The Deposit shall be returned
to Buyer. Buyer's failure to provide timely written notice of disapproval shall
be deemed a waiver thereof. Any cancellation fee or other costs of the Escrow
Holder shall be borne equally by Seller and Buyer and each party shall pay its
own expenses.
4. TITLE. Buyer agrees to take title to the property subject to (i) unpaid real
property taxes and assessments relating to the period after the "Commencement
Date" (defined in the Lease), and (ii) Exception Nos. 9-16 in Preliminary No.
00601697 M07 issued by Chicago Title Company dated as of November 16, 1996
("PTR"). If Buyer receives notice from the Escrow Holder that it intends to
revise the PTR to include one or more additional exceptions to title, Buyer may,
within five (5) days of such notice, notify Seller ("Buyer's Title Notice") of
the additional title exceptions to which it objects ("Title Objections"),
provided, however, that Buyer may object only if Buyer reasonably determines
that the exceptions materially and adversely affect the use and enjoyment of the
Property for Buyer's contemplated use. If Buyer fails to deliver timely notice
within the required period, Buyer shall be deemed to have approved the Title
Objections. Seller shall have the shorter of five (5) days after Buyer's Title
Notice, or until two (2) Business Days before the Closing Date, within which to
deliver to Buyer a notice ("Seller's Title Notice") indicating whether Seller
will eliminate or cure such Title Objections by the Closing. If Seller elects to
eliminate or cure a Title Objection, the elimination or curing by Seller of the
Title Objections shall be completed on or before the Closing. If Seller (a) does
not deliver Seller's Title Notice within the required time, or (b) notifies
Buyer that Seller is unable or unwilling to cure such Title Objections, Buyer
shall have three (3) days to elect to waive such Title Objections or deliver to
Seller written notice terminating this Agreement pursuant to Section 3.3. If
Buyer fails to give Seller notice of its
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election within the time set forth in the previous sentence, Buyer shall be
deemed to have elected to waive such Title Objections.
The term "Permitted Exceptions" shall mean (i) all exceptions to title
listed in the PTR, except as noted above; (ii) any additional exceptions to
which Buyer does not object in Buyer's Title Notice; and (iii) the Lease and any
other matter that is approved, caused, permitted or suffered by Buyer, its
employees, agents, representatives or affiliates. Notwithstanding anything to
the contrary in this Section 4, Seller shall eliminate any and all title
exceptions consisting of: mechanics liens for work caused by Seller; judgment
liens against Seller; liens for taxes not required to have been paid by Buyer
under the Lease; monetary liens, mortgages, deeds of trust, security agreements
and fixture filings executed by Seller; and leases or purchase options executed
by Seller other than the Lease.
5. CONDITIONS TO CLOSING
5.1 Buyer's Closing Conditions. Buyer's obligation to purchase the Property
is expressly conditioned on the fulfillment of each of the conditions precedent
at or before Closing described below ("Buyer's Closing Conditions"). Buyer's
Closing Conditions are under Lease Section 8 which perils occur in, on or about
the Premises, whether due to the negligence of Lessor or Lessee or their agents,
employees, contractors and/or invitees. Lessee and Lessor shall, upon obtaining
the policies of insurance required hereunder, give notice to the insurance
carrier or carriers that the foregoing mutual waiver of subrogation is contained
in this Lease.
8.8 Add to the end: "except for such injuries or losses to the extent
attributable to Lessor's gross negligence or willful misconduct".
10.5 TAX CONTESTS. Lessee shall not be required to pay, discharge, or
remove any tax (including penalties and interest), assessment, tax lien,
forfeiture, or other imposition or charge against the Premises or any part of
the Premises or any improvements, so long as Lessee diligently and in good faith
contests the validity or the legality of the assessment, levy, or charge by
appropriate legal proceedings; provided however, that Lessee, prior to the date
that the tax, assessment, imposition, or charge is due and payable, shall either
have paid it under protest or shall have, (i) in the case of Real Property
Taxes, posted a bond with Lessor sufficient to cover the amount of the taxes and
penalties and interest and, (ii) in the case of taxes other than Real Property
Taxes, given to Lessor a letter executed by an officer of Lessee assuring Lessor
that the tax, assessment, imposition, or charge will be paid when and to the
extent that the legal proceedings conclude in a final determination that the
tax, assessment, imposition, or charge is valid, legal and owing. Upon such
final determination, Lessee agrees to immediately pay the contested tax,
assessment, imposition, or charge, together with all interest and penalties, if
any, and remove and discharge any lien or forfeiture arising from the prior
nonpayment. Any proceedings for contesting the validity, legality, or amount of
any tax, assessment, imposition, or charge, or to recover any tax, assessment,
imposition, or charge paid by Lessee, may be brought by Lessee in the name of
Lessor or in the name of Lessee, or both, as Lessee deems advisable. Lessor
agrees that Lessor will, upon the reasonable request of Lessee, execute or join
in the execution of any instrument or document necessary in connection with any
proceeding. However, if any proceedings are brought by Lessee, Lessee agrees to
indemnify, defend, protect and hold harmless Lessor for all loss, cost, or
expense that may be imposed on Lessor in connection with the proceeding.
Lessee's right to contest taxes as provided in this Lease shall not extend
beyond the point where Lessor's title to the Premises could be lost. In any
event, Lessee shall notify Lessor in advance of any tax contest proceedings that
Lessee intends to initiate, and shall then inform Lessor of all significant
developments in the proceedings as they may occur. If any assessments for local
improvements become a lien after the Commencement Date, Lessee shall pay only
the installments of the assessments that become due and payable during the Term.
On the request of Lessee,
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Lessor agrees to cooperate or join with Lessee in any application that may be
necessary to permit the payment of the assessments in installments.
10.6 Any reimbursement of Real Property Taxes due from Lessor to Lessee
shall be paid within 10 days of written request therefor.
12.1 LESSOR'S CONSENT REQUIRED. Notwithstanding anything to the contrary in
Lease Section 12.1(a), (b) or (c): Addendum Section 12.1(e) shall prevail.
Notwithstanding Lease Section 12.1(b) Lessor's consent shall not be required for
a change in control resulting from the sale of shares in Lessee pursuant to a
public offering registered pursuant to the federal Securities Act of 1933.
12.1(e) ASSIGNMENT TO AFFILIATES. Lessee shall have the right to assign the
Lease and the Section 50 option to any Affiliate without Lessor's consent.
"Affiliate" means any entity controlling, controlled by or under common control
with Lessee, and any entity acquiring (by way of purchase, merger or
consolidation) all or substantially all of the assets of Lessee.
12.4 SUBLEASE OR ASSIGNMENT PROFITS. Lessor shall be entitled to 50% of all
"Profits" from the assignment or sublease of any or all of the Premises
excluding the Additional Improvements (defined in Section 51.1(a)), for which
Lessor shall be entitled to 0% of the Profits. Profits shall equal (i) the sum
of all consideration received by Lessee from such sublessee or assignee for or
relating to the Premises, less (ii) direct, out-of-pocket costs incurred in
effecting such sublease or assignment. Lessee shall provide all information
reasonably requested by Lessor relating to the determination of such profits. If
the entire Premises (including the Additional Improvements) are assigned or
subleased in a single transaction or series of related transactions, the parties
shall equitably allocate Profits between the Additional Improvements and the
remainder of the Premises.
13. 1(g) Deleted.
13.2(e) OTHER LESSOR REMEDIES.
The parties expressly acknowledge that Section 13.2(a)(iii) is intended to
comply with California Civil Code Section 1951.2(c)(1). Lessor has the remedy
described in California Civil Code Section 1951.4 (Lessor may continue the Lease
in effect after Lessee's breach and abandonment and recover rent as it becomes
due) and Lessee expressly agrees and acknowledges that any and all limitations
this Lease to Lessee's sublease and assignment rights are reasonable.
In any action of unlawful detainer commenced by Lessor against Lessee by
reason of any default hereunder, Lessee acknowledges that the monthly fair
rental value of the Premises for the period of the unlawful detainer shall be
not less than the amount of monthly Base Rent, plus one twelfth of all
additional Rental paid during the most recent calendar year.
Lessee hereby waives any right of redemption or relief from forfeiture
under any present of future law, if Lessee is evicted or Lessor takes possession
of the Premises by reason of any default by Lessee hereunder. The various rights
and remedies reserved to Lessor herein, including those not specifically
described herein, shall be cumulative, and except as otherwise provided by
statutory law in force and effect at the time of the execution hereof, Lessor
may pursue any or all of such rights and remedies, whether at the same time or
otherwise. One or more waivers by Lessor of any breach or default shall not be a
waiver of any other breach or default of the same or any other provision.
Lessor's consent to or approval of any act by Lessee requiring Lessor's consent
or approval shall not be deemed to waive or
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render unnecessary Lessor's consent to or approval of any subsequent similar act
by Lessee. The receipt by Lessor of any Rental with or without knowledge of the
breach of any other provision hereof shall not be deemed a waiver of any such
breach. No partial payment of Rental (and no acceptance of a partial payment,
regardless of any notation on or accompanying the check) shall be effective to
waive the remaining unpaid Rental or constitute an accord and satisfaction
unless Lessor executes a written agreement explicitly waiving any such unpaid
Rental. No delay or omission in the exercise of any right or remedy accruing to
Lessor upon any breach by Lessee under this Lease shall impair such right or
remedy or be construed as a waiver of any such breach theretofore or thereafter
occurring.
13.3 Deleted.
13.5.1 Lessee acknowledges and agrees that in the event of a Lessor
default, Lessee's sole and exclusive remedy shall be to seek monetary damages;
provided however, if Lessor defaults its obligation to execute and deliver the
Sale Agreement pursuant to Section 50, then in lieu of damages, Lessee shall be
entitled to the remedy of specific performance. Lessee expressly waives all
other remedies, including without limitation: specific performance, injunction,
any right to terminate the Lease for any reason whatsoever (including without
limitation California Civil Code Sections 1932(2), 193.3(4) and 1941 or any
other current or future law), and statutory, legal or equitable self help remedy
(including without limitation California Civil Code Section 1942 or any other
current or future law).
15.2 is deleted. Lessor shall pay a total commission of $212,000, 50% to
Lessor's Broker and 50% to Lessee's Broker. Such commission shall be payable,
50% within 45 days after mutual execution of the Lease, and 50% promptly after
occupancy of the Premises by Lessee and the commencement of Base Rent.
15.3 is deleted. No brokers or others shall have any right whatsoever to
any commission or finders' fee in the event of an exercise of the Extension
Option or the Purchase Option.
15.4 Deleted.
17.1 LESSOR PERSONAL LIABILITY. Anything in this Lease to the contrary
notwithstanding, Lessee agrees that it shall look solely to the estate and
property of Lessor in the land and buildings comprising the Premises, subject to
prior rights of the holder of any ground lease, mortgage or deed of trust of the
Premises (such net value being the "equity", and provided that if such equity is
less than $100,000, then Landlord shall be personally liable for the difference,
up to a maximum of $100,000), for the collection of any judgment (or other
judicial process) requiring the payment of money by Lessor in the event of any
default or breach by Lessor with respect to any of the terms, covenants to be
observed or performed by Lessor, and no other assets of Lessor shall be subject
to levy, execution or any procedures as a remedy of Lessee; provided however, if
Lessor sells the Premises and the buyer does not assume all liability arising
prior to the transfer under this Lease, then Lessor shall remain personally
liable up to the amount of the net proceeds from such sale. In the event of any
transfer of Lessor's interest in the Premises and assumption of the Lease by the
buyer, Lessor shall be automatically relieved of any and all obligations and
liabilities on the part of Lessor accruing from and after the date of such
transfer.
21. RENTAL. The term "Rental" means each and every payment required to be
made by Lessee pursuant to this Lease including without limitation Base Rent,
utilities, taxes, insurance premiums, late charges and interest and utility
charges, repairs and maintenance incurred by Lessor on Lessee's behalf. All
Rental shall be paid when due and without notice except as expressly provided to
the contrary in this Lease. Lessee waives any right of offset, demand or
deduction against Rental pursuant to California Code
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of Civil Procedure ("CCP") Section 431.70 or otherwise. All Rental constitutes
"rent" or "rental" under the unlawful detainer statutes (CCP Section 1161 et
seq.)
31.1 BANKRUPTCY FEES. If Lessee files for protection under, or voluntarily
or involuntarily becomes subject to, any chapter of the United States Bankruptcy
Code or similar state insolvency laws, the other party shall be entitled to any
and all Fees incurred to protect such party's interest and other rights under
this Lease, whether or not such action results in a discharge.
26.1 HOLDOVER. Should Lessee holdover with or without the consent of
Lessor, such holdover shall be a tenancy at sufferance upon all of the terms and
conditions set forth herein, except that the Base Rent shall be increased to
200% of the Base Rent in effect at the end of the Term.
32.1 Notwithstanding Lease Section 32, provided Lessee is not then in
default, during the first 24 months after the Commencement Date, Lessor shall
not post For Sale or For Lease signs and shall not enter the Premises for the
purpose of showing the Premises to prospective buyers or tenants.
36(b) Deleted.
39.2 Notwithstanding Lease Section 39.2, the Purchase Option may be
assigned to an "Affiliate" as defined in Addendum Section 12.1(e).
39.4(a)(iv) Deleted.
39.4(c)(ii) and (iii) Deleted.
49. CONTINGENCIES. Lessor's obligations under this Lease are expressly
subject to and contingent upon the conditions below. If one or more of the
conditions are not satisfied of waived when and as required, this Lease shall
automatically terminate.
(a) Lessor has a contract to purchase the real property portion of the
Premises, If such contract fails to close for any reason by March 5, 1997, then
this Lease shall automatically terminate, unless Lessor waives such condition
prior to such date.
(c) If Lessor has not received equity and loan financing to purchase the
real property and build the Improvements in an amount and upon on terms and
conditions acceptable to Lessor on or before March 5, 1997, then this Lease
shall automatically terminate, unless Lessor waives such condition prior to such
date.
50. PURCHASE OPTION. Lessee shall have the option ("Purchase Option") to
purchase the Premises. The Purchase Option may be exercised only by satisfaction
of the following conditions on or before end of the 18th calendar month after
the Commencement Date, or if applicable the end of the Starting Stub Month: the
execution and delivery of two originals of the Sale Agreement in the form
attached as Exhibit B hereto, with the "Effective Date" set no later than the
date delivered to Lessor. Upon receipt, Lessor covenants to execute both
originals, return one to Lessee and deliver one to escrow. Thereafter, upon any
default by Lessee after expiration of any applicable notice and cure periods
under the Sale Agreement. this Option shall automatically and irrevocably
terminate. The Purchase Option is personal to the original Lessee and may not be
assigned to any person or entity, except to an Affiliate, as defined in Section
12.5(e). In the event of an assignment or sublease of this Lease or any portion
of the Premises by Lessee other than to an Affiliate, the Purchase Option shall
terminate. Promptly after purchase of the Land, Lessor shall record
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a Memorandum of Option in the form of Exhibit C. Lessee covenants to record a
quitclaim or termination of the Memorandum of Option is a form acceptable to
Lessor upon expiration of the Purchase Option.
51. IMPROVEMENTS. Lessor shall construct the following "Improvements" on
the Premises as provided herein:
51.1 SPECIFICATIONS.
(a) SHELL. The Improvements shall include an industrial building shell
having the following characteristics:
(i) not more than 65,000 sq. ft. single story, high image, concrete tilt-up
shell with high performance reflective glass in office/entry areas;
(ii) 24 ft. minimum under-beam clearance;
(iii) calculated high hazard sprinkler system (.60 GPM);
(iv) 2400 Amp, 277/480, 3-phase, 4 wire main electrical service;
(v) 6" concrete slab (minimum 3,000 PSI);
(vi) ventilated skylights per code in warehouse area;
(vii) two (2) ground level (12' x 20') doors in warehouse area;
(viii) double truck well with two (2) roll-up doors (10' x 10');
(ix) office area improvements per a mutually agreed space plan with
restrooms per code; and
(x) an additional shell area (without office build-out) of not more than
20,000 sq. ft. as shown on the floor plans to be prepared pursuant to the second
paragraph of Section 51.3(a) ("Additional Improvements") and generally having
the same specifications as provided in subsections (ii)-(vi);
(b) INTERIOR. Lessor shall build shell interior improvements, including
without limitation, the following: plumbing from stubbed in slab, electrical
distribution (main electrical panel provided as part of shell), interior
improvements in the office area to lessee's specifications ("Interior
Improvements"). The parties shall subsequently agree upon detailed plans and
specifications for the Interior Improvements which shall then be attached hereto
and made a part hereof.
(c) EXTERIOR. Curbs, gutters, paving, striping, and base landscaping to
code. No signage.
(d) STANDARDS. Improvements shall be completed in a first-class,
workmanlike manner in compliance with all applicable laws. Lessor shall obtain
customary construction warranties from the contractors.
51.2 INTERIOR ALLOWANCE.
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(a) Lessor shall pay the cost of all Shell and Exterior Improvements, and
up to $1,000,000 of Interior Improvements ("Improvement Allowance"), to be
credited by Lessor toward the "Costs" of constructing the Section 51.1(b)
improvements to be constructed by Lessor for Lessee. As used herein, the term
"Costs" shall mean and refer to all costs expended by Lessor relative to the
construction of the Interior Improvements which shall include, but shall not be
limited to, cost of equipment, material and labor, contractor's field overhead
and fee, architectural and engineering costs related to Interior Improvements,
governmental agency fees, testing and inspection costs, the cost of any
requirements regarding construction which are imposed by any federal, state or
local governmental. entity or agency which are not reflected in the plans and
specifications, Lessor's direct field supervision fees, sales and use taxes (but
not real property taxes), permits, plan check fees, bonds and other costs
directly related to the construction of the Lessee Improvements, but excluding
any of Lessor's overhead expenses or payments to any employees of Lessor except
as specifically set forth above.
(b) In the event that the Costs of the Interior Improvements exceed the
Improvement Allowance, as estimated as part of the Budget approval set forth in
Section 51.3(b) below, or due to additional costs which could not be anticipated
by Lessor, including, but not limited to, those incurred due to "Lessee Delays",
as described in Section 51.3(b) and (c), and due to additional requirements
imposed by governmental entities and agencies, Lessee shall (i) post cash,
letters of credit or other security reasonably acceptable to Lessee for such
excess, and (ii) the pay to Lessor, upon presentation of the invoices therefor,
the difference between the Improvement Allowance and the actual costs of
constructing the Interior Improvements.
Section 51.3 PLANS
(a) PREPARATION. The site plan and floor plans and specifications are
attached hereto as Exhibit D ("Preliminary Plans"). Lessor and Lessee hereby
agree to use their respective best good faith efforts to cause all plans and
specifications and working drawings (the "Plans") with respect to the
Improvements in accordance with the Preliminary Plans to be completed and signed
by the parties as soon as possible. Lessor shall cause the Plans to be prepared
by a California licensed architect, to be selected subject to Lessee's
reasonable approval, working in conjunction with Lessee and its space planner on
the basis of a description of the Improvements provided to Lessor by Lessee and
Lessee shall have ten (10) business days after receipt of the Plans to notify
Lessor of any changes in such Plans required by Lessee. In the event Lessor does
not receive such notice from Lessee within such ten (10) day period, the Plans
shall be deemed approved by Lessee.
(b) INTERIOR BIDS. Lessor shall prepare and deliver to Lessee for Lessee's
approval as soon as reasonably possible a non-binding preliminary estimate of
the Costs of the Interior Improvements (the "Budget"). Upon Lessee's approval of
such Budget, Lessor shall obtain a fixed bid for all of the Interior
Improvements work required pursuant to the Plans. In the event such bid is more
than the Budget, Lessee shall have the right to require new bids on such work in
the manner set forth in this subsection (b) and any delay in the Commencement
Date caused by obtaining such bids shall not be deemed to be a Lessee Delay
hereunder. In the event the bid obtained by Lessor is equal to or less than the
Budget, Lessee shall nevertheless have a right to require new bids on all or a
portion of such work in the manner set forth in this subsection (b) ("Lessee
Elective Bid"), but any delay in the Commencement Date caused by a Lessee
Elective Bid shall be deemed to be a Lessee Delay hereunder. Upon receipt of the
initial bid obtained by Lessor, Lessee shall deliver to Lessor its written
approval, disapproval or modifications thereto or to any particular item
contained therein within five (5) business days after delivery of such bid to
Lessee along with a request for new bids to be obtained if Lessee desires to
exercise its right to obtain new bids. If the bidding procedure is instituted by
Lessee, Lessor shall obtain bids for each bid item so required by Lessee from at
least three (3) contractors (or subcontractors in the event such bid is required
only for particular
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items of such work) approved by Lessor and Lessee. The bid specifications shall
be detailed and shall set forth clearly on an item by item basis the components
of the work to be submitted for bid. Lessee shall be entitled to attend the bid
opening and shall be given reasonable notice thereof. Within five (5) days after
receipt of the bids, Lessee may either approve a bid, disapprove all bids or
approve one or more bids for negotiation. Should Lessee approve any bids for
negotiation, such negotiation shall be concluded as soon as reasonably possible
but in no event later than ten (10) days after commencement of negotiations by
either acceptance of one bid or by rejection of all. If the new bids shall
result in a total bid in excess of the Budget, Lessee shall have the right to
either accept such increased costs or to cause the Plans to be revised in order
to cause the Costs of Interior Improvements to be reduced, and such revised
Plans shall then be submitted to bid. Any delay in the Commencement Date caused
by such revision of the Plans and resubmittal to bid shall not be deemed to be a
Lessee Delay hereunder unless it is as a result of a Lessee Elective Bid.
(c) In the event that Lessee desires to change the plans and specifications
for the Interior Improvements after the Budget has been approved, as provided in
Section 51.3(b), Lessee shall provide notice of such proposed change to Lessor
for Lessor's prior written approval which approval shall not be unreasonably
withheld. Lessor's approval of such proposed change order shall include an
estimate of the additional or decreased Costs resulting from such a change, as
well as an estimate of the delay or time-saving involved in complying with such
change order. Such additional Costs, to the extent that they are in excess of
the Improvement Allowance shall be paid by Lessee to Lessor as set forth in
Section 51.3(b). That part of the actual time delay in the Commencement Date
caused solely by such change shall be considered a "Lessee Delay" hereunder and
any time by which the Commencement Date is accelerated as a result of such
change shall be set off against any other Lessee Delay hereunder. Lessor agrees
to use its best efforts to pursue such change orders without delay and to
reasonably work with the contractor so as to avoid any unreasonable Lessee
Delay.
51.4 COMPLETION OF IMPROVEMENTS.
(a) Upon agreement on the Plans, Lessor shall immediately commence the
Improvements and thereafter diligently prosecute such construction to
completion, subject to force majeure.
(b) The Premises shall be deemed to be "substantially completed" when the
work of construction of the Improvements has been substantially completed in
accordance with the approved working drawings as evidenced by the delivery to
Lessee of a certificate as described herein of Lessor's architect or space
planner, and final inspection has been approved by the appropriate City of Lake
Forest official. Within three business days after receipt of a notice from the
Lessor that the Premises are substantially completed, Lessee shall inspect the
Premises with Lessor and deliver a punchlist of any construction defects and
items to be completed to achieve substantial completion. Upon delivery of the
punchlist, Lessee shall be deemed to have accepted the Premises in an "AS IS"
condition, subject only to completion of the punchlist and any latent
construction defects. The punchlist is deemed to be "minor" if or when the cost
of completing the punchlist (as reasonably estimated by lessor's architect) is
less than $10,000 and such punchlist items do not materially affect Lessee's use
and operation of the Premises. The date the punchlist is determined to be minor
is the "Substantial Completion Date". Lessor shall diligently complete as soon
as reasonably possible any punchlist items.
(c) Lessee's current lease expires December 31, 1997. Provided final
working drawings have been approved by Lessee and the City of Lake Forest by
June 1, 1997, then if substantial completion is not achieved by December 1, 1997
plus periods of force majeure not to exceed 15 days plus Lessee Delays
("Required Delivery Date"), Lessor shall be responsible for the excess, if any,
of Lessee's then current rental costs over the Rental that would have been
payable under the Lease from January 1, 1998 through
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the later of occupancy (excluding moving and fixturization only) or the date
fifteen (15) days after the Substantial Completion Date ("Delay Rents"). Lessee
shall be entitled to offset Delay Rents against Base Rent. If substantial
completion is not achieved by Xxxxx 0, 0000, Xxxxxx shall have the option to
terminate this Lease on or before March 10, 1998, provided however that Lessee
shall remain liable for all Costs in excess of the Improvement Allowance for
Interior Improvements completed through March 10, 1998.
51.5 LESSEE DELAY. Notwithstanding anything to the contrary contained in
this Lease, upon the Commencement Date, Lessee shall pay to Lessor an additional
payment of a sum calculated by multiplying the per them fixed monthly Base Rent
times the number of days of delay which are due to Lessee Delays.
51.6 BUILDING AREA. Upon substantial completion, Lessor's architect shall
determine the "Building Area", meaning the gross number of square feet of the
shelf, measured to the exterior of the walls.
Makena Properties, a California corporation
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, President
Ansys, Inc., a California corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------------
Title: President
Exhibits: A Commencement Date Memorandum
B Sale Agreement
C Memorandum of Option
D Preliminary Plans
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EXHIBIT B
SALE AGREEMENT
This Lot Sale Agreement (the "Agreement"), dated as of _____________, 199_
("Effective Date"), is made between __________________________________
("Seller") and __________________________________________________ ("Buyer").
RECITALS
Subject to the terms of this Agreement, Seller wishes to sell, and Buyer
wishes to purchase, the Property defined in Section 1.3.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Seller and Buyer agree as follows:
1. PURCHASE AND SALE OF PROPERTY
1.1 Significant Definitions. The terms below are hereby defined as
follows:
"Closing Date": _____________ [24 months after the "Commencement
Date", as defined in the Lease].
"Deposit": $50,000.
"Lease": Standard Industrial/Commercial Single Tenant Lease - Net
(American Industrial Real Estate Association (1990)) between Buyer and Seller
dated as of November 1, 1996.
"Lot": Xxxxx 00 Xxx Xxx. 00000 in the project commonly known as
Pacific Commercentre, in Lake Forest, California.
"Purchase Price": $5,578,000
1.2 Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, Seller shall sell to Buyer, and Buyer shall purchase from
Seller, the Property (as defined in Section 1.3 and Section 1.4) at Closing (as
defined in Section 8.2).
1.3 Description of Property. Subject to Section 1.4, the "Property" shall
consist of the following:
(a) Land and Improvements. The Lot specifically described in Exhibit A,
and any improvements thereon (the "Improvements").
(b) Appurtenances. The interest of Seller in all rights, privileges and
easements appurtenant to the Lot and Improvements, including all minerals, oil,
gas and other hydrocarbon substances on and under the Lot, as well as all
development rights, air rights, water, water rights and water stock relating to
the Lots and Improvements and any other easements, rights-of-way or
appurtenances used in connection with the
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beneficial use or enjoyment of the Lot and Improvements and, to the extent that
they relate to the Lot and Improvements, all of Seller's rights, easements or
other interests, if any, in and to adjacent streets, alleys and rights-of-way,
and water and sewer taps, sanitary or storm sewer capacity or reservations and
rights under utility agreements with any applicable governmental or
quasi-governmental entities or agencies with respect to the providing of utility
services to the Lot, and all permits, development rights and construction
warranties with respect to the Lot and Improvements ("Appurtenances"). The Lot,
Improvements and Appurtenances are collectively referred to as the "Real
Property," The Real Property shall be transferred to Buyer at Closing (as
defined in Section 8.2) pursuant to a grant deed in the form of Exhibit B (the
"Grant Deed").
2. PURCHASE PRICE
2.1 Amount. Buyer shall pay the Purchase Price for the purchase of the
Property, Buyer shall deliver the Purchase Price to Seller through "Escrow" (as
defined in Section 8.1) in immediately available federal funds at Closing, in
accordance with Section 8.4.
2.2 Deposit. Within two (2) Business Days after the full execution of this
Agreement by the parties, Buyer shall deliver the Deposit in cash to the Chicago
Title Company ("Escrow Holder"), which shall be non-refundable except upon a
default by Seller.
3. CONDITION OF PROPERTY.
3.1 Inspection. Buyer has been and through the Closing will be the sole
tenant of the Property. Buyer is fully aware of all aspects of the Property.
Buyer agrees, and represents and warrants, that it will purchase the Property
"as is" and solely in reliance on its own investigation of the Property. Buyer
agrees, and represents and warrants, that it has conducted an investigation and
determine to its satisfaction each and every matter of concern or relevance
relating to the Property, including without limitation the financial, legal
title, physical and environmental condition of the Property, soils, settlement
or subsidence conditions, applicable governmental laws and regulations, zoning,
building code, access, environmental, environmental and land use laws and
regulations and the extent to which the Property complies therewith, and the
fitness of the Property for Buyer's contemplated use, the presence of hazardous
materials on the Property and, in general, its environmental condition, title
matters and contracts to be assumed by Buyer (collectively, the "Condition of
the Property"). Subject to the other provisions of this Agreement, Buyer agrees
and represents and warrants, that (i) it will purchase the Property subject to
each and every Condition of the Property, including adverse conditions that may
not have been revealed by its investigation of the Property, (ii) Seller has no
obligation to repair, correct or compensate Buyer for any Condition of the
Property, and (iii) by acquiring the Property, Buyer shall be deemed to have
waived any and all objections to the Condition of the Property, whether or not
any Condition of the Property would have been disclosed by inspection. Buyer
shall be deemed to agree that no Condition of the Property, whether or not known
or discovered by either Buyer or Seller at a later date, shall affect this
transaction and the Purchase Price paid for the Property hereunder, and that
Buyer shall be obligated to purchase the Property notwithstanding the Condition
of the Property.
Except to the extent provided in Section 9.2, Buyer hereby waives,
releases, acquits, and forever discharges Seller, and Seller's agents,
directors, officers and employees to the maximum extent permitted by law, of and
from any and all claims, actions, causes of action, demands, rights,
liabilities, damages, losses, costs, expenses, or compensation whatsoever,
direct or indirect, known or unknown, foreseen or unforeseen, that it now has or
which may arise in the future on account of or in any way growing out of or
connected with the Condition of the Property. BUYER EXPRESSLY WAIVES ANY OF ITS
RIGHTS
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GRANTED UNDER CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: "A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Initials: Buyer:______________ Seller:______________
3.2 Books and Records Contingency Review. Seller shall make available for
inspection, review and copying by Buyer, at Buyer's sole cost and expense, such
documents, plans, records, files and other information respecting the Property
that are in Seller's possession (collectively, the "Books and Records"). Seller
shall make the Books and Records available to Buyer at the offices of Seller for
inspection on reasonable prior notice, which may be written or oral. Seller
makes no representation or warranty regarding the correctness, accuracy or
completeness of the Books and Records. The term "Books and Records" specifically
excludes corporate, financial and accounting records and documents regarding the
operations of Seller or its predecessor in title or their affiliates or
subsidiaries as an entity, as opposed to records concerning only the Property;
attorney-client communications and attorney work product and property valuation
information; loan documents regarding loans no longer encumbering any of the
Property, information regarding potential buyers, marketing records, accounting
data regarding properties formerly owned by Seller or its predecessor in title,
and agreements and records regarding the partnerships that own or formerly owned
any other Property; and Books and Records that have been lost or destroyed or
are in the possession of others. It shall be a condition for Buyer's benefit
that, on or before fifteen (10) days after the Effective Date, Buyer shall
investigate and approve, in its sole discretion, the Section 3.2 Books and
Records.
3.3 Condition Failure. If Buyer timely disapproves any condition in
Section 3.2 or Section 4 in writing, this Agreement shall automatically
terminate, and thereafter the parties shall have no further obligation or
liability under this Agreement, except as provided in this subsection. The
Deposit shall be returned to Buyer. Buyer's failure to provide timely written
notice of disapproval shall be deemed a waiver thereof. Any cancellation fee or
other costs of the Escrow Holder shall be borne equally by Seller and Buyer and
each party shall pay its own expenses.
4. TITLE. Buyer agrees to take title to the property subject to (i) unpaid
real property taxes and assessments relating to the period after the
"Commencement Date" (defined in the Lease), and (ii) Exception Nos. 9-16 in
Preliminary No. 00601697 M07 issued by Chicago Title Company dated as of
November 16, 1996 ("PTR"). If Buyer receives notice from the Escrow Holder that
it intends to revise the PTR to include one or more additional exceptions to
title, Buyer may, within five (5) days of such notice, notify Seller ("Buyer's
Title Notice") of the additional title exceptions to which it objects ("Title
Objections"), provided, however, that Buyer may object only if Buyer reasonably
determines that the exceptions materially and adversely affect the use and
enjoyment of the Property for Buyer's contemplated use. If Buyer fails to
deliver timely notice within the required period, Buyer shall be deemed to have
approved the Title Objections. Seller shall have the shorter of five (5) days
after Buyer's Title Notice, or until two (2) Business Days before the Closing
Date, within which to deliver to Buyer a notice ("Seller's Title Notice")
indicating whether Seller will eliminate or cure such Title Objections by the
Closing. If Seller elects to eliminate or cure an Title Objection, the
elimination or curing by Seller of the Title Objections shall be completed on or
before the Closing. If Seller (a) does not deliver Seller's Title Notice within
the required time, or (b) notifies Buyer that Seller is unable or unwilling to
cure such Title Objections, Buyer shall have three (3) days to elect to waive
such Title Objections or deliver to Seller written notice terminating this
Agreement pursuant to Section 3.3. If Buyer fails to give Seller notice of its
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election within the time set forth in the previous sentence, Buyer shall be
deemed to have elected to waive such Title Objections.
The term "Permitted Exceptions" shall mean (i) all exceptions to title
listed in the PTR, except as noted above; (ii) any additional exceptions to
which Buyer does not object in Buyer's Title Notice; and (iii) the Lease and any
other matter that is approved, caused, permitted or suffered by Buyer, its
employees, agents, representatives or affiliates. Notwithstanding anything to
the contrary in this Section 4, Seller shall eliminate any and all title
exceptions consisting of: mechanics liens for work caused by Seller; judgment
liens against Seller; liens for taxes not required to have been paid by Buyer
under the Lease; monetary liens, mortgages, deeds of trust, security agreements
and fixture filings executed by Seller; and leases or purchase options executed
by Seller other than the Lease.
5. CONDITIONS TO CLOSING
5.1 Buyer's Closing Conditions. Buyer's obligation to purchase the
Property is expressly conditioned on the fulfillment of each of the conditions
precedent at or before Closing described below ("Buyer's Closing Conditions").
Buyer's Closing Conditions are solely for Buyer's benefit and any and all of
Buyer's Closing Conditions may be waived in writing by Buyer in whole or in part
without prior notice.
(a) Title. Title to the Real Property shall be conveyed to Buyer by Grant
Deed subject to the Permitted Exceptions. It shall be a Buyer's Closing
Condition that the Escrow Holder shall be irrevocably and unconditionally
committed to issue to Buyer a CLTA standard coverage Owner's Policy ("Title
Policy") insuring title to the Real Property in an amount equal to the Purchase
Price, subject only to the Permitted Exceptions.
(b) Delivery of Closing Documents. It shall be a Buyer's Closing Condition
that Seller shall deliver through escrow the documents specified in Section 8.3.
(c) Performance of Covenants. It shall be a Buyer's Closing Condition that
Seller shall perform the material covenants of Seller under this Agreement to be
performed by Seller before Closing.
5.2 Seller's Closing Conditions. Seller's obligation to sell the Property
is expressly conditioned upon the fulfillment of each of the conditions
precedent at or before Closing described below ("Seller's Closing Conditions").
Seller's Closing Conditions are solely for Seller's benefit and any or all of
Seller's Closing Conditions may be waived in writing by Seller in whole or in
part without prior notice.
(a) Purchase Price. It shall be a Seller's Closing Condition that Buyer
shall have delivered to Seller through Escrow the Purchase Price, upon
satisfaction of Seller's closing obligations.
(b) Delivery of Closing Documents and Funds. It shall be a Seller's
Closing Condition that Buyer deliver through Escrow the documents and funds
specified in Section 8.4.
(c) Performance of Covenants. It shall be a Seller's Closing Condition
that Buyer shall have performed the material covenants of Buyer under this
Agreement.
5.3 Termination. If Buyer's Closing Conditions or Seller's Closing
Conditions, as the case may be, are not approved or waived (including a deemed
waiver) within the time period allowed, this Agreement may be terminated by the
party in whose favor the Closing Condition runs by written notice to the other.
If this Agreement is so terminated, the parties shall have no further obligation
or liability under this
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Agreement, except as provided in Section 9, and this Section 5.3. Subject to
Buyer's obligations and covenants under Section 3.1, the Deposit shall be
returned to Buyer. Any cancellation fee or other costs of the Escrow Holder
shall be borne equally by Seller and Buyer and each party shall pay its own
expenses.
6. [Not Used]
7. REPRESENTATIONS AND WARRANTIES. Seller hereby warrants and represents as of
the date hereof and as of the Closing as set forth below:
(a) Organization; Authority. Seller is a _________________ duly organized,
validly existing and in good standing under the laws of the State of California.
Seller has full power and authority to enter into and perform under this
Agreement. Upon Buyer's request, Seller shall deliver to Buyer a copy of
corporate resolutions from Seller (if a corporation) or from Seller's corporate
general partners, if applicable.
(b) Foreign Person. Seller is not a foreign person and is a "United States
Person" as such term is defined in Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended.
(c) Litigation. Except for matters caused by Buyer, Seller has received no
written notice of any pending litigation or arbitration proceeding or threatened
litigation or arbitration directly affecting the Property or this transaction to
which Seller is a party.
(d) Government Action. Except for matters caused by Buyer, Seller has
received no written notice from any governmental agency or private party
concerning any governmental proceeding or investigation of the Property
(including without limitation matters relating to "Hazardous Substances" (as
defined in the Lease), any violation of any laws or covenants, conditions and
restrictions with respect to the Property, any pending condemnation proceeding
or any formal notice of condemnation involving the Property.
(e) Hazardous Substances. Seller has no knowledge of: the use,
installation, generation, production, storage, transportation to or from, or
release on, under or about the Lot of "Hazardous Substances" (as defined in the
Lease) on or prior to the "Substantial Completion Date" (as defined in the
Lease) in violation of applicable law; the existence of underground storage
tanks on the Lot prior to the Substantial Completion Date; and no liens relating
to environmental matters had been filed against the Lot as of the Substantial
Completion Date. Seller has not released any person from liability for
environmental matters relating to the Lot except for the entity and its
affiliates selling the Lot to Buyer.
(f) Options. Except for the rights of Buyer, Seller has not entered into,
and has no actual knowledge of, any options or rights of first refusal to
purchase the Lot or any leases of any or all of the Lot (excepting subleases
entered into by Buyer as sublessor, if any).
8. CLOSING
8.1 Escrow. An escrow ("Escrow") shall be opened with Escrow Holder at its
office in Irvine, California, within two (2) Business Days after the full
execution of this Agreement. Buyer and Seller shall promptly upon request
therefor execute such additional escrow instructions as are reasonably required
to consummate the transaction contemplated by this Agreement and are not
inconsistent herewith.
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8.2 Closing. The "Closing" means the exchange of money and documents as
described herein, and will be deemed to have occurred when Seller's Grant Deed
to Buyer has been recorded. Seller and Buyer agree that the Closing shall occur
on the Closing Date. The Closing will be at the offices of the Escrow Holder or
such other place as the parties may agree.
8.3 Seller's Closing Obligations. Not later than one (1) Business Day
before the Closing Date, Seller shall deliver to the Escrow Holder for delivery
to Buyer (or the party noted below) through Escrow the following:
(a) The Grant Deed, duly executed and acknowledged by the Seller and in
recordable form;
(b) The Assignment and Assumption Agreement in the form of Exhibit C.
(c) Certificates required by Section 1445 of the Internal Revenue Code of
1986, as amended, and California Revenue and Taxation Code Section 18815
executed by Seller and in a form satisfactory to Buyer, to relieve Buyer of any
potential transferee withholding liability under such Section;
(d) Other documents reasonably required to properly consummate this
transaction.
8.4 Buyer's Closing, Obligations. Not later than one (1) Business Day
before the Closing Date, Buyer will deliver to the Escrow Holder for delivery to
Seller (or the party noted below) through Escrow the following:
(a) Immediately available federal funds as are required to be paid by
Buyer under this Agreement in an amount equal to the Purchase Price, minus the
amount of the Deposit paid by Buyer and adjusted for estimated prorations and
closing costs;
(b) Such proof of Buyer's authority and authorization to enter into this
Agreement and perform hereunder, and such proof of power and authority of the
individuals executing and/or delivering any instruments, documents or
certificates on behalf of Buyer to act for and bind Buyer as may reasonably be
required by the Escrow Holder; and
(c) The Assignment and Assumption Agreement in the form of Exhibit C and
the Special tax Disclosure Agreement in the form of Exhibit D.
(d) Other documents reasonably required to properly consummate this
transaction.
8.5 Close of Escrow. If on the Closing Date, (i) the Escrow Holder holds
and can deliver the documents described in Section 8.3 and Section 8.4, (ii) the
Escrow Holder is irrevocably and unconditionally committed to issue the Title
Policy with respect to the Property, (iii) the Buyer has delivered the funds
required under Section 8.4(a), and (iv) the Escrow Holder can record the Grant
Deed for the Property, then the Escrow Holder shall:
(a) Record the Grant Deed;
(b) Deliver the Purchase Price (less Seller's share of any net prorations
and closing costs) as directed by Seller;
(c) Deliver the remaining documents to the parties specified in Section
8.3 and Section 8.4;
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(d) Deliver the remaining funds to Seller or Buyer, as the case may be,
after taking into account all items chargeable to the account of Seller and
Buyer pursuant to Section 8.7 and Section 8.8; and
(e) Deliver the Special Tax Disclosure Agreement to the County of Orange.
8.6 Termination of Escrow. If Closing does not take place as set forth in
Section 8.2, then the Escrow shall terminate, all documents deposited into
Escrow shall be returned to the respective parties, and, subject to Section 9,
the Deposit shall be returned to Buyer.
8.7 Prorations. Buyer shall be entitled to the prepaid portion of rents on
the Lease and to the amount of the Lease security deposit. Real property taxes
and current installments of assessments applicable to the Property and other
expenses applicable to the Property shall not be prorated.
8.8 Closing Costs. Seller shall pay the real property transfer taxes on
this transaction and the premium for a standard form (CLTA) owner's policy of
title insurance in the amount of the Purchase Price. Buyer shall pay any
additional premiums or charges with respect to the Title Policy, including any
extended coverage and endorsements. Seller and Buyer shall each pay one-half of
the escrow fees. Seller shall pay the costs of recording any necessary releases
or reconveyances, and Buyer shall pay the costs of recording the Grant Deed and
any other documents. All other closing costs shall be divided as is customary in
Orange County. This Section 8.8 shall survive the Closing.
8.9 Commissions. Except for any brokers and commissions specified in the
Lease, Buyer and Seller each represent and warrant to the other that no fee or
commission shall be payable by reason of this transaction either to such party,
or to any broker or finder representing Buyer. Each party agrees to defend,
indemnify and hold harmless the other party harmless from and against any and
all liabilities, claims, demands, damages, or costs of any kind (including
attorneys' fees, costs and expenses) arising from or connected with any broker's
or finder's fee or commission or charge ("Broker Claims") claimed to be due by
any person arising from or by reason of such party's conduct with respect to
this transaction. The provisions of this Section 8.9 shall survive Closing
hereunder.
8.10 Parties to Bear Own Expenses. Each of the parties hereto shall pay all
the costs and expenses incurred or to be incurred by them in negotiating and
preparing this Agreement and in carrying out the transaction contemplated
hereby.
8.11 General Escrow Instructions. The general escrow instructions in
Exhibit E are hereby incorporated herein by this reference. Any conflict between
this Agreement and Exhibit E shall be construed in favor of this Agreement.
9. DEFAULT
9.1 Buyer's Default.
(a) Default. Buyer shall be deemed to be in default hereunder if Buyer
fails, for any reason other than Seller's default hereunder, to meet, comply
with or perform any covenant, agreement or obligation on its part required
within the time limits and in the manner required in this Agreement.
(b) Liquidated Damages. IF THE CLOSING FAILS TO OCCUR BY REASON OF DEFAULT
OF BUYER UNDER THE TERMS OF THIS AGREEMENT, BUYER SHALL BE RESPONSIBLE
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FOR ALL CANCELLATION CHARGES REQUIRED TO BE PAID TO ESCROW HOLDER AND ANY ESCROW
CHARGES. IN ADDITION, THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES SHALL TERMINATE AND THE DEPOSIT SHALL BE IMMEDIATELY DELIVERED BY ESCROW
HOLDER TO SELLER ON SELLER'S REQUEST. THE DEPOSIT SHALL BE DEEMED LIQUIDATED
DAMAGES FOR BUYER'S FAILURE TO ACQUIRE THE PROPERTY AS SELLER'S SOLE AND
EXCLUSIVE REMEDY AGAINST BUYER (INCLUDING, WITHOUT LIMITATION, SELLER'S RIGHTS
TO SEEK SPECIFIC PERFORMANCE OF THIS AGREEMENT AND TO RECEIVE DAMAGES FOR
FAILURE TO ACQUIRE THE PROPERTY) WHICH SUM SHALL BE PRESUMED TO BE A REASONABLE
ESTIMATE OF THE AMOUNT OF ACTUAL DAMAGES SUSTAINED BY SELLER BY REASON OF
BUYER'S BREACH OF ITS OBLIGATION TO ACQUIRE THE PROPERTY. FROM THE NATURE OF
THIS TRANSACTION, IT IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE ACTUAL
DAMAGES THAT SELLER WOULD SUSTAIN, SHOULD BUYER BREACH ANY OF ITS OBLIGATIONS.
THE IMPRACTICABILITY AND DIFFICULTY OF FIXING ACTUAL DAMAGES IS CAUSED BY,
WITHOUT LIMITATION, THE FACT THAT THE PROPERTY IS UNIQUE. GIVEN THE FOREGOING,
AMONG OTHERS, BUYER AND SELLER AGREE THAT LIQUIDATED DAMAGES ARE PARTICULARLY
APPROPRIATE FOR THIS TRANSACTION AND AGREE THAT SAID LIQUIDATED DAMAGES SHALL BE
PAID IN THE EVENT OF BREACH BY BUYER, NOTWITHSTANDING ANY WORDS OR
CHARACTERIZATIONS PREVIOUSLY USED OR HEREIN CONTAINED IMPLYING ANY CONTRARY
INTENT, THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275
OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO
CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. NOTHING HEREIN SHALL,
HOWEVER, BE DEEMED TO LIMIT BUYER'S LIABILITY TO SELLER FOR DAMAGES OR
INJUNCTIVE RELIEF FOR BREACH OF ANY OTHER OBLIGATION OF BUYER HEREUNDER (OTHER
THAN ITS OBLIGATION TO ACQUIRE THE PROPERTY), INCLUDING INDEMNITY OBLIGATIONS OF
BUYER, OR FOR ATTORNEYS' FEES AND COSTS AS PROVIDED IN SECTION 11.14.
Buyer's Initials __________ Seller's Initials ___________
9.2 Seller's Default.
(a) Default. Seller shall be deemed to be in default hereunder if Seller
fails, for any reason other than Buyer's default hereunder or the failure of a
condition precedent to Seller's obligation to perform hereunder, to meet, comply
with, or perform any covenant, agreement or obligation on its part required
within the time limits and in the manner required in this Agreement, or there
shall have occurred a material breach of any representation or warranty (made by
Seller); provided, however, no such default shall be deemed to have occurred
unless and until Buyer has given Seller written notice thereof, describing the
nature of the default, and Seller has failed to cure such default within fifteen
(15) days of receipt of such notice (but in any event before the Closing Date,
unless such default occurs after Closing).
(b) Remedies. If Seller shall be deemed to be in default under Section
9.2(a) at or before Closing, and Buyer does not waive such default, Buyer may
pursue any or all remedies to which it may be entitled.
10. RISK OF LOSS. If before Closing any action or proceeding is commenced for
the condemnation or exercise of the rights of eminent domain of the Property or
any portion thereof, or if Seller is notified by the duly authorized officer of
a duly empowered condemning authority, or if any major casualty event
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occurs, then at Buyer's option either (i) at Closing Seller shall assign and
turn over, and Buyer shall be entitled to keep, all awards for the taking by
eminent domain or insurance proceeds which accrue to Seller and the parties
shall proceed with the Closing, without modifying the terms of this Agreement
and without reducing the Purchase Price; or (ii) Buyer may terminate this
Agreement in which case the Deposit shall be returned to Buyer. Seller shall not
negotiate, resist or stipulate to the condemning action without Buyer's written
consent. In any event, the Closing shall not be affected, delayed or prevented
as a result of such condemning action.
11. MISCELLANEOUS.
11.1 Definition of Business Day. For purposes of this Agreement, "Business
Day" means any day other than Saturday, Sunday or a holiday observed by national
or federally chartered banks. Any event specified to occur on a non-Business Day
shall be extended automatically to the end of the first Business Day thereafter.
11.2 Binding Effect. Subject to the restrictions on assignment contained in
Section 11.3, this Agreement shall be binding on and shall inure to the benefit
of the parties to it and their respective legal representatives, successors and
assigns.
11.3 Assignment. This Agreement may not be assigned by Buyer without
Seller's prior written consent which may be withheld in Seller's sole
discretion.
11.4 Severability. If any term, covenant, provision, paragraph or condition
of this Agreement shall be illegal, such illegality shall not invalidate the
whole Agreement, but, to the extent permitted by law, the Agreement shall be
construed to give effect to the intent manifested by the portion held
inoperative or invalid and the rights and obligations of the parties shall be
construed and enforced accordingly.
11.5 Entire Understanding. This Agreement represents the entire
understanding of Buyer and Seller and supersedes all prior and concurrent
written or oral agreements or representations, if any, relative to the subject
matter involved.
11.6 Amendments. This Agreement may not be modified, changed or
supplemented except by written instrument signed by both parties.
11.7 California Law. The interpretation and performance of this Agreement
shall be governed by the laws of the State of California applied to agreements
to be performed entirely within the State of California by residents of the
State of California.
11.8 Waiver. Other than deemed waivers provided for herein, all waivers by
either party shall be in writing. The waiver by either party of any breach of
any term, covenant or condition of this Agreement shall not be deemed a waiver
of such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition of this Agreement.
11.9 Notices. The notice provisions in the Lease are hereby incorporated
herein by this reference.
11.10 Captions. The captions inserted herein are inserted only as a matter
of convenience and for reference and in no way define, limit or describe the
scope of this Agreement or the intent of any of the provisions hereof.
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11.11 Exhibit. All exhibits and schedules referred to herein are
incorporated by reference as though fully set forth herein.
11.12 Time of the Essence. Time is of the essence in this Agreement and
failure to comply with this provision shall be a material breach of this
Agreement.
11.13 Attorneys' Fees. Should any party institute any action, proceeding,
suit, arbitration, appeal or other similar proceeding or other non-judicial
dispute resolution mechanism ("Action") to enforce or interpret this Agreement
or of any provision hereof, or for a declaration of rights hereunder, the
prevailing party in such Action shall be entitled to receive from the other
party(s) all reasonable attorneys' fees, accountants' fees, expert witness fees,
and any and all other similar fees, costs and expenses incurred by the
prevailing party in connection with the Action and preparations therefor
("Fees"). If any party files for protection under, or voluntarily or
involuntarily becomes subject to, any chapter of the United States Bankruptcy
Code or similar state insolvency laws, any other party shall be entitled to any
and all Fees incurred to protect such party's interest and other rights under
this Agreement, whether or not such action results in a discharge.
11.14 Counterparts. This Agreement may be executed in counterparts, each of
which when executed shall be deemed an original and all of which counterparts
taken together shall constitute but one and the same instrument. Signature pages
may be detached from the counterparts and attached to a single copy of this
Agreement to form one document.
11.15 Notice of Special Tax. Contemporaneously with the execution of this
Agreement, Buyer shall execute the Notice of Special Tax for Community
Facilities District No. 87-7, County of Orange, California, attached hereto
after the signature page.
11.16 Aircraft Environmental Impact Declaration. Pursuant to the Conditions
of Approval imposed by the County of Orange in connection with the Pacific
Commercentre, Seller makes the following Declaration:
We make this Declaration concerning aircraft environmental impact for the
purpose and subject to the same conditions and limitations as shown in that
certain notice concerning aircraft environmental impacts recorded December 1,
1983, as Instrument No. 83-549335 in the Official Records of Orange County,
California. The Pacific Commercentre property is subject to overflight, sight
and sound of aircraft operating from El Toro Marine Corps Air Station.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
"Buyer"
--------------------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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"Seller" Makena, Properties, a California corporation
By:
-------------------------------------
Xxxxxx Xxxxxx, President
[Parties must initial Section 3.5 and Section 9.1(b) and Buyer execute the
Notice of Special Tax following this page]
Acceptance:
Chicago Title Company
By:
------------------------------------
Xxxxxx Xxxxxxx, Escrow Officer
11
45
NOTICE OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 87-7
COUNTY OF ORANGE, CALIFORNIA
TO: THE PROSPECTIVE PURCHASER OF THE REAL PROPERTY KNOWN AS:
Xxx 00 xx Xxxxx Xxx Xx. 00000
THIS IS A NOTIFICATION TO YOU PRIOR TO YOUR ENTERING INTO A CONTRACT TO
PURCHASE THIS PROPERTY. THE SELLER IS REQUIRED TO GIVE YOU THIS NOTICE AND TO
OBTAIN A COPY SIGNED BY YOU TO INDICATE THAT YOU HAVE RECEIVED AND READ A COPY
OF THIS NOTICE.
(1) This property is subject to a special tax, which is in addition to the
regular property taxes and any other charges, fees, special taxes and benefit
assessments on the parcel. It is imposed on this property because it is a new
development, and may not be imposed generally upon property outside of this new
development. If you fail to pay this tax when due each year, the property may be
foreclosed upon and sold. The tax is used to provide public facilities or
services that are likely to particularly benefit the property. YOU SHOULD TAKE
THIS TAX AND THE BENEFITS FROM THE FACILITIES AND SERVICES FOR WHICH IT PAYS
INTO ACCOUNT IN DECIDING WHETHER TO BUY THIS PROPERTY.
(2) Since this parcel is currently Undeveloped Property, the maximum
special tax which may be levied against this parcel to pay for public facilities
and services is $10,432.69 per acre during the 1994-1995 tax year. If this
parcel was Developed Property (i.e., if a building permit had been issued by
March 1, 1994), then the maximum special tax which could have been levied
against this parcel to pay for public facilities and services during the
1994-1995 tax year would have been the greater of (a) $0.27 per square foot of
land or (b) $0.70 per square foot of improvements. This amount will be increased
by 3.5 percent per year after that. The special tax will be levied each year
until all of the authorized facilities are built and all special tax bonds are
repaid and may be levied forever thereafter to pay for ongoing service costs.
(3) The authorized facilities and fees which are being paid for by the
special taxes, and by the money received from the sale of bonds which are being
repaid by the special taxes, are:
Water and sewer acreage fees and the construction, purchase, modification,
expansion, improvement or rehabilitation of a local and regional park, fire
stations, sheriff substation, library, storm drains and the roadway improvements
to be constructed as part of the Foothill Circulation Phasing Program, which
roadway improvements include all related work for grading, paving, drainage,
sewer and water facilities and utilities, together with improvements to
intersections and other appurtenant work.
The facilities may not yet have all been constructed or acquired and it is
possible that some may never be constructed or acquired.
In addition, the special taxes may be used to pay for costs of the
following services:
46
Police protection, fire protection, ambulance, paramedic, flood and storm
protection, recreation program, library, park and open space services,
including, but not limited to, the operation and maintenance of storm drains,
parks and parkways.
YOU MAY OBTAIN A COPY OF THE RESOLUTION OF FORMATION WHICH AUTHORIZED
CREATION OF THE COMMUNITY FACILITIES DISTRICT AND WHICH SPECIFIES MORE PRECISELY
HOW THE SPECIAL TAX IS APPORTIONED AND HOW THE PROCEEDS OF THE TAX WILL BE USED,
FROM THE COUNTY OF ORANGE COUNTY ADMINISTRATIVE OFFICE BY CALLING (714)
834-3055. THERE MAY BE A CHARGE FOR THIS DOCUMENT NOT TO EXCEED THE REASONABLE
COST OF PROVIDING THE DOCUMENT.
I (WE) ACKNOWLEDGE THAT I (WE) HAVE READ THIS NOTICE AND RECEIVED A COPY OF
THIS NOTICE PRIOR TO ENTERING INTO A CONTRACT TO PURCHASE OR DEPOSIT RECEIPT
WITH RESPECT TO THE ABOVE-REFERENCED PROPERTY. I (WE) UNDERSTAND THAT I (WE) MAY
TERMINATE THE CONTRACT TO PURCHASE OR DEPOSIT RECEIPT WITHIN THREE DAYS AFTER
RECEIVING THIS NOTICE IN PERSON OR WITHIN FIVE DAYS AFTER IT WAS DEPOSITED IN
THE MAIL BY GIVING WRITTEN NOTICE OF THAT TERMINATION TO THE OWNER, SUBDIVIDER
OR AGENT SELLING THE PROPERTY.
DATE: [EFFECTIVE DATE] By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
47
EXHIBIT A
XXX 00 XX XXXXX XX. 00000, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS
SHOWN ON A MAP RECORDED IN BOOK 647, PAGES 23 THROUGH 32 INCLUSIVE OF
MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT AN UNDIVIDED HALF INTEREST IN AND TO ANY AND ALL MINERALS, WITHOUT
LIMITATION, ALL OIL, GAS, HYDROCARBON AND SIMILAR RIGHTS, AND ALL WATER, WATER
RIGHTS, GEOTHERMAL STEAM AND STEAM POWER, WITHIN OR UNDERLYING SUCH REAL
PROPERTY, TOGETHER WITH THE PERPETUAL RIGHT OF DEVELOPMENT THEREOF; PROVIDED,
HOWEVER, THAT THE RIGHTS HEREIN CONVEYED DO NOT INCLUDE THE RIGHT TO ENTER UPON
THE SURFACE AND TOP 500 FEET OF THE SUBSURFACE OF SUCH REAL PROPERTY, AS
PROVIDED IN DEED RECORDED JULY 3,1979 IN BOOK 13215, PAGE 646, OFFICIAL RECORDS,
AS INSTRUMENT NO. 3449.
ALSO EXCEPT AN UNDIVIDED HALF INTEREST IN AND TO ANY AND ALL MINERALS LOCATED
WITHIN THE REAL PROPERTY HEREINAFTER DESCRIBED, INCLUDING, WITHOUT LIMITATION,
ALL OIL, GAS, HYDROCARBON AND SIMILAR RIGHTS, AND ALL WATER, WATER RIGHTS,
GEOTHERMAL STEAM AND STEAM POWER, WITHIN OR UNDERLYING SUCH REAL PROPERTY,
TOGETHER WITH THE PERPETUAL RIGHT OF DEVELOPMENT THEREOF; PROVIDED, HOWEVER,
THAT THE RIGHTS HEREIN CONVEYED DO NOT INCLUDE THE RIGHT TO ENTER UPON THE
SURFACE AND TOP 500 FEET OF THE SUBSURFACE OF SAID REAL PROPERTY, AS PROVIDED IN
DEED RECORDED JULY 3,1979 IN BOOK 13215, PAGE 649, OFFICIAL RECORDS, AS
INSTRUMENT NO. 3450.
48
EXHIBIT B
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
-----------------------------------
-----------------------------------
-----------------------------------
--------------------------------------------------------------------------------
(Space above this line for Recorder's use)
Transfer tax not to be shown of public record.
See attached statement submitted herewith.
GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
____________ ("Grantor"), hereby grants to _________ ("Grantee"), all that
certain real property (the "Land") located in the County of Orange, State of
California, and described on Exhibit A attached hereto and incorporated herein
by this reference; subject, however, to: (a) taxes and assessments, both general
and special, not now due and payable; (b) building and zoning ordinances, laws,
regulations and restrictions by municipal or other governmental authority; (c)
any and all leases, easements, rights-of-way, encumbrances, conditions,
covenants, restrictions, reservations and exceptions of record; and (d) all
other matters affecting title to the Land, whether or not of record including,
but not limited to, road, highway, pipeline, railroad and utility easements
which would be disclosed by a survey and inspection of the Property.
SUBJECT TO the following prohibition: Construction of a "self storage
project" on some or all of the Land is prohibited without the consent of the
owner of Xxx 00 xx Xxxxx 00000 ("Benefited Lot"). Such prohibition shall
commence on September 5, 1995 and shall terminate on the earlier of (i) the
later of termination of the CC&R or March 22, 2007, or (ii) December 31, 1997 if
a self storage project having not less than 75,000 gross square feet of storage
units has not been constructed on the Benefited Lot and a certificate of
occupancy issued by such date. The term "self storage project" means a project
having more than 10,000 gross square feet of individual storage rental units,
partitioned for the exclusive use of one tenant, with separate secure access.
"CC&R" means the Declaration of Covenants, Conditions and Restrictions for
Pacific Commercentre between LADCO and Pacific Commercentre Partners (the
"Original CC&R"), recorded on January 10, 1991, as Document No. 91-013945 in the
Official Records of Orange County, California (the "Official Records"), as
amended by that First Amendment to the Original CC&R, dated as of October 2,
1991, and recorded as Document No. 91-540892 in the Official Records, that
Second Amendment to the Original CC&R dated as of September 2, 1992, and
recorded as Document No. 92-606715 in the Official Records and that Third
Amendment to the Original CC&R dated as of April 30, 1993, and recorded as
Document No. 00-0000000 in the Official Records.
Dated: 199 .
------------------------ --- --------------------------------------
By:
-------------------------------------
49
EXHIBIT C
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
-----------------------------------
-----------------------------------
-----------------------------------
--------------------------------------------------------------------------------
(Space above this line for Recorder's use)
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ("Agreement") is made as of __________,
199_ , by and between ("Assignee"), and _________________________ ("Assignor").
RECITALS
A. Assignor owns certain real property in Lake Forest, California described
on Exhibit A hereto (the "Property"), being a portion of that development
commonly known as Pacific Commercentre. In connection with the operation of the
Property, Assignor is a party to the certain agreements ("Contracts") described
below.
B. Assignor and Assignee entered into that certain Sale Agreement dated as
of _________________________, 199__, ("Purchase Agreement"), pursuant to which
Assignee has agreed to purchase the Property and assume the Contracts.
AGREEMENT
For valuable consideration, receipt of which is acknowledged, Assignor and
Assignee agree as follows:
1. Assignor grants, sells, transfers and assigns to Assignee, as of the
date hereof, all of Assignor's right, title and interest in and to the following
contracts to the extent they relate to the development, use and operation of the
Property:
a. Obligation to implement a transportation management program complying
with Condition of Approval No. 5, Board of Supervisors Resolution No. 87 1065,
County of Orange.
b. Foothill Circulation Phasing Plan Fee Credit Agreement No. D89-294
between PCP and the County of Orange, approved June 26, 1990.
c. Fee Credit Agreement (Foothill Transportation Corridor) No. D89-305B
between the Foothill/Eastern Transportation Corridor Agency, PCP and the County
of Orange, approved July 17, 1990.
50
d. The Standard Industrial/Commercial Single Tenant Lease - Net (American
Industrial Real Estate Association (1990)) between Assignor and Assignee dated
as of November 1, 1996, as amended from time to time.
Assignee assumes all of Assignor's obligations arising on and after the
date hereof under, or in connection with, the Contracts to the extent they
relate to the Property, subject to the terms thereof. Assignee agrees to execute
any and all assignment and/or assumption agreements required by public agencies
to evidence Assignee's assumption of such obligations and the release of
Assignor from the duty to perform such obligations. Assignee shall cooperate
with Assignor in acknowledging such notices as may be required by law in
connection with the acquisition of the Property.
2. The Contracts are sold, conveyed and assigned "as is," "where is," "with
all faults" and without any warranty or representation, express or implied, of
any nature or sort, including, without limitation, any warranty of
merchantability, fitness of use for a particular purpose, or otherwise, except
as may specifically be provided otherwise in the Purchase Agreement.
3. Should either party hereto institute any legal action or proceeding to
enforce or interpret any provisions of this Agreement, the prevailing party
shall be entitled to receive from the losing party such amount as the court may
adjudge to be reasonable attorneys' fees for the services rendered to the
prevailing party in such action or proceeding.
4. This Agreement shall be binding on, and inure to the benefit of, the
parties hereto, their successors in interest and assigns, subject, however, to
the provisions of the Contracts regarding assignment.
5. The interpretation and performance of this Agreement shall be governed
by the laws of the State of California applied to agreements to be performed
entirely within the State of California by residents of the State of California.
ASSIGNEE:
------------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ASSIGNOR:
------------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
51
EXHIBIT D
SPECIAL TAX DISCLOSURE AGREEMENT RE
COMMUNITY FACILITIES DISTRICT NO. 87-7
OF THE COUNTY OF ORANGE (LOS ALISOS)
THIS SPECIAL TAX DISCLOSURE AGREEMENT RE COMMUNITY FACILITIES DISTRICT NO.
87-7 OF THE COUNTY OF ORANGE (LOS ALISOS) (the "Agreement") is entered into and
is effective as of the ____ day of __________ 1995, by and between the COUNTY OF
ORANGE, a political subdivision of the State of California (the "County"), for
itself and on behalf of Community Facilities District No. 87-7 of the County of
Orange (Los Alisos) (the "District"), and _____________________ a
__________________ (the "Company").
RECITALS
A. The Board of Supervisors of the County of Orange (the "Board of
Supervisors") has formed and established the District pursuant to the provisions
of the Xxxxx-Xxxx Community Facilities Act of 1982, Chapter 2.5 (commencing with
Section 53311) of Part I of Division 2 of Title 5 of the California Government
Code (the "Act"). The parties hereto acknowledge that the District has been
established as a legally constituted governmental entity pursuant to the Act.
The land included within the District is described on the map attached to
Resolution No. 88-750 adopted by the Board of Supervisors on May 24, 1988, and
subsequently recorded with the County Recorder on May 27, 1988, in Book 41, Page
14 of the maps of assessment and community facilities districts.
B. The Company owns a portion of the land within the District and
acknowledges that the land is subject to the levy of a special tax (the "Special
Tax") in accordance with the Rate and Method of Apportionment contained in
Resolution No. 881007 adopted by the Board of Supervisors on June 29, 1988.
C. The purpose of this Agreement is to set forth the provisions under which
the Company will provide for disclosure of the Special Tax to prospective
purchasers of its land.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereto agree as follows:
1. Recitals. Each of the above recitals is incorporated herein and is
true and correct.
2. Disclosure of Special Tax.
(a) In consideration of the County's and the District's willingness
to permit the financing of certain public improvements through the levy of the
Special Tax, and, in certain cases, through the issuance of bonds by the
District pursuant to the provisions of the Act, the Company agrees to provide
disclosure of the Special Tax in accordance with this Agreement; provided,
however, that nothing herein shall entitle the Company to compel the County or
the District to levy the Special Tax or issue bonds in any particular amount,
which actions shall remain within the sole discretion of the
52
County and the District. The Company covenants to deliver to each person or
entity buying any land or improvements within the District from the Company the
disclosure notice attached hereto as Attachment I and incorporated by reference
herein (the "Special Tax Notice"). In all cases, the Special Tax Notice shall be
provided prior to the opening of escrow for the purchase of any land or
improvements and shall be signed by all buyers prior to any party becoming
contractually obligated to purchase either land or improvements. The provision
of the Special Tax Notice to buyers of new homes shall be in addition to the
disclosure provided by any applicable Department of Real Estate reports. The
Company shall provide copies of the Special Tax Notices, signed by each buyer of
any land or improvements, to the County promptly upon execution by the buyer.
The Company shall include the Special Tax Notice in all of its applications for
Final Subdivision Reports required by the California Department of Real Estate.
(b) The Company covenants that, with respect to sales of real
property within the District by the Company to persons or entities who intend to
construct residential units or commercial or industrial facilities for sale, the
Company shall require as a condition precedent to its obligation to close an
escrow for the sale of real property that the buyer execute an agreement with
the County regarding disclosure of the Special Tax and that such agreement shall
be in the form of this Agreement.
3. Indemnification and Hold Harmless. The Company hereby assumes the
defense of, and indemnifies and saves harmless the County, the District and each
of their respective officers, directors, employees and agents, from and against
all actions, damages, claims, losses or expenses of every type and description
to which they may be subjected or put, by reason of, or resulting form, the
failure by the Company to comply with this Agreement, provided that nothing in
this Section 3 shall be understood or construed to mean that the Company agrees
to indemnify the County or the District, or any of their respective officers,
directors, employees or agents, for any negligent or wrongful acts or omissions
to act of the County or the District, or any of their respective officers,
directors, employees or agents.
4. Governing Law. This Agreement and any dispute arising hereunder shall
be governed by and interpreted in accordance with the laws of the State of
California.
5. Waiver. Failure by a party to insist upon the strict performance of
any of the provisions of this Agreement by the other party, or the failure by a
party to exercise its rights upon the default of the other party, shall not
constitute a waiver of such party's right to insist and demand strict compliance
by the other party with the terms of this Agreement thereafter.
6. Singular and Plural; Gender. As used herein, the singular of any word
includes the plural, and terms in the masculine gender shall include the
feminine.
7. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original. The delivery of an executed copy of this
Agreement by the Company to an escrow company shall be deemed to be an offer by
the Company to enter into this Agreement and shall be irrevocable by the Company
for a period of forty (40) days. This Agreement shall become binding upon the
County and the District upon execution by the County Administrative Officer or
his designee.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year written below.
Date: COUNTY OF ORANGE
---------------------------
53
By:
-------------------------------------
County Administrative Officer
COMMUNITY FACILITIES
DISTRICT NO. 87-7 OF THE
COUNTY OF ORANGE (LOS ALISOS)
By:
-------------------------------------
County Administrative Officer
APPROVED AS TO FORM:
XXXXXX XXXXXX,
County Counsel
By:
----------------------------------
Dated: , 19
----------------------- ----
----------------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
54
Attachment 1
NOTICE OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 87-7
COUNTY OF ORANGE, CALIFORNIA
TO: THE PROSPECTIVE PURCHASER OF THE REAL PROPERTY KNOWN AS:
Lot ___________ of Tract Map No. __________________
THIS IS A NOTIFICATION TO YOU PRIOR TO YOUR ENTERING INTO A CONTRACT TO
PURCHASE THIS PROPERTY. THE SELLER IS REQUIRED TO GIVE YOU THIS NOTICE AND TO
OBTAIN A COPY SIGNED BY YOU TO INDICATE THAT YOU HAVE RECEIVED AND READ A COPY
OF THIS NOTICE.
(1) This property is subject to a special tax, which is in addition to
the regular property taxes and any other charges, fees, special taxes and
benefit assessments on the parcel. It is imposed on this property because it is
a new development, and may not be imposed generally upon property outside of
this new development. If you fail to pay this tax when due each year, the
property may be foreclosed upon and sold. The tax is used to provide public
facilities or services that are likely to particularly benefit the property. YOU
SHOULD TAKE THIS TAX AND THE BENEFITS FROM THE FACILITIES AND SERVICES FOR WHICH
IT PAYS INTO ACCOUNT IN DECIDING WHETHER TO BUY THIS PROPERTY.
(2) Since this parcel is currently Undeveloped Property, the maximum
special tax which may be levied against this parcel to pay for public facilities
and services is $10,432.69 per acre during the 1994-1995 tax year. If this
parcel was Developed Property (i.e., if a building permit had been issued by
March 1, 1994), then the maximum special tax which could have been levied
against this parcel to pay for public facilities and services during the
1994-1995 tax year would have been the greater of ( a) $0.27 per square foot of
land or (b) $0.70 per square foot of improvements. This amount will be increased
by 3.5 percent per year after that. The special tax will be levied each year
until all of the authorized facilities are built and all special tax bonds are
repaid and may be levied forever thereafter to pay for ongoing service costs.
(3) The authorized facilities and fees which are being paid for by the
special taxes, and by the money received from the sale of bonds which are being
repaid by the special taxes, are:
Water and sewer acreage fees and the construction, purchase,
modification, expansion, improvement or rehabilitation of a local and regional
park, fire stations, sheriff substation, library, storm drains and the roadway
improvements to be constructed as part of the Foothill Circulation Phasing
Program, which roadway improvements include all related work for grading,
paving, drainage, sewer and water facilities and utilities, together with
improvements to intersections and other appurtenant work.
The facilities may not yet have all been constructed or acquired and it
is possible that some may never be constructed or acquired.
In addition, the special taxes may be used to pay for costs of the
following services:
55
Police protection, fire protection, ambulance, paramedic, flood and
storm protection, recreation program, library, park and open space services,
including, but not limited to, the operation and maintenance of storm drains,
parks and parkways.
YOU MAY OBTAIN A COPY OF THE RESOLUTION OF FORMATION WHICH AUTHORIZED
CREATION OF THE COMMUNITY FACILITIES DISTRICT AND WHICH SPECIFIES MORE PRECISELY
HOW THE SPECIAL TAX IS APPORTIONED AND HOW THE PROCEEDS OF THE TAX WILL BE USED,
FROM THE COUNTY OF ORANGE COUNTY ADMINISTRATIVE OFFICE BY CALLING (714)
834-3055. THERE MAY BE A CHARGE FOR THIS DOCUMENT NOT TO EXCEED THE REASONABLE
COST OF PROVIDING THE DOCUMENT.
I (WE) ACKNOWLEDGE THAT I (WE) HAVE READ THIS NOTICE AND RECEIVED A COPY
OF THIS NOTICE PRIOR TO ENTERING INTO A CONTRACT TO PURCHASE OR DEPOSIT RECEIPT
WITH RESPECT TO THE ABOVE-REFERENCED PROPERTY. I (WE) UNDERSTAND THAT I (WE) MAY
TERMINATE THE CONTRACT TO PURCHASE OR DEPOSIT RECEIPT WITHIN THREE DAYS AFTER
RECEIVING THIS NOTICE IN PERSON OR WITHIN FIVE DAYS AFTER IT WAS DEPOSITED IN
THE MAIL BY GIVING WRITTEN NOTICE OF THAT TERMINATION TO THE OWNER, SUBDIVIDER
OR AGENT SELLING THE PROPERTY.
DATE: [EFFECTIVE DATE]
___________________________________
By:________________________________
Name:______________________________
Title:_____________________________
56
EXHIBIT E
GENERAL ESCROW INSTRUCTIONS
The following instructions to Escrow Holder are applicable:
1. Escrow Holder shall prorate all items as of the Closing Date,
assuming a 30 day month, using the information contained in the last available
tax statement without regard to any reassessments or subsequent changes, and
association statements delivered into escrow for proration purposes.
2. If any check submitted to escrow is dishonored when presented for
payment, Escrow Holder shall notify Buyer and Seller of such non payment.
3. All funds delivered to Escrow shall be deposited with other escrow
funds in a general escrow account or accounts of Escrow Holder with any state or
national bank. Escrow Holder shall have no obligation to account for the value
of any escrow-related accounting services and incidental benefits that may be
provided to Escrow Holder by any depository bank. All disbursements shall be
made by Escrow Holder check, unless otherwise instructed. Escrow Holder shall
not be responsible for any delay in closing if funds received by Escrow Holder
are not available for immediate withdrawal.
4. The phrase "close of escrow" (or XXX) as used in this Exhibit means
the date on which documents are recorded, unless otherwise specified.
5. Recordation of any instruments delivered through escrow, if necessary
or proper for the issuance of the policy of title insurance called for, is
authorized.
6. No examination or insurance as to the amount or payment of personal
property taxes is required.
7. If a demand to cancel escrow is submitted after the Closing Date, the
party so requesting Escrow Holder to cancel escrow shall file notice of demand
to cancel in Escrow Holder's office in writing. Escrow Holder shall within three
(3) Business Days thereafter mail by certified mail one copy of such notice to
each of the other parties.
8. In the event Escrow Holder receive or become aware of any conflicting
demands or claims with respect to the escrow or the rights of any of the parties
hereto, or any money or property deposited herein, Escrow Holder shall have the
absolute right at its option to discontinue any or all further acts until such
conflict is resolved.
9. Escrow Holder is released from and shall have no liability,
obligation or responsibility with respect to: withholding of funds pursuant to
Section 1445 of the Internal Revenue Code of 1954 as amended, and to Sections
18805 and 26131 of the California Revenue and Taxation Code; advising the
parties as to the requirements of Section 1445; determining whether the
transferor is a foreign person or a non-resident under such Sections; or
obtaining a non foreign affidavit or other exemption from withholding under said
Sections nor otherwise making any inquiry concerning compliance with such
Sections by any party to the transaction.
57
10. Escrow Holder is authorized to destroy or otherwise dispose of any
and all documents, papers, instructions, correspondence and other material
pertaining to this escrow at the expiration of six years (6) from the close of
escrow or cancellation thereof, without liability and without further notice.
11. Buyer and Seller acknowledge that Escrow Holder does not provide
legal advice nor has it made any investigation, representations or assurances
whatsoever regarding the legal aspects or compliance of this transaction with
any tax, securities or other state or federal laws. It is recommended that the
parties obtain independent legal counsel as to such matters.
58
Exhibit C to Lease Addendum
Memorandum of Option
Recording Requested by and when recorded mail to:
________________________________________________________________________________
MEMORANDUM OF OPTION
This MEMORANDUM OF OPTION, is dated for convenience and reference
_________, 1997, by Makena Properties, Inc. a California corporation
("Optionor") for the benefit of Ansys, Inc., a California corporation
(hereinafter "Optionee").
Optioner has granted Optionee an option ("Option") to purchase the real
property described on Exhibit A attached hereto and incorporated herein by this
reference, pursuant to the terms and conditions of that certain Standard
Industrial/Commercial Single Tenant Lease - Net (American Industrial Real Estate
Association (1990)) between Optionor and Optionee dated as of November 1, 1996
("Lease"). The purpose of this Memorandum of Option is to give notice of the
existence of such Option. In the event of any conflict between the provisions of
this Memorandum of Option and the provisions of said incorporated Option, the
provisions of said incorporated Option shall control. Although the expiration of
the Option is currently estimated to be significantly earlier, this Memorandum
of option shall expire automatically and by of no further force or effect upon
December 31, 2000.
IN WITNESS WHEREOF, Optionor has executed this Memorandum of Option as
of the date set forth above.
Makena Properties, Inc., a California
corporation
By:_____________________________________
Title:__________________________________
59
Exhibit D to Lease Addendum
PRELIMINARY PLANS
