EXHIBIT 10.40
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
1. BASIC PROVISIONS ("BASIC PROVISIONS")
PARTIES: This Lease ("LEASE"), dated for reference purposes only February __,
2004, is made by and between Reliance Parkway Capital LP, a Texas limited
partnership, or its assigns ("LESSOR") and Advanced Fibre Access Corporation, a
Delaware corporation ("LESSEE") (collectively the "PARTIES," or individually a
"PARTY").
PREMISES: That certain real property, including all improvements therein or to
be provided by Lessor under the terms of this Lease, and commonly known as 0000
Xxxxxxxx Xxxxxxx, located in the City of Bedford, County of Tarrant, State of
Texas, and generally described as all of the space within an approximately
165,867 square foot industrial building and the use of the existing parking
areas within the shaded area on the site plan attached as Exhibit "A" hereto,
located on an approximately 22.8 acre parcel of land, as indicated on Exhibit
"A" ("PREMISES"). (See also Paragraph 2).
1.1. TERM: Four (4) years and 0 months ("TERM") commencing on the date of
the closing of the purchase of the Premises by Lessor pursuant to the Purchase
Agreement (as defined in Paragraph 23) ("COMMENCEMENT DATE") and ending on the
last day of the calendar month that is 48 months following the Commencement Date
("EXPIRATION DATE"). (See also Paragraph 3 and Paragraph 23). Promptly following
the closing of the purchase of the Premises pursuant to the Purchase Agreement,
the Parties will execute and deliver to each other a memorandum setting forth
the actual calendar day of the Commencement Date hereunder, which memorandum
shall be deemed to modify this Lease and constitute a part thereof.
1.2. EARLY POSSESSION: Not applicable.
1.3. INITIAL BASE RENT: $63,582.35 per month ("BASE RENT"), payable in
advance on or before the Commencement Date and on the first day of each month
thereafter during the Term (See also Paragraph 4)
1.4. BASE RENT PAID UPON EXECUTION: Not applicable.
1.5. SECURITY DEPOSIT: $63,582.35 on or before the Commencement Date
("SECURITY DEPOSIT"). (See also Paragraph 5)
1.6. AGREED USE: Office, warehousing and product testing of fiber optic
cabling and related uses (See also Paragraph 6)
1.7. INSURING PARTY. Lessor is the "INSURING PARTY" unless otherwise
stated herein. (See also Paragraph 8)
REAL ESTATE BROKERS (see also Paragraph 15): Not applicable.
1.8. GUARANTOR. The obligations of the Lessee under this Lease are to be
guaranteed by Advanced Fibre Communications, Inc., a Delaware corporation
("GUARANTOR")
1.9. ADDENDA AND EXHIBITS. Attached hereto is Exhibit A, which
constitutes a part of this Lease.
2. PREMISES.
2.1. LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of size set forth in this Lease, or that may have
been used in calculating rental, is an approximation that the Parties agree is
reasonable and the rental based thereon is not subject to revision whether or
not the actual size is more or less.
2.2. CONDITION. THE PREMISES IS BEING DELIVERED TO LESSEE IN AS IS, WHERE
IS CONDITION, AND LESSOR IS NOT MAKING ANY REPRESENTATIONS OR WARRANTIES AS TO
THE HABITABILITY OF THE PREMISES OR THE SUITABILITY OF THE PREMISES GENERALLY OR
FOR ANY PARTICULAR PURPOSE. Lessee acknowledges that Lessee is a former owner
and continuing lessee of the Premises, and, as such, is familiar with the
condition of the Premises and the property on which the Premises are situated.
Without limitation of the foregoing, Lessor makes no warranty concerning the
condition of the existing electrical, plumbing, fire sprinkler, lighting,
heating, ventilating and air conditioning systems ("HVAC"), loading doors, if
any ("BASE BUILDING SYSTEMS"), nor regarding the structural elements of the
roof, bearing walls and foundation of any buildings on the Premises ("BASE
BUILDING STRUCTURE") (the Base Building Systems and the Base Building Structure,
collectively, the "BUILDING"). Except as expressly provided in this Lease, the
failure of any of the Base Building Systems, Base Building Structure or the HVAC
as a result of any condition that exists as of the Commencement Date, or
resulting from any condition that exists as of the Commencement Date shall not
constitute a breach or default by Lessor hereunder, nor give rise to any right
of Lessee to not pay Rent or terminate this Lease, but rather Lessee shall be
solely responsible for the repair and restoration of the same to good, operable
and useable condition, except for any repairs or restoration attributable to (i)
the gross negligence or willful misconduct of Lessor or any occupant of the
Premises prior to Lessee's occupancy of the Premises or (ii) latent defects in
the Premises that are not actually known to Lessee or would not have been
discovered by Lessee with reasonable diligence.
2.3. COMPLIANCE. Lessee further acknowledges that since Lessee is a
former owner and continuing lessee of the property, and, as such, is familiar
with the condition of the Premises and the property on which the Premises are
situated Lessor is not making any warranty concerning whether or not the Base
Building Systems and Base Building Structure comply with all applicable laws,
covenants or restrictions of record,
STANDARD INDUSTRIAL LEASE DATED FEB 1998
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building codes, regulations and ordinances (including, without limitation, the
Americans with Disabilities Act of 1990, as amended) ("APPLICABLE REQUIREMENTS")
in effect on the date of execution of this Lease. Lessee is responsible for
determining whether or not the Premises are in compliance with Applicable
Requirements and whether zoning is appropriate for Lessee's intended use, and
acknowledges that past uses of the Premises may no longer be allowed under
Applicable Requirements. If following the Commencement Date any non-compliance
of the Premises with Applicable Requirements exists that must be corrected for
Lessee's continued use of the Premises, the cost of bringing the Premises into
compliance with Applicable Requirements shall be the sole obligation of Lessee
at Lessee's sole cost and expense, and without regard to whether such
non-compliance existed at the Commencement Date or arose thereafter, except as
provided in the following sentence. If the Applicable Requirements are hereafter
changed (as opposed to being in existence at the Commencement Date, which is
addressed in Paragraphs 2.3(a), 6.2(e) and 6.3 below) so as to require during
the term of this Lease the construction of an addition to or an alteration of
the Building, the remediation of any Hazardous Substance, or the reinforcement
or other physical modification of the Building ("CAPITAL EXPENDITURE"), Lessor
and Lessee shall allocate the cost of such work as follows:
(a) Subject to Paragraph 2.3(b) below, if such Capital Expenditures
are required as a result of (i) the specific and unique use of the Premises by
Lessee as compared with uses by tenants in general or (ii) improvements made or
proposed to be made by Lessee, Lessee shall be fully responsible for the cost
thereof, provided, however that if such Capital Expenditure is required during
the last eighteen (18) months of this Lease and the cost thereof exceeds three
(3) months' Base Rent. Lessee may instead terminate this Lease unless Lessor
notifies Lessee, in writing, within ten (10) days after receipt of Lessee's
termination notice that Lessor has elected to pay the difference between the
actual cost thereof and the amount equal to three (3) months' Base Rent. If
Lessee elects termination, Lessee shall immediately cease the use of the
Premises which requires such Capital Expenditure and deliver to Lessor written
notice specifying a termination date at least ninety (90) days thereafter. Such
termination date shall, however, in no event be earlier than the last day that
Lessee could legally utilize the Premises without commencing such Capital
Expenditure.
(b) If such Capital Expenditure is not the result of (i) the
specific and unique use of the Premises by Lessee (such as, governmentally
mandated seismic modifications) or (ii) improvements made or proposed to be made
by Lessee, then Lessor and Lessee shall allocate the obligation to pay for such
costs pursuant to the provisions of Paragraph 7.1(c); provided, however, that if
such Capital Expenditure is required during the last eighteen (18) months of
this Lease, either party shall have the option to terminate this Lease upon
ninety (90) days prior written notice to the other party, unless the
non-terminating party notifies the terminating party, in writing, within ten
(10) days after receipt of the terminating party's termination notice, that the
non-terminating party will pay for such Capital Expenditure. If Lessor is the
terminating party in the immediately preceding sentence, then, notwithstanding
the foregoing, Lessee may remain in possession of the Premises beyond such
90-day period provided Lessee indemnifies Lessor for any liability incurred by
Lessor arising out of Lessee's continued occupancy of the Premises beyond such
90-day period.
2.4. ACKNOWLEDGMENTS. Lessee acknowledges that: (a) it has been advised
by Lessor and/or Brokers to satisfy itself with respect to the condition of the
Premises (including but not limited to the information technology
infrastructure, electrical, HVAC and other air-handling equipment, fire
sprinkler systems, security, environmental aspects, and compliance with
Applicable Requirements), and their suitability for Lessee's intended use, (b)
Lessee has made such investigation as it deems necessary with reference to such
matters and assumes all responsibility therefor as the same relate to its
occupancy of the Premises, and (c) neither Lessor, Lessor's agents, nor any
Broker has made any oral or written representations or warranties with respect
to said matters other than as set forth in this Lease.
3. TERM.
3.1. TERM. The Commencement Date, Expiration Date and Term of this Lease
are as specified in Paragraph 1.1.
4. RENT.
4.1. RENT DEFINED. All monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent
("RENT").
4.2. PAYMENT. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is due.
Rent for any period during the term hereof which is for less than one (1) full
calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Lessor at its address stated herein, by
wire transfer of funds as directed by Lessor in writing, or to such other
persons or place or different manner as Lessor may from time to time designate
in writing. Acceptance of a payment which is less than the amount then due shall
not be a waiver of Lessor's rights to the balance of such Rent, regardless of
Lessor's endorsement of any check so stating.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise commits
a Breach of this Lease (taking into account any applicable notice and cure
period), Lessor may, in addition to all other remedies available to Lessor at
law or in equity, 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
STANDARD INDUSTRIAL LEASE DATED FEB 1998
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Lessor for any liability, cost, expense, loss or damage which Lessor may suffer
or incur by reason thereof. If Lessor uses or applies all or any portion of said
Security Deposit, Lessee shall within thirty (30) days after written request
therefor deposit monies with Lessor sufficient to restore said Security Deposit
to the full amount required by this Lease. Lessor shall not be required to keep
the Security Deposit separate from its general accounts. Within fourteen (14)
days after the expiration or termination of this Lease, if Lessor elects to
apply the Security Deposit only to unpaid Rent, and otherwise within thirty (30)
days after the Premises have been vacated pursuant to Paragraph 7.4(c) below,
Lessor shall return that portion of the Security Deposit not used or applied by
Lessor. No part of the Security Deposit shall be considered to be held in trust,
to bear interest or to be prepayment for any monies to be paid by Lessee under
this Lease.
6. USE.
6.1. USE. Lessee shall use and occupy the Premises only for the Agreed
Use, and for no other purpose. Lessee shall not use or permit the Premises to be
used for any other purpose without Lessor's prior written consent, which shall
not unreasonably be withheld. Lessee shall not use or permit the use of the
Premises in a manner that is unlawful, creates damage, waste or a nuisance, or
that disturbs owners and/or occupants of, or causes damage to neighboring
properties.
6.2. HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE"
as used in this Lease shall mean any product, substance, or waste whose
presence, use, manufacture, disposal, transportation, or release, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, to
the environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substances shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, and/or crude oil or any products, by-products or fractions
thereof. Lessee shall not (i) engage in any activity in or on the Premises which
constitutes a Reportable Use of Hazardous Substances without (A) providing
Lessor with at least fifteen (15) days' prior written notice of Lessee's
intention to engage in such activity and (B) obtaining Lessor's express prior
written consent to such activity, which consent may not be unreasonably
withheld, or (ii) engage in any activity not in compliance with all material
Applicable Requirements. "REPORTABLE USE" shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, so long as such use
is in compliance with all Applicable Requirements and is not a Reportable Use.
Upon Lessor's prior written request, Lessee will provide to Lessor copies of all
Hazardous Substance manifests, inspection reports, permits and notices of
violation from all government authorities.
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause
to believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, other than as previously consented to by Lessor or as
otherwise permitted in clause (a) above, Lessee shall immediately give written
notice of such fact to Lessor, and provide Lessor with a copy of any report,
notice, claim or other documentation which it has concerning the presence of
such Hazardous Substance.
(c) LESSEE REMEDIATION. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee's expense, take all necessary investigatory and/or remedial
action, 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, that was caused or materially contributed to by Lessee, or pertaining
to or involving any Hazardous Substance brought onto the Premises during the
term of this Lease, by or for Lessee, or any third party. Notwithstanding the
foregoing, the obligations of Lessee pursuant to this clause (c) shall not apply
to spills or releases of Hazardous Substances in such amounts as do not require
remediation or cleanup under any Applicable Requirements.
(d) LESSEE INDEMNIFICATION. LESSEE SHALL INDEMNIFY, DEFEND AND HOLD
LESSOR, ITS AGENTS, EMPLOYEES, LENDERS AND GROUND LESSOR, IF ANY, HARMLESS FROM
AND AGAINST ANY AND ALL REASONABLY FORESEEABLE DAMAGES, LOSSES, LIABILITIES,
JUDGMENTS, CLAIMS, COSTS, EXPENSES, PENALTIES, AND ATTORNEYS' AND CONSULTANTS'
FEES ARISING OUT OF OR INVOLVING ANY HAZARDOUS SUBSTANCE BROUGHT, SPILLED OR
RELEASED IN, ON, UNDER OR ABOUT THE PREMISES IN VIOLATION OF APPLICABLE
REQUIREMENTS BY OR FOR LESSEE, WHETHER PRIOR TO COMMENCEMENT OF OR DURING THE
TERM OF THIS LEASE, WHICH ARE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF LESSEE, ITS AGENTS, EMPLOYEES, CONTRACTORS, REPRESENTATIVES OR
BUSINESS INVITEES (PROVIDED, HOWEVER, THAT LESSEE SHALL HAVE NO LIABILITY UNDER
THIS LEASE WITH RESPECT TO UNDERGROUND MIGRATION OF ANY HAZARDOUS SUBSTANCE
UNDER THE PREMISES FROM ADJACENT PROPERTIES). LESSEE'S OBLIGATIONS SHALL
INCLUDE, BUT NOT BE LIMITED TO, THE EFFECTS OF ANY CONTAMINATION OR INJURY TO
PERSON, PROPERTY OR THE ENVIRONMENT CREATED OR SUFFERED BY LESSEE, AND THE
REASONABLE COST OF INVESTIGATION, REMOVAL, REMEDIATION, RESTORATION AND/OR
ABATEMENT, AND SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE. NO
EXPIRATION, TERMINATION OR CANCELLATION OF THIS LEASE SHALL RELEASE LESSEE FROM
ITS OBLIGATIONS UNDER THIS LEASE WITH RESPECT TO HAZARDOUS SUBSTANCES, UNLESS
LESSEE AND
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 3 Initials____ ____
LESSOR ENTER INTO A RELEASE AGREEMENT IN CONNECTION THEREWITH AT THE TIME OF
SUCH EXPIRATION, TERMINATION OR CANCELLATION.
(e) LESSOR INDEMNIFICATION. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remediation, which are caused by the gross negligence or willful misconduct
of Lessor, its agents, employees, contractors, representatives or business
invitees (provided, however, that Lessor shall have no liability under this
Lease with respect to underground migration of any Hazardous Substances under
the Premises from adjacent properties following the Commencement Date). Lessor's
obligations, as and when required by the Applicable Requirements, shall include,
but not be limited to, the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of
this Lease.
(f) INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the
responsibility and pay for any investigations or remediation measures required
by governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior to the Commencement Date (provided,
however, that Lessee shall have no liability under this Lease with respect to
underground migration of any Hazardous Substances under the Premises from
adjacent properties), unless such remediation measure is required as a result of
Lessee's use (including "ALTERATIONS", as defined in paragraph 7.3(a) below) of
the Premises, in which event Lessee shall be responsible for such payment.
Lessee shall cooperate fully in any such activities at the request of Lessor,
including allowing Lessor and Lessor's agents to have reasonable access to the
Premises at reasonable times in order to carry out Lessor's investigative and
remedial responsibilities.
(g) LESSOR TERMINATION OPTION. Intentionally deleted.
(h) ASBESTOS NOTICE. BOTH STATE AND FEDERAL APPLICABLE LAW REQUIRES
DISCLOSURE OF ASBESTOS-CONTAINING CONSTRUCTION MATERIALS ("ACM") IN THE
BUILDING. THIS NOTIFICATION IS BEING GIVEN TO PROVIDE THE INFORMATION REQUIRED
UNDER SUCH LEGISLATION IN ORDER TO HELP YOU AVOID ANY UNINTENTIONAL CONTACT WITH
THE ACM, TO ASSURE THAT APPROPRIATE PRECAUTIONARY MEASURES ARE TAKEN BEFORE
DISTURBING ANY ACM, AND TO ASSIST YOU IN MAKING APPROPRIATE DISCLOSURES TO YOUR
EMPLOYEES AND OTHERS, IF ANY. BECAUSE OF THE PERIOD OF TIME THAT THE BUILDING
WAS CONSTRUCTED, THERE ARE ACM IN SOME COMPONENTS OF THE BUILDING. Copies of the
applicable environmental reports, O&M plans and or other applicable materials
(collectively "Asbestos Materials") are available through the office of the
Lessor for your review and application to operations and should be fully and
completely reviewed by your applicable representative. Because any tenant
alterations or other work at the property could disturb ACM and possibly release
asbestos fibers into the air, we require that you use only contractors who are
licensed and qualified to handle ACM. This includes major alterations, but might
also include such activities as drilling or boring holes, installing electrical,
telecommunications or computer lines, sanding floors, removing ceiling tiles or
other work which disturbs ACM. In many cases, such activities will not affect
ACM, but you must confirm same with a contractor licensed to handle ACM. Further
information concerning asbestos handling procedures in general can be obtained
by contacting local, state or federal public health agencies if you wish to
obtain further information regarding handling procedures and restrictions.
6.3. LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise provided in this Lease, Lessee shall, at Lessee's sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, without regard to whether said requirements are now in effect or
become effective after the Commencement Date. With respect to requirements of
any applicable fire insurance underwriter or rating bureau and the
recommendations of Lessor's engineers and/or consultants which relate in any
manner to the Premises, Lessee shall cooperate with such bureau or consultants
in good faith to address any reasonable concerns raised by such persons. Lessee
shall, within fifteen (15) days after receipt of Lessor's written request or
sooner if required by Applicable Requirements, provide Lessor with copies of all
permits and other documents, and other information evidencing Lessee's
compliance with any Applicable Requirements specified by Lessor, and shall
immediately upon receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Lessee or the
Premises to comply with any Applicable Requirements.
6.4. INSPECTION; COMPLIANCE. Lessor and Lessor's "LENDER" (as defined in
Paragraph 31.1 below) and consultants shall have the right to enter into
Premises at any time, in the case of an emergency, and otherwise at reasonable
times upon reasonable prior notice to Lessee, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with this
Lease; provided, however, that Lessor shall use good faith reasonable efforts
not to interfere with Lessee's operations on the Premises in the course of such
inspections. The cost of any such inspections shall be paid by Lessor, unless a
violation of Applicable Requirements, or a Hazardous Substance Condition (see
also Paragraph 9.1(d)) is found to exist or be imminent, or the inspection is
requested or ordered by a governmental authority. In such case, Lessee shall
upon request reimburse Lessor for the cost of such inspections, so long as such
inspection is reasonably related to the violation or contamination.
7. MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS AND
SERVICE CONTRACT COSTS.
7.1. LESSEE'S OBLIGATIONS.
(a) IN GENERAL. It is expressly understood and agreed that Lessor is
under no obligation to provide Lessee with any services (including, without
limitation, any security services) except as otherwise expressly set forth in
this Lease. Subject to the provisions of Paragraph 2.2 (Condition), 2.3
(Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2
(Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee
shall, at Lessee's sole expense, keep the Premises, Utility Installations
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(intended for Lessee's exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee's use, any prior use, the elements or the age of such portion
of the Premises), including, but not limited to, all equipment and facilities,
including but not limited to plumbing, HVAC equipment, electrical, lighting
facilities, boilers, pressure vessels, fixtures, interior walls, interior
surfaces of exterior walls, ceilings, floors, windows, doors, plate glass, and
skylights and the parking lot (in the same condition as of the Commencement
Date) but excluding any items which are the responsibility of Lessor pursuant to
Paragraph 7.2. Lessee, in keeping the Premises and the parking lot in good
order, condition and repair, shall exercise commercially reasonable maintenance
practices, specifically including, without limitation, the procurement and
maintenance of the service contracts required by Paragraph 7.1(b) below, and the
procurement of janitorial services through a contractor previously approved by
Lessor. Other than contractors approved by Lessor, no person may be on the roof.
If Lessee requires rail spur service, Lessee, at its sole cost and expense, must
inspect, repair and maintain the physical aspects of the rail spur, and must
comply with and renew, when necessary, directly with the applicable rail service
provider any rail spur service or switch track agreements for the Premises.
Lessee hereby acknowledges that the rail service is provided by Lessor "As-Is,"
"Where Is" without representation or warranty with all faults, and that any
representations or warranties set forth in Article 2 do not apply to the rail
service or the physical condition thereof, and that Lessee has fully satisfied
itself as to such condition of the physical state of the rail spur and the
availability of service for Lessee's needs.
(b) SERVICE CONTRACTS AND COSTS. Lessee shall, at Lessee's sole
expense, procure and maintain contracts, with copies to Lessor, in customary
form and substance for, and with contractors specializing and experienced in the
maintenance of the following equipment and improvements ("BASIC ELEMENTS"), if
any, if and when installed on the Premises: (i) HVAC and other air handling
equipment, (ii) boiler and pressure vessels, (iii) fire extinguishing systems,
including fire alarm and/or smoke detection, (iv) landscaping and irrigation
systems, (v) roof covering, membranes and drains including the portion thereof
constituting the Lessor Roof Replacement (as defined in Paragraph 7.2)(vi)
clarifiers (vii) utility feed to the perimeter of the Building, and (viii) any
other equipment, if reasonably required by Lessor.
(c) REPLACEMENT. Subject to Lessee's indemnification of Lessor as
set forth in Paragraph 8.7 below and the provisions of Paragraphs 7.1(e) and
7.2, and without relieving Lessee of liability resulting from Lessee's failure
to exercise and perform good maintenance practices, if one or more of the Basic
Elements (described in Paragraph 7.1(b)), and modified by the last sentence of
this Paragraph) cannot be repaired other than at a cost which is in excess of
20% of the cost of replacing such Basic Element, then such Basic Element shall
be replaced by Lessor in a good and workmanlike manner and as expeditiously as
reasonably possible, and the cost thereof shall be allocated between the Parties
as set forth in this Paragraph 7.1(c). Each Party shall provide notice to the
other of the need to repair or replace a Basic Element in accordance with this
Paragraph 7.2(c) as soon as reasonably practicable. Lessee shall only be
obligated to pay, each month during the remainder of the term of this Lease, on
the date on which Base Rent is due, an amount equal to the product of
multiplying the Lessee's portion of the cost of such replacement by a fraction,
the numerator of which is one, and the denominator of which is the number of
months remaining on the Lease Term. Lessee's portion of the cost of such
replacement is determined by multiplying the total cost of such replacement by a
fraction, the numerator of which is the number of months remaining in the Lease
Term, and the denominator of which is the number of months of the useful life of
such replacement as such useful life is determined by the Parties in their
reasonable judgment (including Interest on the unamortized balance as is then
commercially reasonable in the judgment of the Parties and their respective
accountants). Lessee reserves the right to prepay its obligation at any time.
The intent of this Paragraph 7.1(c) is that Lessee is solely responsible for the
pro rata portion of the cost of replacement attributed to the Lease Term. For
purposes of this Paragraph 7.1(c) (and only this Paragraph 7.1(c)), Basic
Elements shall also include exterior walls, structural internal walls and beams,
and foundation, but shall exclude HVAC and other air handling equipment.
(d) LESSEE'S RIGHT TO TERMINATE. Notwithstanding anything to the
contrary set forth herein, to the extent that Lessor (or Lender, as applicable)
fails to replace any Basic Element in the manner required by Paragraph 7.1(c)
and Lessee chooses not to perform such obligations of Lessor in accordance with
Paragraph 13.5(b) hereof, then, in addition to any other right or remedy set
forth herein, Lessee shall have the right to terminate this Lease and its
obligations hereunder effective upon thirty (30) days' written notice to Lessor.
(e) REPLACEMENT OF HVAC EQUIPMENT. Notwithstanding anything to the
contrary set forth in Paragraph 7.1(c), to the extent that the HVAC and other
air handling equipment on the Premises requires replacement consistent with an
obligation of replacement from Lessor as provided in Paragraph 7.1(c), at any
time during the Term, then Lessee provide Lessor with notice of the need for
such replacement as soon as reasonably practicable, and shall promptly replace
such equipment, as necessary, in accordance with the provisions of Paragraph
7.1(a). Lessor shall be responsible for the cost of such replacement, in an
aggregate amount not to exceed $200,000 (the "LESSOR'S HVAC SHARE"), and Lessee
shall be responsible for any costs of such replacement in excess of the Lessor's
HVAC Share. Lessor shall pay the Lessor's HVAC Share to Lessee within 30 days
after presentation to Lessor from Lessee of invoices, proof of payment or lien
releases, warranties, Lessee's certification that the work was completed, copies
of all contracts for work performed, and permits, if any, or governmental
consents required for such work
7.2. LESSOR'S OBLIGATIONS. Notwithstanding anything to the contrary in
Paragraph 7.1, Lessor shall have the obligation, at its sole cost and expense,
to replace the roof covering, membranes and drains of the
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 5 Initials____ ____
entire Premises, other than the portion of the roof covering consisting of
approximately 15,000 square feet located above the office area of the Premises
(the "LESSOR ROOF REPLACEMENT"). Lessor shall perform the Lessor Roof
Replacement in a good and workmanlike manner and as expeditiously as reasonably
possible following the Commencement Date, time being of the essence. Except for
the Lessor Roof Replacement, and subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 7.1(c) (Replacement), 7.1(e) (HVAC Equipment
Replacement), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by
the Parties hereto that Lessor have no other obligation, in any manner
whatsoever, to repair and maintain the Premises, or the equipment therein, all
of which obligations are intended to be that of the Lessee. Lessor has no
obligation to decorate, alter, repair or improve the Premises. It is the
intention of the Parties that the terms of this Lease govern the respective
obligations of the Parties as to maintenance and repair of the Premises, and
they expressly waive the benefit of any statute now or hereafter in effect to
the extent it is inconsistent with the terms of this Lease.
7.3. UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY INSTALLATIONS"
refers to all floor and window coverings, air lines, steam lines, power panels,
electrical distribution, security and fire protection systems, lighting
fixtures, HVAC and other air-handling equipment, plumbing, trash compactors and
fencing in or on the Premises. The term "TRADE FIXTURES" shall mean Lessee's
machinery, equipment and built-in furniture (including, without limitation,
communication systems and information technology infrastructure used by Lessee)
that can be removed without doing material damage to the foundation and
structural components of the Premises. The term "ALTERATIONS" shall mean any
modification of the improvements, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. "LESSEE OWNED ALTERATIONS AND/OR
UTILITY INSTALLATIONS" are defined as Alterations and/or Utility Installations
made by Lessee that are not owned by Lessor pursuant to Paragraph 7.4(a). Lessee
shall not make any Alterations or Utility Installations to the Premises without
Lessor's prior written consent. Lessee may, however, make non-structural Utility
Installations to the interior of the Premises (excluding the roof) without such
consent but upon notice to Lessor, as long as they are not visible from the
outside, do not involve puncturing, relocating or removing the roof or any
existing walls, and the cumulative cost thereof during this Lease as extended
does not exceed $50,000 in the aggregate or $10,000 in any one year.
(b) CONSENT. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. Consent shall be deemed
conditioned solely upon Lessee's: (i) acquiring all applicable governmental
permits, (ii) furnishing Lessor with copies of both the permits and the plans
and specifications prior to commencement of the work, (iii) compliance with all
conditions of said permits and other Applicable Requirements in a prompt and
expeditious manner and (iv) the making of such Alterations or Utility
Installations by Lessee does not, in Lessor's reasonable belief, materially
diminish the value of the Premises or materially increase the costs of insurance
carried by Lessor with respect to the Premises. Notwithstanding clause (iv)
above to the contrary, Lessor shall consent to any proposed Alterations and
Utility Installations by Lessee so long as Lessee agrees to remove such
Alteration or Utility Installation on the Expiration Date and to substantially
restore the Premises to their condition existing immediately prior to such
Alteration or Utility Installation. Any Alterations or Utility Installations
shall be performed in a workmanlike manner with good and sufficient materials.
Lessee shall promptly upon completion furnish Lessor with as-built plans and
specifications.
(c) LIENS; BONDS; AND INDEMNITY. Lessee shall pay, when due, all
claims for labor or materials furnished or alleged to have been furnished to or
for Lessee at or for use on the Premises, which claims are or may be secured by
any mechanic's or materialmen's lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (10) business days' notice
prior to the commencement of any work in, on or about the Premises, and Lessor
shall have the right to post notices of non-responsibility. If Lessee shall
contest the validity of any such lien, claim or demand, then Lessee shall, at
its sole expense defend and protect itself, Lessor and the Premises against the
same and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof.
7.4. OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to Lessor's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility Installations
existing on the Premises as of the Commencement Date shall be deemed to be part
of the Premises and the property of Lessor. Alterations and Utility
Installations, if any, made by Lessee during the Term shall be deemed to be the
property of Lessor and considered a part of the Premises, unless otherwise
instructed per Paragraph 7.4(b) hereof or agreed otherwise by Lessee and Lessor
prior to the making of such Alteration or Utility Installation. Unless otherwise
instructed per Paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
Installations remaining on the Premises at the expiration or termination of this
Lease shall become the property of Lessor and be surrendered by Lessee with the
Premises.
(b) REMOVAL. If Lessor requires by written notice to Lessee within
30 days of Lessee's notice of planned Alterations or Utility Installations on
the Premises that it will require removal by the expiration or termination of
the lease, such Alterations or Utility Installations shall be deemed to be
Lessee Owned Alterations or Utility Installations and Lessee shall be required
to remove any such Alteration or Installation by the expiration or earlier
termination of this Lease. Lessor may require the removal at any time of all or
any part of any Lessee Owned Alterations or Utility Installations made without
the required consent.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises
(including, without limitation, the driveway and parking lots) by the Expiration
Date or any earlier termination date, with all of the improvements (except those
described in Paragraph 7.4(b) above), parts and surfaces thereof broom clean
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 6 Initials____ ____
and free of debris, and in good operating order, condition and state of repair,
ordinary wear and tear and damage by fire or other casualty excepted. Ordinary
wear and tear shall not include any damage or deterioration that would have been
prevented by good maintenance practice. Lessee shall repair any damage
occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee
Owned Alterations and/or Utility Installations, furnishings, and equipment as
well as the removal of any storage tank installed by or for Lessee, and the
removal, replacement, or remediation of any soil, material or groundwater
contaminated by Lessee. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor
shall constitute a holdover under the provisions of Xxxxxxxxx 00 xxxxx.
(x) OPTION TO TRANSFER TRADE FIXTURES. Trade Fixtures shall remain
the property of Lessee and shall be removed by Lessee; provided, however, that,
if Lessee, in its sole discretion, desires to transfer any of the Lessee-owned
Trade Fixtures to Lessor upon the surrender of the Premises, Lessee shall
provide written notice to Lessor within 60 days of the scheduled Expiration Date
specifically identifying such Trade Fixtures that Lessee desires to transfer to
Lessor. If Lessor, in its sole discretion, is willing to acquire any of the
requested Trade Fixtures from Lessee then Lessee shall transfer such Trade
Fixtures to Lessor, for no additional consideration, on the Expiration Date. The
Parties shall execute and deliver to each other any documents and instruments
necessary to evidence such transfer in a form mutually acceptable to the
Parties. The physical transfer of any Trade Fixtures transferred by Lessee to
Lessor as contemplated by this Paragraph 7.4(d) shall be no earlier than the
date on which Lessee surrenders the Premises to Lessor. If the Parties agree to
transfer any Trade Fixtures on the Expiration Date in accordance with this
Paragraph 7.4(d), Lessee shall have no obligation to remove such Trade Fixtures
from the Premises. Absent such agreement, Lessee shall be required to remove
such Trade Fixtures from the Premises in accordance with the terms of this
Lease.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT FOR INSURANCE. Lessee shall pay for all insurance required
under Paragraph 8. Premiums for policy periods commencing prior to or extending
beyond the Lease term shall be prorated to correspond to the Lease term within
thirty (30) days of Lessee's receipt of an invoice for such expenses, issued by
Lessor at such time as to permit payment by Lessee immediately prior to the
commencement of each successive semi-annual insurance term.
8.2 LIABILITY INSURANCE. Lessee shall obtain and keep in force during
the term of this Lease a Commercial General Liability ("CGL") policy of
insurance (individually or together with a policy of umbrella excess liability
insurance) protecting Lessee, Lessor and any Lender(s) whose names have been
provided to Lessee in writing (as insureds) against claims for bodily injury,
property damage, personal injury and advertising injury based upon, relating to,
involving, or arising out of the ownership, use, occupancy, or maintenance of
the Premises and all areas appurtenant thereto. Lessee shall promptly provide
Lessor with evidence of such insurance in the form of an endorsement to the
policy. Such insurance shall be on an occurrence basis for bodily injury and
property damage coverage, providing coverage in an amount not less than
$2,000,000 for damages because of all bodily injury and property damage arising
out of any one occurrence and coverage in an amount not less than $2,000,000 for
all damages because of all personal injury and all advertising injury sustained
by any one person or organization. The insurance shall include an "Additional
Insured - Managers, Lessors, of Premises" endorsement and contain the "Amendment
of the Pollution Exclusion" endorsement for damage or injury caused by heat,
smoke or fumes from a hostile fire. 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 insurance
carried by Lessor, whose insurance shall be considered excess insurance only and
shall not insure Lessee.
8.3 PROPERTY INSURANCE - BUILDING AND IMPROVEMENTS. The Insuring Party
shall obtain and keep in force a policy or policies in the name of Lessor, with
loss payable to Lessor, any ground lessor, and to any Lender(s) insuring loss or
damage to the Premises. The amount of such insurance shall be equal to the full
replacement cost of the Premises. If Lessor is the Insuring Party, however,
Lessee Owned Alterations and Utility installations, Trade Fixtures, and Lessee's
personal property shall be insured by Lessee under Paragraph 8.4 and not under
any Lessor's policies of insurance. 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 Lessor or a Lender), including coverage for debris removal
and the enforcement of any Applicable Requirements requiring the upgrading,
demolition, reconstruction or replacement of any portion of the Premises as the
result of a covered loss. Said policy or policies shall also contain if
available and commercially appropriate waiver of subrogation. If such insurance
coverage has a deductible clause, the deductible amount shall not exceed
$100,000 per occurrence, and Lessee shall be liable for such deductible amount
in the event of an Insured Loss.
8.4 LESSEE'S PROPERTY/BUSINESS INTERRUPTION INSURANCE.
(a) PROPERTY DAMAGE. Lessee shall obtain and maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such insurance shall be full replacement
cost coverage with a deductible of not to exceed $1,000 per loss or occurrence.
The proceeds from any such insurance shall be used by Lessee for the replacement
of personal property, Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Upon written request from Lessor, Lessee shall provide Lessor
with written evidence that such insurance is in force.
(b) BUSINESS INTERRUPTION. Lessee shall obtain and maintain loss of
income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 7 Initials____ ____
commonly insured against by prudent lessees in the business of Lessee or
attributable to prevention of access to the Premises as a result of such perils.
(c) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Lessee's property, business operations or
obligations under this Lease.
8.5 INSURANCE POLICIES. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least A, as set forth in the most current issue of "Best's
Insurance Guide", or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Commencement Date, deliver to
Lessor certified copies of policies of such insurance or endorsements evidencing
the existence and amounts of the required insurance. Lessee shall use
commercially reasonable efforts to cause the insurer to provide Lessor with at
least thirty (30) days' prior written notice of any proposed cancellation of any
of Lessee's insurance policies described in Paragraphs 8.2 or 8.4 above Lessee
shall, at least thirty (30) days prior to the expiration of such policies,
furnish Lessor with evidence satisfactory to Lessor 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; provided, however, that any cancellation of such policies of
insurance during the Term shall constitute a Breach of Lessee's obligations
hereunder (subject to cure in accordance with Paragraph 13.1). Such policies
shall be for a term of at least one year, or the length of the remaining term of
this Lease, whichever is less. If either Party shall fail to procure and
maintain the insurance required to be carried by it, the other Party may, but
shall not be required to, procure and maintain the same.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages against the other, for loss of or damage
to its property arising out of or incident to the perils required to be insured
against herein. The effect of such releases and waivers is not limited by the
amount of insurance carried or required, or by any deductibles applicable
hereto. The Parties agree to have their respective property damage insurance
carriers waive any right to subrogation that such companies may have against
Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.
8.7 INDEMNITY. EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
LESSOR OR ANY OF ITS AGENTS, CONTRACTORS, EMPLOYEES, INVITEES OR
REPRESENTATIVES, LESSEE SHALL INDEMNIFY, PROTECT, DEFEND AND HOLD HARMLESS THE
PREMISES, LESSOR AND ITS AGENTS, LESSOR'S MASTER OR GROUND LESSOR (IF ANY),
PARTNERS AND LENDERS, FROM AND AGAINST ANY AND ALL CLAIMS, LOSS OF RENTS AND/OR
DAMAGES, LIENS, JUDGMENTS, PENALTIES, ATTORNEYS' AND CONSULTANTS' FEES, EXPENSES
AND/OR LIABILITIES WHICH ARISE OUT OF OR RELATE TO THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF LESSEE OR LESSEE'S AGENTS, CONTRACTORS, EMPLOYEES,
INVITEES OR REPRESENTATIVES (COLLECTIVELY, "LESSEE PARTIES") OR ANY INVITEE,
LICENSEE OR CONTRACTOR OF THE LESSEE PARTIES, IN CONNECTION WITH THE USE AND/OR
OCCUPANCY OF THE PREMISES. IF ANY ACTION OR PROCEEDING IS BROUGHT AGAINST LESSOR
BY REASON OF ANY OF THE FOREGOING MATTERS, LESSEE SHALL UPON NOTICE DEFEND THE
SAME AT LESSEE'S EXPENSE BY COUNSEL REASONABLY SATISFACTORY TO LESSOR AND LESSOR
SHALL COOPERATE WITH LESSEE IN SUCH DEFENSE. LESSOR NEED NOT HAVE FIRST PAID ANY
SUCH CLAIM IN ORDER TO BE DEFENDED OR INDEMNIFIED.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. LESSOR SHALL NOT BE LIABLE FOR
INJURY OR DAMAGE TO THE PERSON OR GOODS, WARES, MERCHANDISE OR OTHER PROPERTY OF
LESSEE, LESSEE'S EMPLOYEES, CONTRACTORS, INVITEES, CUSTOMERS, OR ANY OTHER
PERSON IN OR ABOUT THE PREMISES, WHETHER SUCH DAMAGE OR INJURY IS CAUSED BY OR
RESULTS FROM FIRE, STEAM, ELECTRICITY, GAS, WATER OR RAIN, OR FROM THE BREAKAGE,
LEAKAGE, OBSTRUCTION OR OTHER DEFECTS OF PIPES, FIRE SPRINKLERS, WIRES,
APPLIANCES, PLUMBING, HVAC OR LIGHTING FIXTURES, OR FROM ANY OTHER CAUSE,
WHETHER 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, UNLESS SUCH INJURY OR DAMAGE IS
ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSOR OR ITS
AGENTS. 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 AND LESSEE
WAIVES ANY CLAIM AGAINST LESSOR FOR ACTUAL, CONSEQUENTIAL, INCIDENTAL, EXEMPLARY
OR PUNITIVE DAMAGES.
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, which can reasonably be repaired in four (4) months or
less from the date of the damage or destruction. All other damage or destruction
to the improvements on the Premises shall be referred to as "PREMISES TOTAL
DESTRUCTION". Lessee shall notify Lessor in writing within 24 hours following
any material damage to the Premises ("Lessee Damage Notice") Lessor shall notify
Lessee in writing within thirty (30) days from its receipt of the Lessee Damage
Notice as to whether or not the damage is Partial or Total.
(b) "INSURED LOSS" shall mean damage or destruction to improvements
on the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3, irrespective of any deductible amounts or
coverage limits involved.
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 8 Initials____ ____
(c) ""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 unless Lessee has elected to terminate this Lease
pursuant to a right to do so, following such date on which Lessee agrees to
continue this Lease in full force and effect, Lessor shall, at Lessor's expense,
repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations
and Utility Installations) as soon as reasonably possible and this Lease shall
continue in full force and effect; provided, however, that Lessee shall, at
Lessor's election, make the repair of any damage or destruction the total cost
to repair of which is $10,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in
force or the insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage in proceeds (except as to
the deductible which is Lessee's responsibility) as and when required to
complete said repairs. If Lessor receives said funds or adequate assurance
thereof within said ten (10) day period, the party responsible for making the
repairs shall complete them as soon as reasonably possible and this Lease shall
remain in full force and effect. If such funds or assurance are not received,
Lessor may nevertheless elect by written notice to Lessee within ten (10) days
thereafter to 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. Lessee shall not be entitled to reimbursement
of any funds contributed by Lessee to repair any such damage or destruction.
Premises Partial Damage due to flood or earthquake shall be subject to Paragraph
9.3, notwithstanding that there may be some insurance coverage, but the net
proceeds of any such insurance shall be made available for the repairs if made
by either Party.
9.3. PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that
is not an Insured Loss occurs, unless caused by a negligent or willful act or
omission of Lessee, or Lessee's employees, contractors, invitees, licensees or
customers (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either: (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect (but subject to abatement of Rent pursuant to Paragraph 9.6), or (ii)
terminate this Lease by giving written notice to Lessee within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such damage. Such
termination shall be effective sixty (60) days following the date of such
notice. In the event Lessor elects to terminate this Lease, Lessee shall have
the right within ten (10) days after receipt of the termination notice to give
written notice to Lessor of Lessee's commitment to pay for the repair of such
damage without reimbursement from Lessor. Lessee shall provide Lessor with said
funds or satisfactory assurance thereof within thirty (30) days after making
such commitment. In such event this Lease shall continue in full force and
effect, and Lessor shall proceed to make such repairs as soon as reasonably
possible after the required funds are available. If Lessee does not make the
required commitment, this Lease shall terminate as of the date specified in the
termination notice.
9.4. TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate effective
immediately upon such Destruction. If the damage or destruction was caused by
the gross negligence or willful act or omission of Lessee or Lessee's employees,
contractors, invitees or customers, Lessor shall have the right to recover
Lessor's damages from Lessee, except as provided in Paragraph 8.6.
9.5. DAMAGE NEAR END OF TERM. If at any time during the last six (6)
months of this Lease there is damage for which the cost to repair exceeds one
(1) month's Base Rent, whether or not an Insured Loss, Lessor may terminate this
Lease effective sixty (60) days following the date of occurrence of such damage
by giving a written termination notice to Lessee within thirty (30) days after
the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee
at that time has an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by, (a) exercising such option and
(b) providing Lessor with any shortage in insurance proceeds (or adequate
assurance thereof) needed to make the repairs on or before the earlier of (i)
the date which is ten days after Lessee's receipt of Lessor's written notice
purporting to terminate this Lease, or (ii) the day prior to the date upon which
such option expires. If Lessee duly exercises such option during such period and
provides Lessor with funds (or adequate assurance thereof) to cover any shortage
in insurance proceeds, Lessor shall, at Lessor's commercially reasonable
expense, repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during such period, then this Lease shall
terminate on the date specified in the termination notice and Lessee's option
shall be extinguished.
9.6. ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) ABATEMENT. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired. All
other obligations of Lessee hereunder shall be performed by Lessee, and Lessor
shall have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.
(b) REMEDIES. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and material way, such repair
or restoration within ninety (90) days (subject to force majeure) 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
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 9 Initials____ ____
notice. If Lessee gives such notice and such repair or restoration is not
commenced within thirty (30) days (subject to force majeure) thereafter, this
Lease shall terminate as of the date specified in said notice. If the repair or
restoration is commenced within said thirty (30) days (subject to force
majeure), this Lease shall continue in full force and effect. "COMMENCE" shall
mean either the authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs. For
purposes of this Paragraph 9.6(b), "force majeure" means any prevention, delay
or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to
obtain labor or materials, or reasonable substitutes therefor, governmental
restrictions, governmental regulations, governmental controls, judicial orders,
enemy or hostile governmental action, civil commotion, fire or other casualty
and other causes beyond the reasonable control of Lessor shall excuse the
performance by Lessor for a period equal to any such prevention, delay or
stoppage.
9.7. TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to Paragraph 9, (i) an equitable adjustment shall be made concerning
advance Base Rent and any other advance payments made by Lessee to Lessor; and
(ii) the Lessee shall pay Lessor that portion of the insurance proceeds due
pursuant to Paragraph 8.2 equal to the total amount of such proceeds times a
fraction the numerator of which is the number of months elapsed in the term of
the Lease and the denominator of which is the total number of months in the
Lease Term.
9.8. WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1. DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term "REAL
PROPERTY TAXES" shall include any form of assessment, real estate, general,
special, ordinary or extraordinary, or rental levy or tax (other than
inheritance, personal income or estate taxes); improvement bond; and/or license
fee imposed upon or levied against any legal or equitable interest of Lessor in
the Premises, Lessor's right to other income therefrom, and/or Lessor's business
of leasing, including, without limitation, gross receipts and gross rentals,
taxes by any authority having the direct or indirect power to tax and where the
funds are generated with reference to the Building address and where the
proceeds so generated are to be applied by the city, county, state or other
taxing authority of a jurisdiction within which the Premises are located;
provided, however, that Real Property Taxes shall not include (i) any
inheritance or wealth transfer tax, net income or gross receipts tax of Lessor
or any tax based on the net income and net assets of Lessor (such as but not
limited to any tax in the nature of capital stock tax), (ii) any transfer tax or
comparable fee or (iii) any late charges, fines or penalties incurred by Lessor
with respect to the failure to pay any Real Property Taxes in a timely manner.
10.2. PAYMENT OF TAXES. Lessee shall pay the Real Property Taxes
applicable to the Premises during the term of this Lease. All such payments
shall be made at least ten (10) days prior to any delinquency date. Upon request
by Lessor, Lessee shall promptly furnish Lessor with satisfactory evidence that
such taxes have been paid. If any such taxes shall cover any period of time
prior to or after the expiration or termination of this Lease, Lessee's share of
such taxes shall be prorated to cover only that portion of the tax xxxx
applicable to the period that this Lease is in effect, and Lessor shall
reimburse Lessee for any overpayment within thirty (30) days after payment by
Lessor of the applicable taxes. If Lessee shall fail to pay any required Real
Property Taxes, Lessor shall have the right to pay the same, and Lessee shall
reimburse Lessor therefor promptly upon demand.
10.3. JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be conclusively determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available.
10.4. PERSONAL PROPERTY TAXES. Lessee shall pay, prior to delinquency, all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee. When possible, Lessee shall cause such property to be assessed and
billed separately from the real property of Lessor. If any of Lessee's said
personal property shall be assessed with Lessor's real property, Lessee shall
pay Lessor the taxes attributable to Lessee's property within ten (10) days
after receipt of a written statement.
11. UTILITIES/ABATEMENT AND OTHER RIGHTS. Lessee shall obtain and obtain and pay
for all potable and process water, gas, steam, heat, light, electricity,
telephone and other information technology infrastructure, trash disposal and
other utilities and services supplied to the Premises, together with any taxes
thereon. Lessee must arrange and pay for the installation of any required
utility meters. Lessee must pay any fees or deposits required for any of the
utilities. If any such services are not separately metered to Lessee, Lessee
shall pay a reasonable proportion, to be mutually agreed by the parties in
writing, of all charges jointly metered. It is expressly understood and agreed
that Lessor shall have no liability for any interruption or termination of
utility services to the Premises and Lessee shall have no right to terminate
this Lease in the event of any such interruption or termination. Notwithstanding
any provision to the contrary contained in this Lease, and in addition to
Lessee's rights set forth in Paragraph 13.5, in the event that, as a result of
Lessor's replacement of the Basic Elements pursuant to Paragraph 7.1(c), in
excess of 25% of the Premises becomes uninhabitable for a period of five (5)
consecutive days, then Lessee shall have the right thereafter to xxxxx rent on a
per diem basis pro rata with respect to the portion of the Premises that has
been so rendered uninhabitable for each day of such uninhabitability. If in
excess of 25% of the Premises is so uninhabitable for a period of thirty (30)
consecutive days as a result of Lessor's replacement of the Basic Elements
pursuant to Paragraph 7.1(c) and Lessee cannot
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PAGE 10 Initials____ ____
conduct its business from the remaining inhabitable portion of the Premises,
then Lessee shall also have the right, at its sole discretion, to terminate the
Lease with respect to the Premises or the portion thereof which has been so
rendered uninhabitable by written notice to Lessor, in which event Lessee shall
have no further liability or obligation hereunder with respect to the Premises
or the applicable portion thereof. If Lessee terminates the Lease only with
respect to a portion of the Premises in accordance with the immediately
preceding sentence, then Lessee's rent and other monetary obligations shall be
reduced accordingly in proportion to the portion of the Premises for which this
Lease has been so terminated.
12. ASSIGNMENT AND SUBLETTING.
12.1. LESSOR'S CONSENT REQUIRED.
Lessee shall not assign, transfer, mortgage or encumber
(collectively, "ASSIGN OR ASSIGNMENT") or sublet all or any part of Lessee's
interest in this Lease or in the Premises without Lessor's prior written consent
which shall not unreasonably be withheld, conditioned or delayed.
Notwithstanding any provision in the Lease to the contrary, Lessee may assign
the Lease or sublet the Premises or any portion thereof without Lessor's
consent, and without incurring any liability, fees or costs relating to
assignment or subleasing, to any entity which (i) controls, is an affiliate of
or is controlled by or is under common control with Lessee, or (ii) to any
entity resulting from a merger or consolidation with Lessee (or the sale of all
or any portion of the stock of Lessee) or (iii) to any entity which acquires all
or substantially all of the assets of Lessee or (iv) to any entity acquiring all
or substantially all of the assets of the business of Lessee conducted from the
Premises (collectively, an "AFFILIATE"). Notwithstanding the foregoing, Lessee
shall provide Lessor with no less than fifteen (15) days' prior written notice
of any proposed assignment or sublease to an Affiliate hereunder.
12.2. TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, no assignment or
subletting (including an assignment or subletting to an Affiliate contemplated
in Paragraph 12.1(i) or (ii)) shall: (i) be effective without the express
written assumption by such assignee or sublessee of the obligations of Lessee
under this Lease, (ii) release Lessee of any obligations hereunder, or (iii)
alter the primary liability of Lessee for the payment of Rent or for the
performance of any other obligations to be performed by Lessee. Lessee shall be
released from all liability for the performance of its obligations hereunder
(including, without limitation, the payment of Rent) upon an assignment to an
Affiliate pursuant to Paragraph 12.1(iii) or (iv), so long as such assignee
Affiliate (together with all affiliates thereof who are liable, either directly
or as guarantors, for the performance of the obligations of the Lessee under
this Lease), has a tangible net worth equal to or greater than $100,000,000 on
the effective date of such assignment.
(b) Lessor may accept Rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of Rent or performance shall constitute a waiver or estoppel
of Lessor's right to exercise its remedies for Lessee's Default or Breach.
(c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may
proceed directly against Lessee, any Guarantors or anyone else responsible for
the performance of Lessee's obligations under this Lease, including any assignee
or sublessee, without first exhausting Lessor's remedies against any other
person or entity responsible therefore to Lessor, or any security held by
Lessor.
(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $1,000 as
consideration for Lessor's considering and processing said request. 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 to have
assumed and agreed to conform and comply with each and every term, covenant,
condition and obligation herein to be observed or performed by Lessee during the
term of said assignment or sublease, other than such obligations as are contrary
to or inconsistent with provisions of an assignment or sublease to which Lessor
has specifically consented to in writing.
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) In the event of a Breach by Lessee, Lessor may, at its option,
require sublessee to attorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such
sublessor. If Lessee does not require the sublessee to attorn to Lessor, the
sublease shall be extinguished upon the termination of this Lease as a result of
Lessee's breach hereunder, and the sublessee shall have no further right to
occupy the Premises.
(b) Any matter requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor.
(c) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 11 Initials____ ____
(d) 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.
(e) Lessee may list the Premises for sublease or assignment with
only brokers reasonably approved in writing by Lessor. Any broker retained by
Lessee is not the agent of Lessor for any purpose. Lessee must indemnify,
protect, defend and hold Lessor harmless from and against any claim for
compensation or charges claimed by any broker retained by Lessee, or from and
against any party whose claim is based, directly or indirectly, on any proposed
sublease or assignment.
13. DEFAULT; BREACH; REMEDIES.
13.1. DEFAULT; BREACH. A "Default" is defined as a failure by the Lessee
timely to comply with or perform any of the terms, covenants, conditions or
rules under this Lease. A "BREACH" is defined as the occurrence of one or more
of the following Defaults, and the failure of Lessee to cure such Default within
any applicable grace period:
(a) The abandonment of the Premises without payment of rent.
(b) The failure of Lessee to make any payment of Rent required to be
made by Lessee hereunder, whether to Lessor or to a third party, when due, to
provide reasonable evidence of insurance or surety bond, or to fulfill any
obligation under this Lease which endangers or threatens life or property, in
each instance within five (5) calendar days after receipt of notice from Lessor
advising Lessee of such failure.
(c) The failure by Lessee to provide within the time period required
herein (or, if no period is specified, within a reasonable period of time not to
exceed thirty (30) days following receipt of Lessor's request) (i) reasonable
written evidence of compliance with Applicable Requirements, (ii) the service
contracts, (iii) the rescission of an unauthorized assignment or subletting,
(iv) a Estoppel Certificate, (v) a requested subordination, (vi) evidence
concerning any guaranty and/or Guarantor, (vii) any document requested under
Paragraph 41, or (viii) any other documentation or information which Lessor may
reasonably require of Lessee under the terms of this Lease.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 39 hereof,
other than those described in subparagraphs 13.1(a), (b) or (c), above, where
such Default continues for a period of thirty (30) days after written notice;
provided, however, that if the nature of Lessee's Default is such that it is
reasonably capable of cure but more than thirty (30) days are reasonably
required for its cure, then it shall not be deemed to be a Breach if Lessee
promptly (but in no event later than 30 days) commences such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
(e) The occurrence of any of the following events: (i) the making of
any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "DEBTOR" as defined in 11 U.S.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 sixty (60) 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 sixty (60) 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) Lessee does or permits anything that creates a lien on the
Premises, and Lessee fails to discharge the lien, or provide adequate security
therefor by posting a bond or otherwise, within thirty days of its filing.
13.2. REMEDIES. If Lessee fails to perform any of its affirmative duties
or obligations (taking into consideration any applicable notice and opportunity
to cure), within five (5) days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on
Lessee's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Lessor shall be due
and payable by Lessee upon receipt of invoice therefor. In the event of a
Breach, Lessor may, with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such Breach:
(a) Terminate this Lease in which event Lessee shall immediately
surrender possession of the Premises to Lessor; provided that, if Lessee fails
to so surrender the Premises, then Lessor may, without prejudice to any other
remedy it has for possession of the Premises or arrearages in Rent or other
damages, re-enter and take possession of the Premises and expel or remove Lessee
and any other person occupying the Premises, or any part thereof, in accordance
with applicable law, with Lessee hereby waiving, to the fullest extent permitted
by applicable law, any and all statutory notices to vacate the Premises. In the
event of Lessor's termination of this Lease, Lessor shall be entitled to recover
from Lessee as damages: (i) the unpaid Rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) the reasonable cost of recovering possession of the
Premises and out-of-pocket expenses of reletting, including
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PAGE 12 Initials____ ____
necessary renovation and alteration of the Premises, reasonable attorneys' fees,
and that portion of any leasing commission paid by Lessor in connection with
this Lease applicable to the unexpired term of this Lease. The worth at the time
of award of the amount referred to in provision (iii) of the immediately
preceding sentence shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of the District within which the Premises are
located at the time of award.
(b) Terminate Lessee's right of possession of the Premises by any
lawful means, without terminating this Lease, in which event Lessee shall
immediately surrender the Premises to Lessor; provided that, if Lessee fails to
so surrender the Premises, then Lessor may, without prejudice to any other
remedy it has for possession of the Premises or arrearages in Rent or other
damages, re-enter and take possession of the Premises and expel or remove Lessee
and any other person occupying the Premises, or any part thereof, in accordance
with applicable law, with Lessee hereby waiving, to the fullest extent permitted
by applicable law, any and all statutory notices to vacate the Premises. Lessor
may continue to recover the Rent as it becomes due. Acts of maintenance, efforts
to relet, and/or the appointment of a receiver to protect the Lessor's
interests, shall not constitute a termination of the Lessee's right to
possession. In the event of a reletting of the Premises, the Rent derived
therefrom shall be applied first, to any reasonable brokerage commissions
incurred by Lessor in connection with such reletting; second, to any reasonable
attorneys' fees incurred by Lessor in connection with such reletting; third, to
the reasonable costs incurred by Lessor in connection with the repair,
remodeling or other preparation of the Premises for such reletting; and fourth,
to the Rent due under this Lease. No reletting by Lessor is considered to be for
Lessor's own account unless Lessor has notified Lessee in writing that this
Lease has been terminated. If such rentals received from such reletting during
any month shall be less than that to be paid during that month by Lessee
hereunder, Lessee shall pay any such deficiency to Lessor. Such deficiency shall
be calculated and paid monthly. Notwithstanding any such reletting without
termination. Lessor may at any time thereafter elect to terminate this Lease for
such previous Breach. In addition, no such reletting is to be considered an
acceptance of Lessee's surrender of the Premises unless Lessor so notifies
Lessee in writing. Until Lessor relets the Premises under terms satisfactory to
Lessor in its sole discretion, Lessee shall pay to Lessor on or before the first
day of each calendar month the monthly rentals and other charges provided in
this Lease. If and after the Premises have been relet by Lessor, Lessee shall
pay to Lessor on the twentieth (20th) day of each calendar month the difference,
if any, between the monthly rentals and other charges provided in this Lease for
such calendar month and that which is due under the new leasehold agreement. If
it is necessary for Lessor to bring suit in order to collect any deficiency,
Lessor shall have the right to allow such deficiencies to accumulate and to
bring an action on several or all of the accrued deficiencies at one time. Any
such suit shall not prejudice in any way the right of Lessor to bring a similar
action for any subsequent deficiency or deficiencies.
(c) Pursue the remedy of specific performance and/or injunctive
relief.
(d) Pursue any other remedy now or hereafter available in equity
under the laws or judicial decisions of the state wherein the
Premises are located.
(e) 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 nor limit Tenant's liability for,
or obligation to pay, damages to which Lessor is entitled hereunder
as a result of Lessee's Breach, as provided in this Paragraph 13 or
elsewhere in this Lease or under applicable law, all of which
expressly survive the expiration or earlier termination of this
Lease.
Lessor forever waives (i) any right provided by Law or otherwise to obtain,
foreclose upon, execute upon or otherwise benefit from a lien or other
encumbrance against the personal property of Lessee for rent or other sums due
Lessor under the Lease or any other obligation of Lessee to Lessor and (ii) any
right provided by Law or otherwise to distraint or distress any personal
property of Lessee, or to place a lien or other security interest upon any of
Lessee's fixtures on or Alterations to the Premises.
13.3. INDUCEMENT RECAPTURE. Any agreement for free or abated rent or other
charges, or for the giving or paying by Lessor to or for Lessee of any cash or
other bonus, inducement or consideration for Lessee's entering into this Lease,
all of which concessions are hereinafter referred to as "INDUCEMENT PROVISIONS,"
shall be deemed conditioned upon Lessee's full and faithful performance of all
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Lessee, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by Lessor
under such an Inducement Provision shall be immediately due and payable by
Lessee to Lessor, 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. INTEREST AND LATE CHARGES.
(a) INTEREST. Any monetary payment due Lessor hereunder, other
than such amounts which are the subject of a good faith dispute between the
parties and other than late charges, not received by Lessor, when due as to
scheduled payments (such as Base Rent) or within thirty (30) days following the
date on which it was due for non-scheduled payment, shall bear interest from the
date when due, as to scheduled payments, or the thirty-first (31st) day after it
was due as to non-scheduled payments. The interest ("INTEREST") charged shall be
equal to the prime rate reported in the Wall Street Journal as published closest
prior to the date when due plus four percent (4%), but shall not exceed the
maximum rate allowed by law.
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 13 Initials____ ____
(b) LATE CHARGES. In addition the Interest described in Paragraph
13.4(a) above, any Rent shall not be received by Lessor within five (5) days
after such amount shall be due more than two (2) times during any consecutive
12-month period during the Term, then, without any requirement for notice to
Lessee, Lessee shall pay to Lessor a one-time late charge equal to ten percent
(10%) of each such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Lessor will incur
by reason of such late payment. Acceptance of such late charge by Lessor shall
in no event constitute a waiver of Lessee's Default or Breach with respect to
such overdue amount, nor prevent the exercise of any of the other rights and
remedies granted hereunder.
13.5. BREACH BY LESSOR.
(a) NOTICE OF BREACH. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor (including, without limitation, a replacement
of a Basic Element in accordance with Paragraph 7.1(c)). For purposes of this
Paragraph, a reasonable time shall in no event be less than thirty (30) days
after receipt by Lessor, and any Lender whose name and address shall have been
furnished Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however,
that if the nature of Lessor's obligation is such that more than thirty (30)
days are reasonably required for its performance, then Lessor shall not be in
breach if performance is commenced within such thirty (30) day period and
thereafter pursued to completion as expeditiously as is commercially reasonable
under the circumstances.
(b) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event that
neither Lessor nor Lender cures said breach within thirty (30) days after
receipt of said notice, or if having commenced said cure they do not pursue it
to completion, then (subject to Lessee's rights set forth in Paragraph 7.1(d))
Lessee may elect to cure said breach at Lessee's expense and offset from Rent an
amount equal to the greater of one month's Base Rent or the Security Deposit,
and to pay an excess of such expense under protest, reserving Lessee's right to
reimbursement from Lessor. Lessee shall document the cost of said cure and
supply said documentation to Lessor.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "CONDEMNATION"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than twenty percent (20%) of any building portion of the
Premises, or more than thirty-five percent (35%) of the land area portion of the
Premises not occupied by any building, or any lesser land area portion of the
Premises insofar as such taking materially interferes with Lessee's use of or
access to the Premises, 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 proportion
to the reduction in area of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold, the value of the part taken (it being understood and agreed that
Lessee hereby waives any claim to be compensated for the lost value of the
leasehold estate in the Premises), or for severance damages; provided, however,
that Lessee shall be entitled to make a separate claim directly against the
condemning authority for any compensation for Lessee's relocation expenses,
and/or Trade Fixtures, without regard to whether or not this Lease is terminated
pursuant to the provisions of this Paragraph so long as Lessor's claim is not
diminished thereby. Any and all compensation which is payable for Alterations
and Utility Installations made to the Premises by Lessee, for purposes of
Condemnation only, shall be apportioned between Lessor and Lessee, respectively,
in the same proportion as the number of months elapsed in the Lease Term bears
to the total number of months in the Lease Term. In the event that this Lease is
not terminated by reason of the Condemnation, Lessor shall repair any damage to
the Premises caused by such Condemnation. Notwithstanding anything to the
contrary contained in this Paragraph 14, if the temporary use or occupancy of
all or any substantial part of the Premises is taken by condemnation or in any
other manner for any public or quasi-public use or purpose during the Term, and
such temporary taking continues for a period of 180 consecutive days, Lessee
shall have the right, by providing written notice to Lessor, to terminate this
Lease.
15. REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Lessee and Lessor
each represent and warrant to the other that it has had no dealings with any
person, firm, broker or finder (other than the Brokers, if any) in connection
with this Lease, and that no one other than said named Brokers is entitled to
any commission or finder's fee in connection herewith. Lessee and Lessor do each
hereby agree to indemnify, protect, defend and hold the other harmless from and
against liability for compensation or charges which may be claimed by any such
unnamed broker, finder or other similar party by reason of any dealings or
actions of the indemnifying Party, including any costs, expenses, attorneys'
fees reasonably incurred with respect thereto.
16. ESTOPPEL CERTIFICATES.
(a) Each Party (as "RESPONDING PARTY") shall within twenty (20) days
after written notice from the other Party (the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party a
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 14 Initials____ ____
statement in writing in form similar to the then most current "ESTOPPEL
CERTIFICATE" form published by the American Industrial Real Estate Association,
plus such additional information, confirmation and/or statements as may be
reasonably requested by the Requesting Party.
(b) If Lessor desires to finance, refinance, or sell the Premises,
or any part thereof, Lessee and all Guarantors shall deliver to any potential
lender or purchaser designated by Lessor such financial statements as may be
reasonably required by such lender or purchaser, including but not limited to
Lessee's financial statements for the past three (3) years. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. REIMBURSEMENT OF LESSOR. Lessor may, from time to time, but shall not be
under any obligation to, seek to obtain a reduction in the amount of Taxes, or
the cost of insurance, utilities or other amounts chargeable to or payable by
Lessee pursuant to this Lease. If Lessor incurs any cost or expense in
connection with the material reduction of Taxes or the cost of insurance,
utilities or other amounts chargeable to or payable by Lessee pursuant to this
Lease, Lessee shall reimburse Lessor for all such reasonable costs and expenses
that are proportionate to Lessee's interests herein within thirty (30) days
after receipt of an invoice therefore, provided that Lessor previously obtained
Lessee's prior written approval of such efforts and Lessee's agreement to be
accountable in such manner.
18. DEFINITION OF LESSOR. The term "LESSOR" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or this Lease, the prior
Lessor shall fully be released from and 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.
19. 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.
20. DAYS. Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.
21. LIMITATION ON LIABILITY. The obligations of Lessor under this Lease shall
not constitute personal obligations of Lessor, the individual partners of Lessor
or its or their individual partners, directors, officers or shareholders, and
Lessee shall look to the Premises, and to no other assets of Lessor, for the
satisfaction of any liability of Lessor with respect to this Lease, and shall
not seek recourse against the individual partners of Lessor, or its or their
individual partners, directors, officers or shareholders, or any of their
personal assets for such satisfaction. On the Commencement Date, Lessor shall
provide Lessee with a written statement setting forth the principal amount of
any loan or other indebtedness incurred by Lessor in connection with the
acquisition of the Premises pursuant to the Purchase Agreement .
22. 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.
23. NO PRIOR OR OTHER AGREEMENTS. This Lease and that certain Agreement for the
Sale and Purchase of Real Estate dated November 24, 2003 by and between Lessor
and Jabil Circuit of Texas, LP (as amended from time to time, the "PURCHASE
AGREEMENT") constitute the entire agreement with respect to the lease of the
Premises to Lessee by Lessor and supercede any and all other prior written or
oral agreements or understandings with respect to this transaction. Except as
expressly set forth in this Lease or the Purchase Agreement, no representations,
inducements, understanding or anything of any nature whatsoever, made, stated or
represented by Lessor or Lessee or anyone acting on either party's behalf,
either orally or in writing have induced either party to enter into this Lease
24. NOTICES.
24.1. NOTICE REQUIREMENTS. All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by courier) 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 24.
The addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notices. Either Party may by written
notice to the other specify a different address for notice, except that upon
Lessee's taking possession of the Premises, the Premises shall constitute
Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing.
24.2. DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given forty-eight (48) hours after
the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the Postal Service or courier. Notices transmitted by
facsimile transmission or similar means shall be deemed delivered upon telephone
confirmation of receipt, provided a copy is also
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 15 Initials____ ____
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.
25. WAIVERS. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by
Lessee may be accepted by Lessor on account of moneys or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
26. RECORDING. Lessee shall, upon request of Lessor, execute, acknowledge and
deliver to the Lessor a short form memorandum of this Lease for recording
purposes. Lessee shall be responsible for payment of any fees applicable
thereto. In the event of a transfer of Lessor's title or interest in the
Premises or this Lease, the Parties agree to cause any recorded memorandum of
this Lease to be removed from record. Lessee shall not cause this lease, or any
memorandum hereof to be recorded without the prior written consent of Lessor.
27. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then such holdover shall be deemed a
Tenancy at Sufferance (with Lessee waiving, to the fullest extent permitted by
applicable law, any required statutory notices to vacate the Premises), then the
Base Rent shall be increased to one hundred fifty percent (150%) of the Base
Rent applicable during the month immediately preceding the expiration or
termination. Nothing contained herein shall be construed as consent by Lessor to
any holding over by Lessee.
28. 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.
29. COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT. All provisions of this
Lease to be observed or performed by Lessee are both covenants and conditions.
It is expressly understood and agreed that Lessee's obligation to pay Rent and
other charges due hereunder is an independent covenant. In construing this
Lease, all headings and titles are for the convenience of the parties only and
shall not be considered a part of this Lease. Whenever required by the context,
the singular shall include the plural and vice versa. This Lease shall not be
construed as if prepared by one of the parties, but rather according to its fair
meaning as a whole, as if both parties had prepared it.
30. 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.
31. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
31.1. SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as "Lender") shall have no liability or obligation to perform any of
the obligations of Lessor under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of its Security
Device by giving written notice thereof to Lessee, whereupon this Lease and such
Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.
31.2. ATTORNMENT. 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.
31.3. SELF-EXECUTING. The agreements contained in this Paragraph 31 shall
be effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination or attornment agreement provided for herein.
31.4. NON-DISTURBANCE. Notwithstanding anything to the contrary set forth
in this Paragraph 31, in the event of any subordination of this Lease to any
mortgage or ground lease (regardless of whether a document evidencing such
subordination is signed by Lessor or not), if there is no continuing uncured
default by Lessee under this Lease at such time, Lessee may require as a
condition to such subordination that the applicable
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 16 Initials____ ____
mortgagee(s) or ground lessor(s) agrees to enter into a written non-disturbance
agreement with Lessee in a commercially reasonable form which shall provide,
inter alia, that Lessee's possession of the Premises shall not be disturbed
during the Term by the foreclosure of the lien of any mortgage or ground lease
by the holder thereof or the ground lessor thereunder, as the case may be.
Lessor, at Lessee's request, shall assist Lessee in obtaining any document or
instrument described in this Paragraph 31.4 and, if necessary, execute and
deliver such documents as may be required by the mortgagee or ground lessor.
32. ATTORNEYS' FEES. If any Party brings an action or proceeding involving the
Premises to enforce the terms hereof or to declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding, action, or
appeal thereon, shall be entitled to recover its attorneys' fees. Such fees may
be awarded in the same suit or recovered in a separate suit, whether or not such
action or proceeding is pursued to decision or judgment. The term, "PREVAILING
PARTY" shall include, without limitation, a Party who substantially obtains or
defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party of its claim or
defense. The attorneys' fees award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred.
33. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS; LOCKS. 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: (i) showing the
same to prospective purchasers, lenders, or lessees during the last nine (9)
months of the Term; (ii) making such alterations, repairs, improvements or
additions to the Premises as Lessor may deem necessary; or, (iii) any other
reason as Lessor shall deem necessary. All such activities shall be without
abatement of rent or liability to Lessee. Lessor may at any time place on the
Premises any ordinary "FOR SALE" signs and Lessor may during the last nine (9)
months of the term hereof place on the Premises any ordinary "FOR LEASE" signs.
Lessee may at any time place on or about the Premises any ordinary "FOR
SUBLEASE" sign. Lessee shall place no additional locks or bolts of any kind upon
any of the doors or windows, nor shall any changes be made in existing locks or
the mechanisms thereof unless Lessor gives prior written approval. Lessee shall
bear the cost of any lock changes or repairs required by Lessee, and shall
immediately provide Lessor with two (2) keys for each lock which is re-keyed or
installed. Lessee, upon termination or expiration of this Lease, shall deliver
to Lessor all keys to doors or other locked fixtures in the Premises. In the
event of the loss of any keys furnished by Lessor to Lessee, Lessee shall pay
Lessor the cost of changing or re-keying the locks. Additionally, upon
termination, Lessee shall replace any locks with locks and keys approved by
Lessor at Lessee's sole cost and at Lessor's sole and absolute discretion.
34. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, any auction
upon the Premises without Lessor's prior written consent. Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether to
permit an auction.
35. SIGNS. Lessee shall not place any sign upon the Premises without Lessor's
prior written consent. All signs must comply with all Applicable Requirements.
36. 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, that Lessor may elect to continue any one or all
existing subtenancies. Lessor's failure within ten (10) days following any such
event to elect to the contrary by written notice to the holder of any such
lesser interest shall constitute Lessor's election to have such event constitute
the termination of such interest. No payment of money by Lessee to Lessor after
this Lease has expired or terminated will reinstate or extend the Term or make
ineffective any notice given to Lessee prior to Lessee's payment. If after
Lessor has filed and served a law suit against Lessee or after a final judgment
granting Lessor possession of the Premises, Lessor may receive any sums due
under this Lease and the payment will not make ineffective any notice, or in any
manner affect any pending law suit or previously obtained judgment.
37. CONSENTS. Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such consent
shall not be unreasonably withheld, conditioned or delayed. Lessor's actual
reasonable costs and expenses (including but not limited to architects',
engineers', attorneys and other consultants' fees) incurred in the consideration
of, or response to, a request by Lessee for any Lessor consent, including but
not limited to consents to an assignment, a subletting or the presence or use of
a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and
supporting documentation therefor. Lessor's consent to any act, assignment or
subletting shall not constitute an acknowledgment that no Default or Breach by
Lessee of this Lease exists, nor shall such consent be deemed a waiver of any
then existing Default or Breach, except as may be otherwise specifically stated
in writing by Lessor at the time of such consent. The failure to specify herein
any particular condition to Lessor's consent shall not preclude the imposition
by Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given. In the event that either Party disagrees with any determination made by
the other hereunder and reasonably requests the reasons for such determination,
the determining party shall furnish its reasons in writing and in reasonable
detail within ten (10) business days following such request.
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 17 Initials____ ____
38. QUIET POSSESSION. Subject to payment by Lessee of the Rent and performance
of all of the covenants, conditions and provisions on Lessee's part to be
observed and performed under this Lease, Lessee shall have quiet possession and
quiet enjoyment of the Premises during the term hereof free from molestation or
hindrance by Lessor.
39. 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.
40. RESERVATIONS. Lessor reserves to itself the right, from time to time with
Lessee's prior consent, not to be unreasonably withheld, conditioned or delayed,
to grant such easements, rights and dedications that Lessor deems necessary, and
to cause the recordation of parcel maps and restrictions, so long as such
easements, rights, dedications, maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee.
41. 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.
42. AUTHORITY. If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly authorized
to execute and deliver this Lease on its behalf. Each party shall, within thirty
(30) days after request, deliver to the other party satisfactory evidence of
such authority.
43. 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.
44. OFFER. Preparation of this Lease by either Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease to
the other Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto.
45. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.
46. WAIVER OF TRIAL BY JURY. Lessee hereby waives, to the fullest extent
permitted by applicable law, the right to a trial by jury in any action brought
by Lessor against Lessee in connection with this lease.
47. Waiver of consumer Rights in Texas. LESSEE ACKNOWLEDGES THAT LESSEE IS A
"BUSINESS CONSUMER" FOR PURPOSES OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT, BUT
SHOULD SUCH DETERMINATION BE HELD OTHERWISE BY A FINAL JUDGEMENT OF A COURT OF
COMPETENT JURISDICTION THE FOLLOWING SHALL APPLY: LESSEE WAIVES ALL OF LESSEE'S
RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, PARAGRAPH
17.41 ET SEQ., BUSINESS AND COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL
RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF LESSEE'S OWN
SELECTION, LESSEE VOLUNTARILY CONSENTS TO THE FOREGOING WAIVER. LESSOR AND
LESSEE EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE
FOR LESSEE'S INTENDED COMMERCIAL PURPOSE, AND LESSEE'S OBLIGATION TO PAY RENT
HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE
BY LESSOR OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED HEREIN, LESSEE SHALL CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT,
SETOFF, DEDUCTION, NOTWITHSTANDING ANY BREACH BY LESSOR OF ITS DUTIES OR
OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 18 Initials____ ____
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.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures
Executed at: Executed at:
Date: _________________________________ Date: _______________________________
By LESSOR: By LESSEE:
Reliance Parkway Capital LP Advanced Fibre Access Corporation
By: ___________________________________ By: _________________________________
Name Printed: _________________________ Name Printed: _______________________
Title: ________________________________ Title: ______________________________
Address: ______________________________ Address: ____________________________
_______________________________________ _____________________________________
Telephone ( ) ________________________ Telephone ( ) ______________________
Facsimile ( ) ________________________ Facsimile ( ) ______________________
Federal ID No. ________________________ Federal ID No. ______________________
With a required copy to: With a required copy to:
Xxxxx Xxxxxx, Esq. _____________________________________
Xxxxxx Xxxxxx, Esq. _____________________________________
Advisors, LLP _____________________________________
00000 Xxx Xxxxxxx Xxxxxxxxx _____________________________________
Suite 265 _____________________________________
Xxx Xxxxxxx, XX 00000 _____________________________________
Facsimile: (000) 000-0000
By executing below, Guarantor agrees to be bound by the terms contained in this
Lease pursuant to the attached Guaranty of Lease.
GUARANTOR:
Advanced Fibre Communications, Inc.,
a Delaware corporation
By: ___________________________________ By: _________________________________
Name Printed: _________________________ Name Printed: _______________________
Title: ________________________________ Title: ______________________________
Address: ______________________________ Address: ____________________________
_______________________________________ _____________________________________
Telephone ( ) ________________________ Telephone ( ) ______________________
Facsimile ( ) ________________________ Facsimile ( ) ______________________
Federal ID No. ________________________ Federal ID No. ______________________
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 19 Initials____ ____
EXHIBIT A
[XXXXXXX ROAD MAP]
STANDARD INDUSTRIAL LEASE DATED FEB 1998
PAGE 20 Initials____ ____
GUARANTY OF LEASE
This GUARANTY OF LEASE ("Guaranty") is made and entered into as of the __ day of
February 2004, and is by and between Advanced Fibre Communications, Inc., a
Delaware corporation ("Guarantor") in favor of Reliance Parkway Capital LP, a
Texas limited partnership ("Landlord") with respect to the following
circumstances.
1. Landlord has entered into a lease ("Lease"), dated concurrently
herewith, with Advanced Fibre Access Corporation, a Delaware corporation
("Tenant"), whether acting on behalf of itself or any estate created by the
commencement of a case under Title 11 of the United States Code or any successor
statute thereto (the "Bankruptcy Code") or any other insolvency, bankruptcy,
reorganization or liquidation proceeding, or by any trustee under the Bankruptcy
Code, liquidator, sequestrator or receiver of Tenant or Tenant's property or
similar person duly appointed pursuant to any law generally governing any
insolvency, bankruptcy, reorganization, liquidation, receivership or like
proceedings.
2. In consideration of Landlord entering into the Lease with Tenant and
with full knowledge that Landlord would not have entered into the Lease with
Tenant were it not for the agreements of Guarantor hereunder, Guarantor hereby
agrees as follows:
2.1 Guarantor hereby guarantees the full, faithful and timely
payment and performance by Tenant of all payments, covenants and other
obligations of Tenant under or pursuant to the Lease (all of which shall
hereinafter be referred to as "Obligations"). If Tenant shall default at any
time in the payment of any rent or any other sums, costs, or charges whatsoever,
or in the performance of any of the other covenants and obligations of Tenant,
under or pursuant to the Lease after applicable notice and opportunity to cure,
then Guarantor(s), at Guarantor's expense, shall on demand of Landlord fully and
promptly, and well and truly, pay all rent, sums, costs and charges to be paid
by Tenant, and perform all the other covenants and obligations to be performed
by Tenant under or pursuant to the Lease. In addition, Guarantor shall, on
Landlord's demand, pay to Landlord any and all sums due to Landlord, including
(without limitation) all interest and late charges with respect to past due
obligations of Tenant, costs advanced by Landlord, and damages and all expenses
(including attorneys' fees and litigation costs) that may arise in consequence
of Tenant's default. Guarantor hereby waives all requirements of notice of the
acceptance of this Guaranty. Guarantor specifically agrees that this is a
guaranty of payment and performance, not of collection or satisfaction of
judgment.
2.2 In case of the dissolution, liquidation or insolvency
(howsoever evidenced) of, or the institution of bankruptcy or receivership
proceedings against Tenant or Guarantor, all of the Obligations then existing
shall, at option of Landlord, immediately become due or accrued and payable from
Guarantor. In the event of a default by Tenant under the Lease, all dividends or
other payments received thereafter by Guarantor from Tenant or on account of the
Obligations from whatsoever source, shall be taken and applied as payment in
gross, and this Guaranty shall apply to and secure any ultimate balance that
shall remain owing to Landlord.
2.3 The liability hereunder shall in no way be terminated,
diminished, affected or impaired by (and Landlord is hereby authorized to make
from time to time, without notice to Guarantor) any extensions, renewals,
amendments, indulgences, modifications, transfers or assignments in whole or in
part of the Lease by Landlord, whether or not notice thereof is given to
Guarantor, by reason of sums paid or payable to Landlord from the proceeds of
any insurance policy or condemnation award, sale, pledge, surrender, compromise,
settlement, release, renewal, extension, indulgence, alteration, substitution,
exchange, change in, modification or other disposition of any of the
Obligations, either express or implied, or of any security, additional security
or collateral therefore. The liability hereunder shall in no way be terminated,
diminished affected or impaired by any acceptance by Landlord of any security or
additional security for, or other guarantors, or by the invalidity,
unforceability, loss of, change in priority or reduction in value in or loss of
value of any of the security or additional security, or by any failure, neglect
or omission on the part of Landlord to realize upon or protect any of the
Obligations, or any collateral or security or additional security therefor, or
to exercise any lien upon or right of appropriation of any monies, credits or
property of Tenant, possessed by Landlord, toward the liquidation of the
Obligations, or by any application of payments or credits thereon or by any
failure, neglect or omission on the part of Landlord to enforce the obligations
of the other Guarantors or by the surrender, compromise, settlement, release,
change, modification or other disposition of the Obligations of the other
Guarantors. Landlord shall have the exclusive right to determine how, when and
what application of payments and credits, if any, shall be made on the
Obligations, or any part thereof. In order to hold Guarantor liable hereunder,
there shall be no obligation on the part of Landlord, at any time, to resort for
payment to Tenant or to any other Guaranty, or to any other persons or
corporations, their properties or estates, or resort to any collateral,
security, property liens or other rights or remedies whatsoever, and Landlord
shall have the right to enforce this Guaranty irrespective of whether or not
other proceedings or steps seeking resort to or realization upon or form any of
the foregoing are pending.
3. All Landlord's diligence in collection or protection, and all
Landlord's demand and notice, as to any and everyone, whether or not Tenant or
Guarantor or others, of default and of non-payment and of the creation and
existence of any and all of the Obligations, and of any security and collateral
therefor, and of the acceptance of this Guaranty, and of any and all extensions
of credit and indulgence hereunder, are waived.
4. Notwithstanding any other provisions of this Guaranty to the
contrary, Guarantor hereby waives any claim or other rights which Guarantor may
now have or hereafter acquire against Tenant or any other guarantor of all or
any of Tenant's obligations under the Lease that arise from the existence or
performance of Guarantor's obligations under this Guaranty or otherwise (all
such claims and rights are referred to as "Guarantor's Conditional Rights"),
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification, any right to participate any
claim or remedy of Landlord against Tenant or any collateral which Landlord now
has or hereafter acquires, whether or not such claim, remedy, or right arises in
equity or under contract, statute or common law, by any payment made hereunder
or otherwise, including without limitation, the right to take or receive from
Tenant, directly or indirectly, in cash or other property or by setoff or in any
other manner of payment, or security on account of such claim or other rights.
If, notwithstanding the foregoing provisions, any amount shall be paid to
Guarantor on account of any such Guarantor's Conditional Rights and either (a)
such amount is paid to Guarantor at any time when any of Tenant's obligations
under the Lease shall not have been paid or performed in full, or (b) regardless
of when such amount is paid to Guarantor, any payment made by Tenant to Landlord
is at any time determined to be a Preferential Payment, then such amount paid to
Guarantor shall be held in trust for the benefit of Landlord and shall forthwith
be paid to Landlord to be credited and applied upon Tenant's obligations under
the Lease, whether matured or unmatured, in such order as Landlord, in its sole
and absolute discretion, shall determine. To the extent that any of the
foregoing provisions of this Section 4 shall not be enforceable, Guarantor
agrees that until the period of time has expired during which any payment made
by Tenant or Guarantor to Landlord may be determined to be a Preferential
Payment, Guarantor's Conditional Rights to the extent not validly waived shall
be subordinate to Landlord's right to full payment and performance of all the
obligations of Tenant under the Lease and Guarantor shall not enforce
Guarantor's Conditional Rights during such period.
5. Landlord may, without any notice whatsoever to any Guarantor, sell
mortgage, encumber, hypothecate, assign or transfer the Lease and all of the
Obligations, or any part thereof, or grant participation therein, and in that
event each and every immediate and successive grantor, mortgagor, trustee under
a trust deed in the nature of a mortgage, assignee, transferee, or holder or
participant in all or any part of the Lease or Obligations, shall have the right
to enforce this Guaranty, by suit or otherwise, for the benefit of such grantor,
mortgagor, trustee under a trust deed in the nature of a mortgage, assignee,
transferee, holder or participant, as full as if such grantor, mortgagor,
trustee under a trust deed in the nature of the mortgage, assignee, transferee,
holder or participant were herein by name specifically given such rights, powers
and benefits; but Landlord shall have an unimpaired right to enforce this
Guaranty for the benefit of landlord or any such participant, as to so much of
the Obligations that it has not sold, assigned or transferred.
6. Guarantor waives any and all defenses, claims and discharges of
Tenant, or any other obligor, pertaining to the Obligations, except the defense
of discharge by payment in full. Without limiting the generality of the
foregoing. Guarantor will not assert, plead or enforce against Landlord any
defense of waiver, release, discharge in bankruptcy, statute of limitations, res
judicata, statute of frauds, anti-deficiency statute, fraud, incapacity,
minority usury, illegality or unforceability which may be available to Tenant or
any other person liable in respect of any of the Obligations, or any setoff
available against Landlord to Tenant or any such other person, whether or not on
account of a related transaction. Guarantor agrees that Guarantor shall be and
remain liable for any deficiency remaining after foreclosure of any collateral
securing the Obligations, whether or not the liability of Tenant or any other
obligor for such deficiency is discharged pursuant to statute or judicial
decision.
7. Landlord's rights under this Guaranty will not be exhausted by any
action by Landlord until all of the Obligations have been fully paid and
performed and the period of time has expired during which any payment made by
Tenant or Guarantor or Landlord may be determined to be a Preferential Payment
(hereinafter defined). Guarantor further agrees that to the extent Tenant or
Guarantor makes any payment to Landlord in connection with the obligations of
Tenant under the Lease and all or any part of such payment is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid by Landlord or paid over to a trustee, receiver, or any other entity,
whether under any bankruptcy act of otherwise (any such payment is hereinafter
referred to as a "Preferential Payment"), then this Guaranty shall continue to
be effective or shall be reinstated, as the case may be, and, to the extent of
such payment or repayment by Landlord, the obligations or part thereof intended
to be satisfied by such Preferential Payment shall be revived and continued in
full force and effect as if said Preferential Payment had not been made.
8. Any debt, Obligations, obligations and liabilities (the "Debts") of
Tenant now or hereafter held by Guarantor, is hereby subordinated to the
Obligations of Tenant to Landlord; and, in the event of default by Tenant under
the Lease, such Debts of Tenant to Guarantor if Landlord so requests shall be
collected, enforced and received by Guarantor as trustee for Landlord and shall
be paid over to Landlord on account of the Obligations of Tenant to Landlord,
but without reducing or affecting in any manner the liability of Guarantor under
the other provisions of this Guaranty.
9. Guarantor agrees at any time and from time to time, on not less than
fourteen (14) days prior request by Landlord, to execute, acknowledge and
deliver to Landlord and such Landlord's proposed grantors, mortgagees, trustee
under a trust deed in a nature of a mortgage, successor or Tenant of the
Obligations a statement in writing certifying that this Guaranty is unmodified
and in full force or effect (or if the same has been modified, that the same is
in full force and effect as modified and stating the modifications) and stating
whether Guarantor claims any defenses, offsets or counterclaims against the
enforcement of this Guaranty (and if so, the nature and amount of such defense,
offset or counterclaim).
Guarantor understands that the written certificate delivered pursuant to this
paragraph may be relied upon by any prospective purchaser, mortgagee or trustee
under a trust deed in the nature of a mortgage of the Lease or Obligations.
10. Guarantor hereby consents to any remedy pursued by Landlord or its
successor in interest to enforce its rights under the Lease, in whatever order
such party may choose, including any remedies which may affect or destroy
Guarantor's right of subrogation, contribution or reimbursement or the right of
Guarantor to proceed against Tenant for reimbursement. Without limiting the
generality of the foregoing, Guarantor hereby waives any rights Guarantor may
have under the Texas Property Code. Landlord shall have no obligation to
protect, secure or insure the real estate, including all improvements thereon,
described in the Lease or any security or additional security, security
interests, liens or encumbrances of any collateral or additional collateral or
interests in properties subject thereto. Guarantor agrees that there are no
conditions or limitations to Landlord's right to enforce this Guaranty.
11. Any invalidity or unenforceability of any provision or application
of this Guaranty shall not affect other lawful provisions and applications
hereof, and to this end the provisions of this Guaranty are declared to be
severable. This Guaranty shall be construed according to the laws of the State
of California, in which State it shall be performed by Guarantor and may not be
waived, amended, released or otherwise changed except by a writing signed by
Landlord.
12. Guarantor agrees that Landlord shall have the right to file lawsuits
from time to time against Guarantor to enforce this Guaranty in any court or
courts of competent jurisdiction in Los Angeles County, California, and in
furtherance thereof, Guarantor hereby submits itself to and consents to the
jurisdiction of any such court of competent jurisdiction for lawsuits in Los
Angeles County, California.
13. If any legal action is brought to enforce or interpret any part of
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs in connections therewith. Any
judgment shall include an attorneys' fee clause which shall entitle the judgment
creditor to recover attorneys' fees incurred to enforce a judgment hereon, which
attorneys' fees shall be an element of post-judgment costs. The "prevailing
party" shall be the party who is entitled to recover his costs of suit whether
or not the suit proceeds to final judgment. The successful or prevailing party
in any legal action brought to enforce or interpret any part of this Agreement
shall be entitled to recover reasonable attorneys' fees and other costs incurred
after a judgment has been entered in defending, perfecting or enforcing the
judgment, which attorneys' fees shall be an element of post-judgment costs. The
parties agree that this post-judgment attorneys' fee provision is a distinct
contractual agreement severable from the rights set forth elsewhere in this
Agreement and shall not merge into any judgment enforcing or interpreting any
other part of this Agreement.
14. This Guaranty and every part thereof shall be effective upon
delivery to Landlord, without further act, condition or acceptance by Landlord,
shall be binding upon Guarantor and upon its successors and assigns and shall
inure to the benefit of Landlord, its grantors, mortgages, trustees under a
trust deed in nature of a mortgage, successors and assigns. Guarantor waives
notice of Landlord's acceptance hereof.
SIGNED AND DELIVERED by Guarantor as of the year and date first above
written.
GUARANTOR:
Advanced Fibre Communications, Inc.,
a Delaware corporation
By: ___________________________________ By: _________________________________
Name Printed: _________________________ Name Printed: _______________________
Title: ________________________________ Title: ______________________________
Address: ______________________________ Address: ____________________________
_______________________________________ _____________________________________
Telephone ( ) ________________________ Telephone ( ) ______________________
Facsimile ( ) ________________________ Facsimile ( ) ______________________
Federal ID No. ________________________ Federal ID No. ______________________
