EXHIBIT 10.7
NET
INDUSTRIAL SPACE LEASE
BY AND BETWEEN
TASMAN V. LLC
AS LANDLORD
AND
ADEZA BIOMEDICAL, INC.
AS TENANT
NET INDUSTRIAL SPACE LEASE
THIS LEASE, dated July 7, 1999 for reference purposes only, is made by and
between TASMAN V, LLC ("Landlord") and ADEZA BIOMEDICAL, INC. ("Tenant"), to be
effective and binding upon the parties as of the date of the designated
signatories to the Lease shall have executed this Lease (the "Effective Date of
this Lease").
ARTICLE 1. REFERENCES
1.1 REFERENCES
All references in this Lease (subject to any further clarifications
contained in this Lease) to the following terms shall have the following meaning
or refer to the respective address, person, date, time period, amount,
percentage, calendar year or fiscal year as below set forth.
A. Tenant's Address for Notices: 0000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
B. Tenant's Representative: Xxxxx X. Xxxxxxxx
Phone Number: 408-745-0975
C. Landlord's Address for Notices: C/O SARATOGA MANAGEMENT CO.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xx 00000
D. Landlord's Representative: Saratoga Management Company
Phone Number: 408-249-8105
E. Intended Commencement Date: August 15, 1999
F. Intended Term: Three (3) years
G. Lease Expiration Date: August 14, 2002
H. Tenant's Punch list Period: Fifteen (15) days
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I. August 1999 Prepaid Rent: $11,000.00 (for 8/15 thru 8/31/99)
J. Last Month's Prepaid Rent: None
K. Tenant's Security Deposit: $23,408.00 (see article 3.7)
L. Late Charge Amount: $1,100.00
M. Real Property Tax Base Year: n/a, triple net lease
N. Insurance Base Year: n/a, triple net lease
O. Tenant's Required Liability Coverage: $1,000,000 single limit
P. Tenant's Number of Parking Spaces: Sixty (60)
Q. Brokers: Xxxxx Xxxxxx Associates - Tenant
Saratoga Management Co - Landlord
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R. Project: That certain real property situated in the City of Sunnyvale
County of Santa Xxxxx, State of California, as presently improved with two (2)
building(s), which real property is shown on the Site Plan attached hereto at
Exhibit "A" and is commonly known as or otherwise described as follows:
Two concrete tilt up buildings consisting of approximately 37,600 square feet of
office, manufacturing and R & D improvements whose address(s) are commonly known
as: 1234 - 0000 Xxxx Xxxxx and 1255 - 0000 Xxxxxxxx Xxxxxx.
S. Building: That certain Building within the Project in which the leased
Premises are located, which Building is shown outlined in red on Exhibit "A"
hereto.
T. Common Areas: The "Common Areas" shall mean those areas within the
Project which are located outside the buildings and which are provided and
designated by Landlord from time to time for general use by tenants of the
Project including driveways, pedestrian walkways, parking spaces, landscaped
areas and enclosed trash disposal areas.
U. Leased Premises: That certain interior space within the Building which
space is shown outlined in red on the Floor Plan attached hereto as Exhibit "B"
consisting of approximately 17,600 square feet and, for purposes of this Lease,
agreed to contain said number of square feet. The Leased Premises are commonly
known as or otherwise described as follows:
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V. Base Monthly Rent: The term "Base Monthly Rent" shall mean the
following:
Period Base Monthly Rent
------ -----------------
8/15/99 - 8/14/00 $22,000.00
8/15/00 - 8/14/01 $22,704.00
8/15/01 - 8/14/02 $23,408.00
W. Permitted Use: The term "Permitted Use" shall mean the following:
R & D, manufacturing, sales, storage, distribution of laboratory equipment,
reagents and related devices and office use in connections therewith.
X. Exhibits: The term "Exhibits" shall mean the Exhibits to this Lease
which are described as follows:
Exhibit "A" - Site Plan showing the Project and delineating the
Building in which the Leased Premises are located.
Exhibit "B" - Floor Plan outlining the Leased Premises.
Exhibit "C" - Commission Agreement.
Exhibit "D" - Personal Property Items.
Y. Addenda: The term "Addenda" shall mean the Addendum (or Addenda) to
this Lease which is (or are) described as follows:
Paragraph 15.1 through 15.5
ARTICLE 2. LEASED PREMISES, TERM AND POSSESSION
2.1 DEMISE OF LEASED PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
for Tenant's own use in the conduct of Tenant's business and not for purposes of
speculating in real estate, for the Lease Term and upon the terms and subject to
the conditions of this Lease, that certain interior space described in Article 1
as the Leased Premises, along with the land and appurtenances thereto reserving
and excepting to Landlord the exclusive right to all profits to be derived from
any assignments or sub lettings by Tenant during the Lease Term by reason of the
appreciation in the fair market rental value of the Leased Premises. Landlord
further reserves the right to install, maintain, use and replace ducts, wires,
conduits and pipes leading through the Leased Premises in locations which will
not materially interfere with Tenant's use of the Lease Premises. Tenant's Lease
of the Leased Premises, together with the appurtenant right to use the Common
Areas as
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described in Paragraph 2.2 below, shall be conditioned upon and be subject to
the continuing compliance by Tenant with (i) all the terms and conditions of
this Lease, (ii) all Laws governing the use of the Leased Premises and the
Project, (iii) all Private Restrictions, easements and other matters now of
public record respecting the use of the Leased Premises and the Project, and
(iv) all reasonable rules and regulations from time to time established by
Landlord, which are provided to the Tenant, in writing.
2.2 RIGHT TO USE COMMON AREAS
As an appurtenant right to Tenant's right to the use of the Leased
Premises, Tenant shall have the non-exclusive right to use the Common Areas in
conjunction with other tenants of the Project and their invitees, subject to the
limitations on such use as set forth in Article 4, and solely for the purposes
for which they were designed and intended. Tenant's right to use the Common
Areas shall terminate concurrently with any termination of this Lease.
2.3 LEASE COMMENCEMENT DATE AND LEASE TERM
The term of this Lease shall begin, and the Lease Commencement Date shall
be deemed to have occurred, on the Intended Commencement Date (as set forth in
Article 1) unless either (i) Landlord is unable to deliver possession of the
Leased Premises to Tenant on the Intended Commencement Date, in which case the
Lease Commencement Date shall be determined pursuant to Paragraph 2.4 below or
(ii) Tenant enters into possession of the Leaned Premises prior to the Intended
Commencement Date, in which case the Lease Commencement Date shall be as
determined pursuant to Paragraph 2.7 below (the "Lease Commencement Date"). The
term of this Lease shall end on the Lease Expiration Date (as set forth in
Article 1), irrespective of whatever date the Lease Commencement Date is
determined to be pursuant to the foregoing sentence. The Lease Term shall be
that period of time commencing on the Lease Commencement Date and ending on the
Lease Expiration Date (the "Lease Term").
2.4 DELIVERY OF POSSESSION
Landlord shall deliver to Tenant possession of the Leased Premises on or
before the Intended Commencement Date (as set forth in Article 1) in their
presently existing condition, broom clean, unless Landlord shall have agreed, as
it condition to Tenant's obligation to accept possession of the Leased Premises,
pursuant to an Addenda attached to and made a part of this Lease to modify
existing interior improvements or to make, construct and/or install additional
specified improvements within the Leased Premises, in which case Landlord shall
deliver to Tenant possession of the Leased Premises on or before the Intended
Commencement Date as so modified and/or improved. If Landlord is unable to so
deliver possession of the Leased Premises to Tenant on or before the Intended
Commencement Date, for whatever reason, Landlord shall not be in default under
this Lease, nor shall this Lease be void, voidable or cancelable by Tenant until
the
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lapse of one hundred twenty days after the Intended Commencement Date (the
"delivery grace period"); however, the Lease Commencement Date shall not be
deemed to have occurred until such date as Landlord notifies Tenant that the
Leased Premises are Ready for Occupancy. Additionally, the delivery grace period
above set forth shall be extended for such number of days as Landlord may be
delayed in delivering possession of the Leased Premises to Tenant by reason of
Force Majeure or the actions of Tenant. If Landlord is unable to deliver
possession of the Leased Premises to Tenant within the described delivery grace
period (including any extensions thereof by reason of Force Majeure or the
actions of the Tenant), then Tenant's sole remedy shall be to cancel and
terminate this Lease, and in no event shall Landlord be liable to Tenant for
such delay. Tenant may not cancel this Lease at any time after the Landlord
notifies Tenant the Leased Premises are Ready for Occupancy.
2.5 ACCEPTANCE OF POSSESSION
Tenant acknowledges that it has inspected the Leased Premises and is
willing to accept them in their existing condition, broom clean, unless Landlord
shall have agreed, as a condition to Tenant's obligation to accept possession of
the Leased Premises, pursuant to an Addenda attached to and made a part of this
Lease to modify existing interior improvements or to make construction and/or
install additional specified improvements within the Leased premises, in which
case Tenant agrees to accept possession of the Leased Premises when Landlord has
substantially completed such modifications or improvements and the Leased
Premises are Ready for Occupancy. If Landlord shall have so modified existing
improvements or constructed additional improvements within the Leased Premises
for Tenant, Tenant shall, within Tenant's Punch list Period (as set forth in
Article 1) which shall commence on the date that Landlord notifies Tenant that
the Leased Premises are Ready for Occupancy, submit to Landlord a punch list of
all incomplete and/or improper work performed by Landlord. Upon the expiration
of Tenant's Punch list Period, Tenant shall be conclusively deemed to have
accepted the Leased Premises in their then-existing condition as so delivered by
Landlord to Tenant, except as to those items reasonably set forth in the punch
list submitted to Landlord prior to the expiration of said period. Landlord
agrees to correct all items reasonably set forth in Tenant's Punch list,
provided that such punch list was submitted to Landlord within Tenant's Punch
list Period. Additionally, Landlord agrees to place in good working order all
existing plumbing, lighting, heating, ventilating and air conditioning systems
within the Leased Premises and all man doors and roll-up truck doors serving the
Leased Premises to the extent that such systems and/or items are not in good
operating condition as of the date Tenant accepts possession of the Leased
Premises; provided that, and only if, Tenant notifies Landlord in writing of
such failures or deficiencies within thirty (30) business days from the date
Tenant so accepts possession of the Lease Premises.
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2.6 SURRENDER OF POSSESSION
Immediately prior to the expiration or upon the sooner termination of this
Lease, Tenant shall remove all of Tenant's signs from the exterior of the
Building and shall remove all of Tenant's equipment, trade fixtures, furniture,
supplies, wall decorations and other personal property from the Leased Premises,
and shall vacate and surrender the Leased Premises to Landlord in the same
condition, broom clean, as existed at the Lease Commencement Date, reasonable
wear and tear excepted. Tenant shall repair all damage to the Leased Premises
caused by Tenant's removal of Tenant's property and all damage to the exterior
of the building caused by Tenant's removal of Tenant's signs. Tenant shall patch
and refinish, to Landlord's reasonable satisfaction, all penetrations made by
Tenant or its employees to the floor, walls or ceiling of the Leased Premises,
whether such penetrations were made with Landlord's approval or not. Tenant
shall repair or replace all stained or damaged ceiling tiles, wall coverings and
floor coverings to the reasonable satisfaction of Landlord. Tenant shall repair
all damage caused by Tenant to the exterior surface of the Building and the
paved surfaces of the outside areas adjoining the Leased Premises and, where
necessary, replace or resurface the same. Additionally, Tenant shall, prior to
the expiration or sooner termination of this Lease, remove any improvements
constructed or installed by Tenant (provided such request is made at the time
consent for the alteration is given) which Landlord requests be so removed by
Tenant and repair all damage caused by such removal. Notwithstanding anything to
the contrary, Tenant shall have the right at Tenant's sole election, to either
remove or surrender at the end of the lease term those certain improvements to
the Premises described in Exhibit D attached hereto. If the Leased Premises are
not surrendered to Landlord in the condition required by this Paragraph at the
expiration or sooner termination of this Lease, Landlord may, at Tenant's
expense, so remove Tenant's signs, property and/or improvements not so removed
and make such repairs and replacements not so made or hire, at Tenant's expense,
independent contractors to perform such work. Tenant shall be liable to Landlord
for all costs incurred by Landlord in returning the Leased Premises to the
required condition, plus interest on all costs incurred from the date paid by
Landlord at a rate of interest equal to ten (10%) per annum until paid, payable
by Tenant to Landlord within thirty (30) days after receipt of a statement
therefore from Landlord. Tenant shall indemnify Landlord against loss or
liability resulting from delay by Tenant in so surrendering the Leased Premises,
including, without limitation, any claims made by any succeeding tenant or any
losses to Landlord due to lost opportunities to lease to succeeding tenants.
2.7 EARLY OCCUPANCY
Tenant is already in possession of the Premises under an existing lease
dated July 1, 1988 and Lease Extension number 6 dated October 22, 1996.
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ARTICLE 3. RENT, LATE CHARGES AND SECURITY DEPOSITS
3.1 BASE MONTHLY RENT
Commencing on the Lease Commencement Date (as determined pursuant to
Paragraph 2.3 above) and continuing throughout the Lease Term, Tenant shall pay
to Landlord, without prior demand therefore, in advance on the first day of each
calendar month, as base monthly rent, the amount set forth as "Base Monthly
Rent" in Article 1 (the "Base Monthly Rent").
3.2 ADDITIONAL RENT
Commencing on the Lease Commencement Date (as determined pursuant to
Paragraph 2.3 above) and continuing throughout the Lease Term, in addition to
the Base Monthly Rent, Tenant shall pay to Landlord as additional rent (the
"Additional Rent") the following amounts:
A. Tenant's Proportionate Share of All Project Maintenance Costs.
Landlord may xxxx Tenant, on a periodic basis not more frequently than monthly,
Tenant's Proportionate Share of such costs as paid or incurred by Landlord, and
Tenant shall pay to Landlord such share of such costs together with an
accounting fee equal to five percent of the amount so billed within thirty (30)
days from the date Landlord shall have billed Tenant for same.
B. Tenant's Proportionate Share of Landlord's Insurance Costs and
Real Property Taxes plus an accounting fee equal to five percent of such amount.
Payment shall be made by whichever of the following methods is from time to time
designated by Landlord:
(1) Landlord may xxxx to tenant, on a periodic basis not more
frequently than monthly, Tenant's Proportionate Share of Landlord's Insurance
Costs or Real Property Taxes, as paid or incurred by Landlord during the current
period together with an accounting fee equal to five percent of the amount
billed, within thirty (30) days after receipt of a written xxxx therefore from
Landlord; or
(2) Landlord may deliver to Tenant Landlord's reasonable
estimate of Landlord's Insurance Costs and/or Real Property Taxes it anticipates
will be paid or incurred for the ensuring calendar or fiscal year, as the case
requires, and Tenant shall pay its Proportionate Share for such year, together
with an accounting fee equal to five percent of the estimated amount, in equal
monthly installments during such year with the installments of Base Monthly
Rent. Landlord reserves the right to change from time to time the method of
billing Tenants its Proportionate Share or the periodic basis on which such
increases are billed.
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C. Landlord's share of the consideration received by Tenant upon
certain assignments and subletting as required by Article 7;
D. Any legal fees and costs that Tenant is obligated to pay or
reimburse to Landlord pursuant to Article 13; and
E. Any other charges or reimbursements due Landlord from Tenant
pursuant to the terms of this Lease.
3.3 YEAR-END ADJUSTMENTS
If Landlord shall have elected to charge Tenant its Proportionate Share of
Landlord's Insurance Costs and/or Real Property Taxes on an estimated basis in
accordance with the provisions of Paragraph 3.2B(2) above, Landlord shall
furnish to Tenant within three months following the end of the applicable
calendar or fiscal year, as the case may be, a statement setting forth (i) the
amount of Landlord's Insurance Costs and/or Real Property Taxes paid or incurred
during the just ended calendar or fiscal year, as appropriate, (ii) the amount
of Landlord's Insurance Costs and/or Real Property Taxes paid during the
applicable Base Year, and (iii) Tenant's Proportionate Share of Landlord's
Insurance Costs and/or Real Property taxes for the just ended fiscal or calendar
year, as appropriate. If Tenant shall have paid more than its Proportionate
Share for the previous year, Landlord shall, at its election, either (i) credit
the amount of such overpayment toward the next ensuing payment or payments of
Additional Rent that would otherwise be due or (ii) refund in cash to Tenant the
amount of such overpayment. If such year-end statements shall show that Tenant
did not pay its Proportionate Share in full, then Tenant shall pay to Landlord
the amount of such underpayment, together with the accounting fee applicable
thereto, within thirty (30) days from Landlord's billing of same to Tenant. The
provisions of this Paragraph shall survive the expiration or sooner termination
of this Lease.
3.4 LATE CHARGE AND INTEREST ON RENT IN DEFAULT
Tenant acknowledges that the late payment by Tenant of any monthly
installment of Base Monthly Rent or any Additional Rent will cause Landlord to
incur certain costs and expenses not contemplated under this Lease, the exact
amounts of which are extremely difficult or impractical to fix. Such costs and
expenses will include, without limitation, administration and collection costs
and processing and accounting expenses. Therefore, if any installment of base
Monthly Rent is not received by Landlord from Tenant within six calendar days
after the same becomes due, Tenant shall immediately pay to Landlord a late
charge in an amount equal to the amount set forth in Article 1 as the "Late
Charge Amount", and if any Additional Rent is not received by Landlord within
six calendar days after same becomes due, Tenant shall immediately pay to
Landlord a late charge in an amount equal to ten percent of the Additional Rent
not so paid. Landlord and Tenant agree that this late charge represents a
reasonable estimate of
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such costs and expenses and is fair compensation to Landlord for its loss
suffered by reason of Tenant's failure to make timely payment. In no event shall
this provision for a late charge be deemed to grant to Tenant a grace period or
extension of time within which to pay any rental installment or prevent Landlord
from exercising any right or remedy available to Landlord upon Tenant's failure
to pay each rental installment due under this Lease when due, including the
right to terminate this Lease. If any rent remains delinquent for a period in
excess of thirty (30) calendar days, then, in addition to such late charge,
Tenant shall pay to Landlord interest on any rent that is not so paid from said
sixth day at ten (10%) annual interest until paid.
3.5 PAYMENT OF RENT
All rent shall be paid in lawful money of the United States, without any
abatement, deduction of offset for any reason whatsoever, to Landlord at such
address as Landlord may designate from time to time. Tenant's obligation to pay
Base Monthly Rent and all Additional Rent shall be prorated at the commencement
and expiration of the Lease Term. The failure by Tenant to pay any Additional
Rent as required pursuant to this Lease when due shall be treated the same as a
failure by Tenant to pay Base Monthly Rent when due, and Landlord shall have the
same rights and remedies against Tenant as Landlord would have if Tenant failed
to pay the Base Monthly rent when due.
3.6 PREPAID RENT
Tenant has paid to Landlord the amount set forth in Article 1 as "First
Month's Prepaid Rent" as prepayment of rent for credit against the first
installment(s) of Base Monthly Rent due hereunder.
3.7 SECURITY DEPOSIT
A. Tenant has deposited with Landlord the amount set forth in
Article 1 as the "Security Deposit" as security for the
performance by Tenant of the terms of this Lease to be
performed by Tenant, and not as prepayment of rent. Landlord
may apply such portion or portions of the Security Deposit as
are reasonably necessary for the following purposes: (i) to
remedy any default by Tenant in the payment of Base Monthly
Rent or Additional Rent or a late charge or interest on
defaulted rent; (ii) to repair damage to the Leased Premises
caused by Tenant; (iii) to clean and repair the Leased
Premises following their surrender to Landlord if not
surrendered in the condition required pursuant to the
provisions of Article 2; and (iv) to remedy any other default
of Tenant to the extent permitted by Law including, without
limitation, paying in full on Tenant's behalf any sums claimed
by materialmen or contractors of Tenant to be owing to them by
Tenant for work done or improvements made at Tenant's request
to the Leased Premises. In this regard, Tenant
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hereby waives any restriction on the uses to which the
Security Deposit may be applied as contained in Section
1950.7(c) of the California Civil Code and/or any successor
statute. In the event the Security Deposit or any portion
thereof is so used, Tenant shall pay to Landlord, promptly
upon demand, an amount in cash sufficient to restore the
Security Deposit to the full original sum. If Tenant fails to
promptly restore the Security Deposit and if Tenant shall have
paid to Landlord any sums and "Last Month's Prepaid Rent",
Landlord may, in addition to any other remedy Landlord may
have under this Lease, reduce the amount of Tenant's Last
Month's Prepaid Rent by transferring all or portions of such
Last Month's Prepaid Rent to Tenant's Security Deposit until
such Security Deposit is restored to the amount set forth in
Article 1. Landlord shall not be deemed a trustee of the
Security Deposit. Landlord may use the Security Deposit in
Landlord's ordinary business and shall not be required to
segregate it from its general accounts. Tenants shall not be
entitled to any interest on the Security Deposit. If Landlord
transfer the Building during the Lease Term, Landlord may pay
the Security Deposit to any subsequent owner in conformity
with the provisions of Section 1950.7 of the California Civil
Code and/or any successor statute, in which event the
transferring Landlord shall be released from all liability for
the return of the Security Deposit. Tenant specifically grants
to Landlord a period of forty five (45) days following a
surrender of the Leased Premises by Tenant to Landlord within
which to restore the Security Deposit (less permitted
deductions) to Tenant, it being agreed between Landlord and
Tenant that sixty days is a reasonable period of time within
which to inspect the Leased Premises, make required repairs,
receive and verify workmen's xxxxxxxx therefore, and prepare a
final accounting with respect to such deposit. In no event
shall the Security Deposit or any portion thereof, be
considered prepaid rent.
B. Landlord acknowledges that Tenant's security deposit of
$25,000. The difference between $23,408.00 and $25,000.00 will
be credited toward September 1999 rent.
ARTICLE 4. USE OF LEASED PREMISE AND COMMON AREAS
4.1 PERMITTED USE
Tenant shall be entitled to use the Leased Premises solely for the
"Permitted Use" as set forth in Article 1 and for no other purpose whatsoever.
Tenant shall continuously and without interruption use the Leased Premises for
such purpose for the entire Lease Term. Any discontinuance of such use for a
period of thirty consecutive calendar days shall be, at Landlord's election, a
default by Tenant under the terms of this Lease.
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Subject to the limitations contained in this Article 4, Tenant shall have the
right to use the Common Area, in conjunction with other tenants and during
normal business hours solely for the purposes for which they were intended and
for no other purposes whatsoever. Tenant shall have the right to use the
exterior surfaces of the exterior walls, the area beneath the floor or the area
above the ceiling of the Leased Premises, subject to the Landlord's consent,
which shall not be unreasonably withheld.
4.2 GENERAL LIMITATIONS ON USE
Tenant shall not do or permit anything to be done in or about the Leased
Premises, the Building, the Common Areas or the Project which does or could (i)
interfere with the rights of other tenants or occupants of the Building or the
Project, (ii) jeopardize the structural integrity of the Building or (iii) cause
damage to any part of the Building or the Project. Tenant shall not operate any
equipment within the Leased Premises which does or could (i) injure, vibrate or
shake the Leased Premises or the Building, (ii) damage, overload or impair the
efficient operation of any electrical, plumbing, heating, ventilating or air
conditioning systems within or servicing the Leased Premises or the Building or
(iii) damage or impair the efficient operation of the sprinkler system (if any)
within or servicing the Leased Premises or the Building. Tenant shall not
install any equipment or antennas on or make any penetrations of the exterior
walls or roof of the Building. Tenant shall not affix any equipment to or make
any penetrations or cuts in the floor, ceiling or walls of the Leased Premises.
Tenant shall not place any loads upon the floors, walls, ceiling or roof systems
which could endanger the structural integrity of the Building or damage its
floors, foundations or supporting structural components. Tenants shall not place
any explosive, flammable or harmful fluids or other waste materials in the
drainage systems of the Building or the Project, Tenant shall not drain or
discharge any fluids in the landscaped areas or across the paved areas of the
Project. Tenant shall not use any area located outside the Leased Premises for
the storage of its materials, supplies, inventory or equipment, and all such
materials, supplies, inventory and equipment shall at all times be stored within
the Leased Premises. Tenant shall not commit or permit to be committed any waste
in or about the Leased Premises, the Common Areas or the Project.
4.3 NOISE AND EMISSIONS
All noise generated by Tenant in its use of the Leased Premises shall be
confined or muffled so that it does not interfere with the business of or annoy
other tenants of the Building or the Project. All dust, fumes, odors and other
emissions generated by Tenant's use of the Leased Premises shall be sufficiently
dissipated in accordance with sound environmental practices and exhausted from
the Leased Premises in such a manner so as not to interfere with the business of
or annoy other tenants of the Building or the Project, or cause any damage to
the Leased Premises or the Building or any component part thereof or the
property of other tenants of the Building or the Project.
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4.4 TRASH DISPOSAL
Tenant shall provide trash and garbage disposal facilities inside the
Leased Premises for all of its trash, garbage and waste requirements and shall
cause such trash, garbage and waste to be regularly removed from the Leased
Premises at Tenant's sole cost. Tenant shall keep all areas outside the Leased
Premises and all fire corridors and mechanical equipment rooms in or about the
Leased Premises free and clear of all trash, garbage, waste and boxes containing
same at all times.
4.5 PARKING
Tenant is allocated, and Tenant and its employees and invitees shall have
the nonexclusive right to use, not more than the number of parking spaces set
forth in Article 1 as "Tenant's Number of Parking Spaces". Tenant shall not, at
any time, use or permit its employees or invitees to use more parking spaces
than the number so allocated to Tenant. Tenant shall not have the exclusive
right to use any specific parking space, and Landlord reserves the right to
designate from time to time the location of the parking spaces allocated for
Tenant's use. In the event Landlord elects or is required by any Law to limit or
control parking within the Project, whether by validation of parking tickets or
any other method, Tenant agrees to participate in such validation or other
programs as reasonably established by Landlord. Tenant shall not, at any time,
park or permit to be parked any trucks or vehicles adjacent to entryways or
loading areas within the Project so as to interfere in any way with the use of
such areas, nor shall Tenant, at any time, park or permit the parking of
Tenant's trucks or other vehicles, or the trucks and vehicles of Tenant's
supplier or others, in any portion of the Common Areas not designated by
Landlord for such use by Tenant. Tenant shall not, at any time, park or permit
to be parked any recreational vehicles, inoperative vehicles or equipment on any
portion of the common parking area or other Common Areas of the Project. Tenant
agrees to assume responsibility for compliance by its employees and invitees
with the parking provisions contained herein. If Tenant or its employees park
any vehicle within the Project in violation of these provisions, then Landlord
may charge Tenant, as Additional Rent, and Tenant agrees to pay, as Additional
Rent, Ten Dollars per day for each day or partial day that each such vehicle is
parked in any area other than that designated. Tenant hereby authorizes
Landlord, at Tenant's sole expense, to tow away from the Project and store until
redeemed by its owner any vehicle belonging to Tenant or Tenant's employees
parked in violation of these provisions.
4.6 SIGNS
Tenant shall not place or install on or within any portion of the Lease
Premises, the Building, the Common Areas or the Project any sign (other than a
business identification sign first approved by Landlord in accordance with this
Paragraph), advertisements, banners, placards or pictures which are visible from
the exterior of the Leased Premises. Tenant shall not place or install on or
within any portion of the Leased
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Premises, the Building, the Common Areas or the Project any business
identification sign which is visible from the exterior of the Leased Premises
until Landlord shall have first approved in writing the location, size, content,
design, method of attachment and material to be used in the making of such sign.
Any signs, once approved by Landlord, shall be installed only in strict
compliance with Landlord's approval, at Tenant's expense, using a person first
approved by Landlord to install same. Landlord may remove any signs (not first
approved in writing by Landlord), advertisements, banners, placards or pictures
so placed by Tenant on or within the Leased Premises, the Building, the Common
Areas or the Project and charge to Tenant the cost of such removal, together
with any costs incurred by Landlord to repair any damage caused thereby,
including any cost incurred to restore the surface upon which such sign was so
affixed to its original condition. Tenant shall remove any such signs, repair
any damage caused thereby, and restore the surface upon which the sign was
affixed to its original condition, all to Landlord's reasonable satisfaction,
upon the termination of this Lease.
4.7 COMPLIANCE WITH LAWS
Tenant shall not use or permit any person to use the Leased Premises in
any manner which violates any Laws. Tenant shall abide by and shall promptly
observe and comply with, at its sole cost and expense, all Laws respecting the
use and occupancy of the Leased Premises, the Building, the Common Areas or the
Project and shall defend with competent counsel, indemnify and hold Landlord
harmless from any claims, damages or liability resulting from Tenant's failure
to do so. Notwithstanding the foregoing, in no event shall the Tenant be
required to make any alterations or improvements to the Premises that are of a
capital or structural nature and are required by applicable law unless such
alterations or improvements are made necessary by Tenant's particular use of the
Premises (as opposed to office uses generally) or alterations made to the
Premises by Tenant.
4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS
With respect to any insurance policies carried by Landlord in accordance
with the provisions of this Lease, Tenant shall not conduct (nor permit any
other person to conduct) any activities within the Leased Premises, or store,
keep or use anything within the Leased Premises which (i) is prohibited under
the terms of any such policies, (ii) could result in the termination of the
coverage afforded under any such policies, (iii) could give to the insurance
carrier the right to cancel any of such policies, or (iv) could cause an
increase in the rates (over standard rates) charged for the coverage afforded
under any of such policies. Tenant shall comply with all requirements of any
insurance company, insurance underwriter, or Board of Fire Underwriters which
are necessary to maintain, at standard rates, the insurance coverage carried by
either Landlord or Tenant pursuant to this Lease.
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4.9 LANDLORD'S RIGHT TO ENTER
Landlord and its agents shall have the right to enter the Leased Premises
during normal business hours and subject to Tenant's reasonable security
measures for the purpose of (i) inspecting the same; (ii) supplying any services
to be provided by Landlord to Tenant; (iii) showing the Leased Premises to
prospective purchasers, mortgagee or tenants; (iv) making necessary alterations,
additions or repairs; (v) performing any of Tenant's obligations when Tenant has
failed to do so after giving Tenant reasonable written notice of its intent to
do so; and (vi) posting notices of non-responsibility. Additionally, Landlord
shall have the right to enter the Leased Premises at times of emergency. Any
entry into the Premises or portions thereof obtained by Landlord in accordance
with this Paragraph shall not under any circumstances be construed or deemed to
be a forcible or unlawful entry or detainer of the Premises, or an eviction,
actual or constructive, of Tenant from the Premises or any portion thereof.
Landlord agrees to conduct all of Landlord's activities on the Premises in a
manner designed to cause the least possible interruption to the Tenant and
Tenant's use of the Premises.
4.10 CONTROL OF COMMON AREAS
Landlord shall at all times have exclusive control of the Common Areas.
Landlord shall have the right, without the same constituting an actual or
constructive eviction and without entitling Tenant to any reduction of or
abatement of rent, to: (i) temporarily close all or any part of the Common Areas
to whatever extent required in the opinion of Landlord's counsel to prevent a
dedication thereof or the accrual of any prescriptive rights therein; (ii)
temporarily close all or any part of the Common Areas to perform maintenance or
for any other reason deemed sufficient by Landlord; (iii) change the shape,
size, location, number and extent of improvements within the Common Areas
including, without limitation, changing the location of driveways, entrances,
exits, parking spaces, parking areas, sidewalks, directional or locator signs,
or the direction of the flow of traffic; and (iv) to make additions to the
Common Areas including, without limitation, the construction of parking
structures. Landlord shall have the right to change the name or address of the
building. Tenant, in its use of the Common Areas, shall keep the Common Areas
free and clear of all obstructions created for or permitted by Tenant. If, in
the opinion of Landlord, unauthorized persons are using any of the Common Areas
by reason of, or under claim of, the express or implied authority or consent of
Tenant, then Tenant, upon demand of Landlord, shall restrain, to the fullest
extent then allowed by Law, such unauthorized use, and shall initiate such
appropriate proceedings as may be required to so restrain such use. Nothing
contained herein shall affect the right of Landlord at any time to remove any
unauthorized person from the Common Areas or to prohibit the use of the Common
Areas by unauthorized persons, including, without limitation, the right to
prohibit mobile food and beverage vendors. In exercising any such right
regarding the Common Areas, Landlord shall make a reasonable effort to minimize
any disruption to Tenant's business.
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4.11 RULES AND REGULATIONS
Landlord shall have the right from time to time to establish reasonable
rules and regulations and/or amendments or additions thereto respecting the use
of space within the Project and the use of the Common Areas for the care and
orderly management of the Project and the safety of its tenants, occupants and
invitees. Upon delivery to Tenant of a copy of such rules and regulations or any
amendment or additions thereto (which do not conflict with the terms of this
lease), Tenant shall comply with such rules and regulations. A violation by
Tenant of any of such rules and regulations shall constitute a default by Tenant
under this Lease. If there is a conflict between the rules and regulations and
any of the provisions of this Lease, the provisions of this Lease shall prevail.
Landlord shall not be responsible or liable to Tenant for the violation of such
rules and regulations by any other tenant of the Project.
4.12 ENVIRONMENTAL PROTECTION
Landlord may voluntarily cooperate in a reasonable manner with the efforts
of all governmental agencies in reducing actual or potential environmental
damage. Tenant shall not be entitled to terminate this Lease or to any reduction
in or abatement of rent by reason of such compliance or cooperation. Tenant
agrees at all times to cooperate fully with Landlord and to abide by all rules
and regulations and requirements which Landlord may reasonably prescribe in
order to comply with the requirements and recommendations of governmental
agencies regulating, or otherwise involved in, the protection of the
environment.
ARTICLE 5. REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
5.1 REPAIRS AND MAINTENANCE
Except in the case of damage to or destruction of the Leased Premises, the
Building or the Project caused by an Act of God or other peril, in which case
the provisions of Article 10 shall control, the parties shall have the following
obligations and responsibilities with respect to the repair and maintenance of
the Leased Premises, the Building and the Common Areas.
A. Tenant's Obligation: Tenant shall, at all times during the Lease
Term at its sole cost and expense, regularly clean and continuously keep and
maintain in good order, condition and repair the Leased Premises and every part
thereof and all appurtenances thereto, including, without limiting the
generality of the foregoing, (i) all interior walls, floor and ceilings, (ii)
all windows, doors and skylights, (iii) all electrical wiring, conduits,
connectors and fixtures, (iv) all plumbing, pipes, sinks, toilets, faucets and
drains, (v) all lighting fixtures, bulbs, and lamps, (vi) all heating,
ventilating and air conditions equipment located within the Leased Premises or
located outside the Leased Premises (e.g. rooftop compressors) and serving the
Leased Premises (other than
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Common Area HVAC as defined in Subparagraph B below), and (vii) all entranceways
to the Leased Premises. Tenant, if requested to do so by Landlord, shall hire,
at Tenant's sole cost and expense, a licensed heating, ventilating and air
conditioning contractor to regularly and periodically inspect (not less
frequently than every three months) and perform required maintenance on the
heating, ventilating and air conditioning equipment and systems serving the
Leased Premises, or alternatively, Landlord may, at its election, contract in
its own name for such regular and periodic inspections of and maintenance on
such heating, ventilating and air conditioning equipment and systems and charge
to Tenant, as Additional Rent, the cost thereof. Tenant shall, at its sole cost
and expense, repair all damage to the Building, the Common Areas or the Project
caused by the activities of Tenant, its employees, invitees or contractors
promptly following written notice from Landlord to so repair such damage. If
Tenant shall fail to perform the required maintenance or fail to make repairs
required of it pursuant to this Paragraph within a reasonable period of time
following notice from Landlord to do so, then Landlord may, at its election and
without waiving any other remedy it may otherwise have under this Lease or at
Law, perform such maintenance or make such repairs and charge to Tenant, as
Additional Rent, the costs so incurred by Landlord for same. All glass within or
a part of the Leased Premises, both interior and exterior, is at the sole risk
of Tenant and any broken glass shall promptly be replaced by Tenant at Tenant's
expense with glass of the same kind, size and quality.
B. Landlord's Obligation: Landlord shall, at all times during the
Lease Term, maintain in good condition and repair: (i) the exterior and
structural parts of the Building (including the foundation, sub-flooring,
load-bearing and exterior walls, and roof); (ii) the Common Areas; and (iii) the
electrical and plumbing systems located outside the Leased Premises which serve
the Building. Additionally, to the extent that the Building contains central
heating, ventilating and/or air conditioning systems located outside the Leased
Premises which are designed to serve, and are then servicing, more than a single
tenant within the Building ("Common HVAC"), Landlord shall maintain in good
operating condition and repair such Common HVAC equipment and systems. The
provisions of this Subparagraph B shall in no way limit the right of Landlord to
charge to tenants of the Project, as Additional Rent pursuant to Article 3, the
costs incurred by Landlord in making such repairs and/or performing such
maintenance to the extent such costs are deemed to be Project Maintenance Costs
pursuant to Article 13.12 C.
C. Capital Improvements: The costs incurred by Landlord in
performing capital improvements (such as: new roof or new parking lot) shall be
amortized over the useful life according to generally accepted accounting
standards.
5.2 SERVICES AND UTILITIES
The parties shall have the following responsibilities and obligations with
respect to obtaining and paying the cost of providing the following utilities
and other services to the Leased Premises:
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A. Gas and Electricity: Tenant shall arrange, at its sole cost and
expense and its own name, for the supply of gas and electricity to the Leased
Premises. In the event that such services are not separately metered, Tenant
shall, at its sole expense, cause such meters to be installed. Tenant shall be
responsible for determining if the local supplier of gas and/or electricity can
supply the needs of Tenant and whether at not the existing gas and/or electrical
distribution systems within the Building and the Leased Promises are adequate
for Tenant's needs. Tenant shall pay all charges for gas and electricity as so
supplied to the Leased Premises.
B. Water: Landlord shall provide the Leased Premises with water for
lavatory and drinking purposes only. Tenant shall pay, as Additional Rent, the
cost to Landlord of providing water to the Leased Promises. In the event
Landlord determines that Tenant is using more water than what normally would be
required for lavatory and drinking purposes, Landlord at its election may
install (or require Tenant to install at Tenant's sole cost) a separate meter
for purposes of measuring Tenant's water usage and, based upon such meter
readings, periodically charge Tenant, as Additional Rent, a sum equal to
Landlord's estimate of the cost of Tenant's excess water usage. In the event
that Landlord shall so install such a separate meter, Tenant shall pay to
Landlord, upon demand, the cost incurred by Landlord in purchasing and
installing such meter and thereafter all costs incurred by Landlord in
maintaining said meter. The cost of Tenant's excess water usage shall include
any costs to Landlord in keeping account of such usage and all governmental
fees, public charges of the like attributable to or based upon (such as sewer
usage fees) the use of water to the extent of such excess usage.
C. Security Service: Tenant acknowledges that Landlord is not
responsible for the security of the Leased Premises or the protection of
Tenant's property or Tenant's employees, invitees or contractors, and that to
the extent Tenant determines that such security or protection services are
advisable or necessary, Tenant shall arrange for and pay the costs of providing
same.
D. Trash Disposal: Tenant acknowledges that Landlord is not
responsible for the disposal of Tenant's waste, garbage or trash and that Tenant
shall arrange, in its own name and at its sole cost, for the regular and
periodic removal of such waste, garbage or trash from the Leased Premises. In no
event shall Landlord be required to provide trash bins for the disposal of
Tenant's waste, garbage or trash.
5.3 ENERGY AND RESOURCE CONSUMPTION
Landlord may voluntarily cooperate in a reasonable manner with the efforts
of governmental agencies and/or utility suppliers in reducing energy or other
resource consumption within the Project. Tenant shall not be entitled to
terminate this Lease or to any reduction in or abatement of rent by reason of
such compliance or cooperation. Tenant agrees at all times to cooperate fully
with Landlord and to abide by all reasonable rules established by Landlord (i)
in order to maximize the efficient operation of the
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electrical, heating, ventilating and air conditioning systems and all other
energy or other resource consumption systems within the Project and/or (ii) in
order to comply with the requirements and recommendations of utility suppliers
and governmental agencies regulating the consumption of energy and/or other
resources.
5.4 LIMITATION OF LANDLORD'S LIABILITY
Landlord shall not be liable to Tenant for injury to Tenant, its
employees, agents, invitees or contractors, damage to Tenant's property or loss
of Tenant's business or profits, nor shall Tenant be entitled to terminate this
Lease or to any reduction in or abatement of rent by reason of (i) Landlord's
failure to perform any maintenance or repairs to the Project until Tenant shall
have first notified Landlord, in writing, of the need for such maintenance or
repairs, and then only after Landlord shall have five (5) days following its
receipt of such notice within which to commence the performance of such
maintenance or repairs, or (ii) any failure, interruption, rationing or other
curtailment in the supply of water, electric current, gas or other utility
service to the Leased Premises, the Building or the Project from whatever cause
(other than Landlord's active negligence or willful misconduct), or (iii) the
unauthorized intrusion or entry into the Leased Premises by third parties (other
than Landlord).
ARTICLE 6. ALTERATIONS AND IMPROVEMENTS
6.1 BY TENANT
Tenant shall not make any alterations to or modifications of the Leased
Premises or construct any improvements to or within the Leased Premises without
Landlord's prior written approval, and then not until Landlord shall have first
approved, in writing, the plans and specifications therefore, which approval
shall not be unreasonably withheld. All such modifications, alterations or
improvements, once so approved, shall be made, constructed or installed by
Tenant at Tenant's expense, using a licensed contractor first approved by
Landlord, in substantial compliance with the Landlord-approved plans and
specifications therefore. All work undertaken by Tenant shall be done in
accordance with all Laws and in a good and workmanlike manner using new
materials of good quality. Tenant shall not commence the making of any such
modifications or alterations or the construction of any such improvements until
(i) all required governmental approvals and permits shall have been obtained,
(ii) all requirements regarding insurance imposed by this Lease have been
satisfied, (iii) Tenant shall have given Landlord at least five business days
prior written notice of its intention to commence such work so that Landlord may
post and file notices of non-responsibility, and (iv) if requested by Landlord,
Tenant shall have obtained contingent liability and broad form builder's risk
insurance in an amount satisfactory to Landlord to cover any perils relating to
the proposed work not covered by insurance carried by Tenant pursuant in Article
9. In no event shall tenant make any modifications, alterations or improvements
to the Common Areas or any areas outside of the Leased Premises. As used in this
Article, the term
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"modifications, alterations and/or improvements" shall include, without
limitation, the installation of additional electrical outlets, overhead lighting
fixtures, drains, sinks, partitions, doorways, or the like.
6.2 OWNERSHIP OF IMPROVEMENTS
All modifications, alterations and improvements made or added to the
Leased Premises by Tenant (other than Tenant's inventory, equipment, movable
furniture, wall decorations and trade fixtures) shall be deemed real property
and a part of the Leased Premises, but shall remain the Property of Tenant
during the Lease Term. Any such modifications, alterations or improvements, once
completed, shall not be altered or removed from the Leased Premises during the
Lease Term without Landlord's written approval first obtained in accordance with
the provisions of Paragraph 6.1 above. At the expiration or sooner termination
of this Lease, all such modifications, alterations and improvements (other than
Tenant's inventory, equipment, movable furniture, wall decorations and trade
fixtures) shall automatically become the property of Landlord and shall be
surrendered to Landlord as a part of the Leased Premises as required pursuant to
Article 2, unless Landlord shall require Tenant, at the time the consent of such
alteration is given, to remove any of such modifications, alterations or
improvements in accordance with the provisions of Article 2, in which case
Tenant shall so remove same. Landlord shall have no obligation to reimburse to
Tenant all or any portion of the cost or value of any such modifications,
alterations or improvements so surrendered to Landlord. All modifications,
alterations or improvements which are installed or constructed on or attached to
the Leased Premises by Landlord at Landlord's expense shall be deemed real
property and a part of the Leased Premises and shall be the property of the
Landlord. All lighting, plumbing, electrical, heating, ventilating and air
conditioning fixtures, partitioning, window coverings, wall coverings and floor
coverings installed by Tenant shall be deemed improvements to the Leased
Premises and not trade fixtures of Tenant.
6.3 ALTERATIONS REQUIRED BY LAW
Tenant shall make all modifications, alterations and improvements to the
Leased Premises, at its sole cost, that are required by Law because of (i)
Tenant's use or occupancy of the Leased Premises, (ii) Tenant's application for
any permit or governmental approval, or (iii) Tenant's making of any
modifications, alterations or improvements to or within the Leased Premises. If
Landlord shall, at any time during the Lease Term, be required by any
governmental authority to make any modifications, alterations or improvements to
the Building or the Project, the cost incurred by Landlord in making such
modifications, alterations or improvements, including an actual "cost of money"
factor, shall be amortized by Landlord over the useful life of such
modifications, alterations or improvements, as determined in accordance with
generally accepted accounting standards, and the monthly amortized cost of such
modifications, alterations and improvement as so amortized shall be considered a
Project Maintenance Costs.
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6.4 LIENS
Tenant shall keep the Leased Premises, the Building and the Project free
from any liens and shall pay when due all bills arising out of any work
performed, materials furnished, or obligations incurred by Tenant, its agents,
employees or contractors relating to the Leased Premises. If any such claim of
lien is recorded against Tenant's interest in this Lease, the Leased Premises,
the Building or the Project, Tenant shall bond against, discharge or otherwise
cause such lien to be entirely released within ten days after the same has been
so recorded.
ARTICLE 7. ASSIGNMENT AND SUBLETTING BY TENANT
7.1 BY TENANT
Tenant shall not sublet the Leased Premises (or any portion thereof) or
assign or encumber its interest in this Lease, whether voluntarily or by
operation of Law, without Landlord's prior written consent, which consent shall
not be unreasonably withheld, first obtained in accordance with the provisions
of this Article 7. Any attempted subletting, assignment or encumbrance without
Landlord's prior written consent, at Landlord's election, shall constitute a
default by Tenant under the terms of this Lease. The acceptance of rent by
Landlord from any person or entity other than Tenant, or the acceptance of rent
by Landlord from Tenant with knowledge of a violation of the provisions of this
Paragraph, shall not be deemed to be a waiver by Landlord of any provision of
this Article or this Lease or to be a consent to any subletting by Tenant or any
assignment.
7.2 MERGER OR REORGANIZATION
If Tenant is a corporation, any dissolution, merger, consolidation or
other reorganization of Tenant, or the sale or other transfer in the aggregate
over the Lease Term of a controlling percentage of the capital stock of Tenant,
shall be deemed a voluntary assignment of Tenant's interest in this Lease. The
phrase "controlling percentage" means the ownership of and the right to vote
stock possessing more than fifty percent of the total combined voting power of
all classes of Tenant's capital stock issued, outstanding and entitled to vote
for the election of directors. If Tenant is a partnership, a withdrawal or
change, voluntary, involuntary or by operation of Law, of a general partner, or
the dissolution of the partnership, shall be deemed a voluntary assignment of
Tenant's interest in this Lease. Notwithstanding anything herein to the
contrary, nothing herein shall be deemed to prevent Tenant from issuing economic
interests in Tenant as a result of a round of financing or a strategic
investment by an outside party. Said issuance shall not be deemed an assignment
of this lease, even if a controlling percentage of Tenant's interest transfers
as long as the net worth of the Tenant does not decrease.
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7.3 LANDLORD'S ELECTION
If Tenant shall desire to assign its interest under this Lease or to
sublet the Leased Premises, Tenant must first notify Landlord, in writing, of
its intent to so assign or sublet, at least thirty (30) days in advance of the
date it intends to so assign its interest in this Lease or sublet the Leased
Premises but not sooner than one hundred eighty days in advance of such date,
specifying in detail the terms of such proposed assignment or subletting,
including the name of the proposed assignee or sublessee, the proposed
assignee's or sublessees's intended use of the Leased Premises, a current
financial statement of such proposed assignee of sublessee and the form of
documents to be used in effectuating such assignment or subletting. Landlord
shall have a period of fifteen days following receipt of such notice within
which to do one of the following: (a) cancel and terminate this Lease effective
as of the intended subletting or assignment date set forth in Tenant's notice,
or (b) if Landlord shall not have elected to cancel and terminate this Lease, to
either (i) consent to such requested assignment of subletting subject to
Tenant's compliance with the conditions set forth in Paragraph 7.4 below or (ii)
refuse to so consent to such requested assignment or subletting, provided that
such consent shall not be unreasonably refused. During said fifteen day period,
Tenant covenants and agrees to supply to Landlord, upon request, all necessary
or relevant information which Landlord may reasonably request respecting such
proposed assignment or subletting and/or the proposed assignee or sublessee.
Landlord's failure to respond to a request for an assignment or subletting
within fifteen (15) days of receipt thereof shall be deemed a consent to such
request.
7.4 CONDITIONS TO LANDLORDS CONSENT
If Landlord elects to consent, or shall have been ordered to so consent by
a court of competent jurisdiction to such requested assignment, subletting or
encumbrance, such consent shall be expressly conditioned upon the occurrence of
each of the conditions below set forth, and any purported assignment, subletting
or encumbrance made or ordered prior to the full and complete satisfaction of
each of the following conditions shall be void and, at the election of Landlord,
which election may be exercised at any time following such a purported
assignment, subletting or encumbrance but prior to the satisfaction of each of
the stated conditions, shall constitute a material default by Tenant under this
Lease giving Landlord the absolute right to terminate this Lease unless such
default is promptly cured by satisfying in full each such condition by the
assignee, sublessee or encumbrancer. The conditions are as follows:
A. Landlord having approved in form and substance the assignment or
sublease agreements (or the encumbrance agreement), which approval shall not be
unreasonably withheld by Landlord if the requirements of this Article 7 are
otherwise complied with.
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B. Each such sublessee or assignee having agreed, in writing
satisfactory to Landlord and its counsel and for the benefit of Landlord, to
assume, to be bound by, and to perform the obligations of this Lease to be
performed by Tenant (or, in the case of an encumbrance, each encumbrancer having
similarly agreed to assume, be bound by and to perform Tenant's obligations upon
a foreclosure or transfer in lieu thereof).
C. Tenant having fully and completely performed all of its
obligations under the terms of this Lease through and including the date of such
assignment or subletting.
D. Tenant having reimbursed to Landlord all reasonable costs and
attorneys' fees incurred by Landlord in conjunction with the processing and
documentation of any such requested subletting, assignment or encumbrance.
E. Tenant having delivered to Landlord a complete and fully executed
duplicate original of such sublease agreement, assignment agreement or
encumbrance (as applicable) and all related agreements.
F. Tenant having paid, or having agreed in writing to pay as to
future payments, to Landlord one hundred percent of all assignment consideration
or excess rentals to be paid to Tenant or to any other on Tenant's behalf or for
Tenant's benefit for such assignment or subletting as follows:
(1) If Tenant assigns its interest under this Lease and if all
or a portion of the consideration for such assignments is to be paid by the
assignee at the time of the assignment, that Tenant shall have paid to Landlord
and Landlord shall have received an amount equal to one hundred percent of the
assignment consideration so paid or to be paid (whichever is greater) at the
time of the assignment by the assignee or;
(2) If Tenant assigns its interest under this Lease and if
Tenant is to receive all or a portion of the consideration for such assignment
in future installments, that Tenant and Tenant's assignee shall have entered
into a written agreement with and for the benefit of Landlord satisfactory to
Landlord and its counsel whereby Tenant and Tenant's assignee jointly agree to
pay to Landlord an amount equal to one hundred percent of all such future
assignment consideration installments to be paid by such assignee as and when
such assignment consideration is so paid.
(3) If Tenant subleases the Leased Premises, that Tenant and
Tenant's sublessee shall have entered into a written agreement with and for the
benefit of Landlord satisfactory to Landlord and its counsel whereby Tenant and
Tenant's sublessee jointly agree to pay to Landlord one hundred percent of all
excess rentals to be paid by such sublessee as and when such excess rentals are
so paid.
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7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTAL DEFINED
For purposes of this Article, the term "assignment consideration" shall
mean all consideration to be paid by the assignee to Tenant or to any other on
Tenant's behalf or for Tenant's benefit as consideration for such assignment,
less any commissions paid by Tenant to a licensed real estate broker for
arranging such assignment (not to exceed then standard rates), Tenant's
reasonable legal fees in connection with the assignment or subletting and the
term "excess rentals" shall mean all consideration to be paid by the sublessee
to Tenant or to any other on Tenant's behalf or for Tenant's benefit for the
sublease of the Leased Premises in excess of the rent due Landlord under the
terms of this Lease for the same period, less any commissions paid by Tenant to
a licensed real estate broker for arranging such sublease (not to exceed then
standard rates). Tenant agrees that the portion of any assignment consideration
and/or excess rentals arising from any assignment or subletting by Tenant which
is to be paid to Landlord pursuant to this Article now is and shall then be the
property of Landlord and not the property of Tenant.
7.6 PAYMENTS
All payments required by this Article to be made to Landlord shall be made
in cash in full as and when they become due. At the time when Tenant, Tenant's
assignee or sublessee makes each such payment to Landlord, Tenant or Tenant's
assignee or sublessee, as the case may be, shall deliver to Landlord an itemized
statement in reasonable detail showing the method by which the amount due
Landlord was calculated and certified by the party making such payment as true
and correct.
7.7 GOOD FAITH
The rights granted to Tenant by this Article are granted in consideration
of Tenant's express covenant that all pertinent allocations which are made by
Tenant between the rental value of the Leased Premises and the value of any of
Tenant's personal property which may be conveyed or leased generally
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in good faith. If Tenant shall breach this Covenant of Good Faith,
Landlord may immediately declare Tenant to be in default under the terms of this
Lease and terminate this Lease and/or exercise any other rights and remedies
Landlord would have under the terms of this Lease in the case of a material
default by Tenant under this Lease.
7.8 EFFECT OF LANDLORD'S CONSENT
No subletting, assignment or encumbrance, even with the consent of
Landlord, shall relieve Tenant of its personal and primary obligation to pay
rent and to perform all of the other obligations to be performed by Tenant
hereunder. Consent by Landlord to one or more assignments or encumbrances of
Tenant's interest in this Lease to one or
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more sublettings of the Leased Premises shall not be deemed to be a consent to
any subsequent assignment, encumbrance or subletting. If Landlord shall have
been ordered by a court of competent jurisdiction to consent to a requested
assignment or subletting, or such and assignment or subletting shall have been
ordered over the objection of Landlord, such assignment or subletting shall not
be binding between the assignee (or sublessee) and Landlord until such time as
all conditions set forth in Paragraph 7.4 above have been fully satisfied (to
the extent not then satisfied) by the assignee or sublessee, including, without
limitation, the payment to Landlord of all agreed assignment considerations
and/or excess rentals then due Landlord.
ARTICLE 8. LIMITATIONS ON LANDLORD'S LIABILITY AND INDEMNITY
8.1 LIMITATION ON LANDLORD'S LIABILITY AND RELEASE
Landlord shall not be liable to Tenant for, and Tenant hereby releases
Landlord and its partners and officers from, any and all liability, whether in
contract, tort or on any other basis, for any injury to or any damages sustained
by Tenant, its agents, employees, contractors or invitees; any damage to
Tenant's property; or any loss to Tenant's business, loss of Tenant's profits of
other financial loss of Tenant resulting from or attributable to the condition
of, the management of, the maintenance of, or the protection of the Leased
Premises, the Building, the Project or the Common Areas, including, without
limitation, any such injury, damage or loss resulting from (i) the failure,
interruption, rationing or other curtailment or cessation in the supply of
electricity, water, gas or other utility service to the Project, the Building or
the Leased Premises; (ii) the vandalism or forcible entry into the Building or
the Leased Premises; (iii) the failure to provide security and/or adequate
lighting in or about the Project, the Building or the Leased Premises; (iv) the
existence of any design or construction defects within the Project, the Building
or the Leased Premises; (v) the failure of any mechanical systems to function
properly (such as the HVAC systems); or (vi) the blockage of access to any
portion of the Project, the Building or the Leased Premises, except to the
extent such damage was proximately caused by Landlord's active negligence or
willful misconduct, or Landlord's failure to perform an obligation expressly
undertaken pursuant to this Lease.
8.2 TENANT & LANDLORD INDEMNIFICATION
The Parties (Tenant and Landlord) shall defend, with competent counsel
reasonably satisfactory to the Parties, any claims made or legal actions filed
or threatened by third parties against the Parties with respect to the death,
bodily injury, personal injury, damage to property or interference with
contractual or other rights suffered by any third party (including other tenants
within the Project) which (i) occurred within the Leased Premises or (ii)
resulted from Tenant's use or occupancy of the Leased Premises or the Common
Area or (iii) resulted from Tenant's activities in or about the Leased Premises,
the Building or the Project, and the Parties shall indemnify and hold the
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Parties, the Parties' principals, employees and agents harmless from any loss
(including loss of rents by reason of vacant space which otherwise would have
been leased but for such activities), liability, penalties, or expense
whatsoever (including any legal fees incurred by Landlord with respect to
defending such claims) resulting therefrom, except to the extent proximately
caused by the active negligence or willful misconduct of the Parties. This
indemnity agreement shall survive until the latter to occur of (i) the date of
the expiration, or sooner termination, of this Lease, or (ii) the date Tenant
actually vacates the Leased Premises.
ARTICLE 9. INSURANCE
9.1 TENANT'S INSURANCE
Tenant shall maintain insurance complying with all of the following:
A. Tenant shall procure, pay for and keep in full force and effect,
at all times during the Lease Term, the following:
(1) Commercial general liability insurance insuring Tenant
against liability for personal injury, death and damage to property occurring
within the Leased Premises, or resulting from Tenant's use or occupancy of the
Leased Premises or the Common Areas, or resulting from Tenant's activities in or
about the Leased Premises, with combined single limit coverage of not less than
the amount of Tenant's Required Liability Coverage (as set forth in Article 1),
which insurance shall contain a "broad form liability" endorsement insuring
Tenant's performance of Tenant's obligation in indemnifying Landlord as
contained in Article 8.2.
(2) Fire and property damage insurance or "fire and extended
coverage" insuring Tenant against loss from physical damage to Tenant's personal
property, inventory, trade fixtures and improvements within the Leased Premises
with coverage for the replacement cost thereof;
(3) Plate-glass insurance, at actual replacement cost;
(4) Pressure vessel insurance, if applicable;
(5) Product Liability insurance (including, without
limitation, if food and/or beverages are distributed, sold and/or consumed
within the Leased Premises, to the extent obtainable, coverage for liability
arising out of the distribution, sale or consumption of food and/or beverages
[including alcoholic beverages, if applicable] at the Leased Premises) for not
less than Tenant's Required Liability Coverage (as set forth in Article 1);
(6) Worker's compensation insurance and any other employee
benefit insurance sufficient to comply with all Laws; and
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(7) With respect to making of alterations or the construction
of improvements or the like undertaken by Tenant, contingent liability and
builder's risk insurance, in an amount and with coverage satisfactory to
Landlord.
B. Each policy of liability insurance required to be carried by
Tenant pursuant to this Paragraph or actually carried by Tenant with respect to
the Leased Premises (i) shall, except with respect to insurance required by
Subparagraph A(6) above, name Landlord, and such others as are designated by
Landlord, as additional insured; (ii) shall be primary insurance providing that
the insurer shall be liable for the full amounts of the loss, up to and
including the total amount of liability set forth in the declaration of
coverage, with the right of contribution from or prior payment by any other
insurance coverage of Landlord; (iii) shall be in a form satisfactory to
Landlord; (iv) shall be carried with companies with a Best Insurance Guide
Rating of "A" or better; (v) shall provide that such policy shall not be subject
to cancellation, lapse or change except after at least thirty days prior written
notice to Landlord; and (vi) shall contain a so-called "severability" or "cross
liability" endorsement. Each policy of property insurance maintained by Tenant
with respect to the Leased Premises or any property therein shall: (a) provide
that such policy shall not be subject to cancellation, lapse or change except
after at least thirty days prior written notice to Landlord and (b) contain a
waiver and/or a permission to waive by the insurer of any right of subrogation
against Landlord, its principals, employees, agents and contractors, which might
arise by reason of any payment under such policy or by reason of any act or
omission of Landlord, its principals, employees, agents or contractors.
C. Prior to the time Tenant or any of its contractors enters the
Leased Premises, Tenant shall deliver to Landlord, with respect to each policy
of insurance required to be carried by Tenant pursuant to the Article, a copy of
such policy (appropriately authenticated by the insurer as having been issued,
premium paid) or a certificate of the insurer certifying in form satisfactory to
Landlord that a policy has been issued, providing the coverage required by this
Paragraph and containing the provisions specified herein. With respect to each
renewal or replacement of any such insurance, the requirements of this Paragraph
must be complied with not less than thirty days prior to the expiration or
cancellation of the policy being renewed or replaced. Landlord may, at any time
and from time to time, inspect and/or copy any and all insurance policies
required to be carried by Tenant pursuant to this Article. If Landlord's Lender,
insurance broker or advisor or counsel reasonably determines at any time that
the amount of coverage set forth in Paragraph 9.1A for any policy of insurance
Tenant is required to carry pursuant to this Article is not adequate, then
Tenant shall increase the amount of coverage for such insurance to such greater
amount as Landlord's Lender, insurance broker or advisor or counsel reasonably
deems adequate; provided, however, such increased level of coverage may not
exceed the level of coverage for such insurance commonly carried by comparable
business similarly situated and operating under similar circumstances.
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9.2 LANDLORD'S INSURANCE
With respect to insurance maintained by Landlord:
A. Landlord shall maintain, as the minimum coverage required of it
by this Lease, fire and property damage insurance in so-called "fire and
extended coverage" form insuring Landlord (and such others as Landlord may
designate) against loss from physical damage to the Building with coverage of
not less than ninety percent of the full actual replacement cost thereof and
against loss of rents for a period of not less than six months. Such fire and
property damage insurance, at Landlord's election but without any requirement on
Landlord's behalf to do so, (i) may be written in so-called "all risk" form,
excluding only those perils commonly excluded from such coverage by Landlord's
then property damage insurer; (ii) may provide coverage for physical damage to
the improvements so insured for up to the entire full actual replacement cost
thereof; (iii) may be endorsed to cover loss or damage caused by any additional
perils against which Landlord may elect to insure, including earthquake and/or
flood; (iv) may provide coverage for loss of rents for a period of up to twelve
months; and/or (v) may contain "deductibles" not exceeding One Thousand Dollars
per occurrence (or up to five percent of the Building's replacement value in the
case of earthquake and/or flood insurance). Landlord shall not be required to
cause such insurance to cover any of Tenant's personal property, inventory and
trade fixtures, or any modifications, alterations or improvements made or
constructed by Tenant to or within the Leased Premises.
B. Landlord shall maintain comprehensive general liability insurance
insuring Landlord (and such others as are designated by Landlord) against
liability for personal injury, bodily injury, death, and damage to property
occurring in, on or about, or resulting from the use or occupancy of the
Project, or any portion thereof, with combined single limit coverage of at least
Two Million Dollars. Landlord may carry such greater coverage as Landlord or
Landlord's Lender, insurance broker or advisor or counsel may from time to time
determine is reasonably necessary for the adequate protection of Landlord and
the Project.
C. Landlord may maintain any other insurance which in the opinion of
its insurance broker or advisor or legal counsel is prudent to carry under the
given circumstances.
9.3 MUTUAL WAIVER OF SUBROGATION
Landlord hereby releases Tenant, and Tenant hereby releases Landlord and
its respective partners and officers, agents, employees and servants, from any
and all liability for loss, damage or injury to the property of the other in or
about the Leased Premises which is caused by or results from a peril or event or
happening which would be covered by insurance required to be carried under the
terms of this Lease, or is covered by insurance actually carried and in force at
the time of the loss, by the party sustaining
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such loss; provided, however, that such waiver shall be effective only to the
extent permitted by the insurance covering loss and to the extent such insurance
is not prejudiced thereby.
ARTICLE 10. DAMAGE TO LEASED PREMISES
10.1 LANDLORD'S DUTY TO RESTORE
If the Leased Premises are damaged by any peril after the Effective Date
of this Lease, Landlord shall restore the Leased Premises, as and when required
by this Paragraph, unless this Lease is terminated by Landlord pursuant to
Paragraph 10.2 or by Tenant pursuant to Paragraph 10.3. All insurance proceeds
available from the fire and property damage insurance carried by Landlord shall
be paid to and become the property of Landlord. If this Lease is terminated
pursuant to either Paragraph 10.2 or 10.3, all insurance proceeds available from
insurance carried by Tenant which cover loss to property that is Landlord's
property or would become Landlord's property on termination of this Lease shall
be paid to and become the property of Landlord, and the remainder of such
proceeds shall be paid to and become the property of Tenant. If this Lease is
not terminated pursuant to either Paragraph 10.2 or 10.3, all insurance proceeds
available from insurance carried by Tenant which cover loss to property that is
Landlord's property shall be paid to and become the property of Landlord, and
all proceeds available which cover loss to property which would become the
property of Landlord upon the termination of this Lease shall be paid to and
remain the property of Tenant. If this Lease is not terminated, then upon
receipt of the insurance proceeds (if the loss is covered by insurance) and the
issuance of all necessary governmental permits, Landlord shall commence and
diligently prosecute to completion then restoration of the Leased Premises, to
the extent then allowed by Law, to substantially the same condition in which the
Leased Premises existed as of the Lease Commencement Date. Landlord's obligation
to restore shall be limited to the Leased Premises and interior improvements
constructed by Landlord. Landlord shall have no obligation to restore any other
improvements to the Leased Premises or any of Tenant's personal property,
inventory or trade fixtures. Upon completion of the restoration by Landlord,
Tenant shall forthwith replace or fully repair all of Tenant's personal
property, inventory, trade fixtures and other improvements constructed by Tenant
to like or similar conditions at the time of such damage or destruction.
10.2 LANDLORD'S RIGHT TO TERMINATE
Landlord shall have the option to terminate this Lease in the event any of
the following occurs, which option may be exercised only by delivery to Tenant
of a written notice of election to terminate within thirty days after the date
of such damage or destruction:
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A. The Building is damaged by any peril covered by valid and
collectible insurance actually carried by Landlord and in force at the time of
such damage or destruction (an "insured peril") to such an extent that the
estimated cost to restore the Building exceeds the lesser of (i) the insurance
proceeds available from insurance actually carried by Landlord, or (ii)
seventy-five percent of the then actual replacement cost thereof;
B. The Building is damaged by an uninsured peril, which peril
Landlord was required to insure against pursuant to the provisions of Article 9
of this Lease, to such an extent that the estimated cost to restore the Building
exceeds the lesser of (i) the insurance proceeds which would have been available
had Landlord carried such required insurance, or (ii) seventy-five percent of
the then actual replacement cost thereof;
C. The Building is damaged by an uninsured peril, which peril
Landlord was not required to insure against pursuant to the provisions of
Article 9 of this Lease, to any extent.
D. The Building is damaged by any peril and, because of the Laws
then in force, the Building (i) can not be restored at reasonable cost or (ii)
if restored, can not be used for the same use being made thereof before such
damage.
10.3 TENANT'S RIGHT TO TERMINATE
If the Leased Premises are damaged by any peril and Landlord does not
elect to terminate this Lease or is not entitled to terminate this Lease
pursuant to this Article, then as soon as reasonably practicable, Landlord shall
furnish Tenant with the written opinion of Landlord's architect or construction
consultant as to when the restoration work required of Landlord may be complete.
Tenant shall have the option to terminate this Lease in the event any of the
following occurs, which option may be exercised in the case of A or B below only
by delivery to Landlord of a written notice of election to terminate within
thirty (30) days after Tenant receives from Landlord the estimate of the time
needed to complete such restoration:
A. The Leased Premises are damaged by any peril and, in the
reasonable opinion of Landlord's architect or construction consultant, the
restoration of the Leased Premises cannot be substantially completed within six
months after the date of such damage; or
B. The Leased Premises are damaged by any peril within nine months
of the last day of the Lease Term and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Leased Premises
cannot be substantially completed within ninety days after the date such
restoration is commenced; or
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C. Landlord does not complete the restoration of the Leased Premises
within six months from the date of the damage, provided that such nine month
period of time shall be extended for such number of days as Landlord may be
delayed by reason of Force Majeure.
10.4 TENANT'S WAIVER
Landlord and Tenant agree that the provision of Paragraph 10.3 above,
captioned "Tenant's Right to Terminate", are intended to supersede and replace
the provisions contained in California Civil Code, Section 1932, Subdivision 2,
and California Civil Code, Section 1934, and accordingly, Tenant hereby waives
the provisions of said Civil Code Sections and the provisions of any successor
Code Sections or similar Laws hereinafter enacted.
10.5 ABATEMENT OF RENT
In the event of damage to the Leased Premises which does not result in the
termination of this Lease, the Base Monthly Rent (and any Additional Rent) shall
be temporarily abated during the period of restoration in proportion to the
degree to which Tenant's use of the Leased Premises is impaired by such damage.
ARTICLE 11. CONDEMNATION
11.1 LANDLORD'S RIGHT TO TERMINATE
Subject to Paragraph 11.3, Landlord shall have the option to terminate
this lease if, as a result of a taking by means of the exercise of the power of
eminent domain (including inverse condemnation and/or a voluntary sale or
transfer by Landlord to an entity having the power of eminent domain under the
threat of condemnation), (i) all or any part of the Leased Premises is so taken,
(ii) more than thirty-three and one-third percent of the Building's leasable
area is so taken, (iii) more than thirty-three and one-third percent of the
Common Areas is so taken, or (iv) because of the Laws then in force, the Leased
Premises may not be used for the same use being made thereof before such taking,
whether or not restored as required by Paragraph 11.4 below. Any such option to
terminate by Landlord must be exercisable within a reasonable period of time, to
be effective as of the date possession is taken by the condemnor.
11.2 TENANT'S RIGHT TO TERMINATE
Subject to Paragraph 11.3, Tenant shall have the option to terminate this
Lease if, as a result of any taking by means of the exercise of the power of
eminent domain (including inverse condemnation and/or a voluntary sale or
transfer by Landlord to an entity having the power of eminent domain under
threat of condemnation), (i) all of the Leased Premises is so taken, (ii)
thirty-three and one-third percent or more of the Leased Premises is so taken
and the part of the Leased Premises that remains cannot, within a
30
reasonable period of time, be made reasonably suitable for the continued
operation of the Tenant's business or, (iii) there is a taking of a portion of
the Common Areas, as a result of such taking, Landlord cannot provide parking
spaces within the Project (or within a reasonable distance therefrom) equal in
number to at least sixty-six and two-thirds percent of Tenant's Number of
Parking Spaces (as set forth in Article 1), whether by rearrangement of the
remaining parking areas in the Common Area (including, if Landlord elects,
construction of multi-deck parking structures or re-striping for compact cars
where permitted by Law), or by providing alternative parking facilities on other
land within reasonable walking distance of the Leased Premises. Tenant must
exercise such option within a reasonable period of time, to be effective on the
later to occur of (i) the date that possession of that portion of the Common
area or the Leased Premises that is condemned and taken by the condemnor or (ii)
the date Tenant vacates the Leased Premises.
11.3 TEMPORARY TAKING
If any portion of the Leased Premises is temporarily taken for one year or
less, this Lease shall remain in effect. If any portion of the Leased Premises
is temporarily taken for a period which either exceeds one year or which extends
beyond the natural expiration of the Lease Term, then Landlord and Tenant shall
each independently have the option to terminate this Lease, effective on the
date possession is taken by the condemnor.
11.4 RESTORATION AND ABATEMENT OF RENT
If any part of the Leased Premises is taken by condemnation and this Lease
is not terminated, then Landlord shall repair any damage occasioned thereby to
the remainder of the Leased Premises to a condition reasonably suitable for
Tenant's continued operations and otherwise, to the extent practicable, in the
manner and to the extent provided in Paragraph 10.1. As of the date possession
is taken by the condemning authority, (i) the Base Monthly Rent shall be reduced
in the same proportion that the area of that part of the Leased Premises so
taken (less any addition to the area of the Leased Premises by reason of any
construction) bears to the area of the Leased Premises immediately prior to such
taking, and (ii) Tenant's Proportionate Share shall be appropriately adjusted.
11.5 DIVISION OF CONDEMNATION AWARD
Any award made for any condemnation of the Project, the Building, the
Common Areas or the Leased Premises, or any portion thereof, shall belong to and
be paid to Landlord, and Tenant hereby assigns to Landlord all of its right,
title and interest in any such award; provided, however, that Tenant shall be
entitled to receive any condemnation award that is made directly to Tenant (i)
for the taking of personal property, inventory or trade fixtures belonging to
Tenant, (ii) for the interruption of Tenant's business or its
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moving costs, (iii) for loss of Tenant's goodwill, or (iv) for any temporary
taking where this Lease is not terminated as a result of such taking. The rights
of Landlord and Tenant regarding any condemnation shall be determined as
provided in this Article, and each party hereby waives the provisions of Section
1265.130 of the California Code of Civil Procedure, and the provisions of any
similar law hereinafter enacted, allowing either party to petition the Superior
Court to terminate this Lease and/or allocating condemnation awards between
Landlord and Tenant in the event of a taking of the Leased Premises.
ARTICLE 12. DEFAULT AND REMEDIES
12.1 EVENTS OF TENANT'S DEFAULT
Tenant shall be in default of its obligations under this Lease if any of
the following events occur:
A. Tenant shall have failed to pay Base Monthly Rent or any
Additional Rent when due; or
B. Tenant shall have done or permitted to have been done any act,
use or thing in its use, occupancy or possession of the Leased Premises or in
its use of the Common Areas which is prohibited by the terms of this Lease; or
C. Tenant shall have failed to perform any term, covenant or
condition of this Lease, except those requiring the payment of Base Monthly Rent
or Additional Rent, within thirty (30) days after written notice from Landlord
to Tenant specifying the nature of such failure and requesting Tenant to perform
same provided that Tenant shall not be deemed to be in default under this
Section if such default is incapable of cure within said period and Tenant has
commenced to complete the cure of such default within said ten (10) days period
and is proceeding diligently.
D. Tenant shall have sublet the Leased Premises or assigned or
encumbered its interest in this Lease in violation of the provisions contained
in Article 7, whether voluntarily or by operation of Law; or
E. Tenant shall have abandoned the Leased Premises; or
F. Tenant or any Guarantor of this Lease shall have permitted or
suffered the sequestration or attachment of, or execution on, or the appointment
of a custodian or receiver with respect to, all or any substantial part of the
property or assets of Tenant (or such Guarantor) or any property or asset
essential to the conduct of Tenant's (or such Guarantor's) business, and Tenant
(or such Guarantor) shall have failed to obtain a return or release of the same
within sixty (60) days thereafter, or prior to sale pursuant to such
sequestration, attachment or levy, whichever is earlier; or
32
G. Tenant or any Guarantor of this Lease shall have made a general
assignment of all or a substantial part of its assets for the benefit of its
creditors; or
H. Tenant or any Guarantor of this Lease shall have allowed (or
sought) to have entered against it a decree or order which: (i) grants or
constitutes an order for relief, appointment of a trustee, or confirmation of a
reorganization plan under the bankruptcy laws of the United States; (ii)
approves as property filed a petition seeking liquidation or reorganization
under said bankruptcy laws or any other debtor's relief law or similar statute
of the United States or any state thereof; or (iii) otherwise directs the
winding up or liquidation of Tenant; provided, however, if any decree or order
was entered without Tenant's consent or over Tenant's objection, Landlord may
not terminate this Lease pursuant to this Subparagraph if such decree or order
is rescinded or reversed within sixty (60) days after its original entry.
I. Tenant or any Guarantor of this Lease shall have availed itself
of the protection of any debtor's relief law, moratorium law or other similar
Law which does not require the prior entry of a decree or order.
12.2 LANDLORD'S REMEDIES
In the event of any default by Tenant, and without limiting Landlord's
right to indemnification as provided in Article 8.2, Landlord shall have the
following remedies, in addition to all other rights and remedies provided by law
or otherwise provided in this Lease, to which Landlord may resort cumulatively,
or in the alternative:
A. Landlord may, at Landlord's election, keep this Lease in effect
and enforce, by an action at law or in equity, all of its rights and remedies
under this Lease including, without limitation, (i) the right to recover the
rent and other sums as they become due by appropriate legal action, (ii) the
right to make payments required of Tenant, or perform Tenant's obligations and
be reimbursed by Tenant for the cost thereof with interest at the then maximum
rate of interest not prohibited by Law from the date the sum is paid by Landlord
until Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive
relief and specific performance to prevent Tenant from violating the terms of
this Lease and/or to compel Tenant to perform its obligations under this Lease,
as the case may be.
B. Landlord may, at Landlord's election, terminate this Lease by
giving Tenant written notice of termination, in which event this Lease shall
terminate on the date set forth for termination in such notice. Any termination
under this Subparagraph shall not relieve Tenant from its obligation to pay to
Landlord all Base Monthly Rent and Additional Rent then or thereafter due, or
any other sums due or thereafter accruing to Landlord, or from any claim against
Tenant for damages previously accrued or then or thereafter accruing. In no
event shall any one or more of the following actions by
33
landlord, in the absence of a written election by Landlord to terminate this
Lease, constitute a termination of this Lease:
(1) Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;
(2) Consent to any subletting of the Leased Premises or
assignment of this Lease by Tenant, whether pursuant to the provisions hereof or
otherwise; or
(3) Any other action by Landlord or Landlord's agents intended
to mitigate the adverse effects of any breach of this Lease by Tenant,
including, without limitation, any action taken to maintain and preserve the
Leased Premises or any action taken to relet the Leased Premises, or any portion
thereof, for the account of Tenant and in the name of Tenant.
C. In the event Tenant breaches this Lease and abandons the Leased
Premises, Landlord may terminate this Lease, but this Lease shall not terminate
unless Landlord gives Tenant written notice of termination. No act by or on
behalf of Landlord intended to mitigate the adverse effect of such breach,
including those described by Subparagraphs B(1), (2) and (3) immediately
preceding, shall constitute a termination of Tenant's right to possession unless
Landlord gives Tenant written notice of termination. If Landlord does not
terminate this Lease by giving written notice of termination, Landlord may
enforce all its rights and remedies under this lease, including the right to
recover rent as it becomes due under this Lease as provided in California Civil
Code Section 1951.4, as in effect on the Effective Date of this Lease.
D. In the event Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to damages in an amount as set forth in
California Civil Code Section 1951.2, an interest rate equal to the maximum rate
of interest then not prohibited by Law shall be used where permitted. Such
damages shall include, without limitation:
(1) 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 Tenant proves could be reasonably avoided,
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent; and
(2) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this lease, or which in the ordinary course of things would be likely to
result therefrom, including, without limitation, the following (i) expenses for
cleaning, repairing or restoring the Leased Premises; (ii) expenses for
altering, remodeling or otherwise improving the Leased Premises for the purpose
of reletting, including removal of existing leasehold improvements and/or
installation of additional leasehold improvements
34
(regardless of how the same is funded, including reduction of rent, a direct
payment or allowance to a new tenant, or otherwise); (iii) broker's fees,
advertising costs and other expenses of re-letting the Leased Premises; (iv)
costs of carrying the Leased Premises, such as taxes, insurance premiums,
utility charges and security precautions; (v) expenses incurred in removing,
disposing of and/or storing any of Tenant's personal property, inventory or
trade fixtures remaining therein; (vi) attorney's fees, expert witness fees,
court costs and other reasonable expenses incurred by landlord (but not limited
to taxable costs) in retaking possession of the Leased Premises, establishing
damages hereunder, and releasing the Leased Premises; and (vii) any other
expenses, costs or damages otherwise incurred or suffered as a result of
Tenant's default.
12.3 LANDLORD'S DEFAULT AND TENANT'S REMEDIES
In the event Landlord fails to perform any of its obligations under this
Lease, Landlord shall nevertheless not be in default under the terms of this
Lease until such time as Tenant shall have first given Landlord written notice
specifying the nature of such failure to perform its obligations, and then only
after Landlord shall have had thirty (30) days from receipt of written notice of
such failure within which to perform such obligations. In the event of
Landlord's default as above set forth, then, and only then, Tenant shall have
the following remedies only:
A. Tenant may then proceed in equity or at law to compel Landlord to
perform its obligations and/or to recover damages proximately caused by such
failure to perform (except as and to the extent Tenant has waived its right to
damages as provided in this Lease).
B. Tenant, at its option, may then cure any default of Landlord at
Landlord's cost. If, pursuant to this Subparagraph, Tenant reasonably pays any
sum to any third party or does any act that requires the payment of any sum to
any third party at any time by reason of Landlord's default, the sum paid by
Tenant shall be immediately due from Landlord to Tenant at the time Tenant
supplies Landlord with an invoice therefore (provided such invoice sets forth
and is accompanied by a written statement of Tenant setting forth in reasonable
detail the amount paid, the party to whom it was paid, the date it was paid, and
the reasons giving rise to such payment), together with interest at twelve
percent per annum from the date of such invoice until Tenant is reimbursed by
Landlord. Tenant may not offset such sums against any installment of rent due
Landlord under the terms of this Lease.
12.4 LIMITATION ON TENANT'S RECOURSE
If Landlord is a corporation, trust, partnership, joint venture,
unincorporated association, or other form of business entity, Tenant agrees that
(i) the obligations of Landlord under this Lease shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other
35
principals of such business entity and (ii) Tenant shall have recourse only to
the assets of such business entity for the satisfaction of such obligations and
not against the assets of such officers, directors, trustees, partners, joint
venturers, members, owners, stockholders or principals (other than to the extent
of their interest in the assets owned by such business entity). Additionally, if
Landlord is a partnership, then Tenant covenants and agrees:
A. No partner of Landlord shall be sued or named as a party in any
suit or action brought by Tenant with respect to any alleged breach of this
Lease (except to the extent necessary to secure jurisdiction over the
partnership and then only for that sole purpose);
B. No service of process shall be made against any partner of
Landlord except for the sole purpose of securing jurisdiction over the
partnership; and
C. No writ of execution shall be levied against the assets of any
partner of Landlord other than to the extent of his interest in the assets of
the partnership.
12.5 TENANT'S WAIVER
Landlord and Tenant agree that the provisions of Paragraph 12.3 above are
intended to supersede and replace the provisions of California Civil Code
1932(l), 1941 and 1942, and accordingly, Tenant hereby waives the provisions of
Section 1932(l), 1941 and 1942 of the California Civil Code and/or any similar
or successor Law regarding Tenant's right to terminate this Lease or to make
repairs and deduct the expenses of such repairs from the rent due under this
Lease. Tenant hereby waives any right to redemption or relief from forfeiture
under the Laws of the State of California, or under any other present or future
Law, in the event Tenant is evicted or Landlord takes possession of the Leased
Premises by reason of any default by Tenant.
ARTICLE 13. GENERAL PROVISIONS
13.1 TAXES ON TENANT'S PROPERTY
Tenant shall pay before delinquency any and all taxes, assessments,
license fees, use fees, permit fees and public charges of whatever nature or
description levied, assessed or imposed against Tenant or Landlord by a
governmental agency arising out of, caused by reason of or based upon Tenant's
estate in this Lease, Tenant's ownership of property, improvements made by
Tenant to the Leased Premises, improvements made by Landlord for Tenant's use
within the Leased Premises, Tenants use (or estimated use) of public facilities
or services or Tenant's consumption (or estimated consumption) of public
utilities, energy, water or other resources. On demand by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of these payments. If any such
taxes, assessments, fees or public charges are levied against Landlord,
Landlord's property, the
36
Building, or the Project, or if the assessed value of the Building or the
Project is increased by the inclusion therein of a value placed upon the same,
then Landlord, after giving written notice to Tenant, shall have the right,
regardless of the validity thereof, to pay such taxes, assessment, fee or public
charge and xxxx Tenant, as Additional Rent, the amount of such taxes,
assessment, fee or public charge so paid on Tenant's behalf. Tenant shall,
within ten days from the date it receives an invoice from Landlord setting forth
the amount of such taxes, assessment, fee or public charge so levied, pay to
Landlord, as Additional Rent, the amount set forth in said invoice. Failure by
Tenant to pay the amount so invoiced within said ten day period shall be
conclusively deemed a default by Tenant under this Lease. Tenant shall have the
right, and with Landlord's full cooperation if Tenant is not then in default
under the terms of this Lease, to bring suit in any court of competent
jurisdiction to recover from the taxing authority the amount of any such taxes,
assessment, fee or public charge so paid.
13.2 HOLDING OVER
This Lease shall terminate without further notice on the Lease Expiration
Date (as set forth in Article 1). Any holding over by Tenant after expiration of
the Lease Term shall neither constitute a renewal nor extension of this Lease
nor give Tenant any rights in or to the Leased Premises except as expressly
provided in this Paragraph. Any such holding over shall be deemed an unlawful
detainer of the Leased Premises unless Landlord has consented to same. Any such
holding over to which Landlord has consented shall be construed to be a tenancy
from month to month, on the same terms and conditions herein specified insofar
as applicable, except that the Base Monthly Rent shall be increased to an amount
equal to one hundred fifty percent of the Base Monthly Rent payable during the
last full month immediately preceding such holding over.
13.3 SUBORDINATION
This Lease is subject and subordinate to all deeds of trust which affect
the Building and are of public record as of the Effective Date of this Lease,
and to all renewals, modifications, consolidations, replacements and extensions
thereof. However, if any Lender holding any such deed of trust shall advise
Landlord that it desires or requires this Lease to be made prior and superior
thereto, then, upon written request of Landlord to Tenant, Tenant shall promptly
execute, acknowledge and deliver any and all documents or instruments which
Landlord and such Lender deem necessary or desirable to make this Lease prior
thereto. Tenant hereby consents to Landlord's encumbering the Building as
security for future loans on such terms as Landlord shall desire, which future
deeds of trust shall be subject and subordinate to this Lease. However, if any
Lender holding such future deed of trust shall desire or require that this Lease
be made subject and subordinate to such future deed of trust, then Tenant
agrees, within ten days after Landlord's written request therefore, to execute,
acknowledge and deliver to Landlord any and all documents or instruments
requested by Landlord or such Lender as may be necessary or proper to assure the
subordination of this Lease to such future deed of trust;
37
but only if such Lender agrees to recognize Tenant's rights under this Lease and
not to disturb Tenant's quiet possession of the Leased Premises so long as
Tenant is not in default under this Lease.
13.4 TENANT'S ATTORNMENT UPON FORECLOSURE
Tenant shall, upon request, attorn (i) to any purchaser of the Building at
any foreclosure sale or private sale conducted pursuant to any security
instrument encumbering the Building, or (ii) to any grantee or transferee
designated in any deed given in lieu of foreclosure of any security interest
encumbering the Building.
13.5 LENDER PROTECTION
In the event of any default on the part of the Landlord, Tenant will give
notice by certified mail to any Lender who shall have requested, in writing, to
Tenant that it be provided with such notice, and Tenant shall offer such Lender
a reasonable opportunity to cure the default, including time to obtain
possession of the Leased Premises by power of sale of judicial foreclosure or
other appropriate legal proceedings if reasonably necessary to effect a cure.
13.6 ESTOPPEL CERTIFICATES
Tenant will, following any request by Landlord, promptly execute and
deliver to Landlord an estoppel certificate (i) certifying that this Lease is
unmodified and in full force and effect, or, if modified, stating the nature of
such modification and certifying that this Lease, as so modified, is in full
force and effect, (ii) stating the date to which the rent and other charges are
paid in advance, if any, (iii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if any are claimed, and (iv) certifying such other information
about this Lease as may be reasonably requested by Landlord. Tenant's failure to
execute and deliver such estoppel certificate within twenty (20) days after
Landlord's request therefore shall be a material default by Tenant under this
Lease, and Landlord shall have all of the rights and remedies available to
Landlord as Landlord would otherwise have in the case of any other material
default by Tenant, including the right to terminate this Lease and xxx for
damages proximately caused thereby, it being agreed and understood by Tenant
that Tenant's failure to so deliver such estoppel certificate in a timely manner
could result in Landlord being unable to perform committed obligations to other
third parties which were made by Landlord in reliance upon this covenant of
Tenant. Landlord and Tenant understand that any statement delivered pursuant to
this Paragraph may be relied upon by any Lender or purchaser or prospective
Lender or purchaser of the Building, the Project, or any interest therein.
38
13.7 TENANT'S FINANCIAL INFORMATION
Tenant shall, within ten business days after Landlord's request therefore,
deliver to Landlord a copy of a current financial statement and any such other
information reasonably requested by Landlord regarding Tenant's financial
condition. Landlord shall be entitled to disclose such financial statements or
other information to its Lender, to any present or prospective principal of or
investor in Landlord, or to any prospective Lender or purchaser of the Building,
the Project or any portion thereof or interest therein. Any such financial
statement or other information which is marked "confidential" or "company
secrets" (or is otherwise similarly marked by Tenant) shall be confidential and
shall not be disclosed by Landlord to any third party except as specifically
provided in this Paragraph, unless the same becomes a part of the public domain
without the fault of Landlord.
13.8 TRANSFER BY LANDLORD
Landlord and its successors in interest shall have the right to transfer
their interest in the Building, the Project, or any portion thereof at any time
and to any person or entity. In the event of any such transfer, the Landlord
originally named herein (and in the case of any subsequent transfer, the
transferor), from the date of such transfer, (i) shall be automatically
relieved, without any further act by any person or entity, of all liability for
the performance of the obligations of the Landlord hereunder which may accrue
after the date of such transfer and (ii) shall be relieved of all liability for
the performance of the obligations of the Landlord hereunder which have accrued
before the date of transfer if its transferee agrees to assume and perform all
such prior obligations of the Landlord hereunder. Tenant shall attorn to any
such transferee. After the date of any such transfer, the term "Landlord" as
used herein shall mean the transferee of such interest in the Building or the
Project.
13.9 FORCE MAJEURE
The obligations of each of the parties under this Lease (other than the
obligation to pay money) shall be temporarily excused if such party is prevented
or delayed in performing such obligation by reason of any strikes, lockouts or
labor disputes; inability to obtain labor, materials, fuels or reasonable
substitutes therefore; governmental restrictions, regulations, controls, action
or inaction; civil commotion; inclement weather, fire or other acts of God; or
other causes (except financial inability) beyond the reasonable control of the
party obligated to perform (including acts or omissions of the other party) for
a period equal to the period of any such prevention, delay or stoppage.
13.10 NOTICES
Any notice required or desired to be given by a party regarding this Lease
shall be in writing and shall be personally served, or in lieu of personal
service may be given by
39
depositing such notice in the United States mail, registered or certified,
postage prepaid, addressed to the other party as follows:
A. If addressed to Landlord, to Landlord at its Address for Notices
(as set forth in Article 1).
B. If addressed to Tenant, to Tenant at its Address for Notices (as
set forth in Article 1).
Any notice given by registered mail shall be deemed to have been given on
the third business day after its deposit in the United States mail. Any notice
given by certified mail shall be deemed given on the date receipt was
acknowledged to the postal authorities. Any notice given by mail other than
registered or certified mail shall be deemed given only if received by the other
party, and then on the date of receipt. Each party may, by written notice to the
other in the manner aforesaid, change the address to which notices addressed to
it shall thereafter be mailed.
13.11 ATTORNEY'S FEES
In the event any party shall bring any action, arbitration proceeding or
legal proceeding alleging a breach of any provision of this Lease, to recover
rent, to terminate this Lease, or to enforce, protect, determine or establish
any term or covenant of this Lease or rights or duties hereunder of either
party, the prevailing party shall be entitled to recover from the non-prevailing
party as a part of such action or proceeding, or in a separate action for that
purpose brought within one year from the determination of such proceeding,
reasonable attorney's fees, expert witness fees, court costs and other
reasonable expenses incurred by the prevailing party.
13.12 DEFINITIONS
Any term that is given a special meaning by any provision in this Lease
shall, unless otherwise specifically stated, have such meaning whenever used in
this Lease or in any Addenda or Amendment hereto. In addition to the terms
defined in Article 1, the following terms shall have the following meaning:
A. REAL PROPERTY TAXES: The term "Real Property Tax" or "Real
Property Taxes" shall each mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required to pay
any general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership or new
construction), now or hereafter imposed by any governmental or
quasi-Governmental authority or special district having the direct or indirect
power to tax or levy assessments, which are levied or assessed for whatever
reason against the Project or any portion thereof, or Landlord's interest
therein, or the
40
fixtures, equipment and other property of Landlord that is an integral part of
the Project and located thereon, or Landlord's business of owning, leasing or
managing the Project or the gross receipts, income, or rentals from the Project;
(ii) all charges, levies or fees imposed by any governmental authority against
Landlord by reason of or based upon the use of or number of parking spaces
within the Project, the amount of public services or public utilities used or
consumed (e.g. water, gas, electricity, sewage, or surface water disposal) at
the Project, the number of persons employed by tenants of the Project, the size
(whether measured in area, volume, number of tenants or whatever) or the value
of the Project, or the type of use or uses conducted within the Project; and
(iii) all costs and fees (including attorneys' fees) incurred by Landlord in
contesting any Real Property Tax and in negotiating with public authorities as
to any Real Property Tax. If, at any time during the Lease Term, the taxation or
assessment of the Project prevailing as of the Effective Date of this Lease
shall be altered so that in lieu of or in addition to any Real Property Tax
described above there shall be levied, assessed or imposed (whether by reason of
a change in the method of taxation or assessment, creation of a new tax or
charge, or any other cause) an alternate, substitute, or additional tax or
charge (i) on the value, size, use or occupancy of the Project or Landlord's
interest therein or (ii) on or measured by the gross receipts, income or rental
from the Project, or on Landlord's business of owning, leasing or managing the
Project or (iii) computed in any manner with respect to the operation of the
Project, then any such tax or charge, however designated, shall be included
within the meaning of the terms "Real Property Tax" or "Real Property Taxes" for
purposes of this Lease. If any Real Property Tax is partly based upon property
or rents unrelated to the Project, then only that part of such Real Property Tax
that is fairly allocable to the Project shall be included within the meaning of
the terms "Real Property Tax" or "Real Property Taxes". Notwithstanding the
foregoing, the terms "Real Property Tax" or "Real Property Taxes" shall not
include estate, inheritance, transfer, gift or franchise taxes of Landlord or
the federal or state income tax imposed on Landlord's income from all sources.
B. LANDLORD'S INSURANCE COSTS: The term "Landlord's Insurance Costs"
shall mean the costs to Landlord to carry and maintain the policies of fire and
property damage insurance for the Project and general liability insurance
required, or permitted, to be carried by Landlord pursuant to Article 9,
together with any deductible amounts paid by Landlord upon the occurrence of any
insured casualty or loss.
C. PROJECT MAINTENANCE COSTS:
(1) The term "Project Maintenance Costs" shall mean all costs
and expenses (except Landlord's Insurance Costs and Real Property Taxes) paid or
incurred by Landlord in protecting, operating, maintaining, repairing and
preserving the Project and all parts thereof, including without limitation, (i)
professional management fees (not to exceed three percent of the Project's
scheduled gross rental income), (ii) the amortizing portion of any costs
incurred by Landlord in the making of any modifications,
41
alterations or improvements required by any governmental authority as set forth
in Article 6, which are so amortized during the Lease Term, and (iii) such other
costs as may be paid or incurred with respect to operating, maintaining and
preserving the Project, such as repairing and resurfacing the exterior surfaces
of the buildings (including roofs), repairing and resurfacing paved areas,
repairing structural parts of the building, and replacing, when necessary,
electrical, plumbing, heating, ventilating and air conditioning systems serving
the buildings.
(2) The following shall not constitute Project Maintenance
Costs for the purposes of this lease, and nothing contained herein shall be
deemed to require Tenant to pay any of the following: (i) legal fees, brokerage
commissions, advertising costs and other related expenses incurred in connection
with the lease of the Project; (ii) damage and repairs attributable to
condemnation, fire or other casualty; (iii) damage and repairs covered under any
warranty or insurance policy carried by Landlord in connection with the Building
or Project; (iv) damage and repairs necessitated by the negligence or willful
misconduct of Landlord or Landlord's employees contractors or agents; (v)
executive salaries of Landlord; (vi) salaries of service personnel to the extent
salaries of such service personnel perform services not solely in connection
with the management, operation, repair or maintenance of the Building or Common
Areas; (vi) Landlord's general overhead expenses not related to the Building;
(vii) payments of principal or interest on any mortgage or other encumbrance
including ground lease payments and points, commissions and legal fees
associated with financing; (viii) depreciation; (ix) legal fees, accountants'
fees and other expenses incurred in connection with disputes with Tenant or
other tenants or occupants of the Building or associated with the enforcement of
any leases or defense of Landlord's title to or interest in the Building or any
part thereof; (x) costs (including permit, license and inspection fees) incurred
in renovating or otherwise improving, decorating, painting or altering space for
other tenants or other occupants or vacant space in the Building; (xi) costs
incurred due to violation by Landlord or any other tenant in the Building of the
terms and conditions of any lease; (xii) the cost of any service provided to
Tenant or other occupants of the Building for which Landlord is entitled to be
reimbursed; (xiii) charitable or political contributions; (xiv) any cost or
expense related to the testing for, removal, transportation or storage of
hazardous materials from the Project, Building or Premises; (xv) interest,
penalties or other costs arising out of Landlord's failure to make timely
payments of its obligations; (xvi) property management fees of any property
management firm is excess of three percent (3%) of the gross revenues of the
Parcel; (xvii) costs incurred in advertising and promotional activities for the
Building; and (xviii) any other expense which, under generally accepted
accounting principles and practice, would not be considered a normal maintenance
and operating expense.
D. TENANT'S PROPORTIONATE SHARE: The term "Tenant's Proportionate
Share" or "Tenant's Share", as used with respect to an item pertaining to the
Building, shall each mean that percentage obtained by dividing the leasable
square
42
footage contained within the Leased Premises (as set forth in Article 1) by the
total leasable square footage contained within the Building as the same from
time to time exists or, as used with respect to an item pertaining to the
Project, shall each mean that percentage obtained by dividing the leasable
square footage contained within the Leased Premises (as set forth in Article 1)
by the total leasable square footage contained within the Project as the same
from time to time exists, unless, as to any given item, such a percentage
allocation unfairly burdens or benefits a given tenant(s), in which case
Landlord shall have the exclusive right to equitably allocate such item so as to
not unfairly burden or benefit any given tenant(s). Landlord's determination of
any such special allocation shall be final and binding upon Tenant unless made
in bad faith.
E. BUILDING'S PROPORTIONATE SHARE: The term "Building's
Proportionate Share" or "Building's Share" shall each mean that percentage which
is obtained by dividing the leasable square footage contained within the
Building by the leasable square footage contained within all buildings located
within the Project, unless, as to any given item, such a percentage allocation
unfairly burdens or benefits a given building(s), in which case Landlord shall
have the exclusive right to equitably allocate such item so as to not unfairly
burden or benefit any given building(s). Landlord's determination of any such
special allocation shall be final and binding upon Tenant unless made in bad
faith.
F. LAW: The term "Law" shall mean any judicial decision and any
statute, constitution, ordinance, resolution, regulation, rule, administrative
order, or other requirement of any municipal, county, state, federal, or other
governmental agency or authority having jurisdiction over the parties to this
Lease, the Leased Premises, the Building or the Project, or any of them in
effect either at the Effective Date of this Lease or at any time during the
Lease Term, including, without limitation, any regulation, order, or policy of
any quasi-official entity or body (e.g. a board of fire examiners or a public
utility or special district).
G. LENDER: The term "Lender" shall mean the holder of any Note or
other evidence of indebtedness secured by the Project or any portion thereof.
H. RENT: The term "rent" shall mean collectively Base Monthly Rent
and all Additional Rent.
13.13 GENERAL WAIVERS
One party's consent to or approval of any act by the other party requiring
the first party's consent or approval shall not be deemed to waive or render
unnecessary the first party's consent to or approval of any subsequent similar
act by the other party. No waiver of any provision hereof or any breach of any
provision hereof shall be effective unless in writing and signed by the waiving
party. The receipt by Landlord of any rent or payments with or without knowledge
of the breach of any other provision hereof shall not
43
be deemed a waiver of any such breach. No waiver of any provision of this Lease
shall be deemed a continuing waiver unless such waiver specifically states so in
writing and is signed by both Landlord and Tenant. No delay or omission in the
exercise of any right or remedy or be construed as a waiver of any such breach
theretofore or thereafter occurring. The waiver by either party of any breach of
any provision of this Lease shall not be deemed to be a waiver of any subsequent
breach of the same or any other provisions herein contained.
13.14 MISCELLANEOUS
Should any provision of this Lease prove to be invalid or illegal, such
invalidity or illegality shall in no way affect, impair or invalidate any other
provision hereof, and such remaining provisions shall remain in full force and
effect. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor. Any copy of
this Lease which is executed by the parties shall be deemed an original for all
purposes. This Lease shall, subject to the provisions regarding assignment,
apply to and bind the respective heirs, successors, executors, administrators
and assigns of Landlord and Tenant. The term "party" shall mean Landlord or
Tenant as the context implies. If Tenant consists of more than one person or
entity, then all members of Tenant shall be jointly and severally liable
hereunder. This Lease shall be construed and enforced in accordance with the
Laws of the State in which the Leased Premises are located. The language in all
parts of this Lease shall in all cases be construed as a whole according to its
fair meaning, and not strictly for or against either Landlord or Tenant. The
captions used in this Lease are for convenience only and shall not be considered
in the construction or interpretation of any provision hereof. When the context
of this Lease requires, the neuter gender includes the masculine, the feminine,
a partnership or corporation or joint venture, and the singular includes the
plural. The terms "must", "shall", "will" and "agree" are mandatory. The term
"may" is permissive. When a party is required to do something by this Lease, it
shall do so at its sole cost and expense without right of reimbursement from the
other party unless specific provision is made therefore. Where Tenant is
obligated not to perform any act or is not permitted to perform any act, Tenant
is also obligated to restrain any others reasonably within its control,
including agents, invitees, contractors, subcontractors and employees, from
performing said act. Landlord shall not become or be deemed a partner or a joint
venturer with Tenant by reason of any of the provisions of this Lease.
ARTICLE 14. CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT
14.1 CORPORATE AUTHORITY
If Tenant is a corporation, each individual executing this Lease on behalf
of said Corporation represents and warrants that Tenant is validly formed and
duly authorized and existing, that Tenant is qualified to do business in the
State in which the Leased
44
Premises are located, that Tenant has the full right and legal authority to
enter into this Lease, that he is duly authorized to execute and deliver this
Lease on behalf of Tenant in accordance with the bylaws and/or a board of
directors' resolution of Tenant, and that this Lease is binding upon Tenant in
accordance with its terms.
14.2 BROKERAGE COMMISSIONS
The Parties (Tenant and Landlord) warrant that they have not had any
dealings with any real estate broker(s), leasing agent(s), finder(s) or
salesmen, other than those persons or entities named in Article 1 as the
"Brokers" with respect to the Lease by the Parties of the Leased Premises
pursuant to this Lease, and that they will indemnify, defend with competent
counsel, and hold each other harmless from any liability for the payment of any
real estate brokerage commissions, leasing commissions or finder's fees claimed
by any other real estate broker(s), leasing agent(s), finder(s) or salesmen to
be earned or due and payable by reason of Tenant's agreement or promise (implied
or otherwise) to pay (or have Landlord pay) such a commission or finder's fee by
reason of the Tenant's leasing the Leased Premises pursuant to this Lease. See
Exhibit C.
14.3 ENTIRE AGREEMENT
This Lease, the Exhibits (as described in Article 1) and the Addenda (as
described in Article 1), which Exhibits and Addenda are by this reference
incorporated herein, constitute the entire agreement between the parties, and
there are no other agreements, understanding or representations between the
parties relating to the Lease by Landlord of the Leased Premises to Tenant,
except as expressed herein. No subsequent changes, modifications or additions to
this Lease shall be binding upon the parties unless in writing and signed by
both Landlord and Tenant.
14.4 LANDLORD'S REPRESENTATIONS
Tenant acknowledges that neither Landlord nor any of its agents made any
representations or warranties respecting the Project, the Building or the Leased
Premises, upon which Tenant relied in entering into this Lease, which are not
expressly set forth in this Lease. Tenant further acknowledges that neither
Landlord nor any of its agents made any representations as to (i) whether the
Leased Premises may be used for Tenant's intended use under existing Law or (ii)
the suitability of the Leased Premises for the conduct of Tenant's business or
(iii) the exact square footage of the Leased Premises, and that Tenant relied
solely upon its own investigations respecting said matters. Tenant expressly
waives any and all claims for damage by reason of any statement, representation,
warranty, promise or other agreement of Landlord or Landlord's agent(s), if any,
not contained in this Lease or in any Addenda hereto.
45
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
respective dates below set forth with the intent to be legally bound thereby as
of the Effective Date of this Lease first above set forth.
Dated: [ILLEGIBLE] AS LANDLORD:
/s/ [ILLEGIBLE]
----------------------
______________________
______________________
Dated: 7/26/99 AS TENANT:
/s/ Xxxxx X. Xxxxxxxx
----------------------
Xxxxx X. Xxxxxxxx
President
If Tenant is a CORPORATION, the authorized officers must sign on behalf of
the Corporation and indicate the capacity in which they are signing.
46
ADDENDUM TO INDUSTRIAL SPACE LEASE
This Addendum relates to that Net Industrial Space Lease ("Lease") dated July 7,
1999 for reference purposes, between TASMAN V, L.L.C., as Landlord and ADEZA
BIOMEDICAL, INC., as Tenant.
The Addendum shall be part of the Lease and shall include the following
provisions:
15.1 PAYMENT OF PROJECT MAINTENANCE COSTS
Landlord shall have the option to deliver to Tenant a written estimate of
Tenant's share of the Project Maintenance Costs for the ensuing lease year. In
the event that Landlord delivers such a written estimate to Tenant, Tenant shall
then pay to Landlord the estimated amount of the Project Maintenance Costs in
twelve (12) equal installments, in advance, commencing on the first day of each
month provided that such written notice shall be delivered to Tenant ten (10)
days in advance of the due date. Within sixty (60) days after the end of each
lease year, Landlord shall furnish to Tenant a statement showing in reasonable
details the actual Project Maintenance Costs incurred by Landlord during such
lease year. If Tenant paid more than Tenant's proportionate share, Landlord
shall either credit the amount of such overpayment toward the next subsequent
payment or payments due for Project Maintenance Costs that would otherwise
become due, or refund in cash the amount of such overpayment. If Tenant did not
pay Tenant's proportionate share in full, then Tenant shall pay to Landlord the
sum of such underpayment within ten (10) days from Landlord's written demand.
Landlord reserves the right to change from time to time the method of billing
Tenant for Tenant's proportionate share of the Project Maintenance Costs.
15.2 CONDITION OF THE PREMISES
Tenant has inspected the premises and agrees to accept possession of the
premises in the "as is" condition, without warranty, expressed or implied.
15.3 TENANT IMPROVEMENT ALLOWANCE
A. Landlord shall make certain tenant improvements which at this
time are underdetermined. Landlord agrees to contribute the first $100,000 of
the improvements and charge the Tenant as additional rent at a loan constant of
40.0 percent. For example, if $10,000 was expended, the additional rent would be
$10,000 x 0.40 = $4,000 divided by 12 = $333.34 per month. Upon commencement of
improvements to the Premises, Tenant shall deliver to Landlord an irrevocable
letter of credit (or such instrument as may be acceptable to Tenant and
Landlord) in an amount equal to the cost of improvements made by Landlord on
Tenant's behalf as security for Tenant's performance of its contractual
obligations. The amount of the letter of credit shall be reduced by one third
(1/3) annually on renewal.
47
B. Landlord shall provide Tenant an allowance to re-paint the
Premises. Said Allowance shall be $11,000. Landlord shall pay the indicated
amount when the task is completed.
15.4 OPTION TO EXTEND
Provided Tenant is not in default under any provision of the Lease,
Landlord hereby grants to Tenant an option to extend the term of this Lease for
an additional term of three (3) years, when the existing term expires, on the
terms and conditions set forth in this paragraph. Tenant may exercise this
option by giving Landlord written notice of its intention not less than one
hundred twenty (120) days prior to the expiration of the existing term of this
Lease. If this Option is exercised, the Base Monthly Rent for the Premises shall
equal the then current fair market monthly rent ("Fair Market Rent") which shall
not be less than $23,408.00 per month for the Premises as of the commencement
date of the applicable extended term, and adjusted upwards each year for at
least 4% per annum. If the parties cannot agree on the amount of the "Fair
Market Rent" and the annual adjustment to such Fair Market Rent within sixty
(60) days prior to the commencement of such extended term, then the Fair Market
Rent and the annual adjustment thereto shall be determined by an appraisal. All
other terms and conditions contained in the Lease and this Addendum, as the same
may be amended from time to time by the parties in accordance with the
provisions of the Lease, shall remain in full force and effect and shall apply
during the Option term.
If the fair market rental value for the Premises needs to be determined by
appraisal, Landlord and Tenant shall either agree to select one real estate
appraiser or three real estate appraisers. Any real estate appraiser selected
shall be a member of the American Institute of Real Estate Appraisers, shall
have at least five (5) years experience appraising commercial space located in
the vicinity of the Premises, and shall act in accordance with the rules of the
American Institute of Real Estate Appraisers. The Fair Market Rent shall be
based on rental of space of the same age, construction, size and location as the
Premises with the improvements installed therein. If only one appraiser is
selected, then each party shall pay one-half of the fees and expenses of that
appraiser. If proceeding with three appraisers, each party shall select one
appraiser, who in turn shall select the third appraiser. Such third appraiser
shall select one of this first two appraiser's appraisal as the correct fair
market rent. If three appraisers are selected, each party shall bear the fees
and expenses of the appraiser it selects and one-half of the fees and expenses
of the third appraiser.
48
15.4 EFFECT OF ADDENDUM
Each term used herein with initial capital letters shall have the meaning
ascribed to such term in the Lease unless specifically otherwise defined herein.
In the event of any inconsistency between this Addendum and the Lease, the terms
of this Addendum shall prevail.
LANDLORD: TENANT:
[ILLEGIBLE] By: /s/ Xxxxx X. Xxxxxxxx
----------------------
Date: 7-28-99 Date: 7/26/99
49
EXHIBIT A
[MASTER PLAN]
MASTER PLAN
1234 - 0000 XXXX XXXXX
1233 - 1259 - REAMWOOD AVENUE
0000 XXXXXX XXXXX
[INITIALS]
50
[MASTER PLAN]
1234 - 0000 XXXX XXXXX
BUILDING I
[INITIALS]
51
EXHIBIT C
COMMISSION AGREEMENT
The parties hereto agree that the total commission payable to Xxxxx Xxxxxx
Associates for services rendered in connection with the lease between Tasman V,
LLP ("Landlord") and Adeza Biomedical, Inc. ("Tenant"), dated, July 7, 1999,
shall be $24,520.32. The total commission is due and payable by Landlord upon
completion of this lease.
No intermediary other than Xxxxx Xxxxxx Associates (Brokers) has been engaged in
connection with this transaction. Upon receipt of a fully executed Lease,
Landlord shall pay a commission to Broker. The commission shall be an amount
equal to the aggregate of the following percentages of rental (including any
rental increases): An amount equal to the aggregate of 3% of the first, second
and third years rent, 2% of the fourth and fifth years rent, 1.25% of the
balance. The parties hereto agree to indemnify each other for loss, liability,
and reasonable expense, including attorneys fees, incurred by virtue of any
action on their part giving rise to a claim against them by Brokers.
52
EXHIBIT D
PERSONAL PROPERTY ITEMS - ADEZA BIOMEDICAL, INC.
- De-ionized Water System
- Filter water system (large kitchen)
- Fume hoods
- Dishwasher
- Lab benches
- Autoclave
- Inventory cages
- Lockers
- Phone system
- Computer network system
- Lockers
- Alarm system
- Public announcement system
- Emergency kits (blankets, fire extinguishers, first-aid kits, emergency
lights)
- All marketing poster boards
- Electrical strips
- Water heater (next to computer room)
53
TABLE OF CONTENTS
ARTICLE 1. REFERENCES.................................................... 1
1.1 References......................................................... 1
ARTICLE 2. LEASED PREMISES, TERM AND POSSESSION.......................... 3
2.1 Demise Of Leased Premises.......................................... 3
2.2 Right To Use Common Areas.......................................... 4
2.3 Lease Commencement Date And Lease Term............................. 4
2.4 Delivery Of Possession............................................. 4
2.5 Acceptance Of Possession........................................... 5
2.6 Surrender Of Possession............................................ 6
2.7 Early Occupancy.................................................... 6
ARTICLE 3. RENT, LATE CHARGES AND SECURITY DEPOSITS...................... 7
3.1 Base Monthly Rent.................................................. 7
3.2 Additional Rent.................................................... 7
3.3 Year-End Adjustments............................................... 8
3.4 Late Charge And Interest On Rent In Default........................ 8
3.5 Payment Of Rent.................................................... 9
3.6 Prepaid Rent....................................................... 9
3.7 Security Deposit................................................... 9
ARTICLE 4. USE OF LEASED PREMISE AND COMMON AREAS........................ 10
4.1 Permitted Use...................................................... 10
4.2 General Limitations On Use......................................... 11
4.3 Noise And Emissions................................................ 11
4.4 Trash Disposal..................................................... 12
4.5 Parking............................................................ 12
4.6 Signs.............................................................. 12
4.7 Compliance With Laws............................................... 13
4.8 Compliance With Insurance Requirements............................. 13
4.9 Landlord's Right To Enter.......................................... 14
4.10 Control Of Common Areas............................................ 14
4.11 Rules And Regulations.............................................. 15
4.12 Environmental Protection........................................... 15
ARTICLE 5. REPAIRS, MAINTENANCE, SERVICES AND UTILITIES.................. 15
5.1 Repairs And Maintenance............................................ 15
5.2 Services And Utilities............................................. 16
5.3 Energy And Resource Consumption.................................... 17
5.4 Limitation Of Landlord's Liability................................. 18
ARTICLE 6. ALTERATIONS AND IMPROVEMENTS.................................. 18
6.1 By Tenant.......................................................... 18
6.2 Ownership Of Improvements.......................................... 19
6.3 Alterations Required By Law........................................ 19
6.4 Liens.............................................................. 20
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ARTICLE 7. ASSIGNMENT AND SUBLETTING BY TENANT........................... 20
7.1 By Tenant.......................................................... 20
7.2 Merger Or Reorganization........................................... 20
7.3 Landlord's Election................................................ 21
7.4 Conditions To Landlords Consent.................................... 21
7.5 Assignment Consideration And Excess Rental Defined................. 23
7.6 Payments........................................................... 23
7.7 Good Faith......................................................... 23
7.8 Effect Of Landlord's Consent....................................... 23
ARTICLE 8. LIMITATIONS ON LANDLORD'S LIABILITY AND INDEMNITY............. 24
8.1 Limitation On Landlord's Liability And Release..................... 24
8.2 Tenant & Landlord Indemnification.................................. 24
ARTICLE 9. INSURANCE..................................................... 25
9.1 Tenant's Insurance................................................. 25
9.2 Landlord's Insurance............................................... 27
9.3 Mutual Waiver Of Subrogation....................................... 27
ARTICLE 10. DAMAGE TO LEASED PREMISES..................................... 28
10.1 Landlord's Duty To Restore......................................... 28
10.2 Landlord's Right To Terminate...................................... 28
10.3 Tenant's Right To Terminate........................................ 29
10.4 Tenant's Waiver.................................................... 30
10.5 Abatement Of Rent.................................................. 30
ARTICLE 11. CONDEMNATION.................................................. 30
11.1 Landlord's Right To Terminate...................................... 30
11.2 Tenant's Right To Terminate........................................ 30
11.3 Temporary Taking................................................... 31
11.4 Restoration And Abatement Of Rent.................................. 31
11.5 Division Of Condemnation Award..................................... 31
Article 12. DEFAULT AND REMEDIES.......................................... 32
12.1 Events Of Tenant's Default......................................... 32
12.2 Landlord's Remedies................................................ 33
12.3 Landlord's Default And Tenant's Remedies........................... 35
12.4 Limitation On Tenant's Recourse.................................... 35
12.5 Tenant's Waiver.................................................... 36
ARTICLE 13. GENERAL PROVISIONS............................................ 36
13.1 Taxes On Tenant's Property......................................... 36
13.2 Holding Over....................................................... 37
13.3 Subordination...................................................... 37
13.4 Tenant's Attornment Upon Foreclosure............................... 38
13.5 Lender Protection.................................................. 38
13.6 Estoppel Certificates.............................................. 38
13.7 Tenant's Financial Information..................................... 39
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13.8 Transfer By Landlord............................................... 39
13.9 Force Majeure...................................................... 39
13.10 Notices............................................................ 39
13.11 Attorney's Fees.................................................... 40
13.12 Definitions........................................................ 40
13.13 General Waivers.................................................... 43
13.14 Miscellaneous...................................................... 44
ARTICLE 14. CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT............. 44
14.1 Corporate Authority................................................ 44
14.2 Brokerage Commissions.............................................. 45
14.3 Entire Agreement................................................... 45
14.4 Landlord's Representations......................................... 45
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