AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
(DO NOT USE THIS FORM FOR MULLET-TENANT BUILDINGS)
1. Basic Provisions ("Basic Provisions")
1.1 Parties: This Lease ("Lease"), dated for reference purposes only
August 18, 1997, is made by and between KLIEG INVESTMENTS, FAMILY LIMITED
PARTNERSHIP ("Lessor") and IMPCO TECHNOLOGIES, INC., A DELAWARE CORPORATION
("Lessee").
(collectively the "Parties," or individually a "Party").
1.2 Premises: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known as 00000 XXXXXXXXXX XXXX, XXXXXX, located in the County of ORANGE, State
of CALIFORNIA, and generally described as (describe briefly the nature of the
property, and, if applicable, the "Project", if the property is located within a
project) AN APPROXIMATE 79,150 SQUARE FOOT INDUSTRIAL BUILDING AND THE LEGAL
PARCEL OF LAND ON WHICH IT IS SITUATED. ("Premises"). (See also Paragraph 2)
1.3 Term: SEVEN (7) years and 0 months ("Original Term") commencing
August 18, 1997 ("Commitment Date") and ending August 17, 2004 ("Expiration
Date"). (See also Paragraph 3)
1.4 Early Possession: N/A ("Early Possession Date"). (See also
Paragraphs 3.2 and 3.3)
1.5 Base Rent: $34,826.00 per month ("Base Rent"), payable on the FIRST
(1st) day of each month commencing UPON LEASE EXECUTION SEE ADDENDUM (See also
Paragraph 4) _ if this box is checked, there are provisions in this Lease for
the Base Rent to be adjusted.
1.6 Base Rent Paid Upon Execution: $15,727.87 a Base Rent for the period
August 15, 1997 THROUGH AUGUST 31, 1997.
1.7 Security Deposit: $34,826.00 ("Security Deposit"). (See also
Paragraph 5)
1.8 Agreed Use: MANUFACTURING, DISTRIBUTION, AND OFFICE ADMINISTRATION
Lessor. (See also Paragraph 6)
1.9 Insuring Party. Is the "Insuring Party" unless otherwise stated
herein. (See also Paragraph 8)
1.10 Real Estate Brokers: (See also Paragraph 15) SEE ADDENDUM
(a) Representation: The following real estate brokers (collectively,
the "Brokers") and brokerage relationships exist in this transaction (check
applicable boxes):
THE XXXXXX COMPANY - XXXXXXX XXXXXX represents Lessor exclusively ("Lessor's
Broker");
CB COMMERCIAL - XXXXX XXXXXXX represents Lessee exclusively ("Lessee's
Broker"); or
N/A represents both Lessor and Lessee ("Dual Agency").
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"VOIDED PARAGRAPH"
1.11 Guarantor. The obligations of the Lessee under this Lease are to be
guaranteed by N/A ("Guarantor"). (See also Paragraph 37)
1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda
consisting of paragraphs 51 through 68 and Exhibits A and B, all of which
constitute a part of this Lease.
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of size set forth in this Lease, or that may
have been used in calculating rental, is an approximation which the Parties
agree is reasonable and the rental based thereon is not subject to revision
whether or not the actual size is more or less.
"VOIDED PARAGRAPH"
2.2 COMPLIANCE. Lessor warrants that the improvements on the Premises
comply with all applicable laws, covenants or restrictions of record,
building codes, regulations and ordinances ("Applicable Requirements") in
effect on the Start Date. Said warranty does not apply to the use to which
Lessee will put the Premises or to any Alterations or Utility Installations
(as defined in Paragraph 7.3(a)) made or to be made by Lessee. Note: Lessee
is responsible for determining whether or not the zoning is appropriate for
Lessee's intended use, and acknowledges that past uses of the Premises may no
longer be allowed. If the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided, promptly after receipt of written notice
from Lessee setting forth with Specificity the nature and extent of such
non-compliance, rectify the same at Lessor's expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within six
(6) months following the Start Date, correction of that non-compliance shall
be the obligation of Lessee at Lessee's sole cost and expense. If the
Applicable Requirements are hereafter changed (as opposed to being in
existence at the Start Date, which is addressed in Paragraph 6.2(e) below) so
as to require during the term of this Lease the construction of an addition
to or an alteration of the Building, the redemption of any Hazardous
Substance, or the reinforcement or other physical modification of the
Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost
of such work as follows:
(a) Subject to Paragraph 2.2(c) below, if such Capital Expenditures are
required as a result of the specific and unique use of the Premises by Lessee as
compared with uses by tenants in general, Lessee shall be fully responsible for
the cost thereof, provided, however that if such Capital Expenditure is required
during the last two (2) years of this Lease and the cost thereof exceeds six (6)
months Base Rent, Lessee may instead terminate this Lease unless Lessor
notifies Lessee, in writing, within ten (10) days after receipt of Lessee's
termination notice that Lessor has elected to pay the difference between the
actual cost thereof and the amount equal to six (6) months Base Rent. If
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Lessee elects termination, Lessee shall immediately cease the use of the
Premises which requires such Capital Expenditure and deliver to Lessor
written notice specifying a termination date at least ninety (90) days
thereafter. Such termination date shall, however, in no event be earlier
than the last day that Lessee could legally utilize the Premises without
commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the specific and
unique use of the Premises by Lessee (such as, governmentally mandated
seismic modifications), then Lessor and Lessee shall allocate the obligation
to pay for such costs pursuant to the provisions of Paragraph 7.1(c);
provided, however, that if such Capital Expenditure is required during the
last two years of this Lease and provided that such Capital Expenditure does
not exceed the amount of three (3) months Base Rent then payable, or if
Lessor reasonably determines that it is not economically feasible to pay its
share thereof, Lessor shall have the opinion to terminate this Lease upon
ninety (90) days prior written notice to Lessee unless Lessee notifies
Lessor, in writing, within ten (10) days after receipt of Lessor's
termination notice that Lessee will pay for such Capital Expenditure. If
Lessor does not elect to terminate, and fails to tender its share of any such
Capital Expenditure, Lessee may advance such funds and deduct same, with
interest, from Rent until Lessor's share of such costs have been fully paid.
If Lessee is unable to finance Lessor's share, or if the balance of the Rent
due and payable for the remainder of this Lease is not sufficient to fully
reimburse Lessee on an offset basis, Lessee shall have the right to terminate
this Lease upon thirty (30) days written notice to Lessor. SEE ADDENDUM
(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered
by Lessee as a result of an actual or proposed changed in use, changed in
intensity of use, or modification to the Premises made by Lessee then, and in
the event, Lessee shall be fully responsible for the cost thereof, and Lessee
shall not have any right to terminate the Lease.
2.4 Acknowledgments. Lease acknowledgments that: (a) it has been
advised by Lessor and/or Brokers to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical, HVAC
and fire sprinkler systems, security, environmental aspects, and compliance
with Applicable Requirements), and their suitability for Lessee's intended
use, (b) Lessee has made such investigation as it deems necessary with
reference to such matters and assumes all responsibility therefor as the same
relate to its occupancy of the Premises, and (c) neither Lessor, Lessor's
agents, nor any Broker has made any oral or written representations or
warranties with respect to said matters other than as set forth in this
Lease. In addition, Lessor acknowledges that: (a) Broker has made no
representations, promises or warranties concerning Lessee's ability to honor
the Lease or suitability to occupy the Premises, and (b) it is Lessor's sole
responsibility to investigate the financial capability and/or suitability of
all proposed tenants.
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2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in
Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee
shall be responsible for any necessary corrective work.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.
3.2 Early Possession. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent
shall be abated for the period of such early possession. All other terms of
this Lease (including but not limited to the obligations to pay Real Property
Taxes and insurance premiums and to maintain the Premises) shall, however, be
in effect during such period. Any such early possession shall not affect the
Expiration Date.
3.3 Delay In Possession. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease. Lessee shall not,
however, be obligated to pay Rent or perform its other obligations until it
receives possession of the Premises. If possession is no delivered within
sixty (60) days after the Commencement Date, Lessee may, at its option, by
notice in writing within ten (10) days after the end of such sixty (60) day
period, cancel this Lease, in which event the Parties shall be discharged
from all obligations thereunder. If such written notice is not received by
Lessor within said ten (10) day period, Lessee's right to cancel shall
terminate. Except as otherwise provided, if possession is not tendered to
Lessee by the Start Date and Lessee does not terminate this Lease, as
aforesaid, any period of rent abatement that Lessee would otherwise have
enjoyed shall run from the date of delivery of possession and continue for a
period equal to what Lessee would otherwise have enjoyed under the terms
hereof, but minus any days of delay caused by the acts or omissions of
Lessee. If possession of the Premises is not delivered within four (4)
months after the Commencement Date, this Lease shall terminate unless other
agreements are reached between Lessor and Lessee, in writing.
3.4 Lessee Compliance. Lessor shall not be required to tender
possession of the Premises to Lessee until Lessee complies with its
obligation to provide evidence of insurance (Paragraph 8.5). Pending
delivery of such evidence, Lessee shall be required to perform all of its
obligations under this Lease from and after the Start Date, including the
payment of Rent, notwithstanding Lessor's election to withhold possession
pending receipt of such evidence of insurance. Further, if Lessee is
required to perform any other conditions prior to or concurrent with the
Start Date, the Start Date shall occur but Lessor may elect to withhold
possession until such conditions are satisfied.
4. Rent.
4.1 Rent Defined. All monitory obligations of Lessee to Lessor under
the terms of this Lease (except for the Security Deposit) are deemed to be
("Rent").
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4.2 Payment. Lessee shall cause payment of Rent to be received by
Lessor in lawful money of the United States, without offset or deduction
(except as specifically permitted in this Lease), on or before the day on
which it is due. Rent for any period during the term hereof which is for less
than one (1) full calendar month shall be prorated based upon the actual
number of days of said month. Payment of Rent shall be made to Lessor at its
address stated herein or to such other persons or place as Lessor may from
time to time designate in writing. Acceptance of a payment which is less
than the amount then due shall not be a waiver or Lessor's rights to the
balance of such Rent, regardless of Lessor's endorsement of any check so
stating.
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise
Defaults under this Lease, Lessor may use, apply or retain all or any portion
of said Security Deposit for the payment of any amount due Lessor or to
reimburse or compensate Lessor for any liability, expense, loss or damage
which Lessor may suffer or incur by reason thereof. If Lessor uses or
applies all or any portion of said Security Deposit, Lessee shall within ten
(10) days after written request therefor deposit moneys with Lessor
sufficient to restore said Security Deposit to the full amount required by
this Lease. If the Base Rent increases during the term of this Lease, Lessee
shall, upon written request from Lessor, deposit additional moneys with
Lessor so that the total amount of the Security Deposit shall at all times
bear the same proportion to the increased Base Rent as the initial Security
Deposit bore to the initial Base Rent. Should the Agreed Use be amend to
accommodate a material change in the business of Lessee or to accommodate a
sublease or assignee, Lessor shall have the right to increase the Security
Deposit to the extent necessary, in Lessor's reasonable judgment, to account
for any increased wear and tear that the Premises may suffer as a result
thereof. If a change in control of Lessee occurs during this Lease and
following such change the financial condition of Lessee is, in Lessor's
Reasonable judgment, significantly reduced, Lessee shall deposit such
additional moneys with Lessor as shall be sufficient to cause the Security
Deposit to be at a commercially reasonable level based on said change in
financial condition. Lessor shall not be required to keep the Security
Deposit separate from its general accounts. Within fourteen (14) days after
the expiration or termination of this Lease, if Lessor elects to apply the
Security Deposit only to unpaid Rent, and otherwise within thirty (30) days
after the Premises have been vacated pursuant to Paragraph 7.4(c) below,
Lessor shall return that portion of the Security Deposit not used or applied
by Lessor. No part of the Security Deposit shall be considered to be held in
trust, to bear interest or to be prepayment for any moneys to be paid under
this Lease.
6. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the Agreed
Use, or any other legal use which is reasonably comparable thereto, and for
no other purpose. Lessee shall not use or permit the use of the Premises in
a manner that is unlawful, creates damage, waste or a nuisance, or that
disturbs owners and/or occupants of, or causes damage to neighboring
properties. Lessor shall not unreasonably withhold or delay its consent to
any written request for a modification of the Agreed Use, so long as the same
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will not impair the structural integrity of the improvements on the Premises
or the mechanical or electrical systems therein, is not significantly more
burdensome to the Premises. If Lessor elects to withhold consent, Lessor
shall within five (5) business days after such request give written
notification of same, which notice shall include as explanation of Lessor's
objections to the change in use.
6.2 Hazardous Substances. SEE ADDENDUM
(a) Reportable Uses Require Consent. The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, or waste
presence, use, manufacture, disposal, transportation, or release, either by
itself or in combination with other materials expected to be on the Premises,
is either: (i) potentially injurious to the public health, safety or welfare,
the environment or the Premises, (ii) regulated or monitored by any
governmental authority, or (iii) a bases for potential liability of Lessor to
any governmental agency or third party under any applicable statute or common
law theory. Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, and/or crude oil or any products,
by-products or fractions thereof. Lessee shall not engage in any activity in
or on the Premises which constitutes a Reportable Use of Hazardous Substances
without the express prior written consent of Lessor and timely compliance (at
Lessee's expense) with all Applicable Requirements. "Reportable Use" shall
mean (i) the installation or use of any above or below ground storage tank,
(ii) the generation, possession, storage, use, transportation, or disposal of
a Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with,
any governmental authority, and/or (iii) the presence at the Premises of a
Hazardous Substance with respect to which any Applicable Requirements
requires that a notice be given to persons entering or occupying the Premises
of neighboring properties. Notwithstanding the foregoing, Lessee may use any
ordinary and customary materials reasonably required to be used in the normal
course of the Agreed Use, so long as such use is in compliance with all
Applicable Requirements, is not a Reportable Use, and does not expose the
Premises or neighboring property to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor. In addition, Lessor may
condition its consent to any Reportable Use upon receiving such additional
assurance as Lessor reasonably deems necessary to protect itself, the public,
the Premises and/or environment against damage, contamination, injury and/or
liability, including, but not limited to, the installation (and removal on or
before Lease expiration or termination) of protective modifications (such as
concrete encasements) and/or increasing the Security Deposit.
(b) Duty to Inform Lessor. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance has come to be located in, on,
under or about the Premises, other than as previously consented to by Lessor,
Lessee shall immediately give written notice of such fact to Lessor, and
provide Lessor with a copy of any report, notice, claim or other
documentation which it has concerning the presence of such Hazardous
Substance.
(c) Lessee Redemption. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under, or about the
premises (including through
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the plumbing or sanitary sewer system) and shall promptly, at Lessee's
expense, take all investigator and/or remedial action reasonably recommended,
whether or not formally ordered or required, for the cleanup of any
contamination of, and for the maintenance, security and/or monitoring of the
Premises, or neighboring properties, that was caused or materially
contributed to by Lessee, or pertaining to or involving any Hazardous
Substance brought onto the Premises during the term of this Lease, by or for
Lessee, or any third party.
(d) Lessee Indemnification. Lessee shall indemnify, defend and hold
Lessor, its agents, employees, lenders and lessor, if any, harmless from and
against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys and consultants fees arising out of
or involving any Hazardous Substance brought onto the Premises by or for Lessee,
(provided, however, that Lessee shall have no liability under this Lease with
respect to underground migration of any Hazardous Substance under the Premises
from adjacent properties). Lessee's obligations shall include, but not be
limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Lessee, and the cost of investigation,
removal, redemption and/or abatement, and shall survive the expiration or
termination of this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its obligations
under this Lease with respect to Hazardous Substances, unless specifically so
agreed by Lessor in writing at the time of such agreement.
(e) Lessor Indemnification. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including cost of
redemption, which existed as a result of Hazardous Substances on the Premises
prior to the Start Date or which are caused by the negligence or willful
misconduct of Lessor, its agents or employees. Lessor's obligations, as and
when required by the Applicable Requirements, shall include, but not be limited
to, the cost of investigation, removal, redemption, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.
(f) Investigations and Remediations. Lessor shall retain the
responsibility and pay for any investigations or redemption measures required by
governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior to the Start Date, unless such
redemption measure is required as a result of Lessee's use (including
"Alterations", as defined in Paragraph 7.3(a) below) of the Premises, in which
event Lessee shall be responsible for such payment. Lessee shall cooperate
fully in any such activities at the request of Lessor, including allowing Lessor
and Lessor's agents to have reasonable access to the Premises at reasonable
times in order to carry out Lessor's investigative and remedial
responsibilities.
(g) Lessor Termination Option. If a Hazardous Substance Condition
occurs during the term of this Lease, unless Lessee is legally responsible
therefor (in which case Lessee shall make the investigation and redemption
thereof required by the Applicable
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Requirements and this Lease shall continue in full force and effect, but
subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor
may, at Lessor's option, either (i) investigate and remediate such Hazardous
Substance Condition, if required, as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect,
or (ii) if the estimated cost to remediate such condition exceeds twelve (12)
times the then monthly Base Rent or $10,000, whichever is greater, given
written notice to Lessee, within thirty (30) days after receipt by Lessor of
knowledge of the occurrence of such Hazardous Substance Condition, of
Lessor's desire to terminate this Lease as of the date sixty (60) days
following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within ten (10) days thereafter, give written
notice to Lessor of Lessee's commitment to pay the amount by which the cost
of the redemption of such Hazardous Substance Condition exceeds an amount
equal to twelve (12) times the then monthly Base Rent or $10,000, whichever
is greater. Lessee shall provide Lessor with said funds of satisfactory
assurance thereof within thirty (30) days following such commitment. In such
event, this Lease shall continue in full force and effect, and Lessor shall
precede to make such redemption as soon as reasonably possible after the
required funds are available. If Lessee does not give such notice and
provide the required funds or assurance thereof within the time provided,
this Lease shall terminate as of the date specified in Lessor's notice of
termination.
6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise
provided in the this Lease, Lessee shall, at Lessee's sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the reasonable requirements of any applicable fire insurance
underwriter or rating bureau, and the reasonable commendations of Lessor's
engineers and/or consultants which relate in any manner to the Premises, without
regard to whether said requirements are now in effect or become effective after
the Start Date. Lessee shall, within ten (10) days after receipt of Lessor's
written request, provide Lessor with copies of all permits and other documents,
and other information evidencing Lessee's compliance with any Applicable
Requirements specified by Lessor, and shall immediately upon receipt, notify
Lessor in writing (with copies of any documents involved) of any threatened or
actual claim, notice, citation, warning, complaint or report pertaining to or
involving the failure of Lessee or the Premises to comply with any Applicable
Requirements.
6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in
Paragraph 30 below) and consultants shall have the right to enter into Premises
at any time, in the case of an emergency, and otherwise at reasonable times
after reasonable prior notice for the purpose of inspecting the condition of the
Premises and for verifying compliance by Lessee with this Lease. The cost of
any such inspections shall be paid by Lessor, unless a violation of Applicable
Requirements, or a contamination is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority. In such case,
Lessee shall upon request reimburse Lessor for the cost of such inspections, so
long as such inspection is reasonably related to the violation or contamination.
7. Maintenance; Repairs, Utilities Installations; Trade Fixtures and
Alterations.
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7.1 Lessee's Obligations.
(a) In General. Subject to the provisions of Paragraph 2.2
(Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2
(Lessor's Obligations), 9 (Damage or Distraction), and 14 (Condemnation),
Lessee shall, at Lessee's sole expense, keep the Premises, Utility
Installations, and Alterations in good order, condition and repair (whether
or not the portion of the Premises requiring repairs, of the means of
repairing the same, are reasonably or readily accessible to Lessee, and
whether or not the need for such repairs occurs as a result of Lessee's use,
any prior use, the elements or the age of such portion of the Premises),
including, but not limited to, all equipment or facilities, such as plumbing,
heating, ventilating, air-conditioning, electrical, lighting facilities,
boilers, presser vessels, fire protection system, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, floors, windows, doors, plate
glass, skylights, landscaping, driveways, parking lots, fences, retaining
walls, signs, sidewalks and parkways located in, on, or adjacent to the
Premises. Lessee, in keeping the Premises in good odor, condition and
repair, shall exercise and perform good maintenance practices, specifically
including the procurement and maintenance of the service contracts required
by Paragraph 7.1(b) below. Lessee's obligations shall include restorations,
replacements or renewals when necessary to keep the Premises and all
improvements thereon or a part thereof in good order, condition and state of
repair. Lessee shall, during the term of this Lease, keep the exterior
appearance of the building in a first-class condition consistent with the
exterior appearance of other similar facilities of comparable age and size in
the vicinity, including, when necessary, the exterior repainting of the
building.
(b) Service Contracts. Lessee shall, at Lessee's sole expense,
procure and maintain contracts, with copies to Lessor, in customary form and
substance for, and with contractors specializing and experienced the maintenance
of the following equipment and improvements. If any, if and when installed on
the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire
extinguishing system, including fire alarm and/or smoke detection, (iv)
landscaping and irrigation systems, and (v) roof covering and drains.
(c) Replacement. Subject to Lessee's indemnification of Lessor as set
forth in Paragraph 8.7 below, and without relieving Lessee of liability
resulting from Lessee's failure to exercise and perform good maintenance
practices, if the Basic Elements described in Paragraph 7.1(b) cannot be
repaired other than at a cost which is in excess of 50% of the cost of replacing
such Basic Elements, then such Basic Elements shall be replaced by Lessor, and
the cost thereof shall be prorated between the Parties and Lessee shall only be
obligated to pay, each month during the remainder of the term of this Lease, on
the date of which Base Rent is due, an amount equal to the product of
multiplying the cost of such replacement by a fraction, the numerator of which
is one, and the denominator of which is the number of months of the useful life
of such replacement as such useful life is specified pursuant to federal income
tax regulations or guidelines for depreciation thereof (including interest on
the unamorized balance as is then commercially reasonable in the judgment of
Lessor's accountants), with Lessee reserving the right to prepay its obligation
at any time.
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7.2 Lessor's Obligations. Subject to the previous of Paragraph 2.2
(Condition), 2.3 (Compliance), 9 (Damage or Distraction) and 14 (Condemnation),
it is intended by the Parties hereto that Lessor have no obligation, in any
manner whatsoever, to repair and maintain the Premises, or the equipment
therein, all which obligations are intended to be that of the Lessee. It is the
intention of the Parties that the terms of this Lease govern the respective
obligations of the Parties as to maintenance and repair of the Premises, and
they expressly waive the benefit of any statute now or hereafter in effect to
the extent it is inconsistent with the terms of this Lease.
7.3 Utility Installations; Trade Fixtures; Alterations.
(a) Definitions; Consent Required. The term "Utility Installations"
refers to all floor and window coverings, air lines, power panels, electrical
distribution, security and fire protection systems, communication systems,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can
be removed without doing material damage to the Premises. The term:
"Alterations" shall mean any modification of the improvements, other than
Utility Installations or Trade Fixtures, whether by addition or deletion.
"Lessee Owned Alterations and/or Utility Installations" are defined as
Alterations and/or Utility Installations made by Lessee that are not owned by
Lessor pursuant to Paragraph 7.4(a). Lessee shall not make any Alterations or
Utility Installations to the Premises without Lessor's prior written consent.
Lessee may, however, make non-structural Alterations and Utility Installations
to the interior of the Premises (excluding the roof) without such consent but
upon notice to Lessor, as long as they are not visible from the outside, do not
involve puncturing, relocating or removing the roof or any existing walls, and
the cumulative cost thereof during this Lease as extended does not exceed
$50,000 in the aggregate or $10,000 in any one year.
(b) Consent. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. Consent shall be
deemed conditioned upon Lessee's: (i) acquiring all applicable governmental
permits, (ii) furnishing Lessor with copies of both the permits and the plans
and specifications prior to commencement of the work, and (iii) compliance with
all conditions of said permits and other Applicable Requirements in a prompt and
expeditious manner. Any Alterations or Utility Installations shall be performed
in a workmanlike manner with good and sufficient materials. Lessee shall
promptly upon completion furnish Lessor with as-built plans and specifications.
For work which cost an amount equal to the greater of one month's Base Rent, or
$10,000, Lessor may condition its consent upon Lessee providing a lien and
completion bond in an amount equal to one and one-half times the estimated cost
of such Alterations or Utility Installation and/or upon Lessee's posting an
additional Security Deposit with Lessor.
(c) Indemnification. Lessee shall pay, when due, all claims for labor
or materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post
notice of non-responsibility. If Lessee shall contest the
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validity of any such lien, claim, or demand, then Lessee shall, at its sole
expense defend and protect itself, Lessor and the Premises against the same
and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof. If Lessor shall require, Lessee
shall furnish a surety bond in an amount equal to one and one-half times the
amount of such contested lien, claim or demand, indemnifying Lessor against
liability for the same. If Lessor elects to participate in any such action,
Lessee shall pay Lessor's attorneys fees and cost.
7.4 Ownership; Removal; Surrender; and Restoration. See Addendum
(a) Ownership. Subject to Lessor's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility Installations
made by Lessee shall be the property of Lessee, but considered a part of the
Premises. Lessor may, at any time, elect in writing to be the owner of all or
any specified part of the Lessee Owned Alterations and Utility Installations.
Unless otherwise instructed per Paragraph 7.4(b) hereof, all Lessee Owned
Alterations and Utility Installations shall, at the expiration or termination of
this Lease, become the property of Lessor and be surrendered by Lessee with the
Premises.
(b) Removal. Lessor may require that any or all Lessee Owned
Alterations or Utility Installations be removed by the expiration or termination
of this Lease. Prior to the installation of same, Lessee may inquire of Lessor
whether Lessor will require removal of such items by Lessee by the expiration or
termination of this Lease, and Lessor shall notify Lessee within five (5)
business days of Lessee's inquiry. Lessor may require the removal at any time
of all or any part of any Lessee Owned Alterations or Utility Installations made
without the required consent.
(c) Surrender/Restoration. Lessee shall surrender the Premises by the
Expiration Date or any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted, "Ordinary
wear and tear" shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Lessee shall repair any damage
occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee
Owned Alterations and/or Utility Installations, furnishing, and equipment as
well as the removal of any storage tank installed by or for Lessee, and the
removal, replacement, or redemption of any soil, material or groundwater
contaminated by Lessee. Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor
shall constitute a holdover under the provisions of Paragraph 26 below.
8. Insurance; Indemnity.
8.1 Payment For Insurance. Lessee shall pay for all insurance required
under Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor under Paragraph 8.2 (b) in excess of $2,000.00 per
occurrence. Premiums for policy periods commencing prior to or extending beyond
the Lessee term shall be prorated to correspond to the Lease term.
8.2 Liability insurance.
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(a) Carried by Lessee. Lessee shall obtain and keep in force a
Commercial General Liability Policy of insurance protecting Lessee and Lessor
against claims for bodily injury, personal injury and property damage based upon
or arising out of the ownership, use, occupancy or maintenance of the Premises
and all areas appurtenant therein. Such insurance shall be on an occurrence
basis providing single limit coverage in an amount not less than $2,000,000 per
occurrence with an "Additional insured-Managers or Lessors of Premises
Endorsement" and contain the "Amendment of the Pollution Exclusion Endorsement"
for damage caused by heat, smoke or fumes from a hostile fire. The Policy shall
not contain any inter-insured exclusions as between insured xxxxxxx or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Lessee's of any obligation
hereunder. All insurance carried by Lessee shall be primary to and not
contributory with any similar insurance carried by lessor, whose insurance shall
be considered excess insurance only.
(b) Carried by Lessor, Lessor shall maintain liability insurance as
described in Paragraph 8.2(a) in addition to, and not in lieu of, the insurance
required to be maintained by Lessee. Lessee shall not be names as an additional
insured therein.
8.3 Property insurance - Building improvements and Rental Value.
(a) Building and improvements. The insuring Party shall obtain and
keep in force a policy or policies in the name of Lessor, with loss payable to
Lessor, any groundless, and to any Lender(s) insuring loss or damage to the
Premises. The amount of such insurance shall be equal to the full replacement
cost of the Premises, as the same shall exist from time to time, or the amount
required by any Lenders, but in no event more than the commercially reasonable
and available insurable value thereof. If Lessor is the insuring Party,
however, Lessee Owned Alterations and Utility and Utility Installations, Trade
Fixtures, and Lessee's personal property shall be insured by Lessee under
Paragraph 8.4 rather than by Lessor. If the coverage is available and
commercially appropriate, such policy or Policies shall insure against all risks
of direct physical loss of any Applicable Requirements requiring the upgrading,
demolition, reconstruction or replacement of any position of the Premises as the
result and inflation guard protection casing an increase in the annual property
insurance coverage amount by a factor of not less than the adjusted US
Department of Labor Consumer Price index for all Urban Consumers Price Index for
all Urban Consumers for the city nearest to where the Premises are located. If
such insurance coverage has a deductible classes, the deductible amount shall
not exceed $1,000 per occurrence, and Lessee shall be liable for such deductible
amount in the event of an insured loss.
(b) Rental Value. The Insuring Lessor shall obtain and keep in force
a policy or policies in the name of Lessor with loss payable to Lessor and any
Lender, insuring the loss of the full Rent for one (1) year. Said insurance
shall provide that in the even the Lease is terminated by reason of an insured
loss, the period of indemnity of such coverage shall be extended beyond the date
of the completion of repairs or replacement of the Premises, to provide for one
full year's loss of Tent from the date of any such loss. Said insurance shall
contain an agreed valuation provision in lieu of any coinsurance clause, and the
amount of coverage shall be adjusted annually to reflect the projected Rent
otherwise payable by Lessee's acts, omissions use or occupancy of the Premises.
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(c) Adjacent Premises. If the Premises are part of a larger
building, or of a group of a group buildings owned by Lessor, which are adjacent
to the Premises, the Lessee shall pay for any increase in the premiums for the
property insurance of such building or buildings if said increase is caused by
Lessee's acts, omissions, use or occupancy of the Premises.
8.4 Lessee's Property/Business interruption insurance.
(a) Property Damage. Lessee shall obtain and maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures, and Lessee
Owned Alterations and Utility Installations. Such insurance shall be full
replacement cost coverage with a deductible of not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for
the replacement of personal property, Trade Fixtures, Lessee Owned
Alterations and Utility Installations. Lessee shall provide Lessor with
written evidence that such insurance is in force.
(b) Business Interruption. Lessee shall obtain and maintain loss of
income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils commonly insured
against by prudent lessees in the business of Lessee or attributable to
prevention of access to the Premises as a result of such perils.
(c) Adjacent Premises. If the Premises are part of a larger building,
or of a group of buildings owned by lessor which are adjacent to the Premises,
the Lessee shall pay for any increase in the premiums for the property insurance
of such building or buildings if said increase is caused by Lessee's acts,
omission, use or occupancy of the Premises.
8.5 Insurance Policies. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, as set forth in most current issue of "Best's
Insurance guide".or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidated the required
insurance polices. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies o such insurance or certificates evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after thirty (30) days prior
written notice to Lessor. Lessee shall, at least thirty (30) days prior to the
expiration of such change the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand. Such policies shall be for a term of
at least one year, or the length of the remaining term of the Lease, whichever
is less. If either Party shall fail to procure and maintain the insurance
required to be carried by it. the other Party may, but shall not be required to
procure and maintain the same.
8.6 Waiver of Subrogation.. With out affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damage against the other, for loss of or damage
to its property arising out of a incident to the parts required to be insured
against herein. The effect of such releases and waivers is not limited by
amount of insurance carried or required, or by any deductibles applicable
herein. The Parties agree to have their respective property damage
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insurance carriers waive any right to subrogation that such companies may
have against Lessor or Lessee, as the case may be, so long as the insurance
is not invalidated thereby.
8.7 Indemnity. Except to Lessor's negligence or willful misconduct,
Lessee shall indemnity, protect, defend and hold harmless the Premises, Lessor,
and its agents. Lessor's master or ground lessor, partners and Lenders, from
and against any and all claims, loss of rents and/or occupancy of the Premises
by Lessee. If any action of proceeding is brought against Lessor by reason of
any of the foregoing maters, Lessee shall upon notice defend the same at
Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense. Lessor need not have first paid any such
claim in order to defended or indemnified.
8.8 Exemption of Lessor from Liability, Except for Lessor's negligence or
willful misconduct, Lessor shall not be liable for injury or damage to the
person or goods, wares, merchandise or other property of Lessee, Lessor's
employees, contractors, invitees, customers, or any other person in or about the
Premises, whether such damage or injury is caused by or results from fire,
steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wire, appliances,
plumbing, HVAC or lighting fixtures, or from any other cause, whether the said
injury or damage results from conditions arising upon the Premises or upon other
portions of Building of which the Premises are a part, or from other sources of
places. Lessor shall not be liable for any damages arising from any neglect of
any other tenant of Lessor.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, which can reasonably be repaired in six (6) months or less from
the date of he damage or destruction, Lessor shall notify Lessee in writing
within thirty (30) days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.
(b) "Premises Total Destruction" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which cannot reasonably be repaired in six (6) months or less
from the date of the damage of destruction. Lessor shall notify Lessee in
writing within thirty (30) days from the date of the damage or destruction as
to whether or not the damage in Partial or Total.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demotion, debris, removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.
9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that
is an Insured Loss occurs, then Lessor shall at Lessor's expense, repair such
damage (but no Lessee's
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Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon
as reasonably possible and this lease shall continue in full force and
effect; provided, however, that Lessee shall at Lessor's election, make the
repair of any damage or destruction the total cost to repair of which is
$10,000 or less, and, in such event, Lessor shall make any applicable
insurance proceeds available to Lessee on a reasonable basis for the purpose.
Notwithstanding the foregoing the foregoing, if the required insurance was
not in force as to the fact that, by reason of the unique nature of
improvements, full replacement cost insurance coverage was not commercially
reasonable and available, Lessor shall have no obligation to pay for the
shortage in insurance proceeds to fully restore the unique aspect of the
Premises unless Lessee provides Lessor with funds to cover same, or adequate
assurance thereof within said ten (10) days period, the party responsible for
making the repairs shall complete them as soon as reasonably possible and
this Lease shall remain in full force and effect. If such funds or assurance
are not received, Lessor may nevertheless elect by/written notice to Lessee
within ten (10) days thereafter to: (I) make such restoration and repair as
it commercially reasonable with Lessor paying shortage in proceeds, in which
case this Lease any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be
subject in Paragraph 9.3, notwithstanding that there may be some insurance
coverage, but the net proceeds of any such insurance shall be make available
for repairs if made by either Party.
9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expensive, in
which event this Lease shall continue in full force and effect, or (1)repair
such damage as soon as reasonably possible at Lessor's within thirty (30) days,
after receipt by Lessor of knowledge of the occurrence of such damage. Such
termination shall be effective ten (10) days after receipt of the termination
notice to give written notice to lessor of Lessee's commitment to pay for the
repair of such damage without reimbursement from Lessor. Lessee shall provide
Lessor with said funds or satisfactory assurance thereof within thirty (30)
days, after making such commitment. In such event this Lease shall continue in
full force and effect, and Lessor shall proceed to make such repairs as soon as
reasonably possible after the required funds are available. If Lessee does not
make the required commitment this Lease shall terminate as of the date specified
in the termination notice.
9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate sixty (60) days
following such Destruction.. If the damage or destruction was caused by the
gross negligence or will full misconduct or Lessee, Lessor shall have the right
to recover Lessor's damages from Lessee's damages from Lessee, except as
provided in Paragraph 8.6.
9.5 Damage Near End of Term. If at any time during the last six (6)
months of this Lease there is damage for which the cost to repair exceeds one
(1) month Base Rent, whether or not an insured loss either party may terminate
this lease effective sixty (60) days following the date of occurrence of such
damage by giving a written termination notice to the other within thirty (30
days after the date of occurrence of such damage.
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Notwithstanding the foregoing, If Lessee at that time has an execrable option
to extend this Lease or to purchase the Premises, then Lessee may preserve
this Lease by, (a) exercising such option and (b) providing Lessor with any
shortage in insurance proceeds (or adequate notice purporting to terminate
the Lessee, or (I) the day prior to the date which is ten days after Lessee's
receipt of Lessor's written at Lessor's commercially reasonable expense,
repair such damage as seasonably possible and this lease shall continue in
full force and effect. If Lessee fails to exercise such option and provide
such funds or assurance during such period, then this lease shall terminate
on the date specified in the termination notice and Lessee's option shall be
extinguished.
9.6 Abatement of Rent: Lessee's; Lessee's Remedies.
(a) Abatement. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, redemption or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired, but,
not to exceed the proceeds liability for any such damage, destruction,
redemption, repair of restoration except as provided herein.
(b) Remedies. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within forty-five (45) days after such obligation shall come
]accrued, Lessee may, at any time prior to the commencement of such repair of
restoration, give written notice to Lessor and to any Lenders of which Lessee
has actual notice, of Lessee's election to terminate this Lease on a date not
less than sixty (60) days following the giving of such notice. If Lessee gives
such notice and repair or restoration is not commenced with thirty (30 days
thereafter, this Lease shall terminate as of the date specified in said notice.
If the repair or restoration is commenced within said thirty (30) days,
thereafter, this Lease shall terminate as of the date specified in said notice.
If the repair or restoration is commenced with in said thirty (30 days, this
Lease shall continue in full force and effect. "Commence" shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.
9.7 Termination-Advance Payments. Upon termination of this Lease
pursuant to Paragraph 6.2 (g) Paragraph 9, an equitable adjustment shall be
made concerning advance Base Rent and any other advance payments made by
Lessee by Lessor. Lessor shall, in addition, return to Lessee so much of
Lessee's Security Deposit as has not been or is not then required to be used
by Lessor.
9.8 Waive Statutes. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination
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of his Lease and hereby waive the provisions of any present or future statute
to the extent inconsistent herewith.
10 Real Property Texas.
10.1 Definition of "Real Property Texas"(SEE ADDENDUM) as used herein,
"Real Property Taxes" shall include any form of assessment; improvement
estate, general, special, ordinary or extraordinary, or rental levy or tax
(other than inheritance, personal income or estate taxes) ; improvement bond;
and/or license fee imposed upon or levied against any legal or equitable
interest of Lessor in the Premises, Lessor's right to other income therefrom,
and/or Lessor's business of leasing, by authority having the direct or
indirect poser to tax and where the funds are generated with reference to the
Building address and where the proceeds so generated are to applied by the
city, county or other local taxing authority of a jurisdiction within which
the Premises are located. The term "Real Property Taxes" shall also include
any tax, fee, levy, assessment or change, or any increase therein, imposed by
reason of events occurring during the term of the Lease including but not
limited to, a change in the ownership of the Premise.
10.2
(a) Payment of Taxes. Lessee shall pay the Real Property Taxes
applicable to the Premises during the term of the Lease. Subject to
Paragraph 10.2(b), all such payments shall be made at least ten (10) days
prior to any delinquency date. Lessee shall promptly furnish Lessor with
satisfactory evidence that such taxes have been paid. If any such taxes
shall cover any period of the time prior to or after the expiration or
termination of this Lease, Lessee's share of such taxes shall be prorated to
cover only that portion of the tax xxxx applicable to the period that this
Lease is infect, and Lessor shall reimburse Lessee for any overpayment. If
Lessee shall fail to pay any required Real Property Taxes, Lessor shall have
the right to pay the same, and Lessee shall reimburse Lessor therefor upon
demand.
(b) Advance Payment. In the event Lessee incurs a late change on
the third missed Rent payment and all missed Rent thereafter, Lessor may at
Lessor's option, estimate the current Real Property Taxes, and require that
such taxes to paid in advance to Lessor by Lessee, with: (i)in a lump sum
amount equal to the installment due, at least twenty (20) days prior to the
applicable delinquency date, or (ii)monthly in advance with the payment of
the Base Rent. If Lessor elects to require payment monthly in advance
payment shall be an amount equal to the amount of the estimated installment
of taxes divided by the number of months remaining before the month in which
said installment becomes delinquent. When the actual funds needed to pay the
applicable taxes. If the amount collected by Lessor is insufficient to pay
such Real Property Taxed when due. Lessee may be intermingled with other
moneys of Lessor and shall not bear interest. If the event of Breach by
Lessor, be treated as an additional Security Deposit.
10.3 Joint Assessment. If the Premises are not separately assesses,
Lessee's liability shall be an equitable proportion of the Teal Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be conclusively
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determined by Lessor from the respective valuations assigned in the
assessor's work sheets or such other information as may be reasonably
available.
10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency,
all Taxes assessed against and levied upon Lessee Owned Alteration, Utility
installations, Trade Fixtures, furnishings, equipment and all personal
property of Lessee. When possible, Lessee shall cause such property to be
assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee's property
within ten (10) days after receipt of written statement.
11. furnishings, equipment and all personal property of Lessee. When
possible, Lessee shall cause such property to be assessed and billed
separately from the real property of Lessor. If any of Lessee's said
personal property shall be assessed with Lessor's real property, Lessee shall
pay Lessor the taxes attributable to Lessee's property within ten (10) days
after receipt of written statement.
11. Utilities. Lessee shall pay for all water, gas, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all changes jointly metered.
12. Assignment and Subletting.
12.1 Lessor's consent Required
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or encumber (collectively, "assign or assignment") or
sublet all or any part of Lessee's Interest in this Lease or in the Premises
without Lessor's prior written consent.
(b) A change in the control of Lessee shall constitute an
assignment requiring consent. The transfer, on a cumulative basis, of fifty
percent (50%) or more of the voting control of Lessee shall constitute a
change in control for this purposes.
(c) The involvement of Lessee of its assets in any transaction, or
series of transactions (by way of merger, acquisition, financing, transfer,
leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net worth of Lessee by an amount greater than
fifty percent(50%) of such New Worth as it was represented at the time of
execution of this Lease or at the time of the most recent assignment to which
Lessor has connected, or as it exists immediately prior to aid transactions
constituting such reduction, whichever was or is greater, shall be considered
an assignment of the Lease to which Lessor may withhold its consent. "Net
Worth of Lessee" shall mean the net worth of Lessee (excluding any
guarantors) established under generally accepted accounting principles.
(d) An assignment of subletting without consent shall, at Lessor
option, be a Default curable after notice per Paragraph 13.1(c), or a
noncurable Breach without the necessity of any notice and grace period. If
lessor elects to treat such unproved assignment of subletting of noncurable
Breach, Lessor may either:(i) terminate this Lease or (ii) upon thirty
(30)days written notice. Increase the monthly Base Rent to one hundred ten
percent (110%) of the Base Rent then in effect. Further, in the event of
such
18
Breach and rental adjustment, (i) the purchase price previously in effect,
and (ii) all fixed and non-fixed rental adjustments scheduled during the
reminder of the Lease term shall be increased to One Hundred Ten Percent
(110%) of the scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, any assignment of subletting,
shall not: (i) be effective without the express written assumption by such
assignment or subleases of the obligations of Lessee under the lease (ii)
release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any
other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligation
from any persons other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of Rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise in remedies for Lessee's Default or
Branch
(c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Default or breach by Lessee, Lessor may
proceed directly against Lessee, any Guarantors or anyone else responsible
for the performance of Lessee's obligations under this Lease, including any
assignee, without first exhausting Lessor's remedies against any other person
or entity responsible therefore to Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall
be in writing, accompanied by information relevant to Lessor's determination
as to the financial and operational responsibility and appropriateness of the
proposed assignee or subleases, including but not limited to the intended use
and/or required modification of the Premises. If any Lessee agrees to
provide Lessor with such other or additional information and/or documentation
as may be reasonably requested.
(f) Any assignee of, or subleases under, this Lease shall by reason
of accepting such assignment or entering into such sublease, be deemed to
have assumed and agreed to conform and comply with each and every term,
covenant, condition and obligation herein to be observed or performed by
Lessee during the term of said assignment or sublease, other than such
obligations as are contrary to or inconsistent with provision of an
assignment or sublease to which Lessor has specially consented to in writing.
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12.3 Additional Terms and Conditions Applicable to Subletting. The following
terms and conditions shall apply to any subletting by Lessee of all of any
part of the Premises and shall be deemed included in all subleases under this
Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all Lessee's interest
in all Rent payable on any sublease, and Lessor may collect such Rent and
apply same toward Lessee's obligations, Lessee may collect said Rent. Lessor
shall not, by reason of the foregoing and comply with any of Lessee's
obligations of such sublease. Lessee hereby irrevocably authorizes and
directs any such subleases, upon receipt of a written notice from Lessor
starting that a Branch exists in the performance of Lessee's obligations
under the Lease, to pay to Lessor all Rent due and to become due under the
Sublease. Sublease shall rely upon any such notice from Lessor and shall pay
all Rents to Lessor without any obligation or right to inquire as to whether
such Branch exists, notwithstanding any claim form Lessee to the contrary.
(b) In the event of a Breach by Lessee, Lessor may, at its option,
require sublease to attorney to Lessor, in which event Lessor shall undertake
the obligations of the sublessor under such sublease from the time of
exercise of said option to the expiration of such sublease provided, however,
Lessor shall not liable for any prepaid rents or security deposit paid by
such sublessor or any prior Defaults or Breaches or such sub lessor.
(c) Any matter requiring the consent of the sublessor under a sublease
shall also require the consent of Lessor.
(d) No Sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the Sublessee, who shall have the right to cure the Default of
Lessee, within the grace period, if any, specified in such notice. The
Sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.
13. Default: Breach: Remedies.
13.1 Default Breach. a "Default" is defined as a failure by the Lessee
to comply with or perform any of the terms, covenants, conditions or rules
under the Lease. A "Breach" is defined as the occurrence of one or more of
the following Defaults, and the failure of Lessee to cure such Default with
any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the
Premises without providing a commercially reasonable level of security, or
where the coverage of the property insurance described in Paragraph 8.3 is
jeopardized as a result, or without providing reasonable assurances to
minimize potential vandalism.
(b) The failure of Lessee to make any payment of Rent or any
Security Deposit required to be made by Lessee hereunder, whether to Lessor
or to a third party, when due, to provide reasonable evidence of insurance or
surety bond, or to fulfill any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of five
(5) business days following written notice to Lessee.
(c) The failure by Lessee to provide (J) reasonable written
evidence of compliance with Applicable Require (ii) the service contracts,
(iii) the recession, of an unauthorized assignment or subletting, (iv)a
Tenancy Statement, (v) a requested subordination,
20
(vi) evidence concerning any guaranty and/or Guarantor, (vii) any document
requested under Paragraph 42(easements), or (viii) any other documentation or
information which Lessor may reasonable require of Lessee under the terms of
this Lease, where any such failure continues for a period of twenty (20) days
following notice to Lessee.
(d) A Default by Lessee as to terms, convent, conditions or
provisions of the this lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraph 13.1 (a), (b), or (c), above, where
such Default continues for a period of thirty (30)days after written notice;
however, that if the nature of Lessee's Default is such that more than thirty
(30)days are reasonably required for its cure, then it shall not be deemed to be
a Breach if Lessee commerce such cure within thirty (30)day period and
thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (1) the making
of any general arrangement or assignment for the benefit of creditors:(ii)
becoming a "debtor" as defined in 11 U.S..C.~101 or any successor statute
thereto (unless, in the case of a petition filled against Lessee, the same in
dismissed within sixty (60) days; (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located
at the Premises or of Lessee's interest in this Lease, where such seizure is
not discharge within thirty (30) days; provided, however, in the event that
any provision of this subparagraph (e) is contrary to any applicable law,
such provision shall be of no force or effect, and not affect the validity of
the remaining provisions.
(f) The discovery that any financial statement of Lessee or of any
Guarantor given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (1)the death of a Guarantor. (ii) the termination of a
Guarantor's liability with respect to this Lease other than in accordance
with the terms of such guaranty, (iii) guarantor's becoming insolvent or the
subject of a bankruptcy filling, (iv) a Guarantor's refusal to honor the
guaranty or (v) a Guarantor's breach of its guaranty obligation on an
anticipatory basis, and Lessee's failure, within sixty (60) days following
written notice of any such event, to provide written alternative assurance or
security, which, when coupled with the then existing resources of Lessee,
equals or exceeds the combined financial resources of Lessee and the
Guarantors that existed at the time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any of its affirmative duties or
obligations, within ten (10) days after written notice (or in case of an
emergency, without notice). Lessor may, at its option, perform such duty or
obligation on Lessee's behalf, including but not limited to the obtaining of
reasonably required bonds, insurance policies, or governmental license,
permits or approvals. The costs and expenses of any such performance by
Lessor shall be due and payable by Lessee upon receipt of invoice therefor.
If any check given to Lessor by Lessee shall not be honored by the bank upon
which it is drawn, Lessor at its option may require all future payments to
made by Lessee to be by cashier's check. In the event of a Xxxxxx:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which, case this Lessee shall terminate and Lessee's shall
immediately surrender
21
possession to Lessor. In such event Lessor shall be entitled to recover from
Lessee: (I) the unpaid Rent which had been earned at the time of
termination; (i) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could
have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by the Lessee's failure to perform
its obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom, including but not limited to the cost of
recovering possession of the Premises, expenses of resetting, including
necessary renovation and alteration of the Premises, reasonable attorney's
fees, and that portion of any leasing commission paid by Lessor in connection
with this Lease applicable to the unexplored term of this Lease. The worth
at the time of award of the amount referred to in provision (iii) of the
immediately preceding sentence shall be computed by discounting such amount
at the discount rate of the Federal Reserve Bank of the District within which
the Premises are located at the time of award plus one percent (1%). Efforts
by Lessor to mitigate damages causes by Lessee's Branch of this Lease shall
not waive Lessor's right to recover damages under Paragraph 12. If
termination of this Lease is obtained through the provisional remedy of
unlawful detained, Lessor shall have the right to recover in such proceeding
any unpaid Rent and damages as are recoverable therein, or Lessor may reserve
may reserve the right to recover damages under Paragraph 12. If termination
of this Lease is obtained through the provisional remedy of unlawful
detainer, Lessor shall have the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1
was not previously given, a notice to pay rent or quit, or to perform or quit
given to Lessee under the unlawful detainer statute shall run concurrently,
and the failure of Lessee to cure the Default within the greater of the
Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease to remedies provided for in this Lease and/or said statute.
(b) Continue the Lease and Lessee's right to possession and recover
in Rent as it becomes due, in which event Lessee may sublet or assign,
subject only to reasonable limitations. Acts of maintenance, efforts to
relate, and/or the appointment of a receiver to protect the Lessor's
interests, shall not constitute a termination of the Lessee's right to
possession.
(c) Pursue any other remedy now or hereafter available under the
laws of judicial decisions of the state wherein the Premises are located.
The expiration or termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability under
any indemnity provisions of this Lease as to matters occurring during the
term hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture. Any agreement for free or abated rent or
other changes, or for the giving or paying by Lessor to or for Lessee o any
cash or other bonus, inducement or consideration for Lessee's entering into
this Lease all of which concessions are hereinafter referred to as
"inducement Provisions", shall be deemed
22
conditioned upon Lessee's full and faithful performance of all the terms,
covenants and conditions of this Lease. Upon Breach of this Lease by Lessee,
any rent, other change, bonus, inducement, or consideration therefore abated,
given or paid by Lessor under such an inducement Provision shall be
immediately due and payable by Lessor, notwithstanding any subsequent cure of
said Breach by Lessees. The acceptance by Lessor of rent or cure of the
Breach which initiated the operation of this paragraph shall not be deemed a
waiver by Lessor on a pro-rate basis based upon the ratio of the time
remaining in the initial term of the Lease to the then expired portion of the
Lease. (of the provision of this paragraph unless specifically so stated in
writing by Lessor at the time of such acceptance.
13.4 Late charges. Lessee hereby acknowledges that late payment by
Lessee of Rent will cause Lessor in incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to processing and accounting charges,
and late charges which may be imposed upon Lessor by any Lender.
Accordingly, if any Rent shall not be received by Lessor within five (5) days
after such amount shall be due then, without any requirement for notice to
Lessee, Lessee shall pay to Lessor a fair and reasonable estimate of the cots
Lessor will occur by reason of such late payment. Acceptance of such late
charge by Lessor shall in no event constitute a waiver of Lessee's Default or
Breach with respect to such overdue amount nor prevent the exercise of the
other rights and remedies granted hereunder. In the event that a late charge
a payable hereunder, whether or not collect, for three (3) consecutive
installments of Base Rent, then notwithstanding any provision of this lease
to the contrary, Base Rent shall, at Lessor's option, become due and payable
quarterly in advance.
13.5 Interest. Any monetary payment due Lessor hereunder, other than
late charges, not received by Lessor when due as to scheduled payments (such
as Base Rent) or within thirty (30) days following the date on which it was due
for non-scheduled payment shall bear interest for the date when due, as to
scheduled payments, or the thirty-first (31) day after it was due as to
non-scheduled payment. The interest ("interest") charged shall be equal to
the prime rate reported in the Wall Street Journal as published closest prior
to the date when due plus four percent (4%), but shall not exceed the maximum
rate more than once in any twelve (12) month period, or twice of the entire
Term of the Lease, (including any extensions) allowed by law. Interest is
payable in addition to the potential late charge provided for in Paragraph
13.4.
13.6 Breach by Lessor.
(a) Notice of Breach. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For Purpose of this Paragraph, a
reasonable time shall in no event less than thirty (30) days after receipt by
Lessor, and any Lender whose name and address shall
23
have been performed; provided, however, that if the nature of Lessor's
obligation is such that more than thirty (30) days are reasonable required
for its performance, then Lessor shall not be in breach if performance is
commenced with such thirty (30) day period and thereafter diligently pursued
to completion.
(b) Performance by Lessor shall not be deemed in breach of this Lease
nor Lender cures said breach within thirty (30) days after receipt of said
notice, or if having commenced said cure they do not diligently pursue it to
completion, then Lessee may elect to cure said breach at Lessee's expense and
off set from Rent an amount equal to the greater of one month's Base Rent or
the Security Deposit, and to pay a excess such expense under protest,
reserving Lessee's right to reimbursement from Lessor. Lessee shall document
the cost of said cure and supply said documentation to Lessor.
14. Condemnation. If the Premises or any portion thereof under the power of
eminent domain or sold under the threat of the exercise of said power
(collectively "Condemnation"), this Lease shall terminate as to the part
taken as of the date the condemning authority takes title possession,
whichever first occurs. If more than ten percent (10%) of any building
portion of the premises, or more than twenty-five percent (25%) of the land
area portion of the premises not occupied by any building, is taken by
Combination, Lessee may, at Lessee authority takes such possession. If
Lessee does not terminate this Lease in accordance with the foregoing, this
Lease, shall remain in full force and effect as to the portion of the
Premises remain, except that the Base Rent shall be reduced in proportion to
the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold, the value of the leasehold, the value of the part taken, or for
severance damages; provided however, that Lessee shall be entitled to any
compensation for Lessee's relocation expenses, loss of business goodwill
and/or Trade Fixtures, without regard to whether or not this Lease is
terminated pursuant to the provisions of this Paragraph. All Alterations and
Utility Installations made to the Premises by Lessee, for purposes of
Condemnation only, shall be considered the property of the Lessee and Lessee
shall be entitled to any and all compensation which is payable therefor. In
the event that this Lease is not terminated by reason of the Condemnation,
Lessor shall repair any damage to the Premises caused by such Condemnation.
16. Estoppel Certificates,
(a) Each Party (as "Responding Party"-See Addendum) shall within five
(5) days after written notice from the other Party (the "Requesting Party")
execute, acknowledge and deliver to the Requesting Party a statement in
writing in form similar to the then most current "Estoppel Certificate" form
published by the American Industrial Real Estate Association, plus such
additional information, confirmation and/or statements as may be reasonably
requested by the Requesting Party.
24
(b) If the Responding Party shall fail to execute or deliver the
Estoppel Certificate stating that (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party.
(ii) there are no uncured defaults in the Requesting Party's performance, and
(iii) if Lessor is the Requesting Party, not more than one month's rent has
been paid in advance. Prospective purchasers and encumbrances may rely upon
the Requesting Party Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate.
(c) If Lessor desires to finance, refinance, or sell the Premises, or
any thereof, Lessee and all Guarantors shall deliver to any Potential lender
or purchaser designated by Lessor such current financial statements as may be
reasonable required by such lender of purchaser, including but not limited to
Lessee's financial statements for past three (3) years. Which statements
shall be audited if it is Lessee's custom to do so, or otherwise, such
financial statements shall be certified as accurate by Tenant's President or
CFO. All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for purpose herein
set forth.
17. Definition of Lessor. The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, or
if this a sublease, of the Lessee's interest in the prior lease. In the
event of transfer of Lessor's title or interest in the Premises of the Lease,
Lessor shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Lessor. Except as provided in Paragraph 15,
upon such transfer or assignment and delivery of the Security Deposit, as
aforesaid, the prior Lessor shall be relieved of all liability with respect
to the obligations and/or covenants under this Lease thereafter to be
Performed by Lessor. Subject to the foregoing the obligations and/or
covenants in this Lease to be performed by Lessor shall be binding only upon
the Lessor or xxxxx active defined. Notwithstanding the above, and subject to
the provisions of Paragraph 20 below, the original Lessor under this Lease,
and all subsequent holders of the Lessor's interest in Lease shall remain
liable and responsible with regard to the potential duties and liabilities of
Lessor pertaining to Hazardous Substances as outlined in Paragraph 6 above.
18. Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. Days Unless otherwise specially indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.
20. Limitation on Liability. Subject to the provisions of Paragraph 17
above, the obligations of Lessor under this Lease shall not constitute
personal obligations of Lessor, the individual partners of Lessor or is its
or their individual partners, directors, officers or shareholders, and Lessee
shall look to the Premises, and to no other assets of Lessor, for the
satisfaction of any liability of Lessor with respect to this Lessee, and
shall not seek
25
recourse against the individual partners of Lessor, or its or their
individual partners, directors, officers or shareholder, or any of their
personal assets for such satisfaction.
21. Time of Essence. Time is of the essence with respect to the performance
of all obligations to be performed or observed by the Parties under this
Lease.
22. No Prior or Other Agreement Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein,
and no other prior to contemporaneous agreement or understanding shall be
effective Lessor and Lessee each represents and warrants to the Brokers that
it has made, and is relying solely upon, its own investigation as to the
nature, quality character and financial responsibility of the other Party to
this Lease and as to the nature, quality, and character and financial
responsibility of the other Party to this Lease and as to the nature, quality
and character of the Premises. Brokers have no responsibility with respect
thereto or with respect to any default or breach hereof by either Party. The
Liability (including court costs and Attorneys' fees), of any Broker with
respect to negotiation, execution, delivery or performance by either Lessor
or Lessee under this Lease or any amendment or modification hereto shall be
limited to an amount to an amount up to the fee received by such Broker
pursuant to this Lease; provided, however, that the foregoing limitation on
each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.
23. Notices.
23.1 Notice Requirements. All notices required or permitted by this
Lease shall be in writing and may be delivered in person (by hand or by
courier) be sent by certified or registered mail or US Postal Service Express
Main, with postage prepaid, and shall be deemed sufficiently given if served
in a manner specified in this Paragraph 23. The addresses noted adjacent to
a party's signature on this Lease shall be that Party's address for delivery
or mailing of notices. Either Party may by written notice to the other
specify a different address for notice on the business day. A copy of
notices of Lessor shall be concurrently transmitted to such party of parties
of such addresses as Lessor may from time to time hereafter designate in
writing.
23.2 Date of Notice. Any notice sent by registered of certified main
receipt requested shall be deemed given on the date of delivery shown on the
receipt card, or if no delivery date is shown on the postmark thereon.
Express mail or overnight courier that guarantee next delivery shall be
deemed after delivery of the same to the Postal Service or courier. If
notice is received on a Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day.
24. Waivers. No waiver by Lessor of Default or Breach of any term,
convenient or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or
Breach by Lessee of the same or of any other term, covenant or condition
hereof. Lessor's consent, or approval of, any act shall not be deemed to
render unnecessary the obtaining of Lessor's consent to, or approval of,
26
any subsequent or similar act by Lessee, or be construed as the basis of an
estoppel to enforce the provision or provisions of this Lease requiring such
consent. The acceptance of Rent by Lessor shall not be a waiver of any
Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor
on account of moneys or damages due Lessor, notwithstanding any qualifying
statements or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of deposit
of such payment.
25. Recording. Either Lessor or Lessee shall upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees applicable therein.
26. No Right To Holdover. Lessee has no right to retain possession of the
Premises or any thereof beyond the expiration of termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increase to
one hundred fifty percent (150%) of the Base Rent applicable during the month
immediately preceding the expiration or termination. Nothing contained
herein shall be construed as consent by Lessor to any holding over by Lessee.
27. Cumulative Remedies. No remedy or election herunder shall be, wherever
possible, be cumulative with all other remedies at law or in equity
28. Covenants and Conditions; Construction of Agreement. All provisions of
this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the
convenience of the parties only and shall not be considered a part of this
Lease. Whenever required by the context, the singular shall include the
plural and vice versa. This Lease shall not be construed as if prepared by
one of the parties, but rather according to its fair meaning as a whole, as
if both parties had prepared it.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be
governed by the laws of he State in which the Premises are located. Any
litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any option granted hereby shall be
subject and a subordinate to any ground lease, mortgage, deed of trust or
other hypothecation or security device (Collectively, "Security Device"), now
or hereafter place upon the Premises, to any and all advance made on the
security thereof, and to all renewals, modifications, and extensions thereof.
Lessee agrees that the holders of any such Lessor under this Lease accruing
prior to taking title to the Premises. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of its Security
27
Device by give written notice thereof to Lessee, whereupon this Lease and
such Options shall be deemed prior to such Security Device, notwithstanding
the relative dates of the documentation or recordation thereof.
30.2 Attornment Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to althorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security, and that
in the event of such foreclosure, such new owner shall not; (i) be liable for
any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (ii) be subject to any offsets of defenses
which Lessee might have against any prior Lessor, or (iii) be bound by
prepayment of more than one (1) month's rent.
30.3 Non-Disturbance, With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall subject to receiving a commercially reasonable non-disturbance
agreement (a "Non-Disturbance Agreement ") from the Lender which
Non-Disturbance Agreement provides that Lessee's possession of the Premises,
and this Lease, including any options to extend the term hereof, will not be
disturbed so long as Lessee is not in Breach hereof and attires to the record
owner of the Premises. Further, with sixty (60) days after the executive of
this Lease, Lessor shall use its commercially reasonable efforts to obtain a
Non-Disturbance Agreement from the holder of any pre-existing Security Device
which is secured by the Premises. In the event that Lessor is unable to
provided the Non-Disturbance Agreement within said sixty (60) days, Lessee
may, at Lessee's option, directly contract Lessor's lender and attempt to
negotiate for the execution and delivery of a Non-Disturbance Agreement.
30.4 Self-Executing. The agreements contained in this Paragraph 30
shall be effective without the executive of any further writings as may be
reasonably required to separately document any subordination, attornment
and/or Non-Disturbance Agreement provided for herein.
31. Attorney's Fees. If any Party brings an action of proceeding involving
the Premises to enforce the terms hereof or to declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding, or appeal
thereon, shall be entitled to reasonable attorney's fees. Such fees may be
awarded in the same suit or recovered in a separate suit, whether or not such
action or proceeding is pursued to decision or judgment. The term,
"Prevailing Party" shall included, without imitation, a Party who
substantially obtains or defeats to decision or judgment. The term,
"Prevailing Party" shall include, without imitation, a Party who
substantially obtains or defeats the relied sought, as the case may be,
whether by compromise, settlement, judgment, or the abandonment by the other
Party of its claim of defense. The attorney's' fees award shall not be
computed in accordance with any court fee schedule, but shall be such as to
fully reimburse all attorney's fee reasonably incurred. In addition, Lessor
shall be entitled to attorneys' fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in
connection with such Default or resulting Breach.
28
32. Lessor's Access; Showing Premises; Repairs. After reasonable prior
notice, Lessor's agents shall have the right to enter the Premises an any
time, the case of an emergency, and otherwise all reasonable times for the
purpose of showing the same to prospective purchasers, lenders, or lessees
during the last six (6) months of the Term, and making such alterations,
repairs, improvements or additions to the Premises as Lessor may deem
necessary. All such activities shall be without abatement of rent or
liability to Lessee. Lessor may at any time place on the premises any
ordinary "For Sale" signs provided it is clear that only the Premises, is for
sale and not Lessee's business, Lessor may during the last six (6) months of
the term hereof place on the Premises any ordinary "For Lease" signs. Lessee
may at any time place or about the Premises any ordinary "For Sublease" sign.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, any
auction upon the Premises without Lessor's Prior written consent. Lessor
shall not be obligated to exercise any standard of reasonableness in
determining whether to permit an auction.
34. Signs Except for ordinary "For Sublease" signs, Lessee shall not place
any sign upon the Premises without Lessor's prior written consent. All signs
must comply with all Applicable Requirements.
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for
Breach by Lessee, shall automatically terminate any sublease or lesser estate
in the Premises; provided, however that Lessor may elect to continue any one
or all existing subtenants. Lessor's failure within ten (10) days following
any such event to elect to the contrary by written notice to the holder of
any such lesser interest, shall constitute Lessor's election to have such
interest.
36. Consents. Except as otherwise provided herein, wherever in this Lease
the consent of a Party is required to an act by or for other Party, such
consent shall not be unreasonably withheld or delayed. Lessor's actual
reasonable costs and expenses (including but not limited to architect's,
attorney's and other consultants' fees) incurred in the consideration of or
response to, a request by Lessee for any Lessor consent, including but not
limited to consents to as assignment, a subletting or presence of use of a
Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and
supporting documentation therefor. Lessor's consent to a any act, assignment
or subletting shall not constitute an acknowledgment that no Default or
Breach by Lessee of this Lease exists, nor shall such consent be deemed a
waiver of any then existing Default or Breach, except as may otherwise
specifically state in writing by Lessor at the time of such consent. The
failure to specify herein and particular condition to Lessor's consent shall
not preclude the imposition by Lessor at the time of consent of such future
or other conditions as are then reasonable with reference to the particular
matter for which consent is being give. In the event that either Party
disagrees with any determination made by other hereunder and reasonably
requests the reasons or such determination, the determining party shall
furnish
29
its reasons in writing and in reasonable detain within ten (10) days
following such request.
37. Guarantor.
37.1 Execution. The Guarantors, if any, shall each execute a guaranty
in the form most recently published by the American Industry Real Estate
Association, and each such Guarantor shall have the same obligations as
Lessee under this Lease.
37.2 Default. It shall constitute a Default of the Lessee if any,
Guaranty fails or refuses, upon request to provide: (a) evidence of the
execution of the guaranty, including the authority of the party signing on
Guarantor behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of its board of directors
authorizing the making of such guaranty, (b) current financial statements,
(c) a Tenancy Statement, or (d) written confirmation that the guaranty is
still in effect.
38. Quiet Possession. Subject to payment by Lessee of the Rent and
performance of all of the convenants, conditions and provision on Lessee's
part to observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during he term hereof.
39. Options SEE ADDENDUM
39.1 Definition. ":Option" shall mean: (a) the right to extend the term
of renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (b) the right of first refusal or first other to lease
either the Premises or other property of Lessor; (c) the right to purchase or
the right of first refusal to purchase the Premises or other property of
Lessor.
39.2 Options Personal To Original Lessee. Each Option granted to Lessee
in this Lease is personal to the original Lessee, and cannot as assigned or
exercised by anyone's other than said original Lessee and only while the
original Lessee is in full possession of the Premises, and if requested by
Lessor, with Lessor's certifying that Lessee has no intention of thereafter
assigning or subletting.
39.3 Multiple Options. In the event that Lessee has any multiple
Options to extend or renew this Lease, a later Option cannot be exercised
unless the prior Options have been validly exercised
39.4 Effect of Default on Options.
(a) Lessee hall have no right to exercise an option: (I) during the
period commencing with the giving of any notice of Default and continuing
until said Default is cured, (ii) during the period of time any rent is
unpaid (provided that notice thereof is given Lessee).(iii) during the time
Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been
given three (3) or more notices of separate Default, whether or not
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the Defaults are cured, during the twelve (12) month period immediately
preceding the exercise of the Option.
(b) The period of time within an Option may be exercised shall not be
extended or enlarge by reason of Lessee's inability to exercise an Option
because of the provisions of Paragraph 39.4(a).
(c) An Option shall terminate and be of no further force or affect,
notwithstanding Lessee's due and timely exercise of the Option, if, after
such exercise and prior to the commencement of the extended term, (I) Lessees
fails to pay Rent for a period of thirty (30) days after such Rent becomes
due (without any necessity of Lessor to give notice thereof), (ii) Lessor
gives to Lessee three (3) or more notices of separate Default during any
twelve (12) month period, whether or not the Defaults are cured, or (iii) if
lessee commits a Breach of this Lease.
40. Multiple Buildings. If the Premises are a part of a group of buildings
controlled by Lessor, Lessee agrees that it will observe all reasonable rules
and regulations which Lessor may make from time to time for the management,
safety, and care of said properties, including the care and cleanliness of
the grounds and including the parking, loading and unloading of vehicles, and
that Lessee will pay its fair share of common expenses incurred in connection
therewith.
41. Security Measures. Lessee hereby acknowledges hat the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide
same. Lessee assumes all responsibility for the protection of the Premises,
Lessee, its agents and invites and their property from the acts of third
parties.
42. Reservations. Lessor reserves to itself the right, from time to time,
to grant, without the consent or joinder of Lessee, such easements, right and
declarations that Lessor deems necessary, and to cause the recordation of
parcel maps and restrictions, so long as such easements, rights, dedications,
maps and restrictions do not unreasonably interfere with the use of the
Premises by Lessee. Lessee agrees to sign any documents reasonably requested
by Lessor to effectuate any such easement rights, dedication, map or
restrictions.
43. Performance Under Protest. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereto, the Parry whom the obligation to pay the money is asserted
shall have the right to make payment "under protest" and such payment shall
not be regarded as a voluntary payment and there shall survive the right on
the part of said Party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said
Party to pay such sum or any part thereof said Party shall be entitled to
recover such sum or no much or so much thereof as it was not legally required
to pay.
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44. Authority. If either Party hereto is a corporation, trust, limited
company, partnership, or similar antity, each individual executing this Lease
on behalf of such entity represents and warrants that he or she is duty
authorized to execute and deliver this Lease on a its behalf. Each party
shall, with, thirty (30) days after request, deliver, deliver to the other
party satisfactory evidence of such authority.
45. Conflict. Any conflict between the printed previsions of this Lease and
the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
46. Other. Preparation of this Lease by either Party or their agent and
submission of same to the other Party and shall not be deemed an offer to
lease to the other Party. The Lease is not intended to be binding until
executed and delivered by all Parties hereto.
47. Amendments. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary medications to this Lease as may be reasonably
requires's by a Lender connection with the obtaining of normal financing or
refinancing of the Premises.
48. Multiple Parties. If more than one person or entity is names herein as
either Lessor or Lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.
49. Mediation and Arbitration of Disputes. An Addendum requiring the
Mediation and/or the Arbitration of all disputes between the Parties and/or
Brokers arising out of this Lease. (X is not attached to this Lease)
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