EXHIBIT 10.7
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only,
October _______, 2001, is made by and between PRINCIPAL LIFE INSURANCE COMPANY,
an Iowa corporation ("LESSOR") and CONVERSE, 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 0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxx, located in the County of San
Bernardino, 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) approximately 317,070 square foot freestanding
concrete and steel tilt-up industrial building located on approximately 15.17
acres of land ("PREMISES"). See also Paragraph 2.
Subject to Lessor's obligations described in this Section 1.2 and in
Section 2.2 below, Lessee is leasing the Premises in an AS-IS condition. Lessee
has had the full opportunity to inspect, and approve the condition of the
Premises. Lessee acknowledges that there are no other improvements of any type
which are not present in the Premises as they exist as of October 3, 2001 which
are to be provided by Lessor, except for the Tenant improvements, as set forth
below.
Subject to the limitations set forth herein, including, without
limitation, those with respect o the Lessor's maximum contribution to he cost of
certain items thereof, Lessor shall construct or cause to be constructed for
Lessee certain improvements ("Tenant Improvements"). Except in the event that
the cost of any items subject to maximum cost contributions ("MCC'S") are
exceeded, in which event the Lessee shall bear such cost, Lessor shall pay the
costs of the Tenant improvements. The Tenant improvements shall consist of the
following:
1. Installation of a complete ESFR system prior to the Commencement Date,
in accordance with plans and specifications prepared by Lessor's consultants,
which shall be subject to review and approval by Lessee, which shall not be
unreasonably withheld or delayed, and in no event shall the review by Lessee or
its consultants result in any delay of the construction and installation of the
system. Lessee's review and approval of the plans and specifications for the
ESFR system, which have been provided to Lessee, shall be approved or
disapproved on or before October 2, 2001. In the event Lessee has not responded
to the plans by such date, the ESFR system plans and specifications shall be
deemed approved by Lessee. The parties agree that in the event that the
construction of the ESFR is delayed by the review and approval of the plans for
same by Lessee, such a delay shall be considered a "Lessee Delay" within the
definition set forth in this section, below, and he condition that said system
be installed prior to the Commencement date shall be deemed waived to the extent
of such Lessee induced delay.
2. Removal of existing draft curtains, if they are not required by current
fire codes, or for the ESFR system to be in full compliance with all rules and
regulations.
3. Provided 2,000 AMP, 277/480 VAC, 3 phase, 4 wired electrical service to
the Premises, if needed. Lessee shall advise Lessor of the need for same on or
before October 12, 2001, failing which Lessee shall be deemed to have waived the
right to require Lessor to provide the electrical upgrades.
4. Increase the current warehouse area lighting by 30% to achieve 30 foot
candle lighting. All existing and new lighting fixtures shall be equipped with
15 foot extension whips.
5. Construct one men's and one women's restroom adjacent to the existing
warehouse shipping office. Said restrooms shall be at a commercially standard
build out (e.g., one toilet fixture, one sink, standard lighting, painted walls,
or panel walls, as Lessor elects, and concrete or sheet vinyl flooring, as
Lessor elects.
6. Provide protective guard rails for the entire length of the existing
office walls adjacent to the warehouse areas, and for the walls of the shipping
office.
7. Provide security bollards in the existing hardscape area to protect the
glass adjacent to the Xxxxxx Street entrance
8. On or before November 1, 2001, Lessor and Lessee shall agree on a plan
to reduce the temperature inside the warehouse area through the installation of
exhaust fans in the roof, or other similar means not involving the addition of
HVAC units in the warehouse. Lessor's MCC for this item is Twenty Five Thousand
Dollars ($25,000.00), but the parties agree to strive for a plan which will cost
materially less through value engineering. In the event that the final budget
for any mechanical cooling program exceeds the MCC, any such excess shall be the
responsibility of Lessee, and Lessee shall deposit the amount of such excess
with Lessor prior to, and as a condition of, the commencement of such work.
9. Lessor shall install new carpeting in the office areas (except for the
shipping office). The carpet shall be Centerpoint Designweave glue down. Lessor
shall install in the same areas a 4" Xxxxx base.
The Tenant improvements shall be constructed by a contractor or specialty
contractors selected by Lessor (each, a "CONTRACTOR"), pursuant to arm's length
contract(s) entered into with Lessor.
At the, request of Lessee, Lessor and Lessee shall communicate on a weekly
basis concerning the ongoing progress of the Tenant improvements, including the
estimated completion date.
Subject to Lessee Delay, Lessee's failure to obtain any permits, licenses
or similar governmental permission to conduct its business, and Unavoidable
Delays (as described in paragraph 50 below). Lessor shall substantially complete
the Tenant improvements by March 1, 2002, failing which Lessee, following the
giving of 30 days written notice to cure given on or after
such date, shall have the right to an abatement of one day's Base Rent for each
day after the last day in which Lessor has to cure the failure to complete until
the Tenant improvements are substantially complete. As used herein, the Tenant
improvements shall be deemed to be substantially complete at such time as Lessor
has completed the Tenant improvements to the point where it is useable by
Lessee, with all the Tenant improvements in place, but subject to "punch list"
items, i.e., items to completed, added, or modified but which do not
unreasonably interfere with Lessee's use and enjoyment of the Premises (see also
Paragraph 3).
As used herein, "LESSEE DELAY" shall mean any delay in the commencement or
completion of the Tenant improvements caused by Lessee, including, without
limitation, Lessee's delay in approving the ESFR plan, or any other working
drawings or specifications with respect to which Lessor requests Lessee's
approval, change orders resulting in delays, or interference by Lessee, or its
contractors, consultants, or fixture installers with the orderly progress of the
construction of the Tenant improvements.
Lessor shall have no obligation to contribute or advance any funds, or
undertake any work or improvements except as provided expressly herein, and
Lessee shall bear all other costs for all work, improvements, furniture,
fixtures, and equipment. (See also Paragraph 2.)
1.3 TERM: Six years and no months ("ORIGINAL TERM") commencing December
15, 2001 ("COMMENCEMENT DATE") and ending December 14, 2007 ("EXPIRATION DATE").
(See also Paragraph 3).
1.4 EARLY POSSESSION: Subject to the limitations set forth below, the
Lessee shall be allowed to enter the Premises for the purposes of installing its
fixtures and equipment, provided that Lessee has then provided Lessor with
copies certificates of insurance, complying in all respects with the terms of
this Lease, for all insurance required to be carried hereunder. Lessee
acknowledges that Lessor will be constructing Lessee's Tenant improvements
during the period of Early Possession, and that accordingly the ability of
Lessee to freely install its fixtures and equipment or otherwise use the
Premises during this period will be limited by Lessor's activities in the
Premises. Lessee agrees that in all events Lessor shall have the priority over
Lessee in construction or similar activities, that Lessee will follow all
reasonable rules and regulations concerning its activities in and about the
Premises during this period promulgated by Lessor, its Contractor, or Property
Manager. Due to the ongoing construction and other activities, Lessee hereby
forever releases and discharges Lessor, its contractors, agents, employees, and
managers from and against any and all claims of loss, damage or injury to
persons or property, including, without limitation, its product inventory, which
loss, damage or injury occurs, or its alleged to have occurred, during the
period of Early Possession, except to the extent caused by Lessor's gross
negligence or intentional malfeasance. Lessee acknowledges that Lessor does not
guarantee or warrant the safety of the Premises, or its security during such
period, as construction and other activities will be ongoing.
("EARLY POSSESSION DATE"). (See also Paragraphs 3.2 and 3.3)
1.5 BASE RENT: $90,365.00 per month ("BASE RENT"), payable on the first
day of each month commencing March 1, 2002, but subject to the limitations set
forth in. (See also Paragraph 4).
[X] if this box is checked, there are provisions in this Lease for the
Base Rent to be adjusted.
Base Rent for months 1 through 31 shall be $90,365.00, for months 32
through 60 shall be $93,536.00, and the Base Rent for months 61 through 72 shall
be $98,292.00. However, subject to the terms and conditions of this Lease,
including without limitation paragraphs 1.4 and 13.3, Base Rent, real property
taxes, insurance and other building or project expenses shall be abated for the
first two months of the term, and Base Rent only shall be abated for the thirty
first and thirty second months of the Term. Such Rent and expense abatements
shall be considered inducements within the meaning of paragraph 13.3 of this
Lease.
As Additional Rent, Lessee shall also pay no and when due, all dues, fees,
or assessments of the California Commerce Center ("CCC") applicable to the
Building during the Lease Term, and a Management Fee equal to One and One-half
Percent (1 -1/2%) of the Base Rent, payable monthly in advance with each payment
of Base Rent. In the event the CCC items are paid by Lessor and then invoiced to
Lessee, Lessee shall pay same within ten (10) days of the receipt of each such
invoice.
1.6 BASE RENT PAID UPON EXECUTION: $180,730.00 as Base Rent for the period
March and April, 2002.
1.7 SECURITY DEPOSIT: $135,547.50 ("SECURITY DEPOSIT"). (See also
Paragraph 5)
1.8 AGREED USE: Warehousing and distribution of footwear, apparel, and
related accessories. (See also Paragraph 6)
1.9 INSURING PARTY: Lessor is the "INSURING PARTY" unless otherwise stated
herein. (See also Paragraph 8)
1.10 REAL ESTATE BROKERS: (See also Paragraph 15)
(A) REPRESENTATION: The following real estate brokers (collective,
the "BROKERS") and brokerage relationships exist in this transaction (check
applicable boxes):
[X] Xxxxx & Xxxxx represents Lessor exclusively ("LESSOR'S BROKER");
[X] CBRE/Radius Development represents Lessee exclusively ("LESSEE'S BROKER");
or
[ ] none represents both Lessor and Lessee ("DUAL AGENCY").
(B) PAYMENT TO BROKERS: Lessor shall pay to the Broker the fee
agreed to in their separate written agreement for the brokerage services
rendered by said Broker), as and when set forth therein.
1.11 GUARANTOR: The obligations of the Lessee under this Lease are to be
guaranteed by none ("Guarantor"). (See also Paragraph 37)
1.12 ADDENDA AND EXHIBITS.
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. During the term of this Lease, Lessee shall
have the exclusive right to use all of the parking spaces which are on the
property where the Building is located.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee broom clean and
free of debris on the Commencement Date or the Early Possession Date, whichever
first occurs ("START Date"), and, so long as the required service contracts
described in Paragraph 7.1(b) below are obtained by Lessee within thirty (30)
days following the Start bats, warrants that the existing electrical, plumbing,
pre sprinkler, lighting, heating, ventilating and air conditioning systems
("HVAC"), loading doors, landscape irrigation system and parking lot, if any,
and all other such elements in the Premises, other than those constructed by
Lessee, shall be in good operating condition on the Commencement Date and that
the structural elements of the roof, bearing walls and foundation of any
buildings on the Premises (the "BUILDING") shall be free of material defects. If
a non-compliance with said warranty exists as of the Commencement Date, Lessor
shall, as Lessor's sole obligation with respect to such matter, except as
otherwise provided in this Lease, promptly after receipt of written notice from
Lessee setting forth with specificity the nature and extent of such
non-compliance, rectify same at Lessor's expense. If, after the Commencement
Date, Lessee xxxx not give Lessor written notice of any non-compliance with this
warranty within: (i) one year as to the surface of the roof, (ii) six (6) months
as to the HVAC systems, (iii) thirty (30) days as to the remaining systems and
other elements of the Building, correction of such non-compliance shall be the
obligation of Lessee at Lessee's sole cost and expense. Lessee shall notify
Lessor of any claimed defect to the items which are Lessor's responsibility
under paragraph 7.2, below, as soon as practicable after Lessee discovers same,
failing which Lessee shall be responsible for any damage caused by its failure
to provide such notice to Lessor and thereby provide Lessor an opportunity to
repair same.
2.3 COMPLIANCE. Lessor warrants that the improvements on the Premises and
the Tenant improvements to be constructed by Lessor will, upon completion,
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 xxxx 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 remediation of any Hazardous Substance, or the
reinforcement or other physical modification of the Building ("CAPITAL
EXPENDITURE"), Lessor and Lessee shall allocate the cost of such work as
follows:
(a) Subject to Paragraph 2.3(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 pay the
difference between the actual cost thereof and the amount equal to six (6)
months' Base Rent. If Lessee elects termination, Lessee Shall immediately cease
the use of the Premises which requires such Capital Expenditure and deliver to
Lessor written notice specifying a termination date at least ninety days
thereafter. Such termination date shall, however, in no event be earlier than
the last day that Losses could legally utilize the Premises without cam sing
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 thin Lease or if Lessor reasonably determines that it is not economically
feasible to pay its share thereof. Lessor shall have the option 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 falls to tender its share of any such Capital
Expenditure, Lessee may advance such funds and deduct 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 Lasses on an offset basis,
Lessee shall have the right to terminate thirty (30) days written notice to
Lessor.
(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 change intensity of use, or
modification to the Premises then, and in that event, Lessee shall be fully
responsible for the cost thereof, and Lessee right to Terminate this Lease.
2.4 ACKNOWLEDGEMENTS. Lessee acknowledges that (a) it has been advised by
Lessor and/or Brokers to satisfy itself with respect to the condition of the
Premises (including but not limited to the 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.
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. Except as otherwise set forth herein, 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. Except as otherwise set forth herein, all the 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.
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 Data, 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 monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent
("RENT").
4.2 PAYMENT. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is due.
Rent for any period during the term hereof which 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 of Lessor's rights to the balance of such Rent, regardless of
Lessor's endorsement of any check so stating.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise 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 monies 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 monies with Lessor so that 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 amended to accommodate a material change in the business of
Lessee or to accommodate a sublessee 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 monies 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 monies to be paid by Lessee under this
Lease.
6. USE.
6.1 USE. Lessee shall use and occupy the Premises only for the Agreed Use,
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 will not impair the
structural integrity of the improvements on 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 an explanation of Lessor's objections to the change in use.
6.2 HAZARDOUS MATERIALS.
6.2.1 DEFINITIONS.
A. "HAZARDOUS MATERIALS" means any substance, whether solid,
liquid or gaseous in nature:
(i) the presence of which requires investigation or
remediation under any federal, state or local statute, regulation, ordinance,
order, action, policy or common law, or
(ii) which is or becomes defined as a "HAZARDOUS WASTE,"
"HAZARDOUS SUBSTANCE," pollutant or contaminant under any federal, state or
local statute, regulation, rule or ordinance or amendments thereto including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.) and or the Resource Conservation
and Recovery Act (442 U.S.C. Section 6901 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 8401 et seq.) the Toxic Substances Control act, as amended (15 U.S.C.
Section 2601 et seq.), and the Occupational Safety and Health Act (29 U.S.C.
Section 651 et seq.), as these laws have been amended or supplemented; or
(iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous or is
or becomes regulated by any governmental authority, agency, department,
commission, board, agency or instrumentality of the United States, the State of
California or any political subdivision thereof: or
(iv) the presence of which on the property causes or
threatens to cause a nuisance upon the Property or to adjacent properties or
poses or threatens to pose a hazard to the health or safety of persons on or
about the Property; or
(v) the presence of which on adjacent properties could
constitute a trespass by Lessee; or
(vi) without limitation which contains gasoline, diesel
fuel or other petroleum hydrocarbons; or
(vii) without limitation which contains polychlorinated
biphenyls (PCBs), asbestos or urea formaldehyde foam insulation; or
(viii) without limitation with contains radon gas.
B. "ENVIRONMENTAL REQUIREMENTS" means all applicable present
and future:
(i) statutes, regulations, rules, ordinances, codas,
licenses, permits, orders, approvals, plans, authorizations, concessions,
franchises, and similar items (including, but not limited to those pertaining to
reporting, licensing, permitting, investigations and remediation), of all
Governmental Agencies; and
(ii) all applicable, judicial, administrative, and
regulatory decrees, judgments, and orders relating to the protection of human
health or the environment, including, without limitation, all requirements
pertaining to emissions, discharges, releases, or threatened releases of
Hazardous Materials or chemical substances into this air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of Hazardous Materials
or chemical substances.
C. "ENVIRONMENTAL DAMAGES" means all claims, judgments,
damages, losses, penalties, finds, liabilities (including strict liability),
encumbrances, liens, costs, and expenses (including the expense of investigation
and defense of any claim, whether or not such claim is ultimately defeated, or
the amount of any good faith settlement or judgment arising from any such claim)
of whatever kind or nature, contingent or otherwise, matured or unmatured,
foreseeable or unforeseeable (including without limitation reasonable attorneys'
fees and disbursements and consultants' fees) any of which are incurred at any
time as a result of the existence of Hazardous Material or the violation of
environmental Requirements arose prior to the present ownership or operation of
the Property. Environmental Damages include, without limitation:
(i) damages for personal injury or injury to property or
natural resources occurring upon or off of the Property, including, without
limitation, lost profits, consequential damages, the cost of demolition and
rebuilding of any improvements on real property. Interest, penalties and damages
arising from claims brought by or on behalf of employees of Lessee (with respect
to which Lessee waives any right to a defense against Lessor any immunity to
which it may be entitled under any industrial or worker's compensation laws):
(ii) fees, costs or expenses incurred for the services
of attorneys, consultants, contractors, experts, laboratories and all other
costs incurred in connection with the investigation or remediation of such
Hazardous Materials or violation of any feasibility studies or reports or the
performance of any cleanup, remediation, removal, response, abatement,
containment, closure, restoration or monitoring work required by any
Governmental Agency or reasonably necessary to makes full economic use of the
Property or any other property in a manner consistent with its current use or
otherwise expended in connection with such conditions, and including without
limitation any attorneys' fees, costs and expenses incurred in enforcing the
provisions of this Lease or collecting any sums due hereunder;
(iii) Liability to any third xxxxxx or Governmental
Agency to indemnify such person or Governmental Agency for costs expended in
connection with the items referenced in subparagraph (ii) above; and
(iv) diminution in the fair market value of the
Property, including without limitation, any reduction in fair market rental
value or life expectancy of the Property or the improvements located thereon or
the restriction on the use of or adverse impact on the marketing of the Property
or any portion thereof.
D. "GOVERNMENTAL AGENCY" means all governmental agencies,
departments, commissions, boards, bureaus or instrumentalities of the United
States, states, counties, cities and political subdivisions thereof.
E. The "LESSEE GROUP" means Lessee, Tenant's successors,
assignees, guarantors, officers, directors, agents, employees, invitees,
permittees, or other parties under the supervision or control of Lessee or
entering the Property during the term of this Lease with the permission or
knowledge of Lessee other than Lessor or its agents or employees.
6.2.2 PROHIBITIONS.
A. Other than commercially reasonable quantities of general
office supplies AND SUCH OTHER CHEMICALS AS IT REASONABLY DEEMS NECESSARY FOR
THE CONDUCT OF ITS BUSINESS IN THE PREMISES, and provided Lessee's use of same
complies with all APPLICABLE REQUIREMENTS AND Environmental requirements and is
incidental to Lessee's operation of its business. Lessee shall not use, permit
or suffer any Hazardous Material to be brought upon, treated, kept, stored,
disposed of, discharged, releases, produced, manufactured, generated, refined or
used upon, about or beneath the property by the Lessee Group, without the prior
written consent of Lessor. From time to time during the term of this Lease,
Lessee may request Lessor's approval of Lessee's use of other Hazardous
Materials, which approval may be withheld in Lessor's sole discretion. Lessee
shall, prior to the Commencement Date, provide to Lessor all "community right to
know" plans or disclosures and/or emergency response plans which Lessee is
required to supply to local governmental agencies pursuant to any Environmental
Requirements.
B. Lessee shall not cause or permit the commission by the
Lessee Group, of a violation of any Environmental Requirements upon, about or
beneath the Property.
C. Lessee shall neither create, cause to be created, allow nor
permit the Lessee Group to create any lien, security interest or other charge or
encumbrance of any kind with respect to the Property, including without
limitation, any lien imposed pursuant to Section 107(f) of the Superfund
Amendments and Reauthorization Act of 1986 (42 U.S.C. Section 9607(1) or any
similar statute.
D. Lessee shall not install, operate or maintain any above or
below grade tank, sump, pit, pond, lagoon or other storage or treatment vessel
or device on the property, without Lessor's prior written consent, which consent
may be withhold in Lessor's sole discretion.
6.2.3 INDEMNITY.
A. Lessee, its successors, assigns and guarantors agree to
indemnify, defend, reimburse and hold harmless:
(i) Lessor; and
(ii) any other person who acquires title to all or a
portion of the Premises in any manner (including purchase at a foreclosure sale)
or who becomes entitled to exercise the rights and remedies of Lessor under this
Lease; and
(iii) the directors, officers, shareholders, employees,
partners, agents, contractors, subcontractors, experts, licensees, affiliates,
lessees, mortgagees, trustees, heirs, devisees, successors, assigns and invitees
of such persons.
from and against any and all Environmental Damages which exist as a result of
the activities and negligence of the Lessee Group during the Lessee's occupancy
of the Property or which exist as a result of the breach of any warranty or
covenant, or the inaccuracy of any representation of Lessee
contained in this Lease, or by Lessee's remediation of the Property or failure
to meet its remediation obligations contained in this Lease.
B. The obligations contained in this Section 6.2.3 shall
include, but not be limited to, the burden and expense of defending all claims,
suits and administrative proceedings, even if such claims, suits or proceedings
are groundless, false or fraudulent, and conducting all negotiations of any
description, and paying and discharging, when and as the same become due, any
and all judgments, penalties, consequential damages or other sums due against
such indemnified persons. Lessor, at its sole expense, may employ additional
counsel of its choice to associate with Lessee's council.
X. Xxxxxx shall have the right, but not the obligation, to
join and participate in, and control, if it so elects, any legal proceedings or
actions initiated in connection with Lessor's activities. Lessor may also
negotiate, defend, approve and appeal any action taken or issued by any
applicable governmental authority with regard to contamination of the Property
by a Hazardous Material.
D. The obligations of Lessee under this paragraph shall not be
affected by any investigation by or on behalf of Lessor, or by any information
which Lessor may have or obtain with respect thereto.
6.2.4 OBLIGATION TO REMEDIATE. In addition to the obligation of
Lessee to indemnify Lessor pursuant to this Lease, Lessee shall, upon approval
and demand of Lessor, at its sole cost and expense and using contractors
approved by Lessor, promptly take all actions to remediate the Property which
are required by any Governmental Agency, or which are reasonably necessary to
mitigate Environmental Damages or to allow full economic use of the Property,
which remediation is necessitated from the presence upon, about or beneath the
Property, at any time during or upon termination of this Lease, of a Hazardous
Material or a violation of Environmental Requirements, existing as a result of
the activities or negligence of the Lessee Group. Such actions shall include,
but not be limited to, the investigation of the environmental condition of the
Property, the preparation of any feasibility studies, reports or remedial plans,
and the performance of any cleanup, containment, operation, maintenance,
monitoring or restoration work, whether on or off the Property, which shall be
performed in a manner approval by Lessor. Lessee shall take all actions
necessary to restore the Property to the condition existing prior to the
introduction of Hazardous Material upon, about or beneath the Property,
notwithstanding any looser standard of remediation allowable under applicable
law or governmental policies.
6.2.5 RIGHT TO INSPECT. Lessor shall have the right in its sole and
absolute discretion, but not the duty, to enter and conduct an inspection of the
Property, including invasive test, at any reasonable time to determine whether
Lessee is complying with the terms of the Lease, including but not limited to
the compliance of the Property and the activities thereon with Environmental
Requirements and the existence of Environmental damages as a result of the
condition of the Property or surrounding properties and activities thereon.
Lessor shall have right, but not the duty, to retain any independent
professional consultant (the "CONSULTANT") to enter the Property to conduct such
an inspection or to review any report prepared by or for Lessee concerning such
compliance. The cost of the Consultant shall be paid by Landlord unless such
investigation
discloses a violation of any Environmental Requirement by the Lessee Group or
the existence of a Lessor Hazardous Material on the Property or any other
property caused by the activities or negligence of the Lessee Group (other than
Hazardous Materials used in compliance with all Environmental Requirements and
previously approved by Lessor), in which case Lessee may pay the cost of the
Consultant. Lessee hereby grants to Lessor, and the agents, employees,
consultants and contractors of Lessor the right to enter the Property and to
perform such tests on the Property as are reasonably necessary to conduct such
reviews and investigations. Lessor shall use its best efforts to minimize
interference with the business of Lessee.
6.2.6 NOTIFICATION. If Lessees shall become aware of or receive
notice or other communication concerning any actual, alleged, threatened
violation of Environmental Requirements, or liability of Lessee for
Environmental Damages in connection with the Property or past or present
activities of any person thereon, including, but not limited to, notice or other
communication concerning any actual or threatened investigation, inquiry,
lawsuit, claim, citation, directive, summons, proceeding, compliant, notice,
order, writ, or injunction, relating to same, then Lessee shall deliver to
Lessor within ten (10) days of the receipt of such notice or communication by
Lessee, a written description of said violation, liability, or actual or
threatened event or condition, together with copies of any documents evidencing
same. Receipt of such notice shall not be deemed to create any obligation on the
part of Lessor to defend or otherwise respond to any such notification.
If requested by Lessor, Lessee shall disclose to Lessor the names and
amounts of all Hazardous Materials other than general office supplies referred
to in Section 6.2 of this Lease, which were used, generated, treated, handled,
stored or disposed of on the Property or which Lessee intends to use, generate,
treat, handle, store or disposes of an the Property. The foregoing in no way
shall limit the necessity for Lessee obtaining Lessor's consent pursuant to
Section 6.2 of this Lease.
6.2.7 SURRENDER OF PREMISES. In the ninety (90) days prior, to the
expiration or termination of the Lease Term, and for up to ninety (90) days
after Lessee fully surrenders possession of the Property, Lessor may have an
environmental assessment of the Property performed in accordance with Section
6.2 of this Lease. Lessee shall perform at its sole cost and expense, any
cleanup or remedial work recommended by the Consultant which is necessary to
remove, mitigate or remediate any Hazardous Materials and/or contaminations of
the Property caused by the activities or negligence of the Lessee Group.
6.2.8 ASSIGNMENT AND SUBLETTING. In the event the Lease provides
that Lessee may assign the Lease or sublet the Property subject to Lessor's
consent certain other conditions, and if the proposed assignee's or sublessee's
activities in or about the Property involves the use, handling, storage or
disposal of any Hazardous Materials other than those used by Lessee and in
quantities and processes similar to Lessee's uses in compliance with the Lease,
(i) it shall be reasonable for Lessor to withhold its consent to such assignment
or sublease in light of the risk of contamination posed by such activities
and/or (ii) Lessor may impose an additional condition to such assignment or
sublease which requires Lessee to reasonably establish that such assignee's or
sublessee's activities pose no materially greater risk of contamination to the
Property than do Lessee's permitted activities in view of the (a) quantities,
toxicity and other properties of the Hazardous Materials to be used by such
assignee or sublessee, (b) the precautions against a release of Hazardous
Materials such assignee or sublessee agrees to implement, (c) such assignee's or
sublessee's financial condition as it relates to its
ability to fund a major cleanup and (d) such assignee's or sublessee's policy
and historical record respecting its willingness to respond to the clean up of a
sublease of Hazardous Materials. Lessor shall also have its approval rights as
set forth in Section 12.
6.2.9 SURVIVAL OF HAZARDOUS MATERIALS OBLIGATION. Lessee's breach of
any of its covenants or obligations under this Lease shall constitute a material
default under the Lease. The obligations of Lessee under this PARAGRAPH 6.2
shall survive the expiration or earlier termination of the Lease without any
limitation and shall constitute obligations that are independent and severable
from Lessee's covenants and obligations to pay rent under the Lease.
6.3 LEASE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as otherwise
provided in this Lease, including, without limitation, Paragraph 2.3, above,
Lessee shall, at Lessee's sole expense, fully, diligently and in a timely
manner, materially comply with all Applicable Requirements, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants which relate in any
manner to the Premises, without regard to whether said requirements are now in
effect or become effective after the Start Date. Lessee's 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 covenants
involved) of any threatened or actual claim, notice, 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, and
on reasonable notice (24 hours being reasonable in all events) 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 and was occasioned by Lessee's operations in the
Premises, or a good faith belief that Lessee is not in compliance with all
Applicable Requirements. In such case, Lessee shall upon request reimburse
Lessor for the cost of such inspections, so long as such inspection is
reasonably related to the violation or contamination.
7. MAINTENANCE: REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) IN GENERAL. Subject to the provisions of Paragraph 2.2
(Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable
Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises,
Utility installations, and Alterations in good order, condition and repair
(whether or not the portion of the Premises requiring repairs, or the means of
repairing the same, are reasonably or readily accessible to Lessee, and whether
or not the need for such repairs occurs as a result of Lessee's use, any prior
use, the elements or the age of such portion of the Premises), including, but
not limited to, all equipment or facilities, such as plumbing, heating,
ventilating,
air-conditioning, electrical, lighting facilities, boilers, pressure vessels,
fire protection system, fixtures, walls (interior and exterior), ceilings, roofs
membrane and surface, floors, windows, doors, plate glass, skylights,
landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks
and parkways located in, or on, the Premises. Lessee, in keeping the Premises in
good order, 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
present condition of the Building, and the exterior appearance of other similar
facilities of comparable age and size in the vicinity, including, when
necessary, the removal of graffiti or similar defacement of the exterior 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 in 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 systems, including fire alarm and or smoke
detection, (iv) landscaping and irrigation systems, (v) roof covering and
drains, (vi) driveways and parking lots, (vii) clarifiers, (viii) basic utility
feed to the perimeter of the Building, and (ix) any other equipment, if
reasonably required by Lessor,
(c) REPLACEMENT. Subject to Lessee's indemnification of Lesser 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 on which Base Rent is due, an amount equal to the product of
multiplying the cost of such replacement by a fraction, the numeral (which is
one, and the denominator of which is the number of months of the useful life of
such replacement no such useful life is specified pursuant to Federal income tax
regulations or guidelines for depreciation thereof (including interest on the
unamortized 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.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 9 (Damage or Destruction) 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 of 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 hereinafter in effect to
the extent it is inconsistent with the terms of this Lease. Notwithstanding
anything to the contrary herein, Lessor, at its sole cost and expense, shall be
responsible for the repair of any and all structural defects, floor slab and
foundation defects, and latent structural defects in the Building during the
original term of the Lease. Lessor shall also be
responsible for, and keep in good order, maintenance and including restoration,
replacement and renewal, the structural elements of the roof.
7.3 UTILITY INSTALLATION; 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 fending 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 Alternations and/or
Utility installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a). Lessee shall not make any Alterations or Utility
installations to the Premises without Lessor's prior written consent. Lessee
may, however, make non-structural Utility installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative cost
thereof during any twelve month period during the Term of this Lease as extended
does not exceed $50,000 in the aggregate.
(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 he 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 costs 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 Alteration 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 Losses
at or for use on the Premises, which claims are or may be secured by any
mechanic's or materialmen's lien against the Premises or any interest therein.
Lessee shall give Lessor not less than ten (10) days' notice prior to the
commencement of any work in, on or about the Premises, and Lessor shall have the
right to post notices of non-responsibility. If Lessee shall contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend and protect itself, Lessor and the Premises against the same and
shall pay and satisfy any such adverse judgment that may be rendered thereon
before the enforcement thereof. 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 attorney's fees and costs.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(A) OWNERSHIP. Subject to Lessor's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility installations
made by Lessee shall be the property of Lessee, but considered a part of the
Premises. Lessor may, at any time, elect in writing 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. By delivery to Lessee of written notice from Lessor not
earlier than ninety (90) and not later than thirty (30) days prior to the end of
the term of this Lease, Lessor may require that any or all Lessee Owned
Alterations or Utility installations the approval of which by Lessor was
conditioned upon their removal at the time the approval was granted, be removed
by the expiration or termination of this Lease. Lessor may require the removal
at any time of all or any part of any Lessee Owned Alterations or Utility
installations made without the required consent.
(C) SURRENDER/RESTORATION. Lessee shall surrender the Premises 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 and
casualty damage for which lessee has no responsibility under the terms of this
Lease excepted. "ORDINARY WEAR AND TEAR" shall not include any damage or
deterioration that would have been prevented by good maintenance practice.
Losses shall repair any damage occasioned the installation, maintenance or
removal of Trade Fixtures, Losses Owned Alterations and/or utility
installations, furnishings, and equipment as well as the removal of any storage
tank installed by or for Lessee, and the removal, replacement, or remediation of
any soil, material or groundwater contaminated by Lessee. 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. Notwithstanding anything else herein to the
contrary, "ORDINARY WEAR AND TEAR" shall not include any condition which results
in. or the fact of, a failure of any building system (including, without
limitation, the HVAC, plumbing, electrical. load lovelorn, and similar items) to
operate effectively for the purpose for which it was intended. Lessee fully
understands that its surrender obligations shall be performed on or prior to the
Expiration Date or earlier termination of the Lease. In the event that the
Premises are left in a condition at such time which does not comply with the
terms and conditions hereof, Lessor shall be entitled to treat Lessee as a
holdover tenant, on a day to day basis, with Base Rent and all Rent and Expenses
charged in accordance with paragraph 26 hereof. During such holdover period
Lessor shall have the right, but not the obligation, to enter into the Premises,
without notice to Lessee, and without terminating Lessee's holdover status, for
the purpose of assessing the condition of the Premises, and undertaking the
clean up and restoration of same as required to bring the Premises into
compliance with the terms of this paragraph 7, Lessee shall pay and be
responsible for (either from the Security Deposit, or otherwise as Lessor
elects) the cost of such clean up and restoration, which Lessor shall perform,
or cause to be performed, pursuant to an arms length agreement with the
appropriate consultants and contractors and laborers. In the event that Lessee's
Security Deposit is inadequate to pay for such costs, Lessee shall pay same to
Lessor within five (5) days of the date of the invoice for same
provided to Lessee. Lessor shall also have the right, but not the obligation, to
remove any personal property, inventory, machinery, or other items left in the
Premises by Lessee following the Expiration Date or earlier termination of the
Lease, and to store same, as Lessee's expense, or dispose of same, in accordance
with Lessor's rights under law, and Lessor may charge the cost of same against
any remaining Security Deposit, or invoice same to Lessee, who shall pay such
costs within five (5) days of the date of such invoice.
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 $2,000,000 per
occurrence. Premiums for policy periods commencing prior to or extending beyond
the Lease term shall be prorated to correspond to the Lease term. Payment shall
be made by Lessee to Lessor within ten (10) days following receipt of an
invoice.
8.2 LIABILITY INSURANCE.
(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 thereto. 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 intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an 'insured contract' for the performance of Lessee's indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Lessee nor relieve Lessee 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. All policies required to be maintained by Lessee shall name
Lessor, its property manager, and any lender of Lessor's, as additional
insureds. In addition, Lessee shall obtain and keep in force during the term of
the Lease, an "excess" or "umbrella" policy, in the amount of $5,000,000.00,
which shall in all other respects conform to the requirements set forth herein
for insurance to be carried by the Lessee, including, without limitation, those
requirements concerning the named and additional insureds, the characteristics
of the insurer, and the providing of proof of coverage to Lessor.
(B) CARRIED BY LESSOR. Lessor may, but shall not be obligated to,
maintain liability insurance as described in Paragraph 8.2(a), in addition, and
not in lieu of, the insurance required to be maintained by Lessee. Lessee shall
not be named as an additional insured therein.
8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(A) BUILDING AND IMPROVEMENTS. The insuring Party shall obtain and
keep in force a policy or policies in the name of Lessor, with loss payable to
Lessor, any groundlessor, and to any Lender(s) insuring loss or damage to the
Premises. The amount of such insurance shall be
equal to ninety percent (90%) of 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 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 or damage
including the perils of flood and/or earthquake if Lessor so desires, including
coverage for debris removal and the enforcement of any Applicable Requirements
requiring the upgrading, demolition, reconstruction or replacement of any
portion of the Premises as the result of a covered loss. Said policy or policies
shall also contain an agreed valuation provision in lieu of any coinsurance
clause, waiver of subrogation, and inflation guard protection causing an
increase in the annual property insurance coverage amount by a factor of not
less than the adjusted U.S. Department of Labor Consumer Price index for All
Urban Consumers for the city nearest to where the Premises are located. If such
insurance coverage has a deductible clause, the deductible amount shall not
exceed $1,000 per occurrence, and Lessee shall be liable for such deductible
amount in the event of an insured Loss.
(B) RENTAL VALUE. The insuring Party 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 event the Lease is terminated by reason of an insured
loss, the period of indemnity for such coverage shall be extended beyond the
date of the completion of repairs or replacement of the Premises, to provide for
one full year's loss of Rent 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, for the next twelve (12) month period. Lessee
shall be liable for any deductible amount in the event of such loss.
(C) ADJACENT PREMISES. If the Premises are part of a larger
building, or of a group of buildings owned by Lessor which are adjacent to the
Premises, the Lessee shall pay for any increase in the premiums for the property
insurance of such building or buildings if said increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises.
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 and 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) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Lessee's property, business operations or
obligations under this Lease.
8.5 INSURANCE POLICIES. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, as set forth in the most current issue of "Best's
insurance Guide", or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of 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 policies, furnish Lessor with evidence of renewals or
"insurance binders" evidencing renewal thereof, or Lessor may order such
insurance and charge the cost thereof to Lessee, which amount shall be payable
by Lessee to Lessor upon demand. Such policies shall be for a term of at least
one year, or the length of the remaining term of this Lease, whichever is less.
If either Party shall fail to procure and maintain the insurance required to be
carried by it, the other Party may, but shall not be required to, procure and
maintain the same.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages against the other, for loss of or damage to its
property arising out of or incident to the perils required to be insured against
herein. The effect of such releases and waivers is not limited by the amount of
insurance carried or required, or by any deductibles applicable hereto. The
Parties agree to have their respective property damage insurance carriers waive
any right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated thereby.
8.7 INDEMNITY. Except for Lessor's gross negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, liens, judgments,
penalties, attorneys' and consultants' fees, expenses and/or liabilities arising
out of, involving, or in connection with, the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by
reason of any of the foregoing matters, Lessee shall upon notice defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be defended or indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, or from other sources or places. Lessor shall not be liable for any
damages arising from any act or
neglect of any other tenant of Lessor. Notwithstanding Lessor's negligence or
breach of this Lease, Lessor shall under no circumstances be liable for injury
to Lessee's business or for any loss of income or profit therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to
the improvements on the Premises, other than Lessee Owned Alterations and
Utility installations, which can reasonably be repaired in six (6) months or
less from the date of 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 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.
(c) "INSURED LOSS" shall mean damage or destruction to improvements
on the Premises, other than Lessee Owned Alterations and Utility installations
and Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is an
insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
installations) as soon as reasonably possible and this Lease shall continue in
full force and effect. Notwithstanding the foregoing, if the required insurance
was not in force or the insurance proceeds are not sufficient to effect such
repair, the insuring Party shall promptly contribute the shortage in proceeds
(except as to the deductible which is Lessee's responsibility) as and when
required to complete said repairs. In the event, however, such shortage was due
to the fact that, by reason of the unique nature of the improvements, full
replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee
provides Lessor with the funds to cover same, or adequate assurance thereof,
within ten (10) days following receipt of written notice of such shortage and
request
therefor. If Lessor receives said funds or adequate assurance thereof within
said ten days following receipt of written notice of such shortage and request
therefor. If Lessor receives said funds or adequate assurance thereof within
said ten (10) day period, the party responsible for making the repairs shall
complete them as soon as reasonably possible and this Lease shall remain in full
force and effect. If 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 is commercially reasonable with
Lessor paying any shortage in proceeds, in which case this Lease shall remain in
full force and effect, or have this Lease terminate thirty (30) days thereafter.
Lessee shall not be entitled to reimbursement of any funds contributed by Lessee
to repair any such damage or destruction. Premises Partial Damage due to flood
or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may
be some insurance coverage, but the net proceeds of any such insurance shall be
made available for the repairs if made by either Party.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that is
not an insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either: (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence of such
damage. Such termination shall be effective sixty (60) days following the date
of such notice. In the event Lessor elects to terminate this Lease, Lessee shall
have the right within ten (10) days after receipt of the termination notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage without reimbursement from Lessor. Lessee shall provide Lessor with
said funds or satisfactory assurance thereof within thirty (30) days after
making such commitment. In such event this Lease shall continue in full force
and effect, and Lessor shall proceed to make such repairs as soon as reasonably
possible after the required funds are available. If Lessee does not make the
required commitment, this Lease shall terminate as of the date specified in the
termination notice.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate sixty (60) days
following such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Lessee, Lessor shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6) months
of this Lease there is damage for which the cost to repair exceeds one (1)
month's Base Rent, whether or not an insured Loss, Lessor may terminate this
Lease effective sixty (60) days following the date of occurrence of such damage
by giving a written termination notice to Lessee within thirty (30) days after
the date of occurrence of such damage. Notwithstanding if Lessee at that time
has an exercisable option to extend this Lease or to purchase the Premises, then
Lessee may preserve this lease by, (a) exercising such option and (b) providing
Lessor with any shortage in insurance proceeds (or adequate assurance thereof)
needed to make the repairs on or before the earlier of (i) the date which is ten
days after Lessee's receipt of Lessor's written notice purporting to terminate
this Lease, or (ii) the day prior to the date upon which such option expires. If
Lessee duly exercises such option during such period and provides Lessor with
funds (or adequate assurance thereof) to cover any shortage in insurance
proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such
damage as soon as reasonably possible and this Lease will 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.
If during such last six month period Lease has already irrevocably exercised its
Option to Extend, then the provisions of paragraphs 9.1 through 9.4 shall
prevail without regard to the time at which the damage has occurred.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(A) ABATEMENT. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall
have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.
(B) REMEDIES. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial or meaningful way, the repair
or restoration within ninety (90) days after such obligation shall accrue, or,
having commenced, does not thereafter diligently pursue same to completion
(subject to Lessee Delay and paragraph 50 of this Lease) Lessee may, at any time
prior to the commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice, of Lessee's
election to terminate this Lease on a date not less than sixty (60) days
following the giving of such notice. If Lessee gives such notice and such repair
or restoration is not commenced within 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, 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) or Paragraph 9, an equitable adjustment shall be
made concerning advance Base Rent and any other advance payments made by Lessee
to Lessor, and of Additional Rent or other sums owed by Lessee to Lessor. Lessor
shall, in addition, return to Lessee so much of Lessee's Security Deposit as has
not been, or is not then required to be, used by Lessor.
9.8 WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent nonexistent herewith.
10. REAL PROPERTY TAXES.
10.1 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term "REAL
PROPERTY TAXES" shall include any form of assessment; real estate, general,
special, ordinary or extraordinary, or rental levy or tax (other than
inheritance, personal income, excise, franchise or corporate transfer
attributable, 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 any authority
having the direct and indirect power to tax and where the funds are generated
with reference to the Building address and where the proceeds so generated are
to be applied by the city, county or other local taxing authority of a
jurisdiction within which the Premises are located. The term "REAL PROPERTY
TAXES" shall also include any fax, fee, levy, assessment or charge, or any
increase therein, imposed by reason of events occurring during the term of this
Lease, including but not limited to, a change in the ownership of the Premises.
10.2
(A) PAYMENT OF TAXES. Lessee shall pay the Real Property Taxes
applicable to the Premises during the term of this 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 time prior to or after the expiration or termination of this Lease,
Lessee's share of such taxes shall be prorated to cover only that portion of the
tax xxxx applicable to the period that this Lease is in effect, and Lessor shall
reimburse Lessee for any overpayment. 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. However, Lessor, in its sole and
absolute discretion, may elect to pay such taxes directly, and then invoice
Lessee for same. Lessee shall reimburse Lessor for such amounts within ten (10)
business days of the date of same. Unless and until Lessor advises Lessee, in
writing, to the contrary, Lessor shall initially pay all such taxes directly.
(B) ADVANCE PAYMENT. In the event Lessee incurs a late charge on any
Rent payment, Lessor may, at Lessor's option, estimate the current Real Property
Taxes, and require that such taxes be paid in advance to Lessor by Lessee,
either: (i) in a lump sum amount equal to the installment due, at least twenty
(20) days prior to the applicable delinquency date, or (ii) monthly in advance
with the payment of the Base Rent. If Lessor elects to require payment monthly
in advance, the monthly payment shall be an amount equal to the amount of the
estimated installment of taxes divided by the number of Shares remaining before
the month in which said installment becomes delinquent. When the actual amount
of the applicable tax xxxx is known, the amount of such equal monthly advance
payments shall be adjusted as required to provide the funds needed to pay the
applicable taxes. If the amount collected by Lessor is insufficient to pay such
Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such
additional sums as are necessary to pay such obligations. All monies paid to
Lessor under this Paragraph may be intermingled with other monies of Lessor and
shall not bear interest. I the event of a Breach of Lessee in the performance of
its obligations under this Lease, then any balance of funds paid to Lessor under
the provisions of this Paragraph may, at the option of Lessor, be treated as an
additional Security Deposit.
10.3 JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be conclusively determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available.
10.4 PERSONAL PROPERTY TAXES. Lessee shall pay, prior to delinquency, all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee. When possible, Lessee shall cause such Property to be assessed and
billed separately from the real property of Lessor. If any of Lessee's said
personal property shall be assessed with Lessor's real property, Lessee shall
pay Lessor the taxes attributable to Lessee's property within ten (10) days
after receipt of a written statement.
10.5 RIGHT TO CONTEST. Lessee shall have the right to contest any Real
Property Tax with the applicable taxing authority or authorities in accordance
with all applicable tax contest procedures provided by law so long as (a) Lessee
continues to pay all Rent (including all Real Property Taxes then assessed) as
required under this Lease, and (b) such Real Property Tax is being diligently
contested in good faith. In the event that Lessee elects to contest any
assessment of Real Property Taxes, Lessee shall first notify Lessor of any such
intended contest and shall consult and coordinate with, and permit participation
by Lessor and Lessor's legal counsel in connection with such contest, including
any tax contests being concurrently contemplated, undertaken or advocated by
Lessor. Any such contest by Lessee shall be conducted solely at Lessee's cost
and expense. Lessor agrees to cooperate fully with Lessee in such contest,
including executing any documents of authorization necessary in connection
therewith.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered.
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 twenty-five percent
(25%) or more of the voting control of Lessee shall constitute a change in
control for this purpose, except in the normal course of business if Lessee is a
publicly traded company, and except in the course of a bona-fide public offering
of stock, which complies in all respects with all Applicable Requirements.
(c) Except as provided in subparagraph (f), below, the involvement
of Lessee or its assets in any transaction, or series of transactions (by way of
merger, sale, 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 twenty-five percent (25%) of such Net Worth as
it was represented at the time of the execution of this Lease or at the time of
the most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such
reduction, whichever was or is greater, shall be considered an assignment of
this 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 or subletting without consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(e), or a noncurable
Breach without the necessity of any notice and grace period. If Lessor elects to
treat such unapproved assignment or subletting as a 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 Breach and rental
adjustment, (i) the purchase price of any option to purchase the Premises held
by Lessee shall be subject to similar adjustment to one hundred ten percent
(110%) of the price previously in effect, and (ii) all fixed and non-fixed
rental adjustments scheduled during the remainder 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.
(f) Notwithstanding anything in this Paragraph 12.1 to the contrary,
Lessee may assign this Lease, or sublet the Premises or any portion thereof,
without Lessor's consent (a "Permitted Transfer") to any parent, subsidiary, or
affiliate corporation or other business entity which controls, is controlled by
or is under common control with Lessee, or to any person or entity which
acquires all the assets of Lessee's business as a going concern, (collectively,
a "Permitted Transferee") provided that: (i) at least thirty (30) days prior to
such assignment or sublease, or as soon thereafter as is practicable, Lessee
delivers to Lessor the financial statements and other financial and background
information of the assignee or sublessee as is required for other transfers;
(ii) if the transfer is an assignment, the assignee assumes, in full, the
obligations of lessee under this Lease (or if a sublease, the sublessee assumes,
in full, the obligations of Lessee with respect to such portion as sublessee has
subleased); (iii) the financial net worth of the assignees or sublessees as of
the time of the proposed transfer is sufficient for such assignee or sublessee
to fulfill its obligations pursuant to such assignment or sublease (and in
considering same, Lessor shall have the right to consider the long term
prospects for sustaining such ability to perform for the period of any extended
term, if applicable); (iv) Lessee remains fully liable under this Lease; and (v)
unless Lessor consents to same, the use of the Premises set forth herein remains
unchanged.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease; (ii)
release Lessee of any obligations hereunder; or (iii) 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 obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of Rent or performance shall
constitute a waiver or estoppel of Lessor's right to exercise its remedies for
Lessee's Default or Breach.
(c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may
proceed directly against Lessee, any Guarantors or anyone else responsible for
the performance of Lessee's obligations under this Lease, including any assignee
or sublessee, without first exhausting Lessor's remedies against any other
person or entity responsible therefore to Lessor, or any security held by
Lessor.
(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or,
required modification of the Premises, if any. Lessee shall reimburse Lessor, as
Additional Rent, for its actual, reasonable costs and expenses, including
reasonable attorneys' fees, incurred in considering and processing said request.
Lessee agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested.
(f) Any assignee of, or sublessee under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed to have
assumed and agreed to conform and comply with each and every term, covenant,
condition and obligation herein to be observed or performed by Lessee during the
term of said assignment or sublease, other than such obligations as are contrary
to or inconsistent with provisions of an assignment or sublease to which Lessor
has specifically consented to in writing.
(g) Lessor may refuse to consent on any commercially reasonable
grounds. Including, without limitation: the potential inability of the proposed
assignee to fulfill the Lease terms and the financial irresponsibility or
instability of the proposed assignee or sublessee, the lack of suitability of
the Premises for the intended use by the proposed assignee or sublessee, the
potential for unlawful or undesirable use of the Premises by the proposed
assignee or sublessee, or the character or business reputation of the proposed
assignee or sublessee. In any dispute which arises under this paragraph, Lessee
shall pay to Lessor all of Lessor's costs and expenses reasonably incurred by
Lessor in making the investigation and factual findings provided for in this
paragraph.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all Rent payable on any sublease, and Lessor may collect such Rent
and apply same toward Lessee's obligations under this Lease; provided, however,
that until a Breach shall occur in the performance of Lessee's obligations,
Lessee may collect said Rent. Lessor shall not, by reason of the foregoing or
any assignment of such sublease, nor by reason of the collection of Rent, be
deemed liable to the sublessee for any failure of Lessee to perform and comply
with any of Lessee's obligations to such
sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a Breach exists in the
performance of Lessee's obligations under this Lease, to pay to Lessor all Rent
due and to become due under the sublease. Sublessee shall rely upon any such
notice from Lessor and shall pay all Rents to Lessor without any obligation or
fight to inquire as to whether such Breach exists, notwithstanding any claim
from Lessee to the contrary.
(b) In the event of a Breach by Lessee, Lessor may, at its option,
require sublessee to attorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such
sublessor.
(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.
12.4 TRANSFER PREMIUMS. Fifty percent (50%) of any sums or other economic
consideration received by Lessee as a result of any assignment or subletting
entered into pursuant to this Paragraph 12, however denominated under the
assignment or sublease, which exceed, in the aggregate (a) the total sums which
Lessee is obligated to pay Lessor under this Lease (prorated to reflect
obligations allocable to any portion of the Premises subleased), plus (b)(i)
reasonable real estate brokerage commissions or fees payable by Lessee in
connection with such assignment or subletting, (ii) the reasonable fees of
attorneys, architects and engineers, and (iii) reasonable costs of tenant
improvements required to be constructed by Lessee for any such assignee or
subtenant, shall be paid by Lessee to Lessor as additional rent under this Lease
without affecting or reducing any other obligations of Lessee hereunder. Lessee
understands, acknowledges and agrees that Lessor's right to recapture any
consideration paid in connection with an approved assignment or subletting is a
material inducement for Lessor's agreement to lease the Premises to Lessee upon
the terms and conditions set forth herein.
12.5 LESSOR'S OPTION AS TO SUBJECT SPACE. Notwithstanding the foregoing
provisions contained in this Paragraph 12 to the contrary, Lessor shall have the
option, by giving written notice to Lessee within twenty (20) days after
Lessor's receipt of written notice by Lessees (accompanied by all of the items
set forth in this Paragraph 12 concerning the nature of the transfer and the
transferee) of any proposed assignment or sublease (except to a Permitted
Transferee) for a term of three (3) years or more by Lessee (a "Transfer
Notice"), to recapture the space which is the subject of such proposed transfer
(the "Subject Space"), provided the subject space constitutes not less than
100,000 square feet, or, if prior transfers have occurred, would result in
having 100,000 square feet
in the aggregate assigned or sublet. Such recapture notice shall cancel and
terminate this Lease with respect to the Subject Space as of the date stated in
the Transfer Notice. In the event of a recapture by Lessor, if this Lease shall
be canceled with respect to less than the entire Premises, the rent reserved
herein shall be prorated on the basis of the number of rentable square feet
retained by Lessee in proportion to the number of rentable square feet contained
in the Premises, and this Lease as so amended shall continue thereafter in full
force and effect, and upon request of either party, the parties shall execute
confirmation of same. If Lessor declines, or fails to elect in a timely manner
to recapture the Subject Space under this Paragraph 12.5, then, provided Lessor
has consented to the proposed transfer pursuant to Paragraph 12.2, Lessee shall
be entitled to proceed to transfer the Subject Space to the proposed transferee,
subject to the other provisions of this Paragraph 12 (including Paragraph 12.4
above).
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
this Lease. A "BREACH" is defined as the occurrence of one or more of the
following Defaults, and the failure of Lessee to cure such Default within any
applicable grace period:
(a) The abandonment of the Premises; 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 thereof, 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 three
(3) business days following written notice to Lessee.
(c) The failure by Lessee to provide (i) reasonable written evidence
of compliance with Applicable Requirements, (ii) the service contracts, (iii)
the rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination, (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
reasonably require of Lessee under the terms of this Lease, where any such
failure continues far a period of fifteen (15) days following written notice to
Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraphs 13.1(a), (b) or (c), above, where
such Default continues for a period of thirty (30) days after written notice;
provided, however, that it 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 commences such cure within said thirty (30) day
period and thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making of
any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "DEBTOR" as defined in 11 U.S.C. Section 101 or any successor statute
thereto (unless, in the case of a petition filed against Lessee, the same is
dismissed within sixty (60) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where possession is not
restored to Lessee within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where such seizure is not
discharged within thirty (30) days; provided, however, in the event that any
provision of this subparagraph 13.1(a) 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: (i) the death of a Guarantor; (ii) the termination of a grantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty; (iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing; (iv) a Guarantor's refusal to honor the guaranty; or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory 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 licenses, permits
or approvals. The costs and expenses of any such performance by Lessor shall be
due and payable by Lessee upon receipt of invoice therefor. If any check given
to Lessor by Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its option, may require all future payments to be made by Lessee to
be by cashier's check. In the event of a Breach, Lessor may, with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender 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; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after the termination until
the time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including but not limited to the
cost of recovering possession of the Premises, expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys' fees,
and that portion of any leasing commission paid by Lessor in connection with
this Lease applicable to the unexpired term of this Lease. The worth at the time
of award of the amount referred to in provision (iii) of the immediately
preceding sentence shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of the District within which the Premises are
located at the time of award plus one percent (1%). Efforts by Lessor to
mitigate damages caused by Lessee's Breach 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 detainer, Lessor
shall have the right to recover in such proceeding any unpaid Rent and damages
as are recoverable therein, or Lessor may reserve the right to recover all or
any part thereof in a separate suit. If a notice and grace period required under
Paragraph 13.1 previously given, a notice to pay rent or quit, or to perform or
quit given to Lessee under the unlawful detainer statute shall also constitute
the notice required by Paragraph 13.1. In such case, the applicable grace period
required by 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 entitling Lessor to the remedies provided for in this Lease
and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and recover
the Rent as it becomes due, in which event Lessee may sublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or
the appointment of a receiver to protect the Lessor's interests, shall not
constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the
laws or 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 or accruing 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
charges, or for the giving or paying by Lessor to or for Lessee of any cash or
other bonus, inducement or consideration for Lessee's entering into this Lease,
all of which concessions are hereinafter referred to as "Inducement Provisions,"
shall be deemed conditioned upon Lessee's full and faithful performance of all
of the terns, covenants and conditions of this Lease, including without
limitation, the timely payment (i.e., prior to the time Lessee is in default, as
set forth in paragraph 13.1(b)) of all rent due hereunder. Upon Breach of this
Lease by Lessee (which shall be deemed to include any late payment of rent or
other sums due hereunder, or the presentation in payment of any obligation
hereunder of any check which is not honored on the first attempt to realize on
it), any such inducement Provision shall automatically be deemed deleted from
this Lease and of no further force or effect, and any rent, other charge, bonus,
inducement or consideration theretofore abated, given or paid by Lessor under
such an inducement Provision shall be immediately due and payable by Lessee to
Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The
acceptance by Lessor of Rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated in writing by Lessor
at the time of such acceptance. Notwithstanding anything else herein to the
contrary, Lessee
shall not be subject to the loss of an inducement due to a default in the
payment of Rent if Lessee has not been late with respect to the payment of Rent
more than three times in the first thirty menthe of the Term, and all such late
payments have been made within the time periods allowed by this Lease.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payments by Lessee
of Rent will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by 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 one-time late charge equal to ten percent (10%) of each such overdue
amount. The Parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of such late
payment. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent the exercise of any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
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 from the date when due, as to
scheduled payments, or the thirty-first (31st) day after it was due as to
non-scheduled payments. The interest ("INTEREST") charged shall be equal to the
prime rate reported in the Wall Street Journal as published closest prior to the
date when due plus four percent (4%), but shall not exceed the maximum rate
allowed by law. 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 purposes of this Paragraph, (except in
the event of an emergency, in which event the reasonableness of the time of
Lessor's response shall be determined in relationship to the nature and extent
of the emergency) a reasonable time shall in no event be less than thirty (30)
days after receipt by Lessor, and any Lender whose name and address shall have
been furnished Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however,
that if the nature of Lessor's obligation is such that more than thirty (30)
days are reasonably required for its performance, then Lessor shall not be in
breach if performance is commenced with such thirty (30) day period and
thereafter diligently pursued to completion.
(B) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event that
neither Lessor nor Lender cures said breach within thirty (30) days after
receipt of said notice, or if having commenced said cure they do not diligently
pursue it to completion, then Lessee may elect to cure said breach at Lessee's
expense and offset from Rent an amount equal to the greater of one month's
Base Rent or the Security Deposit, and to pay an excess of such expense under
protest, reserving lessee's right to reimbursement from Lessor. Lessee shall
document the cost of said cure and supply said documentation to Lessor.
13.7 MORTGAGEE PROTECTION. Lessee to send by certified or registered mail
to any Lender whose address has been furnished to Lessee, a copy of any notice
of default served by Lessee on Lessor. If Lessor fails to cure such default
within the time provided for in this Lease, such Lender shall have an additional
thirty (30) days to cure such default; provided, however, that if such default
cannot reasonably be cured within that thirty (30) day period, then such Lender
shall have such additional time to cure the default as is reasonably necessary
under the circumstances (including, without limitation, the time to obtain
possession of the Premises by foreclosure or similar proceedings).
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "CONDEMNATION") this Lease shall terminate as to the part taken as
of the data the condemning authority takes title or 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 Condemnation, Lessee may, at Lessee's
option, to be exercised in writing within ten (10) days after Lessor shall have
given Lessee written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in proportion
to the reduction in 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 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.
15. BROKERS' FEE.
15.1 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Lessee and
Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker or finder (other than the Brokers, if any) in
connection with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder's fee in connection herewith. Lessee and
Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the Indemnifying Party, including any costs,
expenses, and/or attorneys' fees reasonably incurred with respect thereto.
16. ESTOPPEL CERTIFICATES.
(a) Each Party (as "RESPONDING PARTY") shall within fifteen (15)
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, or such form as is reasonably
required by any lender of Lessor, plus such additional information, confirmation
and/or statements as may be reasonably requested by the Requesting Party.
(b) If the responding Party fail to execute or deliver the Estoppel
Certificate within such fifteen (15) day period, the Requesting Party may
execute an 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 encumbrancers may rely upon the
Requesting Party's Estoppel Certificate, and the Responding Company 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 part thereof, Lessee and all Guarantors shall deliver to any potential
lender or purchaser designated by Lessor such financial statements as may be
reasonably required by such lender or purchaser, including, but not limited to,
Lessee's financial statements for the past three (3) years. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. DEFINITION OF LESSOR. The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, or, if
this is a sublease, of the Lessee's interest in the prior lease. In the event of
a transfer of Lessor's title or interest in the Premises or this Lease, 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 the Lessor.
Subject to the foregoing, the obligations and/or covenants of this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
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 this Lease shall remain liable and responsible with
regard to the potential duties and liabilities of Lessor pertaining to Hazardous
Substance 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 specifically indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.
20. LIMITATION ON LIABILITY. See paragraph 51, below.
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 AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
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) or
may be sent by regular, certified or registered mail or U.S. Postal Service
Express Mail, with postage prepaid, or by facsimile transmission, and shall be
deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted adjacent to a Party's signature on this Lease shall be
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, except that upon
Lessee's taking possession of the Premises, the Premises shall constitute
Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing.
23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given forty-eight (48) hour after the
same is addressed as required herein and mailed with postage prepaid. Notices
delivered by United States Express Mail or overnight courier that guarantee next
day delivery shall be deemed given twenty-four (24) hours after delivery of the
same to the Postal Service or courier. Notices transmitted by facsimile
transmission or similar means shall be deemed delivered upon telephone
confirmation or receipt, provided a copy is also delivered via delivery or mail.
If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach of
Lessee of the same or of any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any act shall not be deemed to render unnecessary
the obtaining of Lessor's consent to, or approval of, any subsequent or similar
act by Lessee, or be construed as the basis of an estoppel to enforce the
provision or provisions of this Lease requiring such consent. The acceptance of
Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any
payment by Lessee may be accepted by Lessor on account of monies 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 thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
one hundred fifty percent (150%) of the Base Rent applicable during the month
immediately preceding the expiration or termination. Nothing contained herein
shall be construed as consent by Lessor to any holding over by Lessee. Unless
Lessor and Lessee have reached an agreement in writing to the contrary, if
Lessee fails to surrender the Premises upon the expiration or earlier
termination of the Lease despite Lessor's demand to do so. In addition to the
rent and other obligations of Lessee as provided in this Lease, Lessee shall
indemnify and hold Lessor harmless against any and all losses, costs, damages
and liability (including actual attorneys' fees and costs, and court costs),
direct or indirect, which Lessor may suffer as a result of Lessee's failure to
surrender the Premises.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. COVENANTS AND CONDITIONS; 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 the State in which the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as "LESSOR'S LENDER") shall have no liability or obligation to
perform any of the obligations of Lessor under Lease. Any Lender may elect to
have this Lease and/or any Option granted hereby superior to the lien of its
Security Device by giving written notice thereof to Lessee, whereupon this Lease
and such Options shall be deemed prior to such Security Device, notwithstanding
the relative dates of the documentation or recordation thereof. Lessee waives
the protection of any statute or rule of law which gives or purports to give
Lessee any right to terminate this Lease or surrender possession of the Premise
upon the transfer of Lessor's interest by foreclosure, deed in lieu of
foreclosure, or otherwise.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor; or (iii) be bound by prepaying
of more than one (1) month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving 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 attorneys to the record owner of the
Premises. Further, within sixty (60) days after the execution 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 provide the
Non-Disturbance Agreement within said sixty (60) days, then Lessee may, at
Lessee's option, directly contact 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 execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.
31. ATTORNEYS' FEES. If any Party or Broker brings an action or proceeding
involving the Premises to enforce the terms hereof or to declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term,
"PREVAILING PARTY" shall include, without limitation, a Party or Broker who
substantially obtains or defeats the relief sought, as the case may be, whether
by compromise, settlement, judgment, or the abandonment by the other Party or
Broker of its claim or defense. The attorney's fees award shall not be computed
in accordance with any court fee schedule, but shall be such as to fully
reimburse all attorneys' fees reasonably incurred. 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.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times and upon reasonable notice (it
being agreed that 24 hours is reasonable for the purposes of this paragraph 32)
for the purpose of showing the same to prospective purchasers, lenders, or
lessees, 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 and 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 on 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 any auction.
34. SIGNS. Lessee shall have the right, at its sole expense, to install
building signage which is consistent in type, amount and quality with that of
other occupants in California Commerce Center, and in accordance with all
requirements of California Commerce Center, and the City of Fontana. 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 subtenancies. Lessor's failure within ten (10) days following any such
event to elect to the contrary by written notice to the holder of any such
lesser interest, shall constitute Lessor's election to have such event
constitute the termination of such interest.
36. CONSENTS. Except as otherwise provided herein, wherever in this Lease the
consent of a Party be required to an act by or for the other Party, such consent
hall not be unreasonably withheld or delayed. Lessor's actual reasonable costs
and expenses (including, but not limited to, architects', attorneys', engineers'
and other consultants' fees) incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent, including, but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act, assignment or subletting shall not
constitute an acknowledgement that no Default or Breach of Lessee of this Lease
exists, nor shall such consent be deemed a waiver of any then existing Default
or Breach, except as may be otherwise specifically stated in writing by Lessor
at the time of such consent. The failure to specify herein any particular
condition to Lessor's consent shall not preclude the imposition by Lessor at the
time of consent of such further or other conditions as are then reasonable with
reference to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by the other
hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and in reasonable detail
within ten (10) business days following such request.
37. GUARANTOR.
37.1 EXECUTION. The Guarantors, if any, shall each execute a guaranty in
the form most recently published by the American Industrial Real Estate
Association, and each such Guarantor shall have the same obligations as Lessee
under this Lease.
37.2 DEFAULT. It shall constitute a Default of the Lessee if any Guarantor
fails or refuses, upon request to provide: (a) evidence of the execution of the
guaranty, including the authority of the party signing on Guarantor's 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 covenants, conditions and provisions on Lessee's part to be
observed and performed under this Lease, Lessee shall have quiet possession and
quiet enjoyment of the Premises during the term hereof.
39. OPTIONS.
39.1 DEFINITION. "OPTION" shall mean: (a) the right to extend the term of
or 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 offer 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 be assigned or
exercised by anyone other than said original Lessee or Permitted Assignee, as
applicable, 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 shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of Default and continuing until
such Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether 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 the
Defaults are cured, during the twelve (12) month period immediately preceding
the exercise of the Option.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term, (i) Lessee 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.
39.5 OPTIONS TO EXTEND. Lessee may extend the Term for one (1) additional
period of five (5) years (the "EXTENDED TERM") upon all the terms and conditions
of this Lease, subject to the
following terms, conditions and exceptions. Lessee must exercise the Option, if
at all, by giving written notice of its intention to do so no earlier than nine
(9) and no later than six (6) months prior to the end of the Original Term:
(a) Lessee's option shall automatically terminate upon any transfer,
assignment, sublease, conveyance, hypothecation or encumbrance of the Lease
(except to a Permitted Transferee) for which Lessor's consent is required, or if
the use of the Premises specified in Paragraph 1.8 and 6 is changed without the
consent of Lessor.
(b) Base Rent for the first Extended Term shall be equal to the Fair
Market Rate (the "FMRR") of the Premises as of the commencement of such Extended
Term. As used herein, FMRR shall mean the rent that a willing lessee would pay
to a willing lessor, with neither party under any financial duress, in an arm's
length transaction, for property similar to the Premises, as the Premises are
then improved (and taking into account that there shall be no free rent period
and no payment of broker's commissions), in the market area in which the
Premises are located. Not more than nine (9), nor less than six (6) months
before the end of the Original Term, Lessee shall provide Lessor with its
written notice that it wishes to exercise its option as provided for herein.
Within thirty (30) days of Lessor's receipt of such notice, Lessor shall provide
Lessee, in writing, its good faith opinion of the FMRR of the Premises as of the
end of such term ("LESSOR'S FMRR NOTICE"). If Lessee objects to Lessor's
determination of the FMRR of the Premises for the Extended Term, Lessee shall
notify Lessor in writing, within fifteen (15) days after receipt of Lessor's
notice of the FMRR, that Lessee disagrees with Lessor's determination. The
parties shall then attempt to agree upon the FMRR. In the event that Lessor and
Lessee are unable to agree upon the FMRR of the Premises within thirty (30) days
of Lessor's receipt of Lessee's notice that it disagrees with the Lessor's FMRR
Notice, then the FMRR shall be determined by appraisal in the manner provided
below. Until the appraisal procedures are finalized, Lessee shall continue to
pay Lessor the amount of Base Rent due immediately preceding the expiration of
the Lease Term. After the determination of the appraisers is final, Lessee shall
promptly make payment to Lessor for any underpayment of Base Rent owing for
prior months.
The FMRR of the Premises shall be determined as follows: The Premises
shall be appraised by an MAI appraiser chosen by Lessor ("FIRST APPRAISAL") and
the appraisal report forwarded to Lessee. If the First Appraisal is deemed
unacceptable by Lessee, then Lessee shall so advise Lessor in writing within ten
(10) working days after receipt of the First Appraisal and Lessee shall have the
right to engage an MAI appraiser to appraise the Premises ("SECOND APPRAISAL")
and the appraisal report forwarded to Lessor. In the event Lessor shall deem the
Second Appraisal unacceptable, then Lessor shall advise Lessee within ten (10)
working days after receipt of the Second Appraisal, and the first appraiser and
second appraiser shall together choose a third MAI appraiser who shall appraise
the Premises (the "THIRD APPRAISAL") and forward the appraisal report to Lessor
and Lessee. The cost of the second appraisal shall be borne by Lessee, and the
cost of the third Appraiser, if any, shall be shared equally by the parties. All
Appraisers shall have no less than five (5) years experience (up to and
including the date of instituting the appraisal process, of appraising property
like the Premises, in the market area where the Premises are located. If the
Third Appraiser is greater than the highest or lower than the lowest of the
First and Second Appraisals, then the FMRR for the Premises shall be the average
of the First and Second Appraisals. If the Third Appraisal is not greater than
the highest nor lower than the lowest of the First and Second
Appraisals, then the FMRR for the Premises shall be the sum of the three
appraisals, divided by three (3). The appraisal process shall commence no later
than forty-five (45) days prior to the effect date of the Extended Term and
shall be concluded within thirty (30) days after the start of the appraisal
process.
Notwithstanding anything else herein to the contrary, in no event shall
the Base Rent for any Extended Term be less than that in effect at the end of
the prior Term.
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 that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation, whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
42. RESERVATIONS. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not materially 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
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "UNDER PROTEST" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay.
44. AUTHORITY. If either Party hereto is a corporation, trust, limited
liability company, partnership, or similar entity, each individual executing
this Lease on behalf of such entity represents and warrants that he or she is
duly authorized to execute and deliver this Lease on its behalf. Each Party
shall, within thirty (30) days after request, deliver to the other Party
satisfactory evidence of such authority.
45. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46. OFFER. Preparation of this Lease by either Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease to
the other Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto.
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 (i.e., there shall be no
material increase in Lessee's obligations, and no material decrease in Lessee's
rights), Lessee agrees to make such reasonable non-monetary modifications to
this Lease as may be reasonably required by a Lender in connection with the
obtaining of normal financing or refinancing of the Premises.
48. MULTIPLE PARTIES. If more than one person or entity is named 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 is is not attached to this Lease.
50. UNAVOIDABLE DELAYS. If the performance of Lessor of any act required
herein, including, without limitation, the design, planning, permitting,
construction and completion of the Tenant Improvements, is prevent or delayed by
reason of strikes, lockouts, labor disputes, governmental delays, acts of God,
fire, floods, epidemics, freight embargoes, unavailability of materials and
supplies, development moratoriums imposed by any governmental authority, or
other causes beyond the reasonable control of Lessor, Lessor shall be excused
from performing that act for the period equal to the period of the prevention or
delay.
51. LIMITATION ON LIABILITY. In consideration of the benefits accruing
hereunder, Lessee on behalf of itself and all successors and assigns of Lessee
covenants and agrees that, notwithstanding anything in this Lease to the
contrary and notwithstanding any applicable law to the contrary:
(a) the liability of Lessor under this Lease (including any
liability for any actual or alleged failure, breach or default by Lessor under
this case, and/or negligence by Lessor hereunder) and any recourse against
Lessor shall be limited solely to Lessor's interest in the Premises, and the
undistributed rents, profits, other income derived from the Premises, and
available insurance proceeds (and not any other assets of Lessor); and
(b) the obligations of Lessor under this Lease do not constitute
personal obligations of the members, partners or subpartners of Lessor, or any
of the managers, directors, officers or shareholders of lessor or Lessor's
members, partners or subpartners, and Lessee shall not seek recourse against any
such members, partners or subpartners or any of their personal assets for
satisfaction of any liability with respect to this Lease.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVISE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF
THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND
THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.
WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES IS LOCATED.
THIS LEASE MUST BE EXECUTED BY TWO CORPORATE OFFICERS OF LESSEE
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: DES MOINES Executed at: North Andover, Massachusetts
on: on:
By LESSOR: By LESSEE:
PRINCIPAL LIFE INSURANCE CO. CONVERSE INC., A DELAWARE CORPORATION
AN IOWA CORPORATION
By: /S/ XXXX KINTELE By: /S/ MARSDEN X. XXXXX
Name Printed: XXXX KINTELE Name Printed: MARSDEN X. XXXXX
Title: ASSISTANT DIRECTOR, Title: EXECUTIVE CO-CHAIRMAN
COMMERCIAL REAL ESTATE
By: /S/ XXXX X. XXXXX By: /S/ XXXXX X. XXXXXX
Name Printed: XXXX X. XXXXX Name Printed: XXXXX X. XXXXXX
Title: DIRECTOR, ASSET MANAGEMENT Title: VP LEGAL
Address: Address: XXX XXXX XXXXXX
XXXXX XXXXXXX, XX 00000
Telephone: (___) Telephone: (000) 000-0000
Facsimile: (___) Facsimile: (000) 000-0000
Federal ID No. Federal ID No.
NOTE: These forms are often modified to meet the changing requirements of law
and industry needs. Always write or call to make sure you are utilizing
the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 000
Xx. Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, (213)
000-0000, Fax No. (000) 000-0000
