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, April 23, 1997, is made by and between
G.B.G. ("Lessor") and Sigma Circuits Incorporated, "A California
Corporation" ("Lessee"), (collectively the "Parties," or
individually a "Party").
1.2 Premises: That certain real property, including
all improvements therein or to be provided by Lessor under the
terms of this Lease, and commonly known as 345 - 000 Xxxxxx
Xxxxxx, located in the County of Santa Xxxxx, 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) a approximately 10,000
square foot two (2) unit industrial building ("Premises"). (See
also Paragraph 2)
1.3 Term: five (5) years and 0 months ("Original
Term") commencing June 1, 1997 ("Commencement Date") and ending
May 31, 2002 ("Expiration Date"). (See also Paragraph 3)
1.4 Early Possession: N/A ("Early Possession Date").
(See also Paragraphs 3.2 and 3.3)
1.5 Base Rent: $2,817.00 per month ("Base Rent"),
payable on the first (1st) day of each month commencing June 1,
1997 (See also Paragraph 4)
If this box is checked, there are provisions in this
Lease for the Base Rent to be adjusted.
1.6 Base Rent Paid Upon Execution: $2,817.00 as Base
Rent for the period June 1, 1997 - June 30, 1997.
1.7 Security Deposit: $6,650.00 ("Security Deposit").
(See also Paragraph 5)
1.8 Agreed Use: General office, storage distribution,
manufacturing of electronic interconnect products and all related
legal uses. (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 (collectively, the "Brokers") and brokerage relationships
exist in this transaction (check applicable boxes).
N/A represents Lessor exclusively ("Lessor's Broker");
YES BT Commercial represents Lessee exclusively ("Lessee's
Broker"); or
N/A represents both Lessor and Lessee ("Dual Agency").
(b) Payment to Brokers. Upon execution and
delivery of this Lease by both Parties, Lessor shall pay to the
Broker the fee of $5,000.
1.11 Guarantor. The obligations of the Lessee under
this Lease are to be guaranteed by N/A ("Guarantor"). (See
also Paragraph 37)
1.12 Addenda and Exhibits. Attached hereto is an
Addendum or Addenda consisting of Paragraphs 50 through 60 and
Exhibits A, all of which constitute a part of this Lease.
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee, and
Lessee hereby leases from Lessor, the Premises, for the term, at
the rental, and upon all of the terms, covenants and conditions
set forth in this Lease. Unless otherwise provided herein, any
statement of size set forth in this Lease, or that may have been
used in calculating rental, is an approximation which the Parties
agree is reasonable and the rental based thereon is not subject
to revision whether or not the actual size is more or less.
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 Date, warrants that the existing
electrical, plumbing, fire sprinkler, lighting, heating,
ventilating and air conditioning systems ("HVAC"), loading doors,
if any, and all other such elements in the Premises, other than
those constructed by Lessee, shall be in good operating condition
on said 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 Start 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 Start Date, Lessee does
not give Lessor written notice of any non-compliance with this
warranty within. (i) one year as to the surface of the roof and
the structural portions of the roof, foundations and bearing
walls, (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.
2.3 Compliance. Lessor warrants that the improvements
on the Premises comply with all applicable laws, covenants or
restrictions of record, building codes, regulations and
ordinances ("Applicable Requirements") in effect on the Start
Date. Said warranty does not apply to the use to which Lessee
will put the Premises or to any Alterations or Utility
Installations (as defined in Paragraph 7.3(a)) made or to be made
by Lessee. NOTE. Lessee is responsible for determining whether
or not the zoning is appropriate for Lessee's intended use, and
acknowledges that past uses of the Premises may no longer be
allowed. If the Premises do not comply with said warranty,
Lessor shall, except as otherwise provided, promptly after
receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify
the same at Lessor's expense. If Lessee does not give Lessor
written notice of a non-compliance with this warranty within six
(6) months following the Start Date, correction of that non-
compliance shall be the obligation of Lessee at Lessee's sole
cost and expense. If the Applicable Requirements are hereafter
changed (as opposed to being in existence at the Start Date,
which is addressed in Paragraph 6.2(e) below) so as to require
during the term of this Lease the construction of an addition to
or an alteration of the Building, the 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 to 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 (90) days
thereafter. Such termination date shall, however, in no event be
earlier than the last day that Lessee could legally utilize the
Premises without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result
of the specific and unique use of the Premises by Lessee (such
as, governmentally mandated seismic modifications), then Lessor
and Lessee shall allocate the obligation to pay for such costs
pursuant to the provisions of Paragraph 7.1(c); provided,
however, that if such Capital Expenditure is required during the
last two years of this Lease 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 fails to
tender its share of any such Capital Expenditure, Lessee may
advance such funds and deduct same, with Interest, from Rent
until Lessor's share of such costs have been fully paid. If
Lessee is unable to finance Lessor's share, or if the balance of
the Rent due and payable for the remainder of this Lease is not
sufficient to fully reimburse Lessee on an offset basis, Lessee
shall have the right to terminate this Lease upon thirty (30)
days written notice to Lessor.
(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 in use, change in intensity of
use, or modification to the Premises then, and in that event,
Lessee shall be fully responsible for the cost thereof, and
Lessee shall not have any right to terminate this Lease.
2.4 Acknowledgments. Lessee acknowledges that.
(a) it has been advised by Lessor and/or Brokers to satisfy
itself with respect to the condition of the Premises (including
but not limited to the 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. If Lessee totally or partially
occupies the Premises prior to the Commencement Date, the
obligation to pay Base Rent shall be abated for the period of
such early possession. All other terms of this Lease (including
but not limited to the obligations to pay Real Property Taxes and
insurance premiums and to maintain the Premises) shall, however,
be in effect during such period. Any such early possession shall
not affect the Expiration Date.
3.3 Delay In Possession. Lessor agrees to use its
best commercially reasonable efforts to deliver possession of the
Premises to Lessee by the Commencement Date. If, despite said
efforts, Lessor is unable to deliver possession as agreed, Lessor
shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease. Lessee shall not,
however, be obligated to pay Rent or perform its other
obligations until it receives possession of the Premises. If
possession is not delivered within sixty (60) days after the
Commencement Date, Lessee may, at its option, by notice in
writing within ten (10) days after the end of such sixty (60) day
period, cancel this Lease, in which event the Parties shall be
discharged from all obligations hereunder. If such written
notice is not received by Lessor within said ten (10) day period,
Lessee's right to cancel shall terminate. Except as otherwise
provided, if possession is not tendered to Lessee when required
and Lessee does not terminate this Lease, as aforesaid, any
period of rent abatement that Lessee would otherwise have enjoyed
shall run from the date of delivery of possession and continue
for a period equal to what Lessee would otherwise have enjoyed
under the terms hereof, but minus any days of delay caused by the
acts or omissions of Lessee. If possession of the Premises is
not delivered within four (4) months after the Commencement Date,
this Lease shall terminate unless other agreements are reached
between Lessor and Lessee, in writing.
3.4 Lessee Compliance. Lessor shall not be required
to tender possession of the Premises to Lessee until Lessee
complies with its obligation to provide evidence of insurance
(Paragraph 8.5). Pending delivery of such evidence, Lessee shall
be required to perform all of its obligations under this Lease
from and after the Start Date, including the payment of Rent,
notwithstanding Lessor's election to withhold possession pending
receipt of such evidence of insurance. Further, if Lessee is
required to perform any other conditions prior to or concurrent
with the Start Date, the Start Date shall occur but Lessor may
elect to withhold possession until such conditions are satisfied.
4. Rent.
4.1. Rent Defined. All 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, on or before the day on which it is due.
Rent for any period during the term hereof which is for less than
one (1) full calendar month shall be prorated based upon the
actual number of days of said month. Payment of Rent shall be
made to Lessor at its address stated herein or to such other
persons or place as Lessor may from time to time designate in
writing. Acceptance of a payment which is less than the amount
then due shall not be a waiver 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
moneys with Lessor so that the total amount of the Security
Deposit shall at all times bear the same proportion to the
increased Base Rent as the initial Security Deposit bore to the
initial Base Rent. Should the Agreed Use be 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 the Premises or the
mechanical or electrical systems therein, is not significantly
more burdensome to the Premises. If Lessor elects to withhold
consent, Lessor shall within five (5) business days after such
request give written notification of same, which notice shall
include an explanation of Lessor's objections to the change in
use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term
"Hazardous Substance" as used in this Lease shall mean any
product, substance, or waste whose presence, use, manufacture,
disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Premises,
is either. (i) potentially injurious to the public health,
safety or welfare, the environment or the Premises,
(ii) regulated or monitored by any governmental authority, or
(iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute
or common law theory. Hazardous Substances shall include, but
not be limited to, hydrocarbons, petroleum, gasoline, and/or
crude oil or any products, by-products or fractions thereof.
Lessee shall not engage in any activity in or on the Premises
which constitutes a Reportable Use of Hazardous Substances
without the express prior written consent of Lessor and timely
compliance (at Lessee's expense) with all Applicable
Requirements. "Reportable Use" shall mean (i) the installation
or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal
of a Hazardous Substance that requires a permit from, or with
respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with
respect to which any Applicable Requirements requires that a
notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Lessee
may use any ordinary and customary materials reasonably required
to be used in the normal course of the Agreed Use, so long as
such use is in compliance with all Applicable Requirements, is
not a Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor. In addition,
Lessor may condition its consent to any Reportable Use upon
receiving such additional assurances as Lessor reasonably deems
necessary to protect itself, the public, the Premises and/or the
environment against damage, contamination, injury and/or
liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) of
protective modifications (such as concrete encasements).
(b) Duty to Inform Lessor. If Lessee knows, or
has reasonable cause to believe, that a Hazardous Substance has
come to be located in, on, under or about the Premises, other
than as previously consented to by Lessor, Lessee shall
immediately give written notice of such fact to Lessor, and
provide Lessor with a copy of any report, notice, claim or other
documentation which it has concerning the presence of such
Hazardous Substance.
(c) Lessee Remediation. Lessee shall not cause
or permit any Hazardous Substance to be spilled or released in,
on, under, or about the Premises (including through the plumbing
or sanitary sewer system) and shall promptly, at Lessee's
expense, take all investigatory and/or remedial action reasonably
recommended, whether or not formally ordered or required, for the
cleanup of any contamination of, and for the maintenance,
security and/or monitoring of the Premises or neighboring
properties, that was caused or materially contributed to by
Lessee, or pertaining to or involving any Hazardous Substance
brought onto the Premises during the term of this Lease, by or
for Lessee, or any third party.
(d) Lessee Indemnification. Lessee shall
indemnify, defend and hold Lessor, its agents, employees,
lenders and ground lessor, if any, harmless from and against any
and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees
arising out of or involving any Hazardous Substance brought onto
the Premises by or for Lessee, or any third party (provided,
however, that Lessee shall have no liability under this Lease
with respect to underground migration of any Hazardous Substance
under the Premises from adjacent properties). Lessee's
obligations shall include, but not be limited to, the effects of
any contamination or injury to person, property or the
environment created or suffered by Lessee, and the cost of
investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of
this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its
obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessor in writing at
the time of such agreement.
(e) Lessor Indemnification. Lessor and its
successors and assigns shall indemnify, defend, reimburse and
hold Lessee, its employees and lenders, harmless from and against
any and all environmental damages which existed as a result of
Hazardous Substances on the Premises prior to the Start Date or
which are caused by the gross negligence, or intentional acts of
Lessor, its agents or employees. Lessor's obligations, as and
when required by the Applicable Requirements, shall include, but
not be limited to, the cost of investigation, removal,
remediation, restoration and/or abatement, and shall survive the
expiration or termination of this Lease.
(f) Investigations and Remediations. Lessor
shall retain the responsibility and pay for any investigations or
remediation measures required by governmental entities having
jurisdiction with respect to the existence of Hazardous
Substances on the Premises prior to the Start Date. Lessee shall
cooperate fully in any such activities at the request of Lessor,
including allowing Lessor and Lessor's agents to have reasonable
access to the Premises at reasonable times in order to carry out
Lessor's investigative and remedial responsibilities.
(g) Landlord Termination Option. If a Hazardous
Substance Condition occurs during the term of this lease, unless
Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by
the Applicable Requirements and this Lease shall continue in full
force and effect, but subject to Lessor's rights under Paragraph
6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either
(i) investigate and remediate such Hazardous Substance Condition,
if required, as soon as reasonably possible at Lessor's expense,
in which event this Lease shall continue in full force and
effect, or (ii) if the estimated cost to remediate such condition
exceeds twelve (12) times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within
thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such Hazardous Substance Condition, of Lessor's
desire to terminate this Lease as of the date sixty (60) days
following the date of such notice. In the event Lessor elects to
give a termination notice, Lessee may, within ten (10) days
thereafter, give written notice to Lessor of Lessee's commitment
to pay the amount by which the cost of the remediation of such
Hazardous Substance Condition exceeds an amount equal to twelve
(12) times the then monthly Base Rent or $100,000, whichever is
greater. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within thirty (30) days following
such commitment. In such event, this Lease shall continue in
full force and effect, and Lessor shall proceed to make such
remediation as soon as reasonably possible after the required
funds are available. If Lessee does not give such notice and
provide the required funds or assurance thereof within the time
provided, this Lease shall terminate as of the date specified in
Lessor's notice of termination.
6.3 Lessee's Compliance with Applicable Requirements.
Except as otherwise provided in this Lease, 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 shall, within ten
(10) days after receipt of Lessor's written request, provide
Lessor with copies of all permits and other documents, and other
information evidencing Lessee's compliance with any Applicable
Requirements specified by Lessor, and shall immediately upon
receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving the
failure of Lessee or the Premises to comply with any Applicable
Requirements.
6.4 Inspection; Compliance. Lessor and Lessor's
Lender and consultants shall have the right to enter into
Premises at any time, in the case of an emergency, and otherwise
at reasonable times, for the purpose of inspecting the condition
of the Premises and for verifying compliance by Lessee with this
Lease. The cost of any such inspections shall be paid by Lessor,
unless a violation of Applicable Requirements, or a contamination
is found to exist or be imminent, or the inspection is requested
or ordered by a governmental authority. In such case, Lessee
shall upon request reimburse Lessor for the cost of such
inspections, so long as such inspection is reasonably related to
the violation or contamination.
7. Maintenance; Repairs, 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, HVAC, electrical, lighting facilities, boilers,
pressure vessels, fire protection system, fixtures, walls
(interior and exterior), foundations, ceilings, roofs, floors,
windows, doors, plate glass, skylights, landscaping, driveways,
parking lots, fences, retaining walls, signs, sidewalks and
parkways located in, on, or adjacent to the Premises. Lessee, in
keeping the Premises in good 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 exterior appearance of other similar facilities of
comparable age and size in the vicinity, including, when
necessary, the exterior repainting of the Building.
(b) Service Contracts. Lessee shall, at Lessee's
sole expense, procure and maintain contracts, with copies to
Lessor, in customary form and substance for, and with contractors
specializing and experienced in the maintenance of the following
equipment and improvements, ("Basic Elements"), if any, as and
when installed on the Premises. (i) HVAC equipment, (ii) boiler,
and pressure vessels, (iii) fire protection systems,
(iv) landscaping and irrigation systems, (v) roof covering and
drains, and (vi) asphalt and parking lots, (vii) clarifiers and
(viii) any other equipment, if reasonably required by Lessor.
(c) Replacement. Subject to Lessee's
indemnification of Lessor as set forth in Paragraph 8.7 below,
and 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 numerator of which is one, and the denominator of
which is the number of months of the useful life of such
replacement as such useful life is specified pursuant to Federal
income tax regulations or guidelines for depreciation thereof
(including interest on the 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 hereafter in effect to the
extent it is inconsistent with the terms of this Lease.
7.3 Utility Installations; Trade Fixtures;
Alterations.
(a) Definitions; Consent Required. The term
"Utility Installations" refers to all floor and window coverings,
air lines, power panels, electrical distribution, security and
fire protection systems, communication systems, lighting
fixtures, HVAC equipment, plumbing, and fencing in or on the
Premises. The term "Trade Fixtures" shall mean Lessee's
machinery and equipment that can be removed without doing
material damage to the Premises. The term "Alterations" shall
mean any modification of the improvements, other than Utility
Installations or Trade Fixtures, whether by addition or deletion.
"Lessee Owned Alterations and/or Utility Installations" are
defined as Alterations and/or Utility Installations made by
Lessee that are not 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 this Lease as extended does not
exceed $50,000 in the aggregate or $10,000 in any one year.
(b) Consent. Any Alterations or Utility
Installations that Lessee shall desire to make and which require
the consent of the Lessor shall be presented to Lessor in written
form with detailed plans. Consent shall be deemed conditioned
upon Lessee's. (i) acquiring all applicable governmental
permits, (ii) furnishing Lessor with copies of both the permits
and the plans and specifications prior to commencement of the
work, and (iii) compliance with all conditions of said permits
and other Applicable Requirements in a prompt and expeditious
manner. Any Alterations or Utility Installations shall be
performed in a workmanlike manner with good and sufficient
materials. Lessee shall promptly upon completion furnish Lessor
with as-built plans and specifications. For work which 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 Lessee at or for use on the Premises,
which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein.
Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work in, on or about the
Premises, and Lessor shall have the right to post 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 reasonable attorneys' 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 to be the owner of all
or any specified part of the Lessee Owned Alterations and Utility
Installations. Unless otherwise instructed per paragraph 7.4(b)
hereof, all Lessee Owned Alterations and Utility Installations
shall, at the expiration or termination of this Lease, become the
property of Lessor and be surrendered by Lessee with the
Premises.
(b) Removal. By delivery to Lessee of written
notice from Lessor not later than ninety (90) days prior to the
end of the term of this Lease, Lessor may require that any or all
Lessee Owned Alterations or Utility Installations 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 excepted. "Ordinary wear and tear" shall not include any
damage or deterioration that would have been prevented by good
maintenance practice. Lessee shall repair any damage occasioned
by the installation, maintenance or removal of Trade Fixtures,
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.
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.
(b) Carried by Lessor. Lessor shall maintain
liability insurance as described in Paragraph 8.2(a), in addition
to, and not in lieu of, the insurance required to be maintained
by Lessee. Lessee shall not be 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 and to any Lender
insuring loss or damage to the Premises. The amount of such
insurance shall be equal to the full replacement cost of the
Premises, as the same shall exist from time to time, or the
amount required by any Lenders, but in no event more than the
commercially reasonable and available insurable value thereof.
If Lessor is the Insuring Party, however, Lessee Owned
Alterations and Utility 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
(except the perils of flood and/or earthquake unless required by
a Lender), including coverage for debris removal and the
enforcement of any Applicable Requirements requiring the
upgrading, demolition, reconstruction or replacement of any
portion of the Premises as the result of a covered loss. Said
policy or policies shall also contain 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. If reasonably
available, and if Lessor requests Lessee to do so in writing,
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 sole negligence,
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
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.
(b) "Premises Total Destruction" shall mean
damage or destruction to the Premises, other than Lessee Owned
Alterations and Utility Installations, 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; provided, however, that Lessee shall, at
Lessor's election, make the repair of any damage or destruction
the total cost to repair of which is $10,000 or less, and, in
such event, Lessor shall make any applicable insurance proceeds
available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not
in force or the insurance proceeds are not sufficient to effect
such repair, the Insuring Party shall promptly contribute the
shortage in proceeds (except as to the deductible which is
Lessee's responsibility) as and when required to complete said
repairs. 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 (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 the foregoing, if Lessee at that time has an
exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by, (a) exercising
such option and (b) providing Lessor with any shortage in
insurance proceeds (or adequate assurance thereof) needed to make
the repairs on or before the earlier of (i) the date which is ten
days after Lessee's receipt of Lessor's written notice purporting
to terminate this Lease, or (ii) the day prior to the date upon
which such option expires. If Lessee duly exercises such option
during such period and provides Lessor with funds (or adequate
assurance thereof) to cover any shortage in insurance proceeds,
Lessor shall, at Lessor's commercially reasonable expense, repair
such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise
such option and provide such funds or assurance during such
period, then this Lease shall terminate on the date specified in
the termination notice and Lessee's option shall be extinguished.
9.6 Abatement of Rent; Lessee's Remedies.
(a) Abatement. In the event of Premises Partial
Damage or Premises Total Destruction or a Hazardous Substance
Condition for which Lessee is not responsible under this Lease,
the Rent payable by Lessee for the period required for the
repair, remediation or restoration of such damage shall be abated
in proportion to the degree to which Lessee's use of the Premises
is impaired, 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 and meaningful way, such repair or restoration within
ninety (90) days after such obligation shall accrue, Lessee may,
at any time prior to the commencement of such repair or
restoration, give written notice to Lessor and to any Lenders of
which Lessee has actual notice, of Lessee's election to terminate
this Lease on a date not less than sixty (60) days following the
giving of such notice. If Lessee gives such notice 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. 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 inconsistent herewith.
10. Real Property Taxes.
10.1 Definition of "Real Property Taxes". As used
herein, the term "Real Property Taxes" shall include any form of
assessment; real estate, general, special, ordinary or
extraordinary, or rental levy or tax (other than inheritance,
personal income or estate taxes); improvement bond; and/or
license fee imposed upon or levied against any legal or equitable
interest of Lessor in the Premises, Lessor's right to other
income therefrom, and/or Lessor's business of leasing, by any
authority having the direct or indirect power to tax and where
the funds are generated with reference to the Building address
and where the proceeds so generated are to be applied by the
city, county or other local taxing authority of a jurisdiction
within which the Premises are located. The term "Real Property
Taxes" shall also include any tax, fee, levy, assessment or
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.
(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 months 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 moneys paid to Lessor under this Paragraph may
be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a Breach by Lessee in the performance
of 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.
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.
(c) 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(c), 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.
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,
together with a fee of $500.00 as consideration for Lessor's
considering and processing said request. Lessee agrees to
provide Lessor with such other or additional information and/or
documentation as may be reasonably requested.
(f) Any assignee of, or sublessee under, this
Lease shall, by reason of accepting such assignment or entering
into such sublease, be deemed to have assumed and agreed to
conform and comply with each and every term, covenant, condition
and obligation herein to be observed or performed by Lessee
during the term of said assignment or sublease, other than such
obligations as are contrary to or inconsistent with provisions of
an assignment or sublease to which Lessor has specifically
consented to in writing.
12.3 Additional Terms and Conditions Applicable to
Subletting. The following terms and conditions shall apply to
any subletting by Lessee of all or any part of the Premises and
shall be deemed included in all subleases under this Lease
whether or not expressly incorporated therein.
(a) 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 right 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.
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 other monetary payment 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) a Tenancy
Statement, (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 for a period of ten (10) 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 if the nature of Lessee's Default
is such that more than thirty (30) days are reasonably required
for its cure, then it shall not be deemed to be a Breach if
Lessee 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. 101 or any successor statute thereto (unless, in
the case of a petition filed against Lessee, the same is
dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of
Lessee's assets located at the Premises or of Lessee's interest
in this Lease, where possession is not restored to Lessee within
thirty (30) days; or (iv) the attachment, execution or other
judicial seizure of substantially all of Lessee's assets located
at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days; provided,
however, in the event that any provision of this subparagraph
(e) is contrary to any applicable law, such provision shall be of
no force or effect, and not affect the validity of the remaining
provisions.
(f) The discovery 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 Guarantor's liability with respect to
this Lease other than in accordance with the terms of such
guaranty, (iii) a Guarantor's becoming insolvent or the subject
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
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 was not previously
given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful detainer statute shall 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 terms, covenants and
conditions of this Lease. Upon Breach of this Lease by Lessee,
any such Inducement Provision shall automatically be deemed
deleted from this Lease and of no further force or effect, and
any rent, other charge, bonus, inducement or consideration
theretofore abated, given or paid by Lessor under such an
inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said
Breach by Lessee. The acceptance by Lessor of rent or the cure
of the Breach which initiated the operation of this paragraph
shall not be deemed a waiver by Lessor of the provisions of this
paragraph unless specifically so stated in writing by Lessor at
the time of such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that
late payment 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 payments, 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 charged by the largest
state chartered bank in the state in which the Premises are
located plus 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, a reasonable time shall in no
event be less than thirty (30) days after receipt by Lessor, and
any Lender whose name and address shall have been furnished
Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed;
provided, however, that if the nature of Lessor's obligation is
such that more than thirty (30) days are reasonably required for
its performance, then Lessor shall not be in breach if
performance is commenced within such thirty (30) day period and
thereafter 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.
14. Condemnation. If the Premises or any portion thereof
are taken under the power of eminent domain or sold under the
threat of the exercise of said power (collectively
"Condemnation"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent
(10%) of any building, or more than twenty-five percent (25%) of
the land area not occupied by any building, is taken by
Condemnation, Lessee may, at Lessee's option, to be exercised in
writing within ten (10) days after Lessor shall have given Lessee
written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have
taken possession) terminate this Lease as of the date the
condemning authority takes such possession. If Lessee does not
terminate this Lease in accordance with the foregoing, this Lease
shall remain in full force and effect as to the portion of the
Premises remaining, except that the Base Rent shall be reduced in
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 Additional Commission. In addition to the
payments owed pursuant to Paragraph 1.10 above, and unless lessor
and the Brokers otherwise agree in writing, Lessor agrees that.
(a) if Lessee exercises any Option, (b) if Lessee acquires any
rights to the Premises or other premises owned by Lessor and
located within the same Project, if any, within which the
Premises is located, (c) if Lessee remains in possession of the
Premises, with the consent of Lessor, after the expiration of
this Lease, or (d) if Base Rent is increased, whether by
agreement or operation of an escalation clause herein, then,
Lessor shall pay Brokers a fee in accordance with the schedule of
said Brokers in effect at the time of the execution of this
Lease.
15.2 Assumption of Obligations. Any buyer or
transferee of Lessor's interest in this Lease shall be deemed to
have assumed Lessor's obligation hereunder. Each Broker shall be
a third party beneficiary of the provisions of Paragraphs 1.10,
15, 22 and 31. If Lessor fails to pay to a Broker any amounts
due as and for commissions pertaining to this Lease when due,
then such amounts shall accrue Interest. In addition, if Lessor
fails to pay any amounts to Lessee's Broker when due, Lessee's
Broker may send written notice to Lessor and Lessee of such
failure and if Lessor fails to pay such amounts within ten (10)
days after said notice, Lessee shall pay said monies to its
Broker and offset such amounts against Rent. In addition,
Lessee's Broker shall be deemed to be a third party beneficiary
of any commission agreement entered into by and/or between Lessor
and Lessor's Broker.
15.3 Representations and Indemnities of Broker
Relationships. Lessee and Lessor each represent and warrant to
the other that it has had no dealings with any person, firm,
broker or finder (other than the Brokers, if any) in connection
with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder's fee in connection
herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any
such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any
costs, expenses, attorneys' fees reasonably incurred with respect
thereto.
16. Tenancy Statement/Estoppel Certificate.
16.1 Each Party (as "Responding Party") shall within
ten (10) days after written notice from the other Party (the
"Requesting Party") execute, acknowledge and deliver to the
Requesting Party an estoppel certificate in writing, in form
similar to the then most current "Tenancy Statement" form
published by the American Industrial Real Estate Association,
plus such additional information, confirmation and/or statements
as may be reasonably requested by the Requesting Party.
16.2 If Lessor desires to finance, refinance, or sell
the Premises, 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 in this Lease to be performed by the
Lessor shall be binding only upon the Lessor as hereinabove
defined. Notwithstanding the above, 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 Substances as outlined in Paragraph 6 above.
18. Severability. The invalidity of any provision of this
Lease, as determined by a court of competent jurisdiction, shall
in no way affect the validity of any other provision hereof.
19. Days. Unless otherwise specifically indicated to the
contrary, the word "days" as used in this Lease shall mean and
refer to calendar days.
20. Limitation on Liability. The obligations of Lessor
under this Lease shall not constitute personal obligations of
Lessor, the individual partners of Lessor or its or their
individual partners, directors, officers or shareholders, and
Lessee shall look to the Premises, and to no other assets of
Lessor, for the satisfaction of any liability of Lessor with
respect to this Lease, and shall not seek recourse against the
individual partners of Lessor, or its or their individual
partners, directors, officers or shareholders, or any of their
personal assets for such satisfaction.
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.
Lessor and Lessee each represents and warrants to the Brokers
that it has made, and is relying solely upon, its own
investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the
nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any
default or breach hereof by either Party. The liability
(including court costs and Attorneys' fees), of any Broker with
respect to negotiation, execution, delivery or performance by
either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to an amount up to the fee
received by such Broker pursuant to this Lease; provided,
however, that the foregoing limitation on each Broker's liability
shall not be applicable to any gross negligence or willful
misconduct of such Broker.
23. Notices.
23.1 Notice Requirements. All notices required or
permitted by this Lease shall be in writing and may be delivered
in person (by hand or by courier) or may be sent by regular,
certified or registered mail or U.S. Postal Service Express
Mail, with postage prepaid, or by facsimile transmission, and
shall be deemed sufficiently given if served in a manner
specified in this Paragraph 23. The addresses noted adjacent to
a Party's signature on this Lease shall be that Party's address
for delivery or mailing of 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) hours
after the same is addressed as required herein and mailed with
postage prepaid. Notices delivered by United States Express Mail
or overnight courier that guarantee next day delivery shall be
deemed given twenty-four (24) hours after delivery of the same to
the Postal Service or courier. Notices transmitted by facsimile
transmission or similar means shall be deemed delivered upon
telephone confirmation of receipt, provided a copy is also
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 by Lessee of the same or
of any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any act shall not be deemed to render
unnecessary the obtaining of Lessor's consent to, or approval of,
any subsequent or similar act by Lessee, or be construed as the
basis of an estoppel to enforce the provision or provisions of
this Lease requiring such consent. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee.
Any payment by Lessee may be accepted by Lessor on account of
moneys or damages due Lessor, notwithstanding any qualifying
statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or
effect whatsoever unless specifically agreed to in writing by
Lessor at or before the time of deposit of such payment.
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.
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. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted
hereby shall be subject and subordinate to any ground lease,
mortgage, deed of trust, or other hypothecation or security
device (collectively, "Security Device"), now or hereafter placed
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 shall have no liability or obligation to perform any of
the obligations of Lessor under this Lease. Any Lender may elect
to have this Lease and/or any Option granted hereby superior to
the lien of its Security Device by giving written notice thereof
to Lessee, this Lease and such Options shall be deemed prior to
such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.
30.2 Attornment. Subject to the non-disturbance
provisions of Paragraph 30.3, Lessee agrees to attorn to a Lender
or any other party who acquires ownership of the Premises by
reason of a foreclosure of a Security Device, and that in the
event of such foreclosure, such new owner shall not. (i) be
liable for any act or omission of any prior lessor or with
respect to events occurring prior to acquisition of ownership;
(ii) be subject to any offsets or defenses which Lessee might
have against any prior lessor, or (iii) be bound by prepayment of
more than one (1) month's rent.
30.3 Non-Disturbance. With respect to Security Devices
entered into by Lessor after the execution of this Lease,
Lessee's subordination of this Lease shall be subject to
receiving 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 attorns 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 to enforce the terms hereof or 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 attorneys' fees award shall not be
computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys' fees reasonably
incurred. 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 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 an
auction.
34. Signs. Except for ordinary "for sublease" signs,
Lessee shall not place any sign upon the Premises without
Lessor's prior written consent. All signs must comply with all
Applicable Requirements.
35. Termination; Merger. Unless specifically stated
otherwise in writing by Lessor, the voluntary or other surrender
of this Lease by Lessee, the mutual termination or cancellation
hereof, or a termination hereof by Lessor for Breach by Lessee,
shall automatically terminate any sublease or lesser estate in
the Premises; provided, however, that Lessor may elect to
continue any one or all existing 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 is required to an
act by or for the other Party, such consent shall not be
unreasonably withheld or delayed. Lessor's actual reasonable
costs and expenses not to exceed $1,000.00 (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 acknowledgment that no Default or Breach by Lessee
of this Lease exists, nor shall such consent be deemed a waiver
of any then existing Default or Breach, except as may be
otherwise specifically stated in writing by Lessor at the time of
such consent. The failure to specify herein any particular
condition to Lessor's consent shall not preclude the imposition
by Lessor at the time of consent of such further or other
conditions as are then reasonable with reference to the
particular matter for which consent is being given. In the event
that either Party disagrees with any determination made by the
other hereunder and reasonably requests the reasons for such
determination, the determining party shall furnish its reasons in
writing and in reasonable detail within ten (10) business days
following such request.
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 and only while the original Lessee is in
full possession of the Premises and, if requested by Lessor, with
Lessee 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 said 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 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.
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 unreasonably interfere with the use
of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate any such easement
rights, dedication, map or restrictions.
43. Performance Under Protest. If at any time a dispute
shall arise as to any amount or sum of money to be paid by one
Party to the other under the provisions 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, 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 M
is M is not attached 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 ADVICE 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.
The parties hereto have executed this Lease at the place and
on the dates specified above their respective signatures.
Executed at on Executed at on
by LESSOR: G.B.G. by LESSEE: Sigma Circuits, Incorporated
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
Name Printed: Xxxxxxx Xxxxx Name Printed: Xxxxxx X. Xxxxxxxx
Title: General Partner, G.B.G. Title: Sr. Vice President
and CFO
50. Rental Rate:
Lessee shall pay rent to Lessor based upon the following rent
schedule:
Monthly
Months Base Rent NNN Square Footage & Address
01-03 $2,817.00 Approximately 4,700 SF (345 Xxxxxx Street)
04-12* $6,650.00 Approximately 10,000 SF (000-000 Xxxxxx Xxxxxx)
13-24 $6,850.00 Approximately 10,000 SF (000-000 Xxxxxx Xxxxxx)
25-36 $7,050.00 Approximately 10,000 SF (000-000 Xxxxxx Xxxxxx)
37-48 $7,250.00 Approximately 10,000 SF (000-000 Xxxxxx Xxxxxx)
49-60 $7,450.00 Approximately 10,000 SF (345-347 Xxxxxx Street)
* Upon Business Solutions vacating 000 Xxxxxx Xxxxxx, Xxxxxx
shall have possession of said premises rent free for
ninety (90) days to paint, carpet and construct any tenant
improvements. Lessee shall pay Lessor $2,817.00 per month
plus the NNN expenses for 000 Xxxxxx Xxxxxx (Approximately
4,700 sq. ft.) until ninety (90) days after Business
Solutions has vacated 000 Xxxxxx Xxxxxx (Approximately
5,300 square feet) with possession delivered to Lessee.
The full base rental amount of $6,650.00 per month and the
full NNN expense for both units (Approximately 10,000
square feet) shall commence ninety (90) days after
Business Solutions has vacated 000 Xxxxxx Xxxxxx with
possession delivered to Lessee.
In the event possession of 000 Xxxxxx Xxxxxx is not
delivered to Lessee by December 1, 1997, this Lease shall
terminate unless other agreements are reached with Lessee,
in writing.
51. Condition of the Premises:
Notwithstanding anything to the contrary contained in the
Lease Agreement, Lessor shall deliver the Premises with all
building systems and components in good working order and
repair including, but not limited to, HVAC, electrical,
lighting, plumbing, ceiling tiles, man doors, utility systems,
office doors, structural integrity, walls, roof, fire
protection system, roll-up doors, parking lot, landscape
irrigation, etc. If required by any governmental agency
having jurisdiction, Lessor shall be responsible for
compliance with the California Tile 24 Disabled Access
Regulation which incorporates the Federal Americans with
Disability Act (ADA).
52. Foundation, Walls and Roof:
Notwithstanding anything to the contrary contained in the
Lease Agreement, Lessor, at Lessor's sole cost and expense,
shall be responsible for the maintenance and replacement of
the foundation, walls, roof structure and roof membrane.
53. Maintenance and Repairs:
Lessor shall perform and construct, at Lessor's sole cost and
expense, and Lessee shall have no obligation to perform or pay
for, any repair, maintenance or improvements (i) necessitated
by the acts or omissions of Lessor, or its agents, employees,
licensees, invitees or contractors, (ii) for which Lessor has
a right of reimbursement from others.
54. NNN Expenses:
The Lessor estimates the current NNN expenses to be $.065 per
square foot per month.
55. Option to Renew:
Lessee shall have one (1) five (5) year option to extend this
Lease by giving notice in writing to the Lessor not less than
one hundred eighty (180) days prior to any expiration date.
All conditions and covenants of this Lease shall remain in
full force and effect during any extension except that the
annual rental payable during the said extended term, shall be
the fair market rental rate of the leased Premises as of the
commencement date of the extended term. Such fair market
rental rate shall be ascertained by comparing the subject
Premises to other like
Premises in like areas in vicinity. In the event that the
parties are unable to agree as to the fair lease value of the
Premises, then the fair lease value shall be determined by
three (3) appraisers, one of whom shall be chosen by the
Lessor, one of whom shall be chosen by the Lessee and one of
whom shall be chosen by the first two appraisers. Each party
shall pay for the cost of the appraisers selected by him and
one-half of the cost of the third appraiser. The average of
the two appraisers which are closer together, shall then be
calculated and the value thus determined shall conclusively be
deemed to be the fair lease value of the leased Premises for
the purposes of this paragraph and shall accrue from the first
day of any extended term hereof.
56. Signage:
Lessee shall be allowed signage per the City of Santa Clara's
sign ordinance.
57. Entry by Lessor:
Lessor and Lessor's agents, except in the case of emergency,
shall provide Lessee with twenty-four (24) hours notice prior
to entry of the Premises. Any such entry by Lessor and
Lessor's agents shall comply with all reasonable security
measures of Lessee and shall not impair Lessee's operations
more than reasonably necessary. During any such entry, Lessor
and Lessor's agents shall at all times be accompanied by a
representative of Lessee.
58. Reasonable Expenditures:
Any expenditure by a party permitted or required under the
Lease, for which such party is entitled to demand and does
demand reimbursement from the other party, shall be limited to
the fair market value of the goods and services involved,
shall be reasonably incurred, and shall be substantiated by
documentary evidence available for inspection and review by
the other party.
59. Lessor's Acknowledgment and Consent:
Notwithstanding anything to the contrary contained in
Paragraphs 6.2 and 7 of the Lease Agreement, Lessor
acknowledges and consents to the following:
1) Lessee's use of the Premises for the storage and use of
hazardous substances in the manufacturing process of interconnect
products.
2) Any modifications/alterations to the Premises required by
any governmental organization having jurisdiction for the storage
and use of hazardous materials in the manufacturing process of
interconnect products.
Lessee shall, at Lessee's sole cost and expense, comply with
any and all rules, regulations, codes, ordinances, statutes,
and other requirements of lawful government authority
respecting hazardous substances in connection with the
manufacturing process of interconnect products.
60. Effect of Addendum:
In the event of any inconsistency between this Addendum and
the Lease, the terms of this Addendum shall prevail. As used
herein, the term "Lease" shall mean the Lease, this Addendum
and all riders, exhibits, rules and regulations, referred to
in the Lease of this Addendum.
READ AND APPROVED:
LESSOR: LESSEE:
G.B.G. Sigma Circuits Incorporated
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
Its: General Partner, G.B.G. Its: Sr. Vice President and CFO
Date: 6/24/97 Date: 4/30/97
EXHIBIT A
Exhibit A is a map (Book 230, Page 47) compiled in conformance
with Section 327 of the Revenue B Taxation Code. Effective Date
- March 1, 1993. Xxxxxx X. Xxxxxxx - Assessor.
Said map shows property location in relation to all other
property located on Xxxxxx Street, Xxxx Street, Xxxxxx Street and
De La Xxxx Avenue in Santa Clara, California. Property is
located at 000 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx.
MODIFICATION TO STANDARD INDUSTRIAL/COMMERCIAL
SINGLE - TENANT LEASE - NET
This is a modification to that certain "STANDARD
INDUSTRIAL/COMMERCIAL SINGLE - TENANT LEASE - NET" ("Tenant
Lease") entered into between G.B.G., a California general
partnership ("Lessor"), and Sigma Circuits Incorporated, a
California corporation ("Lessee"), and executed on the same date
as this "Modification" to the Tenant Lease.
1. Purpose.
The Lessor and Lessee of the Tenant Lease originally
drafted the Tenant Lease for the purpose of memorializing their
agreement. However, after the Tenant Lease was drafted, the
parties negotiated and entered into certain modifications to the
Tenant Lease. This modification to the Tenant Lease will
memorialize the said modifications.
2. Modification to Provision 1.3 of the Tenant Lease:
Provision 1.3 of the Tenant Lease is modified to
provide that the lease term shall begin on July 1, 1997 and end
on June 30, 2002.
3. Modification to Provision 1.5 of the Tenant Lease:
Provision 1.5 of the Tenant Lease is modified to
provide that the Tenant Lease rent is $6,650 commencing on July
1, 1997.
4. Modification to Provision 1.7 of the Tenant Lease:
Provision 1.7 of the Tenant Lease is modified to
provide for a security deposit of $7,450. This provision shall be
further modified to provide that if the Lessee fails to timely
pay the last month's rent the Lessee shall pay the Lessor $10,175
or an amount equal to 150% of the last month's rent, which ever
is the greater, for the last month's rent. The intent of this
modification is that the Lessee has represented to the Lessor
that the prepayment of an amount equal to the last month's rent
will be available to the Lessor as a security deposit to provide
for damages, and not used up by the lessee in the final month of
the lease term.
5. Modification to Provision 1.10(a)&(b) of the Tenant
Lease:
Provisions 1.10(a) and (b) of the Tenant Lease are
modified to provide that BT Commercial represents the interests
of the Lessee and Xxxxxxxxx X. Eagle III, Attorney at Law,
represents the interests of the Lessor. These provisions of the
lease shall also be modified to provide that any commission
payable to BT Commercial shall be paid by the Lessee, and any
attorneys' fees payable to Xxxxxxxxx X. Eagle III shall be paid
by the Lessor.
6. Modification to Provision 1.12 of the Tenant Lease:
Provision 1.12 of the Tenant Lease is modified to
provide that the addendum or addenda consists of paragraph 50
through 61
7. Modification to Provision 15.1 of the Tenant Lease:
Provision 15.1 of the Tenant Lease shall be deleted in
its entirety.
8. Modification to Provision 50 of the Tenant Lease:
The reference to month's 01-03 and 04-12 shall be modified
to provide that the months 01-12 shall be at the rental rate of
$6,650 per month. The intent of this modification is to delete
any reduction in the rent during the first three months of the
Tenant Lease.
Provision 50 of the Tenant Lease shall also be modified to
delete the third full paragraph, in its entirety, which paragraph
begins with the words, "Upon Business Solutions vacating" and
ends with the words "347 Xxxxxx Street with possession delivered
to Lessee."
9. Modification to Provision 51 of the Tenant Lease:
The last sentence of Provision 51 of the Tenant Lease
shall be modified to provide that, "[I]f required by any
governmental agency having jurisdiction, Lessor shall be
responsible for compliance with California Title 24 Disabled
Access Regulation which incorporates the Federal Americans With
Disability Act ("ADA"), except if such a requirement is caused by
any acts of the Lessee, such as alterations, improvements, or
modifications made to any part of the premises by the Lessee,
then the Lessee shall be responsible for all costs of any such
ADA compliance." It is the intent of this modification that the
Lessor shall not be responsible for the cost of any ADA
requirements caused by Lessee's alteration, improvement, or
modification of the premises.
10. Modification to Provision 55 of the Tenant Lease:
The first paragraph of provision 55 of the Tenant Lease
shall be modified with the addition of the following:
"During the period of time that the Lessee and Lessor
may be attempting to settle any dispute regarding the
market rental rate, the Lessee shall continue to be
responsible for a monthly base rent of $7,450, and all
other costs, i.e., triple net costs, that may be
payable under the Tenant Lease.
Every calendar year after June 30, 2002 (the first
increase will be July 1, 2003), the rental rate shall
be increased to reflect the increase, if any, in the
cost of living during the previous calendar year by
adding to the current monthly base rent an amount
obtained by multiplying the monthly base rent by the
percentage by which the level of the Consumer Price
Index for the San Francisco-Oakland Metropolitan Area,
as reported for the last day of that annual period by
the Bureau of Labor Statistics of the United States
Department of Labor, has increased over its level as
of June 30, 2002.
11. Addition of Provision 61 to the Tenant Lease:
A Provision 61 shall be added providing that, "[I]f
the Lessee materially alters, improves or modifies existing
office improvements of the premises, Lessee shall return the
premises to Lessor in the following condition: The premises shall
be divided into two units divided down the middle in the same
manner as each unit is currently divided. Each of the two
separate units shall consist of at least 20% office space with
the office space being located on the street side of the
premises. Each of the units shall have its own bathroom. The
Lessee shall return the premises to the Lessor in said condition
upon expiration of the lease and if Lessee doesn't, the Lessee's
rental shall continue in full until the premises are returned in
such condition. Lessee shall also return the premises to Lessor
with all improvements made by the Lessee during the term of the
lease unless the improvements conflict with the use of the
premises as a two unit building with 20% office. The intent of
this provision arises out of the Lessee's indication that it may
want to turn the premises into a single manufacturing facility.
The Lessor does not want the premises returned to it as a single
unit building because, in the Lessor's opinion, that is not the
highest and best rental use of the premises; and the Lessee's
indication that Lessee may be making substantial improvements to
the premises, i.e. a sprinkler system, updating utilities to
current codes and requirements and ADA requirements. Therefore,
the Lessee has promised to return the premises in the above
condition.
Complete with any useable improvements made during the term of
the Tenant Lease.
11. Reallegation and inconsistencies:
All provisions of the Tenant Lease not inconsistent with
this Modification are restated in this document. If any provision
of the Tenant Lease are inconsistent with this Modification, the
provisions of this Modification shall control.
We, the undersigned, agree to the above modifications and
changes.
(Signature Page Follows)
Lessor: Lessee:
G.B.G. Sigma Circuits Incorporated
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
Its: General Partner, G.B.G. Its: Sr. Vice President and CFO
Date: 6/24/97 Date: 6/23/97
