LEASE AGREEMENT FOR OFFICE SPACE
1.
Basic Provisions ("Basic
Provisions").
1.1. Parties: This Lease ("Lease"), dated as October 1,
2007, but effective as of January 1, 2007, is made by and between EVANGELICAL
CHRISTIAN CREDIT UNION, a California corporation ("Lessor"), and MINISTRY
PARTNERS INVESTMENT CORPORATION, a California corporation ("Lessee"), (collectively the
"Parties", or individually a "Party").
1.2(a) Premises: That certain portion
of the Project (as defined below), known as Suite Numbers(s) 101, consisting of
approximately 1200 rentable square feet and approximately 1200 useable square
feet ("Premises"). The
Premises are located at: 000 X. Xxxxxxxx Xxxxxxx xx xxx Xxxx xx Xxxx, Xxxxxx of
Orange, State of California, with zip code 92821. In addition to
Lessee’s rights to use and occupy the Premises as hereinafter specified, Lessee
shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7
below) as hereinafter specified, but shall not have any rights to the roof, the
exterior walls, the area above the dropped ceilings, or the utility raceways of
the building containing the Premises ("Building") or to
any other buildings in the Project. The Premises, the Building, the
Common Areas, the land upon which they are located, along with all other
buildings and improvements thereon, are herein collectively referred to as the
"Project."
1.2(b) Parking: See
Paragraph 2.6 below.
1.3 Term: One (1) year commencing
January 1, 2007 ("Commencement Date") and ending
December 31, 2007 ("Expiration
Date"). (See also Paragraph 3)
1.4 Early Possession: N/A
1.5 Base
Rent: $3,288.00 per month, commencing January 1, 2007, payable
on the 1st day of
each month ("Base
Rent").
1.6 Lessee's Share of Operating Expense Increase
: One percent (1.0%) ("Lessee's Share"). Lessee's
Share has been calculated by dividing the approximate rentable square footage of
the Premises by the total approximate square footage of the space contained in
the Project and shall not be subject to revision except in connection with an
actual change in the size of the Premises.
1.7 Base Rent and Other Monies Paid Upon
Execution:
(a) Base Rent: $-0-
(payable monthly commencing on January 1, 2007).
(b) Security Deposit: $
-0- ("Security
Deposit"). (See also Paragraph 5)
(c) Parking: $
-0-
(d) Other: $
-0-
(e) Total Due Upon Execution of this
Lease: $ -0-
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1.8 Agreed Use: The
Premises shall be used and occupied solely for office and related purposes
("Agreed
Use"). (See also Paragraph 6).
1.9 Base Year; Insuring
Party: The term "Base Year" is 2006. Lessor is the
"Insuring
Party".
1.10 Real Estate
Brokers: N/A
1.11 Guarantor. N/A
1.12 Business Hours for the Building:
7:00 a.m. to 8:00 p.m., Mondays through Fridays (except Building
Holidays). "Building Holidays" shall mean
the dates of observation of New Year's Day, Xxxxxx Xxxxxx Xxxx, Xx.'s Birthday
Observed, President's Day, Memorial Day, Independence Day, Labor Day, Veteran's
Day, Thanksgiving Day, and Christmas Day.
1.13 Lessor Supplied Services
. Notwithstanding the provisions of Paragraph 11.1,
Lessor is NOT obligated to provide security services.
1.14
Attachments. Attached
hereto are the following, all of which constitute a part of this
Lease:
þ a current
set of the Rules and Regulations;
2.
Premises.
2.1 Letting. Lessor hereby leases
to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at
the rental rate set forth in Paragraph 1.5 above, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of size of the Premises set forth in this Lease, or that
may have been used in calculating Rent, is an approximation which the Parties
agree is reasonable and any payments based thereon are not subject to revision
whether or not the actual size is more or less. Note: Lessee is advised to verify the
actual square footage prior to executing this Lease.
2.2 Condition. Lessor shall
deliver the Premises to Lessee in a clean condition on the Commencement Date
("Start Date"), and
warrants that the existing electrical, plumbing, fire sprinkler, lighting,
heating, ventilating and air conditioning systems ("HVAC") shall be in good
operating condition on said date, that the structural elements of the roof,
bearing walls and foundation of the Premises shall be free of material defects,
and that the Premises do not contain hazardous levels of any mold or fungi
defined as toxic under applicable state or federal law.
2.3 Compliance. Lessor warrants to
the best of its knowledge that the improvements comprising the Premises and the
Common Areas comply with the building codes that were in effect at the time that
each such improvement, or portion thereof, was constructed, and also with
all
applicable laws, covenants or restrictions of record, 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, modifications which may be
required by the Americans with Disabilities Act or any similar laws as a result
of Lessee's use (see Paragraph 49), 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 and other Applicable Requirements are
appropriate for Lessee's intended use. 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. If the Applicable
Requirements are hereafter changed so as to require during the term of this
Lease the construction of an addition to or an alteration of the Premises, the
remediation of any Hazardous Substance, or the reinforcement or other physical
modification of the Premises ("Capital Expenditure"), Lessor
and Lessee shall allocate the cost of such work as follows:
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(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 cost exceeds 6 months' Base Rent, Lessee may
instead terminate this Lease unless Lessor notifies Lessee, in writing, within
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 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 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 shall pay for such Capital Expenditure and Lessee shall only be
obligated to pay for such Capital Expenditures in accordance with Section
4.2(c)(viii). If, however, Lessor reasonably determines that it is
not economically feasible to pay its share thereof, Lessor shall have the option
to terminate this Lease upon 90 days prior written notice to Lessee unless
Lessee notifies Lessor, in writing, within 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 its share of any
such Capital Expenditure, Lessee may advance such funds and deduct same, with
interest, from its rental payment 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 30 days written notice to
Lessor.
(c) Notwithstanding
the above, the provisions concerning Capital Expenditures are intended to apply
only to nonvoluntary, 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
either: (i) immediately cease such changed use or intensity of use and/or take
such other steps as may be necessary to eliminate the requirement for such
Capital Expenditure, or (ii) complete such Capital Expenditure at its own
expense. Lessee shall not have any right to terminate this Lease.
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2.4 Acknowledgements. Lessee
acknowledges that: (a) Lessee has been advised by Lessor 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, nor its agents,
have made any oral or written representations or warranties with respect to said
matters other than as set forth in this Lease.
2.5 Lessee as Prior Owner
Occupant. N/A.
2.6 Vehicle Parking. So long as
Lessee is not in default, and subject to the Rules and Regulations (as defined
in Section 2.9 herein), and as established by Lessor from time to time, Lessee
shall be entitled to use certain unreserved parking spaces in connection with
its use of the Premises for its employees and visitors, as determined by Lessor
from time to time.
2.7 Common Areas - Definition. The
term "Common Areas" is
defined as all areas and facilities outside the Premises and within the exterior
boundary line of the Project and interior utility raceways and installations
within the Premises that are provided and designated by the Lessor from time to
time for the general nonexclusive use of Lessor and Lessee and their respective
employees, suppliers, customers, contractors and invitees, including, but not
limited to, common entrances, lobbies, corridors, stairwells, public restrooms,
elevators, parking areas, loading and unloading areas, trash areas, roadways,
walkways, driveways and landscaped areas.
2.8 Common Areas - Lessee's
Rights. Lessor grants to Lessee, for the benefit of Lessee and its
employees, contractors, customers and invitees, during the term of this Lease,
the nonexclusive right to use, in common with others entitled to such use, the
Common Areas as they exist from time to time, subject to any rights, powers, and
privileges reserved by Lessor under the terms hereof or under the terms of any
rules and regulations or restrictions governing the use of the Project. Under no
circumstances shall the right herein granted to use the Common Areas be deemed
to include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior
written consent of Lessor, which consent may be revoked at any
time. In the event that any unauthorized storage shall occur
then Lessor shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove the property and charge the cost
to Lessee, which cost shall be immediately payable upon demand by Lessor. Lessee
and its employees, customers and invitees shall have the right to use the common
area meeting rooms, provided that Lessee has made prior reservation with Lessor
of any meeting room to be used. Lessee and its employees shall have the right to
use the Project fitness center.
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2.9 Common Areas – Rules and
Regulations. Lessor or such other person(s) as Lessor may appoint shall
have the exclusive control and management of the Common Areas and shall have the
right, from time to time, to adopt, modify, amend and enforce reasonable rules
and regulations ("Rules and
Regulations") for the management, safety, care, and cleanliness of the
grounds, the parking and unloading of vehicles and the preservation of good
order, as well as for the convenience of other occupants or tenants of the
Building and the Project and their invitees. The Lessee agrees to abide by and
conform to all such Rules and Regulations, and shall use its best efforts to
cause its employees, customers, contractors and invitees to so abide and
conform. Lessor shall not be responsible to Lessee for the noncompliance with
said Rules and Regulations by other tenants of the Project.
2.10 Common Areas -
Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To
make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of the lobbies, windows, stairways, air shafts,
elevators, escalators, restrooms, driveways, entrances, parking spaces, parking
areas, loading and unloading areas, ingress, egress, direction of traffic,
landscaped areas, walkways and utility raceways;
(b) To
close temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available;
(c) To
designate other land outside the boundaries of the Project to be a part of the
Common Areas;
(d) To
add additional buildings and improvements to the Common Areas;
(e) To
use the Common Areas while engaged in making additional improvements, repairs or
alterations to the Project, or any portion thereof; and
(f) To
do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and Project as Lessor may, in the exercise of sound
business judgment, deem to be appropriate.
3.
Term.
3.1 Term. The Commencement Date,
Expiration Date and initial term of this Lease are as specified in Paragraph
1.3.
3.2 Early
Possession. N/A.
3.3 Delay In
Possession. N/A.
3.4 Lessee Compliance;
Renewal. Lessee shall be required to perform all of its
obligations under this Lease from and after the Start Date, including the
payment of Rent. This Agreement shall be automatically renewed for one-year
periods unless either party provides written notice to the other party at least
three months prior to Expiration Date or the termination date of any renewal
term thereafter.
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4.
Rent.
4.1. Rent Defined. All
monetary obligations of Lessee to Lessor under the terms of this
Lease are deemed to be rent ("Rent").
4.2 Operating Expense
Increase. Lessee shall pay to Lessor during the term
hereof, in addition to the Rent, Lessee's Share of the amount by which all
Operating Expenses for each Comparison Year exceeds the amount of all Operating
Expenses for the Base Year, such excess being hereinafter referred to as the
"Operating Expense
Increase", in accordance with the following provisions:
(a) "Base Year" is as specified in
Paragraph 1.9.
(b) "Comparison Year" is defined as
each calendar year period during the term of this Lease subsequent to the Base
Year. Lessee's Share of the Operating Expense Increase for the Comparison Year
shall be prorated according to that portion of such Comparison Year as to which
Lessee is responsible for a share of such increase.
(c) The
following costs relating to the ownership and operation of the Project, are
defined as "Operating
Expenses" :
(i) Costs
relating to the operation, repair, and maintenance in neat, clean, safe, good
order and condition and replacement of the following:
(aa) The
Common Areas, including their surfaces, coverings, decorative items, carpets,
drapes and window coverings, and including parking areas, loading and unloading
areas, trash areas, roadways, sidewalks, walkways, stairways, parkways,
driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area
lighting facilities, building exteriors and roofs, fences and
gates;
(bb) All
heating, air conditioning, plumbing, electrical systems, life safety equipment,
communication systems and other equipment used in common by, or for the benefit
of, tenants or occupants of the Project, including elevators and escalators,
tenant directories, fire detection systems including sprinkler system
maintenance and repair.
(ii) The
cost of trash disposal, janitorial and security services, pest
control services, and the cost of any environmental inspections;
(iii) the
costs of any other service to be provided by Lessor that is elsewhere in this
Lease stated to be an “Operating Expense”;
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(iv) The
cost of any deductible portion of an insured loss concerning the Building or the
Common Areas under the insurance policies maintained by Lessor pursuant to
paragraph 8;
(v) The
amount of the Real Property Taxes payable by Lessor pursuant to
paragraph 10;
(vi) The
cost of water, sewer, gas, electricity, and other publicly mandated services not
separately metered;
(vii) Materials,
supplies and tools, used in maintaining and/or cleaning the
Project;
(viii) The
cost of any capital improvement to the Building or the Project not covered under
the provisions of Paragraph 2.3(a); provided, however, that Lessor shall
allocate the cost of any such capital improvement over the useful life of such
improvement and Lessee shall not be required to pay more than Lessee's monthly
share of the allocated cost of such Capital Expenditure in any given month;
and
(ix) The
cost to replace equipment or improvements that have a useful life for accounting
purposes of 5 years or less.
(d) Intentionally
omitted.
(e) The
inclusion of the improvements, facilities and services set forth in Subparagraph
4.2(c) shall not be deemed to impose an obligation upon Lessor to either have
said improvements or facilities or to provide those services unless the Project
already has the same, Lessor already provides the services, or Lessor has agreed
elsewhere in this Lease to provide the same or some of them.
(f) Lessee's
Share of Operating Expense Increase shall be payable to by Lessee within thirty
(30) days after a reasonably detailed statement of actual expenses is presented
to Lessee by Lessor. At Lessor's option, however, an amount may be estimated by
Lessor from time to time in advance of Lessee's Share of the Operating Expense
Increase for any Comparison Year, and the same shall be payable monthly during
each Comparison Year of the Lease Term, on the same day as the Rent is due
hereunder. In the event that Lessee pays Lessor's estimate of Lessee's Share of
Operating Expense as aforesaid, Lessor shall deliver to Lessee within 60 days
after the expiration of each Comparison Year a reasonably detailed statement
showing Lessee's Share of the actual Operating Expense Increase during such
year. If Lessee's payments under this paragraph (f) during said Comparison Year
exceed Lessee's Share as indicated on said statement, Lessee shall be entitled
to credit the amount of such overpayment against Lessee's Share of Operating
Expense Increase next falling due. If Lessee's payments under this paragraph
during said Comparison Year were less than Lessee's Share as indicated on said
statement, Lessee shall pay to Lessor the amount of the deficiency within thirty
(30) days after delivery by Lessor to Lessee of said statement. Lessor and
Lessee shall forthwith adjust between them by cash
payment any balance determined to exist with respect to that portion of the last
Comparison Year for which Lessee is responsible as to Operating Expenses
Increase, notwithstanding that the Lease term may have terminated before the end
of such Comparison Year.
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(g) Operating
Expenses shall not include the costs of replacement for equipment or capital
components such as the roof, foundations, exterior walls or a Common Area
capital improvement, such as the parking lot paving, elevators, fences that have
a useful life for accounting purposes of 5 years or more.
(h) Operating
Expenses shall not include any expenses paid by any tenant directly to third
parties, or as to which Lessor is otherwise reimbursed by any third party, other
tenant, or by insurance proceeds.
4.3 Payment. Lessee
shall cause payment of Rent to be received by Lessor in lawful money of the
United States on or before the day on which it is due, without offset or
deduction (except as specifically permitted in this Lease). All monetary amounts
shall be rounded to the nearest whole dollar. In the event that any invoice
prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver
and Lessee shall be obligated to pay the amount set forth in this Lease. Rent
for any period during the term hereof which is for less than one 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. In the event that any check, draft, or
other instrument of payment given by Lessee to Lessor is dishonored for any
reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late
Charge and Lessor, at its option, may require all future Rent be paid by
cashier's check. Payments will be applied first to accrued late charges and
attorney's fees, second to accrued interest, then to Rent and Common Area
Operating Expenses, and any remaining amount to any other outstanding charges or
costs.
5.
Security Deposit. 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
assess and require payment of a 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 such change
in financial condition. Lessor shall not be required to keep the Security
Deposit separate from its general accounts. Within 90 days after the expiration
or termination of this Lease, 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 occupants of or causes damage to
neighboring premises or properties. Other than guide, signal and seeing eye
dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds,
fish, or reptiles. 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 of the Building,
will not adversely affect the mechanical, electrical, HVAC, and other systems of
the Building, and/or will not affect the exterior appearance of the Building. If
Lessor elects to withhold consent, Lessor shall within 7 days after such request
give written notification of same, which notice shall include an explanation of
Lessor's objections to the change in the Agreed Use.
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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, byproducts 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 such as ordinary office supplies (copier toner, liquid paper, glue,
etc.) and common household cleaning materials, 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) and/or increasing the Security
Deposit.
(b) Duty to Inform Lessor. If
Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has
come to be located in, on, under or about the Premises, other than as previously
consented to by Lessor, Lessee shall immediately give written notice of such
fact to Lessor, and provide Lessor with a copy of any report, notice, claim or
other documentation which it has concerning the presence of such Hazardous
Substance.
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(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, comply with all
Applicable Requirements and 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 areas outside of the Project not caused or contributed to by Lessee).
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, including the cost of remediation, which result from
Hazardous Substances which existed on the Premises prior to Lessee's occupancy
or which are caused by the gross negligence or willful misconduct of Lessor, its
agents or employees. Lessor's obligations, as and when required by the
Applicable Requirements, shall include, but not be limited to, the cost of
investigation, removal, 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 Lessee's occupancy, unless such remediation measure is
required as a result of Lessee's use (including "Alterations", as defined in
paragraph 7.3(a) below) of the Premises, in which event Lessee
shall be responsible for such payment. Lessee shall cooperate fully in any such
activities at the request of Lessor, including allowing Lessor and Lessor's
agents to have reasonable access to the Premises at reasonable times in order to
carry out Lessor's investigative and remedial responsibilities.
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(g) Lessor Termination Option. If
a Hazardous Substance Condition (see Paragraph 9.1(e)) 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 12 times the then
monthly Base Rent or $100,000, whichever is greater, give written notice to
Lessee, within 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 60 days following the date of such notice. In the event Lessor
elects to give a termination notice, Lessee may, within 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 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 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 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. Likewise, Lessee shall immediately give written notice to Lessor
of: (i) any water damage to the Premises and any suspected seepage, pooling,
dampness or other condition conducive to the production of mold; or (ii) any
mustiness or other odors that might indicate the presence of mold in the
Premises.
6.4 Inspection; Compliance. Lessor
and Lessor's "Lender" (as defined in Paragraph
30) and consultants shall have the right to enter into Premises at any time, in
the case of an emergency, and otherwise at reasonable times, after reasonable
notice, for the purpose of inspecting
the condition of the Premises and for verifying compliance by Lessee with this
Lease. The cost of any such inspections shall be paid by Lessor, unless a
violation of Applicable Requirements, or a Hazardous Substance Condition (see
paragraph 9.1e) 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 inspection, so long as such inspection is
reasonably related to the violation or contamination. In addition, Lessee shall
provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days
of the receipt of written request therefor.
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7.
Maintenance; Repairs; Utility
Installations; Trade Fixtures and Alterations.
7.1 Lessee's Obligations.
Notwithstanding Lessor's obligation to keep the Premises in good condition and
repair, Lessee shall be responsible for payment of the cost thereof to Lessor as
additional rent for that portion of the cost of any maintenance and repair of
the Premises, or any equipment (wherever located) that serves only Lessee or the
Premises, to the extent such cost is attributable to causes beyond normal wear
and tear. Lessee shall be responsible for the cost of painting, repairing or
replacing wall coverings, and to repair or replace any improvements with the
Premises. Lessor may, at its option, upon reasonable notice, elect to have
Lessee perform any particular such maintenance or repairs the cost of which is
otherwise Lessee's responsibility hereunder.
7.2 Lessor's Obligations. Subject
to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2
(Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor shall reasonably maintain, repair and
replace, as necessary, and keep in good order and condition, as applicable: (a)
the heating, ventilating and air conditioning systems serving the Premises and
the common areas in the Building; (b) the plumbing, sprinkler and electrical
lines and systems serving the Premises and the common areas in the Building; (c)
the interior and exterior structure of the Building (not including the
interiorof the Premises), including the roof, exterior walls, load-bearing
walls, support beams, foundation, columns and exterior doors and windows; (d)
the common areas located within or adjacent to the Building, including any
common driveways, parking areas, entrance ways, lobbies, corridors, lavatories,
elevators, ramps, stairs and similar access and service ways; and (e)
landscaping around the Building. Lessee expressly waives 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. The term "Utility Installations" refers
to all floor and window coverings, air lines, vacuum lines, power panels,
electrical distribution, security and fire protection systems, communication
cabling, lighting fixtures, HVAC equipment, and plumbing 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).
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(b) Consent. 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, ceilings, floors or
any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and
the cumulative cost thereof during this Lease as extended does not exceed $2000.
Notwithstanding the foregoing, Lessee, shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting such approval,
require Lessee to utilize a contractor chosen and/or approved by Lessor. 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 in excess of one month's Rent, Lessor may condition its consent upon
Lessee providing a lien and completion bond in an amount equal to 150% of the
estimated cost of such Alteration or Utility Installation and/or upon Lessee's
posting a Security Deposit with Lessor.
(c) Liens; Bonds. 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 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 150% of the amount of such contested
lien, claim or demand, indemnifying Lessor against liability for the same. If
Lessor elects to participate in any such action, Lessee shall pay Lessor's
attorneys' fees and 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.
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(b) Removal. By
delivery to Lessee of written notice from Lessor not earlier than 90 and not
later than 30 days prior to the end of the term of this Lease, Lessor may
require that any or all Lessee Owned Alterations or Utility Installations 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 clean and free of
debris, and in good operating order, condition and state of repair, ordinary
wear and tear excepted. "Ordinary wear and tear" shall not include any damage or
deterioration that would have been prevented by good maintenance practice.
Lessee shall repair any damage occasioned by the installation, maintenance or
removal of Trade Fixtures, Lessee owned Alterations and/or Utility
Installations, furnishings, and equipment as well as the removal of any storage
tank installed by or for Lessee. Lessee shall also completely remove from the
Premises any and all Hazardous Substances brought onto the Premises by or for
Lessee, or any third party (except Hazardous Substances which were deposited via
underground migration from areas outside of the Premises) even if such removal
would require Lessee to perform or pay for work that exceeds statutory
requirements. Trade Fixtures shall remain the property of Lessee and shall be
removed by Lessee. Any personal property of Lessee not removed on or before the
Expiration Date or any earlier termination date shall be deemed to have been
abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may
desire. 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 Liability
Insurance.
(a) Carried by Lessee. Lessee
shall obtain and keep in force a Commercial General Liability policy of
insurance protecting Lessee and Lessor as an additional insured 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 $1,000,000 per occurrence with
an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an
additional insured by means of an endorsement at least as broad as the Insurance
Service Organization's "Additional Insured-Managers or Lessors of Premises"
Endorsement and coverage shall also be extended to include 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. Lessee shall provide an endorsement on its
liability policy(ies) which provides that its insurance shall be primary to and
not contributory with any similar insurance carried by Lessor, whose insurance
shall be considered excess insurance only.
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(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.
(c) Limitations
to Insurance Coverage. Notwithstanding any other provision of
this Lease, neither Lessor nor Lessee shall be liable to the other or to any
insurance company (by way of subrogation or otherwise) insuring the other party
for any loss or damage to any building, structure or other tangible property, or
any resulting loss of income or additional expense, even though such loss or
damage might have been occasioned by the negligence of such party, its agents or
employees, if such loss or damage is covered by insurance benefiting the party
suffering such loss or damage or was required to be covered by insurance
pursuant to this paragraph. If required to make the foregoing waiver
of subrogation binding upon their respective insurance carriers, Lessor and
Lessee shall give notice to their respective insurance carriers that such mutual
waiver of subrogation is contained in this Lease.
8.3 Property Insurance - Building,
Improvements and Rental Value.
(a) Building and Improvements.
Lessor shall obtain and keep in force a policy or policies of insurance in the
name of Lessor, with loss payable to Lessor, any ground-lessor, and to any
Lender insuring loss or damage to the Building and/or Project. The amount of
such insurance shall be equal to the full insurable replacement cost of the
Building and/or Project, as the same shall exist from time to time, or the
amount required by any Lender, but in no event more than the commercially
reasonable and available insurable value thereof. Lessee Owned Alterations and
Utility Installations, Trade Fixtures, and Lessee's personal property shall be
insured
by Lessee under Paragraph 8.4. 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.
(b) Intentionally
omitted.
(c) Adjacent Premises. Lessee
shall pay for any increase in the premiums for the property insurance of the
Building and for the Common Areas or other buildings in the Project if said
increase is caused by Lessee's acts, omissions, use or occupancy of the
Premises.
(d) Lessee's Improvements. Since
Lessor is the Insuring Party, Lessor shall not be required to insure Lessee
Owned Alterations and Utility Installations unless the item in question has
become the property of Lessor under the terms of this Lease.
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8.4 Lessee's Property; Business
Interruption Insurance.
(a) Property Damage. Lessee shall
obtain and maintain insurance coverage on all of Lessee's personal property,
Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such
insurance shall be full replacement cost coverage with a deductible of not to
exceed $1,000 per occurrence. The proceeds from any such insurance shall be used
by Lessee for the replacement of personal property, Trade Fixtures and Lessee
Owned Alterations and Utility Installations. Lessee shall provide Lessor with
written evidence that such insurance is in force.
(b) Business Interruption. Lessee
may, at its sole option, 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 A-, VI, 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 ten (10) 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.
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8.7 Indemnity. Except for Lessor's
gross negligence or willful misconduct, Lessee shall indemnify, protect, defend
and hold harmless the Premises, Lessor and its agents, Lessor's master or ground
lessor, partners and Lenders, from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys' and consultants' fees,
expenses and/or liabilities arising out of, involving, or in connection with,
the use and/or occupancy of the Premises by Lessee. If any action or proceeding
is brought against Lessor by reason of any of the foregoing matters, Lessee
shall upon notice defend the same at Lessee's expense by counsel reasonably
satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense.
Lessor need not have first paid any such claim in order to be defended or
indemnified.
This
Paragraph 8.7 shall survive the expiration or termination of this
Lease. Any subsequent attempt to change this Paragraph 8.7 must be in
writing, signed by both Lessor and Lessee and expressly reference this
paragraph.
8.8 Exemption of Lessor and its Agents
from Liability. Notwithstanding the negligence or breach of this Lease by
Lessor or its agents, neither Lessor nor its agents shall be liable under any
circumstances for: (i) 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, indoor air quality, the presence of mold 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, or from
other sources or places, (ii) any damages arising from any act or neglect of any
other tenant of Lessor or from the failure of Lessor or its agents to enforce
the provisions of any other lease in the Project, or (iii) injury to Lessee's
business or for any loss of income or profit therefrom. Instead, it is intended
that Lessee's sole recourse in the event of such damages or injury be to file a
claim or the insurance policy(ies) that Lessee is required to maintain pursuant
to the provisions of paragraph 8.
8.9 Failure to Provide Insurance.
Lessee acknowledges that any failure on its part to obtain or maintain
the insurance required herein will expose Lessor to risks and potentially cause
Lessor to incur costs not contemplated by this Lease, the extent of which will
be extremely difficult to ascertain. Accordingly, for any month or portion
thereof that Lessee does not maintain the required insurance and/or does not
provide Lessor with the required binders or certificates evidencing the
existence of the required insurance, the Rent shall be automatically increased,
without any requirement for notice to Lessee, by an amount equal to 10% of the
then existing Rent or $100, whichever is greater. The parties agree that such
increase in Rent represents fair and reasonable compensation for the additional
risk/costs that Lessor will incur by reason of Lessee's failure to maintain the
required insurance. Such increase in Rent shall in no event constitute a waiver
of Lessee's Default or Breach with respect to the failure to maintain such
insurance, prevent the exercise of any of the other rights and remedies granted
hereunder, nor relieve Lessee of its obligation to maintain the insurance
specified in this Lease.
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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 3 months or less from the date of the damage or destruction, and the
cost thereof does not exceed a sum equal to 6 month's Base Rent. Lessor shall
notify Lessee in writing within 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 improvements on the Premises, other than
Lessee Owned Alterations and Utility Installations and Trade Fixtures, which
cannot reasonably be repaired in 3 months or less from the date of the damage or
destruction and/or the cost thereof exceeds a sum equal to 6 month’s Rent.
Lessor shall notify Lessee in writing within 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 which requires repair, remediation, or
restoration.
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 $5,000 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 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 10 days following receipt of written notice
of such shortage and request therefor. If Lessor receives said funds or adequate
assurance thereof within said 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 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 (ii) have this Lease terminate 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.
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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 30 days after receipt by Lessor of
knowledge of the occurrence of such damage. Such termination shall be effective
60 days following the date of such notice. In the event Lessor elects to
terminate this Lease, Lessee shall have the right within 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 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 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 6 months of this Lease there is damage for which the
cost to repair exceeds six months’ Rent, whether or not an Insured Loss, Lessor
may terminate this Lease effective 60 days following the date of occurrence of
such damage by giving a written termination notice to Lessee within 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 10 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.
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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 is
obligated to repair or restore the Premises and does not commence, in a
substantial and meaningful way, such repair or restoration within 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 60 days following the giving of such notice. If Lessee
gives such notice and such repair or restoration is not commenced within 30 days
thereafter, this Lease shall terminate as of the date specified in said notice.
If the repair or
restoration is commenced within such 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.
10. Real Property
Taxes.
10.1 Definitions. 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 Project, 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 Project 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 Project is
located. "Real
Property Taxes"
shall also include any tax, fee, levy, assessment or charge, or any
increase therein: (i) imposed by reason of events occurring during the term of
this Lease, including but not limited to, a change in the ownership of the
Project, (ii) a change in the improvements thereon, and/or (iii) levied or
assessed on machinery or equipment provided by Lessor to Lessee pursuant to this
Lease.
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10.2 Payment of Taxes. Except as
otherwise provided in Paragraph 10.3, Lessor shall pay the Real Property Taxes
applicable to the Project, and said payments shall be included in the
calculation of Operating Expenses in accordance with the provisions of Paragraph
4.2.
10.3 Additional Improvements.
Operating Expenses shall not include Real Property Taxes specified in the tax
assessor's records and work sheets as being caused by additional improvements
placed upon the Project by other lessees or by Lessor for its exclusive
enjoyment. Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to
Lessor at the time Operating Expenses are payable under Paragraph 4.2, the
entirety of any increase in Real Property Taxes if assessed solely by reason of
Alterations, Trade Fixtures or Utility Installations placed upon the Premises by
Lessee or at Lessee request or by reason of any alterations or improvements to
the Premises made by Lessor subsequent to the execution of this Lease by the
Parties.
10.4 Joint Assessment. If the
Building is not separately assessed, Real Property Taxes allocated to the
Building 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 determined by Lessor from the respective valuations assigned in
the assessor's work sheets or such other information
as may be reasonably available. Lessor's reasonable determination thereof, in
good faith, shall be conclusive.
10.5 Personal Property Taxes.
Lessee shall pay prior to delinquency all taxes assessed against and levied upon
Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all personal property of Lessee contained in the Premises. When
possible, Lessee shall cause its Lessee Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's said property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee's property within 10
days after receipt of a written statement setting forth the taxes applicable to
Lessee's property.
11. Utilities and
Services.
11.1 Services Provided by Lessor.
Lessor shall provide heating, ventilation, air conditioning, reasonable
amounts of electricity for normal lighting and office machines, water for
reasonable and normal drinking and lavatory use in connection with an office,
and replacement light bulbs and/or fluorescent tubes and ballasts for standard
overhead fixtures. Lessor shall also provide janitorial services to the Premises
and Common Areas 5 times per week, excluding Building Holidays, or pursuant to
the attached janitorial schedule, if any. Lessor shall not, however,
be required to provide janitorial services to kitchens or storage areas included
within the Premises. Lessor shall provide Lessee after-hours HVAC service at
Lessee's request, the cost of which shall be paid by Lessee as invoiced and
shall not exceed Lessor's actual cost to provide the same to
Lessee.
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11.2 Services Exclusive to Lessee.
Lessee shall pay for all water, gas, light, power, telephone and other
utilities and services specially or exclusively supplied and/or metered
exclusively to the Premises or to Lessee, together with any taxes thereon. If a
service is deleted by Paragraph 1.13 and such service is not separately metered
to the Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges for such jointly
metered service.
11.3 Hours of Service. Said
services and utilities shall be provided during times set forth in Paragraph
1.12. Utilities and services required at other times shall be subject to advance
request and reimbursement by Lessee to Lessor of the cost thereof.
11.4 Excess Usage by Lessee. Lessee
shall not make connection to the utilities except by or through existing outlets
and shall not install or use machinery or equipment in or about the Premises
that uses excess water, lighting or power, or suffer or permit any act that
causes extra burden upon the utilities or services, including but not limited to
security and trash services, over standard office usage for the Project. Lessor
shall require Lessee to reimburse Lessor for any excess expenses or costs that
may arise out of a breach of this subparagraph by Lessee. Lessor may, in its
sole discretion, install at Lessee's expense supplemental equipment and/or
separate metering applicable to Lessee's excess usage or loading.
11.5 Interruptions. There shall be
no abatement of rent and Lessor shall not be liable in any respect whatsoever
for the inadequacy, stoppage, interruption or discontinuance of any utility or
service due to riot, strike, labor dispute, breakdown, accident, repair or other
cause beyond Lessor's reasonable control or in cooperation with governmental
request or directions.
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) Unless
Lessee is a corporation and its stock is publicly traded on a national stock
exchange, a change in the control of Lessee shall constitute an assignment
requiring consent. The transfer, on a cumulative basis, of 35% 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 buyout 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 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 Lesee (excluding any guarantors)
established under generally accepted accounting principles.
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(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 30 days written notice, increase
the monthly Base Rent to 110% of the Base Rent then in
effect. Further in the event of such Breach and rental adjustment,
all fixed and non-fixed rental adjustments scheduled during the remainder of the
Lease term shall be increased to 110% of the scheduled adjusted
rent.
(e) Lessee's
remedy for any breach of Paragraph 12.1 by Lessor shall be limited to
compensatory damages and/or injunctive relief.
(f) Lessor
may reasonably withhold consent to a proposed assignment or subletting if Lessee
is in Default at the time consent is requested.
(g) Notwithstanding
the foregoing, allowing a de minimis portion of the Premises, i.e. 20 square
feet or less, to be used by a third party vendor in connection with the
installation of a vending machine or payphone shall not constitute a
subletting.
12.2 Terms and Conditions Applicable to
Assignment and Subletting.
(a) Regardless
of Lessor's consent, no assignment or subletting shall: (i) be
effective without the express written assumption by such assignee or sublessee
of the obligations of Lessee under this Lease, (ii) release Lessee of any
obligations hereunder, or (iii) alter the primary liability of Lessee for the
payment of Rent or for the performance of any 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, 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.
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(e) Each
request for consent to an assignment or subletting shall be in writing,
accompanied by information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any. Lessee agrees to
provide Lessor with such other or additional information and/or documentation as
may be reasonably requested. (See also Paragraph 36)
(f) Any
assignee of, or sublessee under, this Lease shall, by reason of accepting such
assignment, entering into such sublease, or entering into possession of the
Premises or any portion thereof, be deemed to have assumed and agreed
to conform and comply with each and every term, covenant, condition
and obligation herein to be observed or performed by Lessee during the term of
said assignment or sublease, other than such obligations as are contrary to or
inconsistent with provisions of an assignment or sublease to which Lessor has
specifically consented to in writing.
(g) Lessor's
consent to any assignment or subletting shall not transfer to the assignee or
sublessee any Option granted to the original Lessee by this Lease unless such
transfer is specifically consented to by Lessor in writing. (See Paragraph
39.2)
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. In the event that the amount collected by Lessor exceeds Lessee's then
outstanding obligations any such excess shall be refunded to Lessee. 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.
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(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 and Regulations 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 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 five (5) business days following written
notice to Lessee.
(c) The
commission of waste, act or acts constituting public or private nuisance, and/or
an illegal activity on the Premises by Lessee, where such actions continue for a
period of five (5) business days following written notice to
Lessee.
(d) The
failure by Lessee to provide (i) reasonable written evidence of compliance with
Applicable Requirements, (ii) the service contracts, (iii) the rescission of an
unauthorized assignment or subletting, (iv) an Estoppel Certificate, (v) a
requested subordination, (vi) any document requested under Paxxxxxxx 00, (xxx)
xaterial data safety sheets (MSDS), 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 10 days following
written notice to Lessee.
(e) A
Default by Lessee as to the terms, covenants, conditions or provisions of this
Lease, or of the rules adopted under Paragraph 2.9 hereof, other than those
described in subparagraphs 13.1(a), (b) or (c), above, where such Default
continues for a period of 30 days after written notice; provided, however, that
if the nature of Lessee's Default is such that more than 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 30 day period and thereafter diligently
prosecutes such cure to completion.
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(f) 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 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 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 30 days; provided, however, in the event that any provision of this
subparagraph is contrary to any applicable law, such provision shall be of no
force or effect, and not affect the validity of the remaining
provisions.
(g) The
discovery that any financial statement of Lessee given to Lessor was materially
false.
13.2 Remedies. If Lessee fails to
perform any of its affirmative duties or obligations, within 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. Lessee shall pay to Lessor an
amount equal to 115% of the costs and expenses incurred by Lessor in such
performance upon receipt of an invoice therefor. In the event of a Breach,
Lessor may, with or without further notice or demand, and without limiting
Lessor in the exercise of any right or remedy which Lessor may have by reason of
such Breach:
(a) Terminate
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) all damages
incurred by Lessor by reason of the Breach; and (iii) any other amount necessary
to compensate Lessor for all damages 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, including necessary renovation
and alteration of the Premises and reasonable attorneys' fees. 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 no 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.
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(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 Intentionally
omitted.
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 5 days after such amount shall be due, then, without any requirement for
notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge
equal to 5% of each such overdue amount or $100, whichever is greater. 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 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 30 days
following the date on which it was due for nonscheduled payment, shall bear
interest from the date when due, as to scheduled payments, or the 31st day after
it was due as to nonscheduled payments. The interest (" Interest") charged shall be
computed at the rate of 10% per annum 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 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 30 days are
reasonably required for its performance, then Lessor shall not be in breach if
performance is commenced within such 30 day period and thereafter diligently
pursued to completion.
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(b) Independent Covenants. This
Lease shall be construed as though the covenants herein between Lessor and
Lessee are independent and not dependent, and Lessee hereby expressly waives the
benefit of any statute to the contrary (including, without limitation,
subsection 1 of Section 1932 and Sections 1942 of the California Civil Code and
any similar statutes or ordinances now or hereafter in effect) and agrees that
if Lessor fails to perform its obligations set forth herein, Lessee shall not be
entitled to make any repairs or perform any acts hereunder at Lessor's expense
or to any setoff of the Rent or other amounts owing hereunder 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 10% of the
rentable floor area of the Premises, or more than 25% of Lessee's Reserved
Parking Spaces, if any, are taken by Condemnation, Lessee may, at Lessee's
option, to be exercised in writing within 10 days after Lessor shall have given
Lessee written notice of such taking (or in the absence of such notice, within
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 paid by the condemnor 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. 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 in
connection with this Lease, and that no one 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.
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16. Estoppel
Certificates.
(a) Each
Party (as "Responding
Party") shall within 10 days after written notice from the other Party
(the "Requesting Party")
execute, acknowledge and deliver to the Requesting Party a statement in writing
in form similar to the then most current "Estoppel Certificate" form
published by the AIRCommercial Real Estate Association, plus such additional
information, confirmation and/or statements as may be reasonably requested by
the Requesting Party.
(b) If
the Responding Party shall fail to execute or deliver the Estoppel Certificate
within such 10 day period, the Requesting Party may execute an Estoppel
Certificate stating that: (i) the Lease is in full force and effect without
modification except as may be represented by the Requesting Party, (ii) there
are no uncured defaults in the Requesting Party's performance, and (iii) if
Lessor is the Requesting Party, not more than one month's rent has been paid in
advance. Prospective purchasers and encumbrancers may rely upon the Requesting
Party's Estoppel
Certificate,
and the Responding Party shall be estopped from denying the truth of the facts
contained in said Certificate.
(c) If
Lessor desires to finance, refinance, or sell the Premises, or any
part thereof, Lessee 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 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. 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.
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 or its partners, members, directors, officers or shareholders, and
Lessee shall look to the Project, 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 Lessor's partners, members, directors, officers or
shareholders, or any of their personal assets for such
satisfaction.
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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.
This Lease contains all agreements between the Parties with respect to
any matter mentioned herein, and no other prior or contemporaneous agreement or
understanding shall be effective.
23. Notices.
23.1 Notice Requirements. All
notices required or permitted by this Lease or applicable law 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 72 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 24
hours after delivery of the same to the Postal Service or courier. Notices
transmitted by facsimile transmission or similar means shall be deed delivered
upon telephone confirmation of receipt (confirmation report from fax machine is
sufficient), provided a copy is also delivered via delivery m mail. If notice is
received on a Saturday, Sunday or legal holiday, it shall be deemed received on
the next business day.
24. Waivers.
(a) 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.
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(b) 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.
(c) THE
PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL
MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE
STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS
LEASE.
25. Intentionally
omitted.
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 150% of the Base Rent applicable
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 a binding upon the Parties, their personal representatives,
successors and assigns and be governed by the laws of the State of California.
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
(in this Lease together referred to as "Lender") shall have no
liability or obligation to perform any of the obligations of Lessor under this
Lease. Any Lender may elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device by giving written notice thereof to
Lessee, whereupon this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.
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30.2 Attornment. In the event that
Lessor transfers title to the Premises, or the Premises are acquired by another
upon the foreclosure or termination of a Security Device to which this Lease is
subordinated (i) Lessee shall, subject to the non-disturbance provisions of
Paragraph 30.3, attorn to such new owner, and upon request, enter into a new
lease, containing all of the terms and provisions of this Lease, with such new
owner for the remainder of the term hereof, or, at the election of the new
owner, this Lease will automatically become a new lease between Lessee and such
new owner, and (ii) Lessor shall thereafter be relieved of any further
obligations hereunder and such new owner shall assume all of Lessor's
obligations, except that such new owner shall not: (a) be liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) be subject to any offsets or defenses which Lessee
might have against any prior lessor, (c) be bound by prepayment of more than one
month's rent, or (d) be liable for the return of any security deposit paid to
any prior lessor which was not paid or credited to such new owner.
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 60 days after the
execution of this Lease, Lessor shall, if requested by Lessee, 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 60 days, then Lessee may, at Lessee's option, directly contact Lender and
attempt to negotiate for the execution and delivery of a Non-Disturbance
Agreement.
30.4 Self-Executing. The agreements
contained in this Paragraph 30 shall be effective without the execution of any
further documents; provided, however, that, upon written request from Lessor or
a Lender in connection with a sale, financing or refinancing of the Premises,
Lessee and Lessor shall execute such further writings as may be reasonably
required to separately document any subordination, attornment and/or
Non-Disturbance Agreement provided for herein.
31. Attorneys' Fees. If any Party
or Broker brings an action or proceeding involving the Premises whether founded
in tort, contract or equity, or to declare rights hereunder, the Prevailing
Party (as hereater 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 who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party of its claim or defense. The attorneys'
fees award shall not be computed in accordance with any court fee schedule, but
shall be such as to fully reimburse all attorneys' fees reasonably incurred. 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 ($200 is a reasonable
minimum per occurrence for such services and consultation).
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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 after reasonable prior notice for the purpose of showing the same to
prospective purchasers, lenders, or tenants, and making such alterations,
repairs, improvements or additions to the Premises as Lessor may deem necessary
or desirable and the erecting, using and maintaining of utilities, services,
pipes and conduits through the Premises and/or other premises as long as there
is no material adverse effect on Lessee's use of the Premises. All such
activities shall be without abatement of rent or liability to
Lessee.
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. Lessor may place on the
Premises ordinary "For Sale" signs at any time and ordinary "For Lease" signs
during the last 6 months of the term hereof.
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 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 (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 10 business days following such request.
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37. Intentionally
omitted.
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. If Lessee is granted
an Option, as defined below, then the following provisions shall
apply.
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
. Any 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 3 or more notices of
separate Default, whether or not the Defaults are cured, during the 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 or completion of the purchase,
(i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due
(without any necessity of Lessor to give notice thereof), or (ii) if Lessee
commits a Breach of this Lease.
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40. Security Measures. Lessee
hereby acknowledges that the Rent payable to Lessor hereunder does not include
the cost of guard service or other security measures, and that Lessor shall have
no obligation whatsoever 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. In the event, however, that Lessor should elect
to provide security services, then the cost thereof shall be an Operating
Expense.
41. Reservations.
(a) Lessor
reserves the right: (i) to grant, without the consent or joinder of Lessee, such
easements, rights and dedications that Lessor deems necessary, (ii) to cause the
recordation of parcel maps and restrictions, (iii) to create and/or install new
utility raceways, so long as such easements, rights, dedications, maps,
restrictions, and utility raceways do not unreasonably interfere with the use of
the Premises by Lessee. Lessor may also: change the name, address or title of
the Building or Project upon at least 90 days prior written notice; provide and
install, at Lessee's expense, Building standard graphics on the door of the
Premises and such
portions of the Common Areas as Lessor shall reasonably deem appropriate; grant
to any lessee the exclusive right to conduct any business as long as such
exclusive right does not conflict with any rights expressly given herein; and to
place such signs, notices or displays as Lessor reasonably deems necessary or
advisable upon the roof, exterior of the Building or the Project or on signs in
the Common Areas. Lessee agrees to sign any documents reasonably requested by
Lessor to effectuate such rights. The obstruction of Lessee's view, air, or
light by any structure erected in the vicinity of the Building, whether by
Lessor or third parties, shall in no way affect this Lease or impose any
liability upon Lessor.
(b) Lessor
also reserves the right to move Lessee to other space of comparable size in the
Building or Project. Lessor must provide at least 60 days prior
written notice of such move, and the new space must contain improvements of
comparable quality to those contained within the Premises. Lessor shall pay the
reasonable out of pocket costs that Lessee incurs with regard to such
relocation, including the expenses of moving and necessary stationary revision
costs. In no event, however, shall Lessor be required to pay an
amount in excess of two months Base Rent. Lessee may not be relocated more than
once during the term of this Lease, except as otherwise may be agreed by the
parties in writing.
(c) Lessee
shall not: (i) use a representation (photographic or otherwise) of
the Building or Project or their name(s) in connection with Lessee's business;
or (ii) suffer or permit anyone, except in emergency, to go upon the roof of the
Building.
42. 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. A Party who does not initiate suit for the recovery of
sums paid "under protest" within 6 months shall be deemed to have waived its
right to protest such payment.
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43. Authority; Multiple Parties;
Execution
(a) 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 30 days
after request, deliver to the other Party satisfactory evidence of such
authority.
(b) If
this Lease is executed by more than one person or entity as
"Lessee", each such person or entity
shall be jointly and severally liable
hereunder. It is agreed that any one of the named Lessees shall
be empowered to execute any amendment to this Lease, or other document ancillary
thereto and bind all of the named Lessees, and Lessor may rely on the same as if
all of the named Lessees had executed such document.
(c) This
Lease may be executed by the Parties in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.
44. 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.
45. 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.
46. 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 nonmonetary 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.
47. Waiver of Jury Trial. THE PARTIES
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS
AGREEMENT.
48. Mediation and Arbitration of Disputes
. An Addendum requiring the Mediation and/or the Arbitration of all
disputes between the Parties arising out of this Lease □ is □ is not attached
to this Lease.
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49. Americans with Disabilities
Act. Since compliance with the Americans with Disabilities Act (ADA) is
dependent upon Lessee's specific use of the Premises, Lessor makes no warranty
or representation as to whether or not the Premises comply with ADA or any
similar legislation. In the event that Lessee's use of the Premises requires
modifications or additions to the Premises in order to be in ADA compliance,
Lessee agrees to make any such necessary modifications and/or additions at
Lessee's expense.
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 THE LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND
LESSEE WITH RESPECT TO THE PREMISES.
The
parties hereto have executed this Lease at the place and on the dates specified
above their respective signatures.
Executed
on:
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Executed
on:
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LESSOR:
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LESSEE:
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EVANGELICAL
CHRISTIAN CREDIT
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MINISTRY
PARTNERS INVESTMENT
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UNION
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CORPORATION
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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