Exhibit 10.1
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STANDARD MULTI-TENANT OFFICE LEASE - GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Basic Provisions ("Basic Provisions").
1.1 Parties: This Lease ("Lease"), dated for reference purposes
only March 19, 2001, is made by and between Uenaka Family Partnership, a general
partnership ("Lessor") and KAL Equity Group, Ltd. A Nevada 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) 200 , -- floor(s), consisting of approximately
2,078 rentable square feet and approximately -- useable square feet
("Premises"). The Premises are located at: 00 Xxxxx Xxxxxx , xx xxx Xxxx xx Xxx
Xxxxx o County of Santa Xxxxx , State of California , with zip code 94022 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." The
Project consists of approximately 10,426 rentable square feet. (See also
Paragraph 2)
1.2 (b) Parking: (8)unreserved and n/a reserved vehicle parking spaces
at a monthly cost of $ 0.00 per unreserved space and $ n/a per reserved space.
(See Paragraph 2.6)
1.3 Term: One (1) years and no (0) months ("Original Term")
commencing April 16, 2001 ("Commencement Date") and ending April 15, 2002
("Expiration Date"). (See also Paragraph 3)
1.4 Early Possession: n/a ("Early Possession Date"). (See also
Paragraphs 3.2 and 3.3)
1.5 Base Rent: $ 10,390.00 per month ("Base Rent"), payable on the
first day of each month commencing April 16, 2001 . (See also Paragraph 4)
[ ] If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted.
1.6 Lessee's Share of Operating Expense Increase: n/a percent ( --
%) ("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 rentable 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 or a change in the space available for lease in the Project.
1.7 Base Rent and Other Monies Paid Upon Execution:
(a) Base Rent: $ 10,390.00 for the period April 16.2001
thru May 15,2001
(b) Security Deposit: $ 10500.00 ("Security Deposit").
(See also Paragraph 5)
(c) Parking: $____________________for the period
______________________________
(d) Other: $______________________ for __________________
(e) Total Due Upon Execution of this Lease: $ 20,890.00.
1.8 Agreed Use: The investment business office of Iessee
________________________________________________________________________________
__________________________________________________________(See also Paragraph 6)
1.9 Base Year; Insuring Party. The Base Year is n/a . Lessor is
the "Insuring Party". (See also Paragraphs 4.2 and 8)
1.10 Real Estate Brokers: (See also Paragraph 15)
(a) Representation: The following real estate brokers
(the "Brokers") and brokerage relationships exist in this transaction (check
applicable boxes):
[ ] (by separate agreement) represents Lessor exclusively ("Lessor's Broker");
[ ] (by separate agreement) represents Lessee exclusively ("Lessee's Broker");
or
[ ] (by separate agreement) represents both Lessor and Lessee ("Dual Agency").
(b) Payment to Brokers: Upon execution and delivery of
this Lease by both Parties, Lessor shall pay to the Brokers the brokerage tee
agreed to in a separate written agreement (or if there is no such agreement, the
sum of or % of the total Base Rent for the brokerage services rendered by the
Brokers).
1.11 Guarantor. The obligations of the Lessee under this Lease
shall be guaranteed by n/a ("Guarantor"). (See also Paragraph
37)
1.12 Business Hours for the Building: 7:00 a.m. to 6:00 p.m.,
Monday through Friday (except Building Holidays) and 7:00 a.m. to 6:00 p.m. on
Saturday (except Building Holidays). "Building Holidays" shall mean the dates of
observation of New Year's Day, President's Day, Memorial Day, independence Day,
Labor Day, Thanksgiving Day, Christmas Day, and n/a
1.13 Lessor Supplied Services. Notwithstanding the provisions of
Paragraph 11.1 , Lessor is NOT obligated to provide the following:
[ ] Janitorial services
[ ] Electricity
[ ] Other (specify):__________________________________________________________
1.14 Attachments. Attached hereto are the following, all of which
constitute a part of this Lease: NI an Addendum consisting of Paragraphs 51
through 64 ;
a plot plan depicting the Premises;
a current set of the Rules and Regulations;
a Work Letter;
[ ] a janitorial schedule;
[ ] other (specify): _________________________________________________________
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises, for the term, at the rental, and upon all of
the terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of size set forth in this Lease, or that may have
been used in calculating 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 size prior to executing this Lease.
2.2 Condition. Lessor shall deliver the Premises to Lessee in a
clean condition on the Commencement Date or the Early Possession Date, whichever
first occurs ("Start Date"), and warrants that the existing electrical,
plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning
systems ("HVAC"), and all other Items which the Lessor is obligated to construct
pursuant to the Work Letter attached hereto, if any, other than those
constructed by Lessee, shall be in good operating condition on said date.
2.3 Compliance. Lessor warrants 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
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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 isabilities Act or any similar laws as a
result of Lessee's use (see Paragraph 50), 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, and
acknowledges that past uses of the Premises may no longer be allowed. If the
Premises do not comply with said warranty, Lessor shall, except as otherwise
provided, promptly after receipt of written notice from Lessee setting forth
with specificity the nature and extent of such non-compliance, rectify the same.
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:
(a) Subject to Paragraph 2.3(c) below, if such Capital
Expenditures are required as a result of the specific and unique use of the
Premises by Lessee as compared with uses by tenants in general, Lessee shall be
fully responsible for the cost thereof, provided, however, that if such Capital
Expenditure is required during the last 2 years of this Lease and the cost
thereof 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 and Lessee shall allocate the cost
of such Capital Expenditure as follows: Lessor shall advance the funds necessary
for such Capital Expenditure but Lessee shall be obligated to pay, each month
during the remainder of the term of this Lease, on the date on which Base Rent
is due, an amount equal to the product of multiplying Lessee's share of the cost
of such Capital Expenditure (the percentage specified in Paragraph 1.6 by a
fraction, the numerator of which is one, and the denominator of which is 144
(ie. 1/144th of the cost per month)). Lessee shall pay interest on the
unamortized balance of Lessee's share at a rate that is commercially reasonable
in the judgment of Lessor's accountants. Lessee may, however, prepay its
obligation at any time, Provided, however, that if such Capital Expenditure is
required during the last 2 years of this Lease or if Lessor reasonably
determines that it is not economically feasible to pay its share thereof, Lessor
shall have the option to terminate this Lease upon 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 any such Capital Expenditure, Lessee may advance such funds and deduct
same, with Interest, from Rent until Lessor's share of such costs have been
fully paid. If Lessee is unable to finance Lessor's share, or if the balance of
the Rent due and payable for the remainder of this Lease is not sufficient to
fully reimburse Lessee on an offset basis, Lessee shall have the right to
terminate this Lease upon 30 days written notice to Lessor.
(c) Notwithstanding the above, the provisions concerning
Capital Expenditures are intended to apply only to non-voluntary, unexpected,
and new Applicable Requirements. If the Capital Expenditures are instead
triggered by Lessee as a result of an actual or proposed change in use, change
in intensity of use, or modification to the Premises then, and in that event,
Lessee shall be fully responsible for the cost thereof, and Lessee shall not
have any right to terminate this Lease.
2.4 Acknowledgements. Lessee acknowledges that: (a) Lessee has
been advised by Lessor and/or Brokers to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical, HVAC and
fire sprinkler systems, security, environmental aspects, and compliance with
Applicable Requirements), and their suitability for Lessee's intended use, (b)
Lessee has made such investigation as It deems necessary with reference to such
matters and assumes all responsibility therefor as the same relate to Its
occupancy of the Premises, and (c) neither Lessor, Lessor's agents, nor Brokers
have made any oral or written representations or warranties with respect to said
matters other than as set forth in this Lease. In addition, Lessor acknowledges
that: (i) Brokers have made no representations, promises or warranties
concerning Lessee's ability to honor the Lease or suitability to occupy the
Premises, and (ii) it is Lessor's sole responsibility to investigate the
financial capability and/or suitability of all proposed tenants.
2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor
in Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date, Lessee was the owner or occupant of the Premises. In such event, Lessee
shall be responsible for any necessary corrective work.
2.6 Vehicle Parking. So long as Lessee is not in default, and
subject to the Rules and Regulations attached hereto, and as established by
Lessor from time to time, Lessee shall be entitled to rent and use the number of
parking spaces specified in Paragraph 1.2(b) at the rental rate applicable from
time to time for monthly parking as set by Lessor and/or Its licensee.
(a) If Lessee commits, permits or allows any of the
prohibited activities described in the Lease or the rules then in effect, then
Lessor shall have the right, without notice, in addition to such other rights
and remedies that it may have, to remove or tow away the vehicle involved and
charge the cost to Lessee, which cost shall be immediately payable upon demand
by Lessor.
(b) The monthly rent per parking space specified in
Paragraph 1.2(b) is subject to change upon 30 days prior written notice to
Lessee. The rent for the parking is payable one month in advance prior to the
first day of each calendar month.
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 non-exclusive use of Lessor, Lessee and other tenants of
the Project and their respective employees, suppliers, shippers, 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, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive 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 or
Lessor's designated agent, 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.
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 to cause its employees, suppliers, shippers,
customers, contractors and invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the non-compliance 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;
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(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 Original Term
of this Lease are as specified in Paragraph 1.3.
3.2 Early Possession. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this Lease
(including but not limited to the obligations to pay Lessee's Share of the
Operating Expense Increase) shall, however, be in effect during such period. Any
such early possession shall not affect the Expiration Date.
3.3 Delay In Possession. Lessor agrees to use its best
commercially reasonable efforts to deliver possession of the Premises to Lessee
by the Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession by such date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease. Lessee shall not,
however, be obligated to pay Rent or perform its other obligations until Lessor
delivers possession of the Premises and any period of rent abatement that Lessee
would otherwise have enjoyed shall run from the date of delivery of possession
and continue for a period equal to what Lessee would otherwise have enjoyed
under the terms hereof, but minus any days of delay caused by the acts or
omissions of Lessee. If possession is not delivered within 60 days after the
Commencement Date, as the same may be extended under the terms of any Work
Letter executed by Parties, Lessee may, at Its option, by notice in writing
within 10 days after the end of such 60 day period, cancel this Lease, in which
event the Parties shall be discharged from all obligations hereunder. If such
written notice is not received by Lessor within said 10 day period, Lessee's
right to cancel shall terminate. If possession of the Premises is not delivered
within 120 days after the Commencement Date, this Lease shall terminate unless
other agreements are reached between Lessor and Lessee, in writing.
3.4 Lessee Compliance. Lessor shall not be required to deliver
possession of the Premises to Lessee until Lessee complies with its obligation
to provide evidence of insurance (Paragraph 8.5). Pending delivery of such
evidence, Lessee shall be required to perform all of its obligations under this
Lease from and after the Start Date, including the payment of Rent,
notwithstanding Lessor's election to withhold possession pending receipt of such
evidence of Insurance. Further, If Lessee Is required to perform any other
conditions prior to or concurrent with the Start Date, the Start Date shall
occur but Lessor may elect to withhold possession until such conditions are
satisfied.
4. Rent.
4.1. Rent Defined. All monetary obligations of Lessee to Lessor
under the terms of this Lease (except for the Security 'et Deposit) are deemed
to be rent ("Rent").
4.2 Operating Expense Increase. Lessee shall pay to Lessor during
the term hereof, in addition to the Base 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
during the term of this Lease subsequent to the Base Year; provided, however,
Lessee shall have no obligation to pay a share of the Operating Expense Increase
applicable to the first 12 months of the Lease Term (other than such as are
mandated by a governmental authority, as to which government mandated expenses
Lessee shall pay Lessee's Share, notwithstanding they occur during the first
twelve 12 months). Lessee's Share of the Operating Expense Increase for the
first and last Comparison Years of the Lease Term shall be prorated according to
that portion of such Comparison Year as to which Lessee is responsible for a
share of such increase.
(c) "Operating Expenses" include all costs incurred by
Lessor relating to the ownership and operation of the Project, calculated as if
the Project was at least 95% occupied, including, but not limited to, the
following:
(1) The operation, repair, and maintenance in
neat, clean, safe, good order and condition, but not the replacement (see
subparagraph (g)), 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, lessees or occupants
of the Project, including elevators and escalators, tenant directories, fire
detection systems including sprinkler system maintenance and repair.
(ii) Trash disposal, janitorial and security
services, pest control services, and the costs of any environmental inspections;
(iii) Any other service to be provided by Lessor
that is elsewhere in this Lease stated to be an "Operating Expense";
(iv) The cost of the premiums for the insurance
policies maintained by Lessor pursuant to paragraph 8 and any deductible portion
of an insured loss concerning the Building or the Common Areas;
(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) Labor, salaries, and applicable fringe
benefits and costs, materials, supplies and tools, used in maintaining and/or
cleaning the Project and accounting and management fees attributable to the
operation of the Project;
(viii) The cost of any Capital Expenditure to the
Building or the Project not covered under the provisions of Paragraph 2.3
provided; however, that Lessor shall allocate the cost of any such Capital
Expenditure over a 12 year period and Lessee shall not be required to pay more
than Lessee's Share of 1/144th of the cost of such Capital Expenditure in any
given month;
(ix) Replacement of equipment or improvements
that have a useful life for accounting purposes of 5 years or less.
(d) Any item of Operating Expense that is specifically
attributable to the Premises, the Building or to any other building in the
Project or to the operation, repair and maintenance thereof, shall be allocated
entirely to such Premises, Building, or other building. However, any such item
that is not specifically attributable to the Building or to any other building
or to the operation, repair and maintenance thereof, shall be equitably
allocated by Lessor to all buildings in the Project.
(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 by Lessee within 10 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 Base Rent is due hereunder. In the event that Lessee pays Lessor's
estimate of Lessee's Share of Operating Expense Increase 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 incurred 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 10 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 Expense Increases, notwithstanding that the Lease term may have
terminated before the end of such Comparison Year.
(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
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purposes of 5 years or more unless it is of the type described In paragraph
4.2(c) (viii), in which case their cost shall be included as above provided.
(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). 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. Payments will be applied first to accrued late charges and
attorney's fees, second to accrued interest, then to Base Rent and Operating
Expense Increase, and any remaining amount to any other outstanding charges or
costs.
5. Security Deposit. Lessee shall deposit with Lessor upon execution
hereof, the Security Deposit as security for Lessee's faithful performance of
Its obligations under this Lease. if Lessee fails to pay Rent, or otherwise
Defaults under this Lease, Lessor may use, apply or retain all or any portion of
said Security Deposit for the payment of any amount due Lessor or to reimburse
or compensate Lessor for any liability, expense, loss or damage which Lessor may
suffer or incur by reason thereof. if Lessor uses or applies all or any portion
of the Security Deposit, Lessee shall within 10 days after written request
therefor, deposit monies with Lessor sufficient to restore said Security Deposit
to the full amount required by this Lease. If the Base Rent Increases during the
term of this Lease, Lessee shall, upon written request from Lessor, deposit
additional monies with Lessor so that the total amount of the Security Deposit
shall at all times bear the same proportion to the increased Base Rent as the
Initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be
amended to accommodate a material change in the business of Lessee or to
accommodate a sublessee or assignee, Lessor shall have the right to increase the
Security Deposit to the extent necessary, in Lessor's reasonable judgment, to
account for any increased wear and tear that the Premises may suffer as a result
thereof. If a change in control of Lessee occurs during this Lease and following
such change the financial condition of Lessee Is, in Lessor's reasonable
judgment, significantly reduced, Lessee shall deposit such additional monies
with Lessor as shall be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on such change in financial condition.
Lessor shall not be required to keep the Security Deposit separate from its
general accounts. Within 14 days after the expiration or termination of this
Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and
otherwise within 30 days after the Premises have been vacated pursuant to
Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit
not used or applied by Lessor. No part of the Security Deposit shall be
considered to be held in trust, to bear interest or to be prepayment for any
monies to be paid by Lessee under this Lease.
6. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the
Agreed Use, or any other legal use which is reasonably comparable thereto, and
for no other purpose. Lessee shall not use or permit the use of the Premises in
a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs
occupants of or causes damage to neighboring premises or properties. Lessor
shall not unreasonably withhold or delay its consent to any written request for
a modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements 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.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, or waste
whose presence, use, manufacture, disposal, transportation, or release, either
by Itself or In combination with other materials expected to be on the Premises,
is either: (i) potentially injurious to the public health, safety or welfare,
the environment or the Premises, (II) regulated or monitored by any governmental
authority, or (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substances shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, and/or crude oil or any products, by-products or fractions
thereof. Lessee shall not engage In any activity in or on the Premises which
constitutes a Reportable Use of Hazardous Substances without the express prior
written consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. "Reportable Use" shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use 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.
(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.
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(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.
(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, it
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.
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, 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.
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,
subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order,
condition and repair the foundations, exterior walls, structural condition of
interior bearing walls, exterior roof, fire sprinkler system, fire alarm and/or
smoke detection systems, fire hydrants, and the Common Areas. 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).
(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, Oft 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 Base 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 an
additional 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.
(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
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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. Notwithstanding the
foregoing, if this Lease is for 12 months or less, then Lessee shall surrender
the Premises in the same condition as delivered to Lessee on the Start Date with
NO allowance for ordinary wear and tear. 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 Project) 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. 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 Insurance Premiums. The cost of the premiums for the insurance
policies maintained by Lessor pursuant to paragraph 8 are included as Operating
Expenses (see paragraph 4.2 (c)(1v)). Said costs shall include increases in the
premiums resulting from additional coverage related to requirements of the
holder of a mortgage or deed of trust covering the Premises, Building and/or
Project, increased valuation of the Premises, Building and/or Project, and/or a
general premium rate increase. Said costs shall not, however, include any
premium increases resulting from the nature of the occupancy of any other tenant
of the Building. If the Project was not insured for the entirety of the Base
Year, then the base premium shall be the lowest annual premium reasonably
obtainable for the required insurance as of the Start Date, assuming the most
nominal use possible of the Building and/or Project. In no event, however, shall
Lessee be responsible for any portion of the premium cost attributable to
liability insurance coverage in excess of $2,000,000 procured under Paragraph
8.2(b).
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep In
force a Commercial General Liability policy of insurance protecting Lessee and
Lessor 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, an "Additional Insured-Managers or Lessors of Premises
Endorsement" and contain the "Amendment of the Pollution Exclusion Endorsement"
for damage caused by heat, smoke or fumes from a hostile fire. The policy shall
not contain any intra-insured exclusions as between Insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Lessee's indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance carried by Lessee shall be primary to and not contributory with any
similar insurance carried by Lessor, whose Insurance shall be considered excess
insurance only.
(b) Carried by Lessor. Lessor shall maintain liability
insurance as described in Paragraph 8.2(a), in addition to, and not in lieu of,
the insurance required to be maintained by Lessee. Lessee shall not be named as
an additional insured therein.
8.3 Property Insurance - Building, Improvements and Rental Value.
(a) Building and improvements. 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 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) Rental Value. Lessor shall also obtain and keep in
force a policy or policies in the name of Lessor with loss payable to Lessor and
any Lender, insuring the loss of the full Rent for one year with an extended
period of indemnity for an additional 180 days ("Rental Value insurance"). Said
insurance shall contain an agreed valuation provision in lieu of any coinsurance
clause, and the amount of coverage shall be adjusted annually to reflect the
projected Rent otherwise payable by Lessee, for the next 12 month period.
(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.
8.4 Lessee's Property; Business Interruption Insurance.
(a) Property Damage. Lessee shall obtain and maintain
insurance coverage on all of Lessee's personal property, Trade Fixtures, and
Lessee Owned Alterations and Utility Installations. Such insurance shall be full
replacement cost coverage with a deductible of not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal property, Trade Fixtures and Lessee Owned Alterations
and Utility Installations. Lessee shall provide Lessor with written evidence
that such insurance is in force.
(b) Business Interruption. Lessee shall obtain and
maintain loss of Income and extra expense insurance in amounts as will reimburse
Lessee for direct or indirect loss of earnings attributable to all perils
commonly insured against by prudent lessees in the business of Lessee or
attributable to prevention of access to the Premises as a result of such perils.
(c) No Representation of Adequate Coverage. Lessor makes
no representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Lessee's property, business operations or
obligations under this Lease.
8.5 Insurance Policies. Insurance required herein shall be by
companies duly licensed or admitted to transact business In the state where the
Premises are located, and maintaining during the policy term a "General
Policyholders Rating" of at least B+, V, as set forth In the most current issue
of "Best's Insurance Guide", or such other rating as may be required by a
Lender. Lessee shall not do or permit to be done anything which invalidates the
required insurance policies. Lessee shall, prior to the Start Date, deliver to
Lessor certified copies of policies of such insurance or certificates evidencing
the existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 30 days prior written notice
to Lessor. Lessee shall, at least 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
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hereto. The Parties agree to have their respective property damage insurance
carriers waive any right to subrogation that such companies may have against
Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.
8.7 Indemnity. Except for Lessor's gross negligence or willful
misconduct, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
liens, judgments, penalties, attorneys' and consultants' fees, expenses and/or
liabilities arising out of, involving, or in connection with, the use and/or
occupancy of the Premises by Lessee. If any action or proceeding is brought
against Lessor by reason of any of the foregoing matters, Lessee shall upon
notice defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not
have first paid any such claim in order to be defended or indemnified.
8.8 Exemption of Lessor from Liability. Lessor shall not be liable
for Injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers, or any
other person in or about the Premises, whether such damage or injury is caused
by or results from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building, or from other sources or
places. Lessor shall not be liable for any damages arising from any act or
neglect of any other tenant of Lessor nor from the failure of Lessor to enforce
the provisions of any other lease in the Project. Notwithstanding Lessor's
negligence or breach of this Lease, Lessor shall under no circumstances be
liable for injury to Lessee's business or for any loss of income or profit
therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or
destruction to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations, which can reasonably be repaired in 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 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.
(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.
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 one
month's Base 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.
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.
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(b) Remedies. If Lessor Shall be obligated to repair or
restore the Premises and does not commence, in a substantial and meaningful way,
such repair or restoration within 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.
9.8 Waive Statutes. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination of this Lease and hereby waive the provisions of
any present or future statute to the extent inconsistent herewith.
10. Real Property Taxes.
10.1 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, 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 or any portion thereof or a
change in the improvements thereon.
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 the exclusive enjoyment of such other lessees. 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's request.
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.
11.2 Services Exclusive to Lessee. Lessee shall pay for all water,
gas, heat, 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 Flours 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 25% or more of the voting control of Lessee shall constitute a change
In control for this purpose.
(c) The involvement of Lessee or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation of this Lease or Lessee's assets occurs, which
results or will result in a reduction of the Net Worth of Lessee by an amount
greater than 25% of such Net Worth as It was represented at the time of the
execution of this Lease or at the time of the most recent assignment to which
Lessor has consented, or as It exists immediately prior to said transaction or
transactions constituting such reduction, whichever was or is greater, shall be
considered an assignment of this Lease to which Lessor may withhold its consent.
"Net Worth of Lessee" shall mean the net worth of Lessee (excluding any
guarantors) established under generally accepted accounting principles.
(d) An assignment or subletting without consent shall, at
Lessor's option, be a Default curable after notice per Paragraph 13.1(c), or a
noncurable Breach without the necessity of any notice and grace period. If
Lessor elects to treat such unapproved assignment or subletting as a noncurable
Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 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, (i) the
purchase price of any option to purchase the Premises held by Lessee shall be
subject to similar adjustment to 110% of the price previously in effect, and
(ii) all fixed and non-fixed rental adjustments scheduled during the remainder
of the Lease term shall be increased to 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.
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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 other
obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's
obligations from any person other than Lessee pending approval or disapproval of
an assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of Rent or performance shall constitute a waiver or estoppel
of Lessor's right to exercise its remedies for Lessee's Default or Breach.
(c) Lessor's consent to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee,
Lessor may proceed directly against Lessee, any Guarantors or anyone else
responsible for the performance of Lessee's obligations under this Lease,
including any assignee or sublessee, without first exhausting Lessor's remedies
against any other person or entity responsible therefor to Lessor, or any
security held by Lessor.
(e) Each request for consent to an assignment or
subletting shall be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any. Lessee
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 or entering into such sublease, be
deemed to have assumed and agreed to conform and comply with each and every
term, covenant, condition and obligation herein to be observed or performed by
Lessee during the term of said assignment or sublease, other than such
obligations as are contrary to or inconsistent with provisions of an assignment
or sublease to which Lessor has specifically consented to in writing.
(g) Lessor'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. Lessor shall not, by reason of the
foregoing or any assignment of such sublease, nor by reason of the collection of
Rent, be deemed liable to the sublessee for any failure of Lessee to perform and
comply with any of Lessee's obligations to such sublessee. Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a written
notice from Lessor stating that a Breach exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor all Rent due and to become due
under the sublease. Sublessee shall rely upon any such notice from Lessor and
shall pay all Rents to Lessor without any obligation or right to inquire as to
whether such Breach exists, notwithstanding any claim from Lessee to the
contrary.
(b) In the event of a Breach by Lessee, Lessor may, at
its option, require sublessee to attorn to Lessor, in which event Lessor shall
undertake the obligations of the sublessor under such sublease from the time of
the exercise of said option to the expiration of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to such sublessor or for any prior Defaults or Breaches
of such sublessor.
(c) Any matter requiring the consent of the sublessor
under a sublease shall also require the consent of Lessor.
(d) No sublessee shall further assign or sublet all or
any part of the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default
or Breach by Lessee to the sublessee, who shall have the right to cure the
Default of Lessee within the grace period, if any, specified in such notice. The
sublessee shall have a right of reimbursement and offset from and against Lessee
for any such Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. A "Default" is defined as a failure by the
Lessee to comply with or perform any of the terms, covenants, conditions or
Rules 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 B.3 is
jeopardized as a result thereof, or without providing reasonable assurances to
minimize potential vandalism.
(b) The failure of Lessee to make any payment of Rent or
any Security Deposit required to be made by Lessee hereunder, whether to Lessor
or to a third party, when due, to provide reasonable evidence of insurance or
surety bond, or to fulfill any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of 3
business days following written notice to Lessee.
(c) The failure by Lessee to provide (i) reasonable
written evidence of compliance with Applicable Requirements, (ii) the service
contracts, (Hi) the rescission of an unauthorized assignment or subletting, (iv)
an Estoppel Certificate, (v) a requested subordination, (vi) evidence concerning
any guaranty and/or Guarantor, (vii) any document requested under Paragraph 41
(easements), or (viii) any other documentation or information which Lessor may
reasonably require of Lessee under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Lessee.
(d) A Default by Lessee as to the terms, covenants,
conditions or provisions of this Lease, or of the rules adopted under Paragraph
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.
(e) The occurrence of any of the following events: (i)
the making of any general arrangement or assignment for the benefit of
creditors; (ii) becoming a "debtor" as defined in 11 U.S.C. ss. 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 (e) is contrary to any applicable law, such provision shall be
of no force or effect, and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of Lessee
or of any Guarantor given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this
Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor's liability with respect to this Lease other than in accordance with
the terms of such guaranty, (iii) a Guarantor's becoming insolvent or the
subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the
guaranty, or (v) a Guarantor's breach of its guaranty obligation on an
anticipatory basis, and Lessee's failure, within 60 days following written
notice of any such event, to provide written alternative assurance or security,
which, when coupled with the then existing resources of Lessee, equals or
exceeds the combined financial resources of Lessee and the Guarantors that
existed at the time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any of its affirmative
duties or obligations, within 10 days after written notice (or in case of an
emergency, without notice), Lessor may, at its option, perform such duty or
obligation on Lessee's behalf, including but not limited to the obtaining of
reasonably required bonds, insurance policies, or governmental licenses, permits
or approvals. The costs and expenses of any such performance by Lessor shall be
due and payable by Lessee upon receipt of invoice therefor. If any check given
to Lessor by Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its option, may require all future payments to be made by Lessee to
be by cashier's check. In the event of a Breach, Lessor may, with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:
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(a) Terminate Lessee's right to possession of the
Premises by 'any lawful means, in which case this Lease shall terminate and
Lessee shall Immediately surrender possession to Lessor. In such event Lessor
shall be entitled to recover from Lessee: (i) the unpaid Rent which had been
earned at the time of termination; (ii) the worth at the time of award of the
amount by which the unpaid rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss that the Lessee
proves could have been reasonably avoided; (ill) the worth at the time of award
of the amount by which the unpaid rent for the balance of the term after the
time of award exceeds the amount of such rental loss that the Lessee proves
could be reasonably avoided; and (iv) any other amount necessary to compensate
Lessor for all the detriment proximately caused by the Lessee's failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including but not limited to the
cost of recovering possession of the Premises, expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys' fees,
and that portion of any leasing commission paid by Lessor In connection with
this Lease applicable to the unexpired term of this Lease. The worth at the time
of award of the amount referred to in provision (iii) of the immediately
preceding sentence shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of the District within which the Premises are
located at the time of award plus one percent. Efforts by Lessor to mitigate
damages caused by Lessee's Breach of this Lease shall not waive Lessor's right
to recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof In a
separate suit. If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.
(b) Continue the Lease and Lessee's right to possession
and recover the Rent as it becomes due, in which event Lessee may sublet or
assign, subject only to reasonable limitations. Acts of maintenance, efforts to
relet, and/or the appointment of a receiver to protect the Lessor's Interests,
shall not constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available
under the laws or judicial decisions of the state wherein the Premises are
located. The expiration or termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability under any
Indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture. Any agreement for free or abated rent or
other charges, or for the giving or paying by Lessor to or for Lessee of any
cash or other bonus, inducement or consideration for Lessee's entering into this
Lease, all of which concessions are hereinafter referred to as "Inducement
Provisions", shall be deemed conditioned upon Lessee's full and faithful
performance of all of the terms, covenants and conditions of this Lease. Upon
Breach of this Lease by Lessee, any such Inducement Provision shall
automatically be deemed deleted from this Lease and of no further force or
effect, and any rent, other charge, bonus, Inducement or consideration
theretofore abated, given or paid by Lessor under such an Inducement Provision
shall be immediately due and payable by Lessee to Lessor, notwithstanding any
subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or
the cure of the Breach which initiated the operation of this paragraph shall not
be deemed a waiver by Lessor of the provisions of this paragraph unless
specifically so stated in writing by Lessor at the time of such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by
Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 5 days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a
one-time late charge equal to 10% 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
non-scheduled payment, shall bear interest from the date when due, as to
scheduled payments, or the 31st day after It was due as to non-scheduled
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.
(b) Performance by Lessee on Behalf of Lessor. In the
event that neither Lessor nor Lender cures said breach within 30 days after
receipt of said notice, or If having commenced said cure they do not diligently
pursue it to completion, then Lessee may elect to cure said breach at Lessee's
expense and offset from Rent the actual and reasonable cost to perform such
cure, provided however, that such offset shall not exceed an amount equal to the
greater of one month's Base Rent or the Security Deposit, reserving Lessee's
right to seek reimbursement from Lessor. Lessee shall document the cost of said
cure and supply said documentation to Lessor.
14. Condemnation. If the Premises or any portion thereof are taken under
the power of eminent domain or sold under the threat of the exercise of said
power (collectively "Condemnation"), this Lease shall terminate as to the part
taken as of the date the condemning authority takes title or possession,
whichever first occurs. If more than 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 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. Brokerage Fees.
15.1 Additional Commission. In addition to the payments owed
pursuant to Paragraph 1.10 above, and unless Lessor and the Brokers otherwise
agree in writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if
Lessee acquires from Lessor any rights to the Premises or other premises owned
by Lessor and located within the Project, (c) if Lessee remains in possession of
the Premises, with the consent of Lessor, after the expiration of this Lease, or
(d) if Base Rent is increased, whether by agreement or operation of an
escalation clause herein, then, Lessor shall pay Brokers a fee in accordance
with the schedule of the Brokers in effect at the time of the execution of this
Lease.
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15.2 Assumption of Obligations. Any buyer or transferee of Lessor's
interest in this Lease shall be deemed to have assumed Lessor's obligation
hereunder. Brokers shall be third party beneficiaries of the provisions of
Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts
due as and for brokerage fees pertaining to this Lease when due, then such
amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts
to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor
and Lessee of such failure and If Lessor fails to pay such amounts within 10
days after said notice, Lessee shall pay said monies to its Broker and offset
such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a
third party beneficiary of any commission agreement entered into by and/or
between Lessor and Lessor's Broker for the limited purpose of collecting any
brokerage fee owed.
15.3 Representations and Indemnities of Broker Relationships.
Lessee and Lessor each represent and warrant to the other that it has had no
dealings with any person, firm, broker or finder (other than the Brokers, if
any) in connection with this Lease, and that no one other than said named
Brokers is entitled to any commission or finder's fee in connection herewith.
Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold
the other harmless from and against liability for compensation or charges which
may be claimed by any such unnamed broker, finder or other similar party by
reason of any dealings or actions of the indemnifying Party, including any
costs, expenses, attorneys' fees reasonably incurred with respect thereto.
16. 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
American Industrial 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 and all Guarantors shall deliver to any
potential lender or purchaser designated by Lessor such financial statements as
may be reasonably required by such lender or purchaser, including but not
limited to Lessee's financial statements for the past 3 years. All such
financial statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. Definition of Lessor. The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, or, if
this is a sublease, of the Lessee's interest in the prior lease. In the event of
a transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash, or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of ail liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined.
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.
21. Time of Essence. Time is of the essence with respect to the performance
of all obligations to be performed or observed by the Parties under this Lease.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains
all agreements between the Parties with respect to any matter mentioned herein,
and no other prior or contemporaneous agreement or understanding shall be
effective. Lessor and Lessee each represents and warrants to the Brokers that it
has made, and is relying solely upon, its own investigation as to the nature,
quality, character and financial responsibility of the other Party to this Lease
and as to the use, nature, quality and character of the Premises. Brokers have
no responsibility with respect thereto or with respect to any default or breach
hereof by either Party. The liability (including court costs and attorneys'
fees) of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.
23. Notices.
23.1 Notice Requirements. All notices required or permitted by this
Lease 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 48 hours after
the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given 24 hours after delivery of the
same to the Postal Service or courier. Notices transmitted by facsimile
transmission or similar means shall be deemed delivered upon telephone
confirmation of receipt (confirmation report from fax machine is sufficient),
provided a copy is also delivered via delivery or mail. If notice is received on
a Saturday, Sunday or legal holiday, it shall be deemed received on the next
business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or of any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any act shall not be deemed to render unnecessary
the obtaining of Lessor's consent to, or approval of, any subsequent or similar
act by Lessee, or be construed as the basis of an estoppel to enforce the
provision or provisions of this Lease requiring such consent. The acceptance of
Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any
payment by Lessee may be accepted by Lessor on account of moneys or damages due
Lessor, notwithstanding any qualifying statements or conditions made by Lessee
in connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.
(a) When entering into a discussion with a real estate
agent regarding a real estate transaction, a Lessor or Lessee should from the
outset understand what type of agency relationship or representation it has with
the agent or agents in the transaction. Lessor and Lessee acknowledge being
advised by the Brokers in this transaction, as follows:
(i) Lessor's Agent. A Lessor's agent under a
listing agreement with the Lessor acts as the agent for the Lessor only. A
Lessor's agent or subagent has the following affirmative obligations: To the
Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in
dealings with the Lessor. To the Lessee and the Lessor; a Diligent exercise of
reasonable skills and care in performance of the agent's duties. b. A duty of
honest and fair dealing and good faith. c. A duty to disclose all facts known to
the agent
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materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the Parties. An
agent is not obligated to reveal to either Party any confidential information
obtained from the other Party which does not involve the affirmative duties set
forth above.
(ii) Lessee's Agent. An agent can agree to act as
agent for the Lessee only. In these situations, the agent is not the Lessor's
agent, even if by agreement the agent may receive compensation for services
rendered, either in full or in part from the Lessor. An agent acting only for a
Lessee has the following affirmative obligations. To the Lessee: A fiduciary
duty of utmost care, integrity, honesty, and loyalty in dealings with the
Lessee. To the Lessee and the Lessor, a. Diligent exercise of reasonable skills
and care in performance of the agent's duties. b. A duty of honest and fair
dealing and good faith. c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the Parties. An
agent is not obligated to reveal to either Party any confidential information
obtained from the other Party which does not involve the affirmative duties set
forth above.
(iii) Agent Representing Both Lessor and Lessee. A
real estate agent, either acting directly or through one or more associate
licenses, can legally be the agent of both the Lessor and the Lessee in a
transaction, but only with the knowledge and consent of both the Lessor and the
Lessee. In a dual agency situation, the agent has the following affirmative
obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost
care, integrity, honesty and loyalty In the dealings with either Lessor or the
Lessee. b. Other duties to the Lessor and the Lessee as stated above in
subparagraphs (I) or (ii). In representing both Lessor and Lessee, the agent may
not without the express permission of the respective Party, disclose to the
other Party that the Lessor will accept rent in an amount less than that
indicated In the listing or that the Lessee is willing to pay a higher rent than
that offered. The above duties of the agent in a real estate transaction do not
relieve a Lessor or Lessee from the responsibility to protect their own
interests. Lessor and Lessee should carefully read all agreements to assure that
they adequately express their understanding of the transaction. A real estate
agent is a person qualified to advise about real estate. If legal or tax advice
is desired, consult a competent professional.
(b) Brokers have no responsibility with respect to any
default or breach hereof by either Party. The liability (including court costs
and attorneys' fees), of any Broker with respect to any breach of duty, error or
omission relating to this Lease shall not exceed the fee received by such Broker
pursuant to this Lease; provided, however, that the foregoing limitation on each
Broker's liability shall not be applicable to any gross negligence or willful
misconduct of such Broker.
(c) Buyer and Seller agree to Identify to Brokers as
"Confidential" any communication or Information given Brokers that is considered
by such Party to be confidential.
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 binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall
be subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "Security Device"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (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.
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 such new owner, this Lease shall
automatically become a new Lease between Lessee and such new owner, upon all of
the terms and conditions hereof, for the remainder of the term hereof, and (ii)
Lessor shall thereafter be relieved of any further obligations hereunder and
such new owner shall assume all of Lessor's obligations hereunder, 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.
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 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 hereafter defined) in any
such proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys' fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term, "Prevailing Party" shall Include, without limitation, a
Party or Broker who substantially obtains or defeats the relief sought, as the
case may be, whether by compromise, settlement, judgment, or the abandonment by
the other Party or Broker of its claim or defense. The attorneys' fees award
shall not be computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys' fees reasonably incurred. In addition,
Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach ($200 is a reasonable minimum per
occurrence for such services and consultation).
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or 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 to Lessee's use of the Premises. All such
activities shall be without abatement of rent or liability to Lessee. Lessor may
at any time place on the Premises any ordinary "For Sale" signs and Lessor may
during the last 6 months of the term hereof place on the Premises any ordinary
"For Lease" signs. In addition, Lessor shall have the right to retain keys to
the Premises and to unlock all doors in or upon the Premises other than to
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files, vaults and safes, and in the case of emergency to enter the Premises by
any reasonably appropriate means, and any such entry shall not be deemed a
forcible or unlawful entry or detainer of the Premises or an eviction. Lessee
waives any charges for damages or injuries or interference with Lessee's
property or business in connection therewith.
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. Lessee shall not place any sign upon the Project without
Lessor's prior written consent.
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.
37. Guarantor.
37.1 Execution. The Guarantors, if any, shall each execute a
guaranty in the form most recently published by the American Industrial Real
Estate Association.
37.2 Default. It shall constitute a Default of the Lessee if any
Guarantor fails or refuses, upon request to provide: (a) evidence of the
execution of the guaranty, including the authority of the party signing on
Guarantor's behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of Its board of directors
authorizing the making of such guaranty, (b) current financial statements, (c)
an Estoppel Certificate, or (d) written confirmation that the guaranty Is still
in effect.
38. Quiet Possession. Subject to payment by Lessee of the Rent and
performance of all of the covenants, conditions and provisions on Lessee's part
to be observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during the term hereof.
39. Options. 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: (1)
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.
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 to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties. 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 pole 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 45 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.
(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.
43. Authority.
(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
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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.
44. 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 shell 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 non-monetary modifications to this Lease as may be reasonably
required by a Lender In connection with the obtaining of normal financing or
refinancing of the Premises.
47. Multiple Parties. If more than one person or entity is named herein as
either Lessor or Lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.
45. 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.
49. Mediation and Arbitration of Disputes. An Addendum requiring the
Mediation and/or the Arbitration of all disputes between the Parties and/or
Brokers arising out of this Lease 0 Is |_| is not attached to this Lease.
50. Americans with Disabilities Act. In the event that as a result of
Lessee's use, or intended use, of the Premises the Americans with Disabilities
Act or any similar law requires modifications or the construction or
installation of improvements in or to the Premises, Building, Project and/or
Common Areas, the Parties agree that such modifications, construction or
improvements shall be made at: [ ] Lessor's expense [ ] 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 THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING AND SIZE OF THE PREMISES, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,
COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE
PREMISES FOR LESSEE'S INTENDED USE.
WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES ARE LOCATED. The parties hereto have executed this
Lease at the place and on the dales specified above their respective signatures.
Executed at: [ILLEGIBLE] Executed at: [ILLEGIBLE]
On: [ILLEGIBLE] On: [ILLEGIBLE]
By LESSOR: By LESSE:
Uenaka Family Partnership KAL Equity Group, Ltd.
------------------------------- -------------------------------
By: [ILLEGIBLE] By: /s/ XXX X. XXXX
---------------------------- ----------------------------
Name Printed: [ILLEGIBLE] Name Printed: Xxx X. Xxxx
----------------- ------------------
Title: [ILLEGIBLE] Title: President
------------------------- --------------------------
By:____________________________ By:_____________________________
Name Printed:__________________ Name Printed:___________________
Title:_________________________ Title:__________________________
Address:_______________________ Address:________________________
_______________________________ ________________________________
Telephone: ( ) _______________ Telephone: ( ) ________________
Facsimile: ( )________________ Facsimile: ( )_________________
Federal ID No._________________ Federal ID No.__________________
________ ________
________ ________
Initials Initials
Page 14
STANDARD LEASE ADDENDUM PARAGRAPHS
51. Rent Payments. All payments due under this Lease by Lessee shall be made to
the following payee and address until Lessor shall notify Lessee otherwise.
00 Xxxxx Xxxxxx Building
c/o Portfolio Realty Management, Inc.
00000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
52. Special Provisions. The following special provisions shall apply in this
Lease.
(a) Section 4.2 of the Lease is hereby deleted in its entirety.
(b) All consents required of Lessor within Section 12 shall not be
unreasonably withheld.
(c) In Section 12.1, the threshold level of voting control of Lessee shall
be 50% rather than 25%.
53. Replacement for Paragraph 8.7, Indemnity. The following paragraph replaces
paragraph 8.7 of the Lease in its entirety. Lessee shall indemnify Lessor
against, and hold Lessor harmless from, any and all claims (whether or not
meritorious) for personal injury or property damage arising from any of the
following:
(a) Lessee's occupancy of the Premises and use of the Office Building
Project or Building;
(b) Lessee's conduct of business in the Premises;
(c) Any work performed by or for Lessee in the Premises;
(d) Lessee's failure to perform Lessee's obligations under this Lease; or
(e) Any act or omission of Lessee occurring within the Office Building
Project.
For purposes of this paragraph, "Lessor" includes Lessor, Lessor's
ground lessor, partners, employees, lenders, invitees and agents; and "Lessee"
includes Lessee, Lessee's employees, agents, partners, invitees, and
contractors. The indemnity given in this paragraph shall cover all liability,
loss, damages, and expenses of all kinds incurred by Lessor, including without
limitation attorney's fees, costs of suit, expert's and consultant's fees, and
other litigation expenses. Lessor shall be entitled to such indemnity
notwithstanding Lessor's contributory negligence whether active or passive, but
Lessee shall not be required to indemnify Lessor against Lessor's willful injury
to persons or property or Lessor's violation of law. Lessee's indemnity shall
include a defense of Lessor at Lessee's expense through legal counsel selected
by Lessee and reasonably acceptable to Lessor. Lessee shall provide such defense
upon written notice from Lessor, who shall cooperate with Lessee in the defense.
54. Hours of Operation; Utilities. Lessor shall furnish to the Premises, at
Lessor's sole cost, during ordinary business hours (i.e. from 7:00 a.m. to 6:00
p.m., Monday through Friday, holidays excepted) the following services:
(a) Normal electrical service, heat, and air conditioning as required in
the reasonable judgment of Lessor for the comfortable use and occupancy
of the Premises, subject to any regulations imposed by any local,
state, or federal government authority; and
(b) Janitorial and trash removal service three days per week, holidays
excepted; and
(c) Water and sewage services as is customary with other Lessees in the
Office Building Project.
Lessor shall not be liable, under any circumstances and however occurring, for
injury to person, inconvenience, damage to or loss of use of property and Lessee
shall not be entitled to any abatement or reduction of Rent or other sums by
reason of Lessor's failure to furnish any service for any cause beyond Lessor's
reasonable control. Notwithstanding the ordinary business hours noted above,
Lessor shall provide Lessee with normal access to the Building after-hours and
the use of all normal utilities after-hours. Lessor reserves the right to charge
Lessee for utility usage after-hours (see paragraph 57 below).
55. Utility Rooms; Telephone Equipment; Telecommunications Wiring. Lessee shall
not install any telecommunications equipment nor telecommunications wiring
anywhere inside or outside the immediate Premises of Lessee without the
expressed written consent of Lessor and in accordance with the following
limitations
(a) Location of Lessee's Equipment. Lessee shall install Lessee's telephone
equipment within Lessee's Premises and not within the utility rooms or
telephone closets on each floor. Lessor and Lessee agree that these
rooms are available for making Lessee's telephone line connections
only. No rooftop locations are available to Lessee at any time without
a special lease amendment and compensation to Lessor.
(b) Lessor May Elect to Either Remove or Keep Telecommunications Wiring.
Within fifteen (15) days after the expiration or sooner termination of
this Lease, Lessor may elect (the "Election Right") by written notice
to Lessee to:
(i) Retain any or all electrical or telecommunications wiring,
cables, risers, mounts, and/or similar installations installed
by Lessee (the "Telecommunications Wiring");
(ii) Remove any or all such Telecommunications Wiring and restore
the Premises or other areas within the Office Building Project
to their condition prior to the installation of the
Telecommunications Wiring (the "Wiring Restoration Work").
Lessor shall perform such Wiring Restoration Work at Lessee's
sole cost and expense; or
(iii) Require Lessee to perform the Wiring Restoration Work at
Lessee's sole cost and expense.
(c) Survival. The provisions of this paragraph shall survive the expiration
or sooner termination of this Lease.
(d) Condition of Wiring. In the event Lessor elects to retain the
Telecommunications Wiring pursuant to this paragraph, Lessee covenants
that:
(i) Lessee shall be the sole owner of such Telecommunications
Wiring, that Lessee shall have good right to surrender such
Telecommunications Wiring to Lessor, and that such
Telecommunications Wiring shall be free of all liens and
encumbrances; and
(ii) All Telecommunications Wiring shall be left in good condition
(including fittings and connections), good working order,
properly labeled at each end and in safe condition.
(e) Lessor May Retain Security Deposit. Lessor may retain Lessee's Security
Deposit after the expiration or sooner termination of this Lease until
the earliest of the following events:
(i) Lessor elects to retain the Telecommunications Wiring pursuant
to this paragraph; see (b) above.
(ii) Lessor elects to perform the Wiring Restoration Work pursuant
to this paragraph and the Wiring Restoration Work is complete
and the Lessee has fully reimbursed Lessor for all costs
related thereto; or
Initials: Lessor _____ Lessee _____
PORTFOLIO REALTY MANAGEMENT, INC.
408/255-2278
STANDARD LEASE ADDENDUM PARAGRAPHS
(iii) Lessor elects to require Lessee to perform the Wiring
Restoration Work pursuant to this paragraph and the Wiring
Restoration Work is complete and Lessee has paid for all costs
related thereto.
(f) Lessor Can Apply Security Deposit. In the event Lessee fails or refuses
to pay all costs of the Wiring Restoration Work within fifteen (15)
days of Lessee's receipt of Lessor's notice, Lessor may apply all or
any portion of Lessee's Security Deposit toward the payment of such
unpaid costs relative to the Wiring Restoration Work. The retention or
application of Lessee's Security Deposit by Lessor pursuant to this
paragraph does not constitute a limitation on or waiver of Lessor's
right to seek further remedy under law or equity.
56. Heat Generating Equipment. Whenever heat generating machines or equipment,
including computer servers, are used in the Premises which affect the
temperature maintained in the Premises or elsewhere in the building by the HVAC
(heating, ventilating, and air conditioning) systems, Lessor reserves the right
to provide supplementary HVAC. The costs of acquiring, installing, maintaining
and powering such HVAC shall be paid by Lessee upon demand as Additional Rent.
57. Additional Electrical Power. Lessee shall not use, without Lessor's prior
written consent, any machines or equipment of any type whatsoever which will or
in fact increase the amount of electricity ordinarily furnished for use in the
Premises as general office space. If Lessee requires additional electrical
power, Lessee shall request Lessor to provide such power, which request Lessor
may refuse at Lessor's sole discretion. If additional electrical power is
furnished, Lessee shall pay on demand and as Additional. Rent the costs,
including without limitation, installation, maintenance costs and power
consumption, plus all expenses incurred by Lessor in keeping accounts of the
electric power consumed, including the cost of special circuits, transformers
and/or submeters.
58. Bonus Value Shared Between Lessee and Lessor. It is the intent of the
parties hereto that this Lease, including any' amendments and addendum, shall
confer upon Lessee only the right to use and occupy the Premises, and to
exercise such other rights as are conferred upon Lessee by this Lease. The
parties agree that an assignment of this Lease is not intended to have a bonus
value, nor to serve as a vehicle whereby Lessee may profit by a future transfer
of the Lease or the right to use or occupy the Premises as a result of any
favorable terms contained herein or any future changes in the market for lease
space. However, it is the intent of the parties that any such bonus value that
may occur upon subleasing all or a portion of the Premises shall be shared
between Lessor and Lessee on a 50/50 basis after Lessee's and Lessor's direct
costs associated with the sublease are reimbursed in full. Unless Lessor
provides documentation from third parties to the contrary, Lessor's direct costs
associated with a sublease shall be the sum of five hundred dollars ($5OO). In
the event Lessee seeks to transfer its interest in this Lease or the Premises,
Lessor shall have the options provided for in the section(s) of the Lease
dealing with assignment and subletting, which may be exercised at Lessor's sole
choice without limiting Lessor in the exercise of any other rights or remedies
at law or equity which Lessor may have by reason of such transfer.
59. Partnerships and Corporations. If Lessee is a partnership, a withdrawal or
substitution (whether voluntary, involuntary, or by operation of law, and
whether occurring at one time or over a reasonable period of time) of any
partner(s) owning 25% or more of the partnership, any assignment(s) of 25% or
more (cumulatively) of any interest in the capital or profits of the
partnership, or the dissolution of the partnership shall be deemed a transfer of
this Lease. If Lessee is a corporation, any dissolution, merger, consolidation
or other reorganization of Lessee, any sale or transfer (or cumulative sales or
transfers) of the capital stock of Lessee in excess of 25%, or any sale (or
cumulative sales) of 51% of the value of the assets of Lessee shall be deemed a
transfer of this Lease. This section shall not apply to corporations in which
the capital stock of the corporation is publicly traded or is being offered to
the public for the first time in an initial public offering (IPO).
60. Reasonableness. Lessee expressly agrees that the provisions of the
paragraphs in this Addendum are not unreasonable for purposes of Section
1951.4(b)(2) of the California Civil Code, as amended from time to time.
61. Disclosures. Various laws, regulations and policies require disclosure of
the following information:
(a) Xxxxxxx-Xxxxxx Notification; Xxxxxxx-Xxxxxx Special Earthquake Studies
Zone Act: The Premises and the property containing the Premises may be
situated in a "Special Study Zone" as designated under the
Xxxxxxx-Xxxxxx Special Studies Zone Act, Sections 2621-2630, inclusive,
of the California Public Resources Code. As such, the construction of
the Premises and the property may be subject to the findings of a
geologic report prepared by a geologist registered in the State of
California, unless such report is waived by the city or county under
the terms of that act. No representations on the subject are made by
Lessor or by Portfolio Realty Management, Inc., its agents or its
employees. Lessee should make its own inquiry or investigation of the
geological risks.
(b) Hazardous Wastes or Substances and Underground Storage Tanks:
Comprehensive federal and state laws and regulations have been enacted
in the past several years in an effort to control the use, storage,
handling, clean-up, removal and disposal of hazardous wastes or
substances. Some of the laws and regulations (for example, CERCLA)
provide for broad liability on the part of property owners, Lessees, or
other users of the property for clean-up costs and damages regardless
of fault. Other laws and regulations set standards for the handling of
asbestos, and establish requirements for the use, modification,
abandonment, and closure of underground storage tanks.
It is not practical or possible to list all such laws and regulations
in this disclosure. Therefore, property owners and Lessees are urged to consult
legal counsel to determine their respective rights and liabilities with respect
to the issues described in this disclosure, as well as all other aspect of the
proposed transaction. If hazardous wastes or substances have been, or are going
to be used, stored, handled or disposed of within the Premises or on the
property, or if the property has or may have had underground storage tanks, it
is essential that legal and technical advice be obtained to determine, among
other things, the nature of permits and approvals which have been obtained or
may be required; the estimated costs and expenses associated with the use,
storage, handling, clean-up, disposal or removal of hazardous wastes or
substances; and the nature and extent of contractual provisions necessary or
desirable in this transaction.
Initials: Lessor _____ Lessee _____
PORTFOLIO REALTY MANAGEMENT, INC.
408/255-2278
STANDARD, LEASE ADDENDUM PARAGRAPHS
Lessor agrees to disclose to Portfolio Realty Management, Inc. and to
Lessee any and all information which it has regarding present and future zoning
and environmental matters affecting the Premises or the property and the
condition of the Premises or the property, including, but not limited to
structural, mechanical and soils conditions, the presence and location of
asbestos, PCB transformers, other toxic, hazardous or contaminated substances,
and underground storage tanks in or about the property.
Portfolio Realty Management, Inc. has conducted no investigation
regarding the subject matter hereof, except as may be separately provided by
Portfolio Realty Management, Inc. Otherwise, Portfolio Realty Management, Inc.
makes no representations concerning the existence or nonexistence of hazardous
wastes or substances, or underground storage tanks in or about the property.
Lessee should contact a professional, such as a civil engineer, industrial
hygienist or other experienced person, to advise on these matters. The term
"hazardous wastes or substances" is used herein in its very broadest sense and
includes, but is not limited to, petroleum based products, paints, solvents,
lead, cyanide, printing inks, acids, pesticides, ammonium compounds, asbestos,
PCB's and other chemical products.
(c) Americans With Disabilities Act: Be advised that an owner or Lessee of
real property may be subject to the Americans With Disabilities Act
(the ADA). ADA requires owners and Lessees of "public accommodations"
to remove barriers to access by disabled persons and to provide
auxiliary aids and services for hearing, vision or speech impaired
persons. You are advised to consult your attorney with respect to the
application of ADA to the Premises and the property.
(d) Portfolio Realty Management, Inc. Disclosure: The parties to this Lease
hereby expressly acknowledge Portfolio Realty Management, Inc.,
Lessor's managing agent, has made no independent determination or
investigation regarding, but not limited to, present or future use of
the property; environmental matters affecting the property; the
condition of the property, including, but not limited to structural,
mechanical and soils conditions, as well as issues surrounding
hazardous wastes or substances as set out above; violations of the
Occupational Safety and Health Act (OSHA) or any federal, state, county
or municipal laws, ordinances, or statutes; or measurements of land or
buildings; except as otherwise disclosed by Portfolio Realty
Management, Inc. Lessee agrees to make its own investigation and
determination regarding such items.
62. Improvements. Lessee accepts the Premises as-is, except for the following
improvements to be made by Lessor at Lessor's sole cost and expense prior to
April 16, 2001, except as noted
(a) Interior Paint: Lessor shall repair the walls and paint the Premises
its building standard off-white paint.
(b) Carpet Replacement: Lessor shall replace all carpeting throughout the
Premises at Lessor's sole cost and expense with building standard grade
carpeting of a color mutually agreeable between Lessor and Lessee. The
tile flooring in the supply/service room shall be retained.
(c) Ceiling Tiles, Ceiling Grid, & Lighting: Lessor shall repair or replace
same so that they are in good working order.
(d) Window Coverings: Lessor shall clean, repair, or replace as necessary
the window coverings of the Premises as-existing so that they are in
good working order at the beginning of this Lease. Lessor shall not add
window coverings.
(e) Suite Front Door: Lessor shall replace the front door of the suite with
a glass door at Lessor's sole cost and expense in a design, color and
style that reasonably matches or compliments the other glass entry
doors within the Building and is mutually agreeable between Lessor and
Lessee. The rear suite entry door shall not be changed.
(0 Installation of Wet Bar and Cabinetry: Lessor shall install Lessee's
wet bar and cabinetry along the wall backing the restrooms of the
Building at Lessor's cost to install same. Such installation shall
include connections for hot and cold water and sewer. The timing of the
availability of the wet bar and cabinetry for installation shall not
serve to delay the beginning of this Lease.
Additional improvements, if any, shall be completed at the sole cost of Lessee
after obtaining reasonable consent from Lessor. Lessor shall also have the right
to post Notices of Non-Responsibility if appropriate.
63. Signage. Lessor shall provide building standard signage for Lessee's suite
door, the building directory and the building monument sign(s) one time at the
beginning of this Lease at the sole cost of Lessor. However, Lessor shall
provide such signage for only one person or entity of Lessee. Should Lessee
desire further signage, then such further signage shall be provided by Lessor to
Lessee at Lessee's cost and expense.
64. Obligations of Lessee and Lessor; Clarification to Section 7. As a
clarification to section 7, Maintenance, Repairs, Utility Installations, Trade
Fixtures and Alterations, the intent of the parties is that the operating
expenses of the Building be borne by the Lessor as a conventional "full service"
building. Lessor is to provide the Common Areas and the Premises with normal and
routine maintenance. By way of examples, such normal and routing maintenance
includes maintenance to the lighting and HVAC systems of the Building, including
to the interior of the Premises, but does not include periodic repainting,
recarpeting or the repair of damage done to the Premises by Lessee's use or
occupancy.
Copyright 0 Portfolio Realty Management, Inc., 1999 - 2000
JDL:mmi Revised: 3/17/01
StdAddendumNFF
Initials: Lessor _____ Lessee _____
PORTFOLIO REALTY MANAGEMENT, INC.
408/255-2278
EXHIBIT X
XXXXX XXXX
Xxxxx 000, Xxxxxx Xxxxx
00 Xxxxx Xxxxxx Xxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx
Premises outlined in yellow.
Not to scale; no interior partitions shown.
[GRAPHIC OMITTED]
Initials:
PORTFOLIO REALTY MANAGEMENT, INC.
408/255-2278
RULES AND REGULATIONS FOR
STANDARD OFFICE LEASE
[GRAPHIC OMITTED]
Dated: February 23, 2001
By and Between Uenaka Family Partnership, Lessor, and KAL Equity Group, Inc.,
Lessee
GENERAL RULES
1. Lessee shall not suffer or permit the obstruction of any Common Areas,
including driveways, walkways and stairways.
2. Lessor reserves the right to refuse access to any persons Lessor in
good faith judges to be a threat to the safety and reputation of the Project and
Its occupants.
3.o Lessee shall not make or permit any noise or odors that annoy or
interfere with other lessees or persons having business within the Project.
4. Lessee shall not keep animals or birds within the Project, and shall
not bring bicycles, motorcycles or other vehicles into areas not designated as
authorized for same.
5. Lessee shall not make, suffer or permit litter except In appropriate
receptacles for that purpose.
6. Lessee shall not alter any lock or install new or additional locks or
bolts.
7. Lessee shall be responsible for the Inappropriate use of any toilet
rooms, plumbing or other utilities. No foreign substances of any kind are to be
Inserted therein.
8. Lessee shall not deface the walls, partitions or other surfaces of the
Premises or Project.
9. Lessee shall not suffer or permit anything In or around the Premises or
Building that causes excessive vibration or floor loading in any part of the
Project.
10. Furniture, significant freight and equipment shall be moved Into or out
of the building only with the Lessor's knowledge and consent, and subject to
such reasonable limitations, techniques and timing, as may be designated by
Lessor. Lessee shall be responsible for any damage to the Office Building
Project arising from any such activity.
11. Lessee shall not employ any service or contractor for services or work
to be performed in the Building, except as approved by Lessor.
12. Lessor reserves the right to close and lock the Building on Saturdays,
Sundays and Building Holidays, and on other days between the hours of 7:00 PM.
and 7:00 A.M. of the following day. If Lessee uses the Premises during such
periods, Lessee shall be responsible for securely locking any doors it may have
opened for entry.
13. Lessee shall return all keys at the termination of its tenancy and
shall be responsible for the cost of replacing any keys that are lost.
14. No window coverings, shades or awnings shall be installed or used by
Lessee.
15. No Lessee, employee or Invitee shall go upon the roof of the Building.
16. Lessee shall not suffer or permit smoking or carrying of lighted cigars
or cigarettes in areas reasonably designated by Lessor or by applicable
governmental agencies as non-smoking areas.
17. Lessee shall not use any method of heating or air conditioning other
than as provided by Lessor.
18. Lessee shall not install, maintain or operate any vending machines upon
the Premises without Lessor's written consent.
19. The Premises shall not be used for lodging or manufacturing, cooking or
food preparation.
20. Lessee shall comply with all safety, fire protection and evacuation
regulations established by Lessor or any applicable governmental agency.
21. Lessor reserves the right to waive any one of these rules or
regulations, and/or as to any particular Lessee, and any such waiver shall not
constitute a waiver of any other rule or regulation or any subsequent
application thereof to such Lessee.
22. Lessee assumes all risks from theft or vandalism and agrees to keep Its
Premises locked as may be required.
23. Lessor reserves the right to make such other reasonable rules and
regulations as It may from time to time deem necessary for the appropriate
operation and safety of the Project and Its occupants. Lessee agrees to abide by
these and such rules and regulations.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles herein called "Permitted Size Vehicles."
Vehicles other than Permitted Size Vehicles are herein referred to as `Oversized
Vehicles."
2. Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked In areas other than those designated
by Lessor for such activities.
3. Parking stickers or Identification devices shall be the property of
Lessor and be returned to Lessor by the holder thereof upon termination of the
holder's parking privileges. Lessee will pay such replacement charge as Is
reasonably established by Lessor for the loss of such devices.
4. Lessor reserves the right to refuse the sale of monthly Identification
devices to any person or entity that willfully refuses to comply with the
applicable rules, regulations, laws and/or agreements.
5. Lessor reserves the right to relocate all or a part of parking spaces
from floor to floor, within one floor, and/or to reasonably adjacent otIsite
location(s), and to reasonably allocate them between compact and standard size
spaces, as long as the same complies with applicable laws, ordinances and
regulations.
6. Users of the parking area will obey all posted signs and park only in
the areas designated for vehicle parking.
7. Unless otherwise Instructed, every person using the parking area Is
required to park and lock his own vehicle. Lessor will not be responsible for
any damage to vehicles, Injury to persons or loss of property, all of which
risks are assumed by the party using the parking area.
8. Validation, if established, will be permissible only by such method or
methods as Lessor and/or Its licensee may establish at rates generally
applicable to visitor parking.
9. The maintenance, washing, waxing or cleaning of vehicles In the parking
structure or Common Areas Is prohibited.
10. Lessee shall be responsible for seeing that all of Its employees,
agents and Invitees comply with the applicable parking rules, regulations, laws
and agreements.
11. Lessor reserves the right to modify these rules and/or adopt such other
reasonable and non-discriminatory rules and regulations as it may deem necessary
for the proper operation of the parking area.
12. Such parking use as is herein provided Is Intended merely as a license
only and no bailment Is Intended or shall be created hereby.
Initials PAGE 1 of 1 Initials
