AMENDED AND RESTATED
REAL ESTATE LEASE
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the Landlord
and Tenant named below. Other Articles, Sections and Paragraphs of the Lease
referred to in this Article One explain and define the Basic Terms and are to
be read in conjunction with the Basic Terms.
SECTION 1.01. DATE OF LEASE: April 1, 2000.
SECTION 1.02. LANDLORD: MDC Land, LLC.
Address of Landlord: 0000 Xxxxxxx Xxxxxx, Xxxxx Xxx, XX 00000.
SECTION 1.03. TENANT: Simple Technology, Inc.
Address of Tenant: 0000 Xxxxxxx Xxxxxx, Xxxxx Xxx, XX 00000.
SECTION 1.04. PROPERTY: The Property is known as Daimler Commerce Centre
Building #4 and described or depicted in Exhibit "B" (the "Project"). The
Project includes the land, the buildings and all other improvements located on
the land, and the common areas described in Paragraph 4.05(a). The Property is
0000 Xxxxxxx Xxxxxx, Xxxxx Xxx, XX 00000; 24,500 sq. ft. building.
SECTION 1.05. LEASE TERM: Five (5) years beginning on April 1, 2000 or such
other date as is specified in this Lease, and ending on March 31, 2005.
SECTION 1.06. PERMITTED USES: (See Article Five) General office and assembly
work for computer components and electronic equipment.
SECTION 1.07. TENANT'S GUARANTOR: (If none, so state) None.
SECTION 1.08. BROKERS: (See Article Fourteen)(If none, so state)
Landlord's Broker: None.
Tenant's Broker: None.
SECTION 1.09. COMMISSION PAYABLE TO LANDLORD'S BROKER: (See Article Fourteen)
N/A.
SECTION 1.10. INITIAL SECURITY DEPOSIT: (See Section 3.03) $17,150.00.
SECTION 1.11. VEHICLE PARKING SPACES ALLOCATED TO TENANT: (See Section 4.05)
Non-exclusive with other tenants and occupants of Daimler Commerce Centre per
recorded CCRs.
SECTION 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT:
(a) BASE RENT: $17,150.00/month. (See Exhibit A)
(b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See Section
4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section
4.04); (iv) Tenant's Pro Rata Share of Common Area Expenses 100% (See Section
4.05); (v) Impounds for Insurance Premiums and Property Taxes (See Section
4.08); (vi) Maintenance, Repairs and Alterations (See Article Six).
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SECTION 1.13. LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR SUBLEASE: (See Section
9.05) Fifty percent (50%) of the Profit (the "Landlord's Share").
SECTION 1.14. RIDERS: The following Riders are attached to and made a part of
this Lease: (If none, so state) See Exhibits A and B.
ARTICLE TW0: LEASE TERM
SECTION 2.01. LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the Property
to Tenant and Tenant leases the Property from Landlord for the Lease Term.
The Lease Term is for the period stated in Section 1.05 above and shall begin
and end on the dates specified in Section 1.05 above, unless the beginning or
end of the Lease Term is changed under any provision of this Lease. The
"Commencement Date" shall be the date specified in Section 1.05 above for the
beginning of the Lease Term, unless advanced or delayed under any provision
of this Lease.
SECTION 2.02. DELAY IN COMMENCEMENT. Landlord shall not be liable to Tenant
if Landlord does not deliver possession of the Property to Tenant on the
Commencement Date. Xxxxxxxx's non-delivery of the Property to Tenant on that
date shall not affect this Lease or the obligations of Tenant under this
Lease except that the Commencement Date shall be delayed until Landlord
delivers possession of the Property to Tenant. The Lease Term shall not be
extended and the expiration date of the Lease shall remain unchanged. If
Landlord does not deliver possession of the Property to Tenant within ninety
(90) days after the Commencement Date, Tenant may elect to cancel this Lease
by giving written notice to Landlord within ten (10) days after the ninety
(90)-day period ends. If Tenant gives such notice, the Lease shall be
cancelled and neither Landlord nor Tenant shall have any further obligations
to the other. If Tenant does not give such notice, Xxxxxx's right to cancel
the Lease shall expire and the Lease Term shall commence upon the delivery of
possession of the Property to Tenant. If delivery of possession of the
Property to Tenant is delayed, Landlord and Tenant shall, upon such delivery,
execute an amendment to this Lease setting forth the actual Commencement Date
and expiration date of the Lease. Failure to execute such amendment shall not
affect the actual Commencement Date and expiration date of the Lease.
SECTION 2.03. EARLY OCCUPANCY. If Tenant occupies the Property prior to the
Commencement Date, Xxxxxx's occupancy of the Property shall be subject to all
of the provisions of this Lease. Early occupancy of the Property shall not
advance the expiration date of this Lease. Tenant shall pay Base Rent and all
other charges specified in this Lease for the early occupancy period.
SECTION 2.04. HOLDING OVER. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. Tenant shall reimburse
Landlord for and indemnify Landlord against all damages which Landlord incurs
from Xxxxxx's delay in vacating the Property. If Tenant does not vacate the
Property upon the expiration or earlier termination of the Lease and Landlord
thereafter accepts rent from Tenant, Xxxxxx's occupancy of the Property shall
be a "month-to-month" tenancy, subject to all of the terms of this Lease
applicable to a month-to-month tenancy, except that the Base Rent then in
effect shall be increased by twenty-five percent (25%).
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ARTICLE THREE: BASE RENT (SEE EXHIBIT A)
SECTION 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this Lease,
Tenant shall pay Landlord the Base Rent in the amount stated in Paragraph
1.12(a) above for the first month of the Least Term. On the first day of the
second month of the Lease Term and each month thereafter, Tenant shall pay
Landlord the Base Rent, in advance, without offset, deduction or prior
demand. The Base Rent shall be payable at Landlord's address or at such other
place as Landlord may designate in writing.
SECTION 3.02. COST OF LIVING INCREASES. The Base Rent shall be fixed for the
duration of the initial term.
SECTION 3.03. SECURITY DEPOSIT; INCREASES.
(a) Upon the execution of this Lease, Tenant shall deposit with
Landlord a cash Security Deposit in the amount set forth in Section 1.10
above. Landlord may apply all or part of the Security Deposit to any unpaid
rent or other charges due from Tenant or to cure any other defaults of
Tenant. If Landlord uses any part of the Security Deposit, Tenant shall
restore the Security Deposit to its full amount within ten (10) days after
Landlord's written request. Tenant's failure to do so shall be a material
default under this Lease. No interest shall be paid on the Security Deposit.
Landlord shall not be required to keep the Security Deposit separate from its
other accounts and no trust relationship is created with respect to the
Security Deposit.
(b) Each time the Base Rent is increased, Tenant shall deposit
additional funds with Landlord sufficient to increase the Security Deposit to
an amount which bears the same relationship to the adjusted Base Rent as the
initial Security Deposit bore to the initial Base Rent.
SECTION 3.04. TERMINATION; ADVANCE PAYMENTS. Upon termination of this Lease
under Article Seven (Damage or Destruction), Article Eight (Condemnation), or
any other termination not resulting from Tenant's default, and after Tenant
has vacated the Property in the manner required by this Lease, Landlord shall
refund or credit to Tenant (or Xxxxxx's successor) the unused portion of the
Security Deposit, any advance rent or other advance payments made by Tenant
to Landlord, and any amounts paid for real property taxes and other reserves
which apply to any time periods after termination of the Lease.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
SECTION 4.01. ADDITIONAL RENT. All charges payable by Tenant other than Base
Rent are called "Additional Rent." Unless this Lease provides otherwise,
Tenant shall pay all Additional Rent then due with the next monthly
installment of Base Rent. The term "rent" shall mean Base Rent and Additional
Rent.
SECTION 4.02. PROPERTY TAXES.
(a) REAL PROPERTY TAXES. Tenant shall pay all real property taxes on
the Property (including any fees, taxes or assessments against, or as a
result of, any tenant improvements installed on the Property by or for the
benefit of Tenant) during the Lease Term. Subject to Paragraph 4.02(c) and
Section 4.08 below, such payment shall be made at least ten (10) days prior
to the delinquency date of the taxes. Within such ten (10)-day period, Tenant
shall furnish Landlord with satisfactory evidence that the real property
taxes have been paid. Landlord shall reimburse Tenant for any real property
taxes paid by Tenant covering any period of time prior to or after the Lease
Term. If Tenant
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fails to pay the real property taxes when due, Landlord may pay the taxes and
Tenant shall reimburse Landlord for the amount of such tax payment as
Additional Rent.
(b) DEFINITION OF "REAL PROPERTY TAX." "Real property tax" means:
(i) any fee, license fee, license tax, business license fee, commercial
rental tax, levy, charge, assessment, penalty or tax imposed by any taxing
authority against the Property; (ii) any tax on the Landlord's right to
receive, or the receipt of, rent or income from the Property or against
Landlord's business of leasing the Property; (iii) any tax or charge for fire
protection, streets, sidewalks, road maintenance, refuse or other services
provided to the Property by any governmental agency; (iv) any tax imposed
upon this transaction or based upon a re-assessment of the Property due to a
change of ownership, as defined by applicable law, or other transfer of all
or part of Landlord's interest in the Property; and (v) any charge or fee
replacing any tax previously included within the definition of real property
tax. "Real property tax" does not, however, include Landlord's federal or
state income, franchise, inheritance or estate taxes.
(c) JOINT ASSESSMENT. If the Property is not separately assessed,
Landlord shall reasonably determine Tenant's share of the real property tax
payable by Tenant under Paragraph 4.02(a) from the assessor's worksheets or
other reasonably available information. Tenant shall pay such share to
Landlord within fifteen (15) days after receipt of Landlord's written
statement.
(d) PERSONAL PROPERTY TAXES.
(i) Tenant shall pay all taxes charged against trade fixtures,
furnishings, equipment or any other personal property belonging to
Xxxxxx. Tenant shall try to have personal property taxed separately
form the Property.
(ii) If any of Tenant's personal property is taxed with the
Property, Tenant shall pay Landlord the taxes for the personal property
within fifteen (15) days after Xxxxxx receives a written statement from
Landlord for such personal property taxes.
SECTION 4.03. UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied
to the Property. However, if any services or utilities are jointly metered
with other property, Landlord shall make a reasonable determination of
Tenant's proportionate share of the cost of such utilities and services and
Tenant shall pay such share to Landlord within fifteen (15) days after
receipt of Landlord's written statement.
SECTION 4.04. INSURANCE POLICIES.
(a) LIABILITY INSURANCE. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance (sometimes known
as broad form comprehensive general liability insurance) insuring Tenant
against liability for bodily injury, property damage (including loss of use
of property) and personal injury arising out of the operation, use or
occupancy of the Property. Tenant shall name Landlord as an additional
insured under such policy. The initial amount of such insurance shall be One
Million Dollars ($1,000,000) per occurrence and shall be subject to periodic
increase based upon inflation, increased liability awards, recommendation of
Landlord's professional insurance
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advisers and other relevant factors. The liability insurance obtained by
Tenant under this Paragraph 4.04(a) shall (i) be primary and
non-contributing; (ii) contain cross-liability endorsements; and (iii) insure
Landlord against Tenant's performance under Section 5.05, if the matters
giving rise to the indemnity under Section 5.05 result from the negligence of
Tenant. The amount and coverage of such insurance shall not limit Tenant's
liability nor relieve Tenant of any other obligation under this Lease.
Landlord may also obtain comprehensive public liability insurance in an
amount and with coverage determined by Landlord insuring Landlord against
liability arising out of ownership, operation, use or occupancy of the
Property. The policy obtained by Landlord shall not be contributory and shall
not provide primary insurance.
(b) PROPERTY AND RENTAL INCOME INSURANCE. During the Lease Term,
Tenant shall maintain policies of insurance covering loss of or damage to the
Property in the full amount of its replacement value. Such policy shall
contain an Inflation Guard Endorsement and shall provide protection against
all perils included within the classification of fire, extended coverage,
vandalism, malicious mischief, special extended perils (all risk), sprinkler
leakage and any other perils which Landlord deems reasonably necessary.
Landlord shall have the right, at Tenant's cost, to obtain flood and
earthquake insurance if required by any lender holding a security interest in
the Property. Landlord shall not obtain insurance for Tenant's fixtures or
equipment or building improvements installed by Tenant on the Property.
During the Lease Term, Landlord shall also maintain a rental income insurance
policy, with loss payable to Landlord, in an amount equal to one year's Base
Rent, plus estimated real property taxes and insurance premiums. Tenant shall
be liable for the payment of any deductible amount under Xxxxxxxx's or
Tenant's insurance policies maintained pursuant to this Section 4.04, in an
amount not to exceed Ten Thousand Dollars ($10,000). Tenant shall not do or
permit anything to be done which invalidates any such insurance policies.
(c) PAYMENT OF PREMIUMS. Subject to Section 4.08, Tenant shall pay
all premiums for the insurance policies described in Paragraphs 4.04(a) and
(b) (whether obtained by Landlord or Tenant) within fifteen (15) days after
Xxxxxx's receipt of a copy of the premium statement or other evidence of the
amount due, except Landlord shall pay all premiums for non-primary
comprehensive public liability insurance which Landlord elects to obtain as
provided in Paragraph 4.04(a). For insurance policies maintained by Landlord
which cover improvements on the entire Project, Tenant shall pay Landlord's
premiums. If insurance policies maintained by Landlord cover improvements on
real property other than the Project, Landlord shall deliver to Tenant a
statement of the premium applicable to the Property showing in reasonable
detail how Tenant's share of the premium was computed. If the Lease Term
expires before the expiration of an insurance policy maintained by Landlord,
Tenant shall be liable for Tenant's prorated share of the insurance premiums.
Before the Commencement Date, Tenant shall deliver to Landlord a copy of any
policy of insurance which Tenant is required to maintain under this Section
4.04. At least thirty (30) days prior to the expiration of any such policy,
Tenant shall deliver to Landlord a renewal of such policy. As an alternative
to providing a policy of insurance, Tenant shall have the right to provide
Landlord a certificate of insurance, executed by an authorized officer of the
insurance company, showing that the insurance which Tenant is required to
maintain under this Section 4.04 is in full force and effect and containing
such other information which Landlord reasonably requires.
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(d) GENERAL INSURANCE PROVISIONS.
(i) Any insurance which Tenant is required to maintain under
this Lease shall include a provision which requires the insurance
carrier to give Landlord not less than thirty (30) days' written notice
prior to any cancellation or modification of such coverage.
(ii) If Tenant fails to deliver any policy, certificate or
renewal to Landlord required under this Lease within the prescribed
time period or if any such policy is cancelled or modified during the
Lease Term without Landlord's consent, Landlord may obtain such
insurance, in which case Tenant shall reimburse Landlord for the cost
of such insurance within fifteen (15) days after receipt of a statement
that indicates the cost of such insurance.
(iii) Tenant shall maintain all insurance required under this
Lease with companies holding a "General Policy Rating" of A-12 or
better, as set forth in the most current issue of "Best Key Rating
Guide". Landlord and Tenant acknowledge the insurance markets are
rapidly changing and that insurance in the form and amounts described
in this Section 4.04 may not be available in the future. Tenant
acknowledges that the insurance described in this Section 4.04 is for
the primary benefit of Landlord. If at any time during the Lease Term,
Tenant is unable to maintain the insurance required under the Lease,
Tenant shall nevertheless maintain insurance coverage which is
customary and commercially reasonable in the insurance industry for
Tenant's type of business, as that coverage may change from time to
time. Xxxxxxxx makes no representation as to the adequacy of such
insurance to protect Xxxxxxxx's or Xxxxxx's interests. Therefore,
Tenant shall obtain any such additional property or liability insurance
which Tenant deems necessary to protect Landlord and Tenant.
(iv) Unless prohibited under any applicable insurance policies
maintained, Landlord and Tenant each hereby waive any and all rights of
recovery against the other, or against the officers, employees, agents
or representatives of the other, for loss of or damage to its property
or the property of others under its control, if such loss or damage is
covered by any insurance policy in force (whether or not described in
this Lease) at the time of such loss or damage. Upon obtaining the
required policies of insurance, Landlord and Tenant shall give notice
to the insurance carriers of this mutual waiver of subrogation.
SECTION 4.05. COMMON AREAS; USE, MAINTENANCE AND COSTS.
(a) COMMON AREAS. As used in this Lease, "Common Areas" shall mean
all areas within the Project which are available for the common use of
tenants of the Project and which are not leased or held for the exclusive use
of Tenant or other tenants, including, but not limited to, parking areas,
driveways, sideways, sidewalks, loading areas, access roads, corridors,
landscaping and planted areas. Landlord, from time to time, may change the
size, location, nature and use of any of the Common Areas, convert Common
Areas into leaseable areas, construct additional parking facilities
(including parking structures) in the Common Areas, and increase or decrease
Common Area land and/or facilities. Tenant acknowledges that such activities
may result in inconvenience to Tenant. Such activities and changes are
permitted if they do not materially affect Tenants' use of the Property.
(b) USE OF COMMON AREAS. Tenant shall have the nonexclusive right
(in common with other tenants and all others to whom Landlord has granted or
may
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grant such rights) to use the Common Areas for the purposes intended, subject
to such reasonable rules and regulations as Landlord may establish from time
to time. Tenant shall abide by such rules and regulations and shall use its
best effort to cause others who use the Common Areas with Xxxxxx's express or
implied permission to abide by Landlord's rules and regulations. At any time,
Landlord may close any Common Areas to perform any acts in the Common Areas
as, in Landlord's judgment, are desirable to improve the Project. Tenant
shall not interfere with the rights of Landlord, other tenants or any other
person entitled to use the Common Areas.
(c) SPECIFIC PROVISION RE: VEHICLE PARKING. Tenant shall be entitled
to use the number of vehicle parking spaces in the Project allocated to
Tenant in Section 1.11 of the Lease without paying any additional rent.
Tenant's parking shall not be reserved and shall be limited to vehicles no
larger than standard size automobiles or pickup utility vehicles. Tenant
shall not cause large trucks or other large vehicles to be parked within the
Project or on the adjacent public streets. Temporary parking of large
delivery vehicles in the Project may be permitted by the rules and
regulations established by Landlord. Vehicles shall be parked only in striped
parking spaces and not in driveways, loading areas or other locations not
specifically designated for parking. Handicapped spaces shall only be used by
those legally permitted to use them. If Tenant parks more vehicles in the
parking area than the number set forth in Section 1.11 of this Lease, such
conduct shall be a material breach of this Lease. In addition to Xxxxxxxx's
other remedies under this Lease, Tenant shall pay a daily charge determined
by Landlord for each such additional vehicle.
(d) MAINTENANCE OF COMMON AREAS. Tenant shall maintain the Common
Areas in good order, condition and repair, and shall pay all costs associated
with the operation and maintenance of the Common Areas. Common Area costs
include, but are not limited to, costs and expenses for the following:
gardening and landscaping; utilities, water and sewage charges; maintenance
of signs; premiums for liability, property damage, fire and other types of
casualty insurance on the Common Areas and worker's compensation insurance;
all property taxes and assessments levied on or attributable to the Common
Areas and all Common Area improvements; fees for required licenses and
permits; repairing, resurfacing, repaving, maintaining, painting, lighting,
cleaning, refuse removal, security and similar items; and reserves for roof
replacement and exterior painting and other appropriate and reasonable
reserves as determined by Landlord. Tenant may cause any or all of such
services to be provided by third parties and the cost of such services shall
be included in Common Area costs. Common Area costs shall not include
depreciation of real property which forms part of the Common Areas.
(e) TENANT'S SHARE AND PAYMENT. Landlord may, at Landlord's
election, estimate in advance and charge to Tenant as Common Area costs, all
real property taxes for which Tenant is liable under Section 4.02 of the
Lease, all insurance premiums for which Tenant is liable under Section 4.04
of the Lease, all maintenance and repair costs for which Tenant is liable
under Section 6.04 of the Lease, and all other Common Area costs payable by
Tenant hereunder. At Landlord's election, such statements of estimated Common
Area costs shall be delivered monthly, quarterly or at any other periodic
intervals to be designated by Landlord, Landlord may adjust such estimates at
any time based upon Xxxxxxxx's experience and reasonable anticipation of
costs. Such adjustments shall be effective as of the next rent payment date
after notice to Tenant. Within sixty (60) days after the end of each calendar
year of the Lease Term, Landlord shall deliver to Tenant a statement prepared
in accordance with generally accepted accounting principles setting forth, in
reasonable detail, the Common Area costs paid or incurred by Landlord during
the preceding
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calendar year. Upon receipt of such statement, there shall be an adjustment
between Landlord and Tenant, with payment to or credit given by Landlord (as
the case may be) so that Landlord shall receive the entire amount of Tenant's
share of such costs and expenses for such period.
SECTION 4.06. LATE CHARGES. Xxxxxx's failure to pay rent promptly may cause
Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but
are not limited to, processing and accounting charges and late charges which
may be imposed on Landlord by any ground lease, mortgage or trust deed
encumbering the Property. Therefore, if Landlord does not receive any rent
payment within ten (10) days after it becomes due, Tenant shall pay Landlord
a late charge equal to ten percent (10%) of the overdue amount. The parties
agree that such late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of such late payment.
SECTION 4.07. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by Tenant to
Landlord which is not paid when due shall bear interest at the rate of
fifteen percent (15%) per annum from the due date of such amount. However,
interest shall be payable on late charges to be paid by Tenant under this
Lease. The payment of interest on such amounts shall not excuse or cure any
default by Tenant under this Lease. If the interest rate specified in this
Lease is higher than the rate permitted by law, the interest rate is hereby
decreased to the maximum legal interest rate permitted by law.
SECTION 4.08. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES. If
requested by any ground lessor or lender to whom Landlord has granted a
security interest in the Property, or if Tenant is more than ten (10) days
late in the payment of rent more than once in any consecutive twelve
(12)-month period, Tenant shall pay Landlord a sum equal to one-twelfth
(1/12) of the annual real property taxes and insurance premiums payable by
Tenant under this Lease, together with each payment of Base Rent. Landlord
shall hold such payments in a non-interest bearing impound account. If
unknown, Landlord shall reasonably estimate the amount of real property taxes
and insurance premiums when due. Tenant shall pay any deficiency of funds in
the impound account to Landlord upon written request. If Tenant defaults
under this Lease, Landlord may apply any funds in the impound account to any
obligation then due under this Lease.
ARTICLE FIVE: USE OF PROPERTY
SECTION 5.01. PERMITTED USES. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.
SECTION 5.02. MANNER OF USE. Tenant shall not cause or permit the Property to
be used in any way which constitute a violation of any law, ordinance, or
governmental regulation or order, which annoys or interferes with the rights
of tenants of the Project, or which constitutes a nuisance or waste. Tenant
shall obtain and pay for all permits, including a Certificate of Occupancy,
required for Tenant's occupancy of the Property and shall promptly take all
actions necessary to comply with all applicable statutes, ordinances, rules,
regulations, orders and requirements regulating the use by Tenant of the
Property, including the Occupational Safety and Health Act.
SECTION 5.03. HAZARDOUS MATERIALS. As used in this Lease, the term "Hazardous
Material" means any flammable items, explosives, radioactive materials,
hazardous or toxic substances, material or waste or related materials,
including any substances defined as or included in the definition of
"hazardous
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substances", "hazardous waste", "hazardous materials" or "toxic substances"
now or subsequently regulated under any applicable federal, state or local
laws or regulations, including without limitation petroleum-based products,
paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides,
ammonia compounds and other chemical products, asbestos, PCBs and similar
compounds, and including any different products and materials which are
subsequently found to have adverse effects on the environment or the health
and safety of persons. Tenant shall not cause or permit any Hazardous
Material to be generated, produced, brought upon, used, stored, treated or
disposed of in or about the Property by Tenant, its agents, employees,
contractors, subleasees or invitees without the prior written consent of
Landlord. Landlord shall be entitled to take into account such other factors
or facts as Landlord may reasonably determine to be relevant in determining
whether to grant or withhold consent to Tenant's proposed activity with
respect to Hazardous Material. In no event, however, shall Landlord be
required to consent to the installation or use of any storage tanks on the
Property.
SECTION 5.04. SIGNS AND AUCTIONS. Tenant shall not place any signs on the
Property without Landlord's prior written consent. Tenant shall not conduct
or permit any auctions or sheriff's sales at the Property.
SECTION 5.05. INDEMNITY. Tenant shall indemnify Landlord against and hold
Landlord harmless from any and all costs, claims or liability arising from
(a) Tenant's use of the Property; (b) the conduct of Tenant's business or
anything else done or permitted by Tenant to be done in or about the
Property, including any contamination of the Property or any other property
resulting from the presence or use of Hazardous Material caused or permitted
by Tenant; (c) any breach or default in the performance of Tenant's
obligations under this Lease; (d) any misrepresentation or breach of warranty
by Tenant under this Lease; or (e) other acts or omissions of Tenant. Tenant
shall defend Landlord against any such cost, claim or liability at Xxxxxx's
expense with counsel reasonably acceptable to Landlord or, at Landlord's
election, Tenant shall reimburse Landlord for any legal fees or costs
incurred by Landlord in connection with any such claim. As a material part of
the consideration to Landlord, Xxxxxx assumes all risk of damage to property
or injury to persons in or about the Property arising from any cause, and
Tenant hereby waives all claims in respect thereof against Landlord, except
for any claim arising out of Landlord's gross negligence or willful
misconduct. As used in this Section, the term "Tenant" shall include Tenant's
employees, agents, contractors and invitees, if applicable.
SECTION 5.06. LANDLORD'S ACCESS. Landlord or its agents may enter the
Property at all reasonable times to show the Property to potential buyers,
investors or tenants or other parties; to do any other act or to inspect and
conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Landlord deems necessary. Landlord shall
give Tenant prior notice of such entry, except in the case of an emergency.
Landlord may place customary "For Sale" or "For Lease" signs on the Property.
SECTION 5.07. QUIET POSSESSION. If Tenant pays the rent and complies with all
other terms of this Lease, Tenant may occupy and enjoy the Property for the
full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
SECTION 6.01. EXISTING CONDITIONS. Tenant accepts the Property in its
condition as of the execution of the Lease, subject to all recorded matters,
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laws, ordinances, and governmental regulations and orders. Except as provided
herein, Xxxxxx acknowledges that neither Xxxxxxxx nor any agent of Landlord
has made any representation as to the condition of the Property or the
suitability of the Property for Xxxxxx's intended use. Tenant represents and
warrants that Tenant has made its own inspection of and inquiry regarding the
condition of the Property and is not relying on any representations of
Landlord or any Broker with respect thereto. If Landlord or Landlord's Broker
has provided a Property Information Sheet or other Disclosure Statement
regarding the Property, a copy is attached as an exhibit to the Lease.
SECTION 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be
liable for any damage or injury to the person, business (or any loss of
income therefrom), goods, wares, merchandise or other property of Tenant,
Tenant's employees, invitees, customers or any other person in or about the
Property, whether such damage or injury is caused by or results from: (a)
fire, steam, electricity, water, gas or rain; (b) the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures or any other cause; (c)
conditions arising in or about the Property or upon other portions of the
Project, or from other sources or places; or (d) any act or omission of any
other tenant of the Project. Landlord shall not be liable for any such damage
or injury even though the cause of or the means of repairing such damage or
injury are not accessible to Tenant. The provisions of this Section 6.02
shall not, however, exempt Landlord from liability for Landlord's gross
negligence or willful misconduct.
SECTION 6.03. LANDLORD'S OBLIGATIONS.
(a) Except as provided in Article Seven (Damage or Destruction) and
Article Eight (Condemnation), Landlord shall keep the following in good
order, condition and repair: the foundations, exterior walls and roof of the
Property (including painting the exterior surface of the exterior walls of
the Property not more often than once every five (5) years, if necessary) and
all components of electrical, mechanical, plumbing, heating and air
conditioning systems and facilities located in the Property which are
concealed or used in common by tenants of the Project. However, Landlord
shall not be obligated to maintain or repair windows, doors, plate glass or
the interior surfaces of exterior walls. Landlord shall make repairs under
this Section 6.03 within a reasonable time after receipt of written notice
from Tenant of the need for such repairs.
(b) Tenant shall pay or reimburse Landlord for all costs Landlord
incurs under Paragraph 6.03(a) above as Common Area costs as provided for in
Section 4.05 of the Lease. Tenant waives the benefit of any statute in effect
now or in the future which might give Tenant the right to make repairs at
Landlord's expense or to terminate this Lease due to Landlord's failure to
keep the Property in good order, condition and repair.
SECTION 6.04. TENANT'S OBLIGATIONS.
(a) Except as provided in Section 6.03, Article Seven (Damage or
Destruction) and Article Eight (Condemnation), Tenant shall keep all portions
of the Property (including structural, nonstructural, interior, systems and
equipment) in good order, condition and repair (including interior repainting
and refinishing, as needed). If any portion of the Property or any system or
equipment in the Property which Tenant is obligated to repair cannot be fully
repaired or restored, Tenant shall promptly replace such portion of the
Property or system or equipment in the Property, regardless of whether the
benefit of such replacement extends beyond the Lease Term; but if the benefit
10
or useful life of such replacement extends beyond the Lease Term (as such
term may be extended by exercise of any options), the useful life of such
replacement shall be prorated over the remaining portion of the Lease Term
(as extended), and Tenant shall be liable only for that portion of the cost
which is applicable to the Lease Term (as extended). Tenant shall maintain a
preventive maintenance contract providing for the regular inspection and
maintenance of the heating and air conditioning system by a licensed heating
and air conditioning contractor, unless Landlord maintains such equipment
under Section 6.03 above. If any part of the Property or the Project is
damaged by any act or omission of Tenant, Tenant shall pay Landlord the cost
of repairing or replacing such damaged property, whether or not Landlord
would otherwise be obligated to pay the cost of maintaining or repairing such
property. It is the intention of Landlord and Tenant that at all times Tenant
shall maintain the portions of the Property which Tenant is obligated to
maintain in an attractive, first-class and fully operative condition.
(b) Tenant shall fulfill all of Tenant's obligations under this
Section 6.04 at Tenant's sole expense. If Tenant fails to maintain, repair or
replace the Property as required by this Section 6.04, Landlord may, upon ten
(10) days' prior notice to Tenant (except that no notice shall be required in
the case of an emergency), enter the Property and perform such maintenance or
repair (including replacement, as needed) on behalf of Tenant. In such case,
Tenant shall reimburse Landlord for all costs incurred in performing such
maintenance or repair immediately upon demand.
SECTION 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.
(a) Tenant shall not make any alterations, additions, or
improvements to the Property without Landlord's prior written consent, except
for non-structural alterations which do not exceed Ten Thousand Dollars
($10,000) in cost cumulatively over the Lease Term and which are not visible
from the outside of any building of which the Property is part. Landlord may
require Tenant to provide demolition and/or lien and completion bonds in form
and amount satisfactory to Landlord. Tenant shall promptly remove any
alterations, additions, and improvements constructed in violation of this
Paragraph 6.05(a) upon Xxxxxxxx's written request. All alterations,
additions, and improvements shall be done in a good and workmanlike manner,
in conformity with all applicable laws and regulations, and by a contractor
approved by Landlord. Upon completion of any such work, Tenant shall provide
Landlord with "as built" plans, copies of all construction contracts, and
proof of payment for all labor and materials.
(b) Tenant shall pay when due all claims for labor and material
furnished to the Property. Tenant shall give Landlord at least twenty (20)
days' prior written notice of the commencement of any work on the Property,
regardless of whether Xxxxxxxx's consent to such work is required. Landlord
may elect to record and post notices of non-responsibility on the Property.
SECTION 6.06. CONDITION UPON TERMINATION. Upon the termination of the Lease,
Xxxxxx shall surrender the Property to Landlord, broom clean and in the same
condition as received except for ordinary wear and tear which Tenant was not
otherwise obligated to remedy under any provision of this Lease. However,
Tenant shall not be obligated to repair any damage which Landlord is required
to repair under Article Seven (Damage or Destruction). In addition, Landlord
may require Tenant to remove any alterations, additions or improvements
(whether or not made with Xxxxxxxx's consent) prior to the expiration of the
Lease and to restore the Property to its prior condition, all at Tenant's
expense. All alterations, additions and improvements which Landlord has not
11
required Tenant to remove shall become Landlord's property and shall be
surrendered to Landlord upon the expiration or earlier termination of the
Lease, except that Tenant may remove any of Tenant's machinery or equipment
which can be removed without material damage to the Property. Tenant shall
repair, at Tenant's expense, any damage to the Property caused by the removal
of any such machinery or equipment. In no event, however, shall Tenant remove
any of the following materials or equipment (which shall be deemed Landlord's
property) without Landlord's prior written consent: any power wiring or power
panels; lighting or lighting fixtures; wall coverings; drapes, blinds or
other window coverings; carpets or other floor coverings; heaters, air
conditioners or any other heating or air conditioning equipment; fencing or
security gates; or other similar building operating equipment and decorations.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
SECTION 7.01. PARTIAL DAMAGE TO PROPERTY.
(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property is only partially
damaged (i.e., less than fifty percent (50%) of the Property is untenantable
as a result of such damage or less than fifty percent (50%) of Tenant's
operations are materially impaired) and if the proceeds received by Landlord
from the insurance policies described in Paragraph 4.04(b) are sufficient to
pay for the necessary repairs, this Lease shall remain in effect and Landlord
shall repair the damage as soon as reasonably possible. Landlord may elect
(but is not required) to repair any damage to Tenant's fixtures, equipment,
or improvements.
(b) If the insurance proceeds received by Landlord are not
sufficient to pay the entire cost of repair, or if the cause of the damage is
not covered by the insurance policies which Landlord maintains under
Paragraph 4.04(b), Landlord may elect either to (i) repair the damage as soon
as reasonably possible, in which case this Lease shall remain in full force
and effect, of (ii) terminate this Lease as of the date the damage occurred.
Landlord shall notify Tenant within thirty (30) days after receipt of notice
of the occurrence of the damage whether Landlord elects to repair the damage
or terminate the Lease. If Landlord elects to repair the damage, Tenant shall
pay Landlord the "deductible amount" (if any) under Landlord's insurance
policies and, if the damage was due to an act or omission of Tenant, or
Tenant's employees, agents, contractors or invitees, the difference between
the actual cost of repair and any insurance proceeds received by Landlord. If
Landlord elects to terminate this Lease, Tenant may elect to continue this
Lease in full force and effect, in which case Tenant shall repair any damage
to the Property and any building in which the Property is located. Tenant
shall pay the cost of such repairs, except that upon satisfactory completion
of such repairs, Landlord shall deliver to Tenant any insurance proceeds
received by Landlord for the damage repaired by Tenant. Tenant shall give
Landlord written notice of such election within ten (10) days after receiving
Landlord's termination notice.
(c) If the damage to the Property occurs during the last six (6)
months of the Lease Term and such damage will require more than thirty (30)
days to repair, either Landlord or Tenant may elect to terminate this Lease
as of the date the damage occurred, regardless of the sufficiency of any
insurance proceeds. The party electing to terminate this Lease shall give
written notification to the other party of such election within thirty (30)
days after Xxxxxx's notice to Landlord of the occurrence of the damage.
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SECTION 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is
substantially or totally destroyed by any cause whatsoever (i.e., the damage
to the Property is greater than partial damage as described in Section 7.01),
and regardless of whether Landlord receives any insurance proceeds, this
Lease shall terminate as of the date the destruction occurred.
Notwithstanding the preceding sentence, if the Property can be rebuilt within
six (6) months after the date of destruction, Landlord may elect to rebuild
the Property at Landlord's own expense, in which case this Lease shall remain
in full force and effect. Landlord shall notify Tenant of such election
within thirty (30) days after Xxxxxx's notice of the occurrence of total or
substantial destruction. If Landlord so elects, Landlord shall rebuild the
Property at Landlord's sole expense, except that if the destruction was
caused by an act or omission of Tenant, Tenant shall pay Landlord the
difference between the actual cost of rebuilding and any insurance proceeds
received by Landlord.
SECTION 7.03. TEMPORARY REDUCTION OF RENT. If the Property is destroyed or
damaged and Landlord or Tenant repairs or restores the Property pursuant to
the provisions of this Article Seven, any rent payable during the period of
such damage, repair and/or restoration shall be reduced according to the
degree, if any, to which Xxxxxx's use of the Property is impaired. However,
the reduction shall not exceed the sum of one year's payment of Base Rent,
insurance premiums and real property taxes. Except for such possible
reduction in Base Rent, insurance premiums and real property taxes, Tenant
shall not be entitled to any compensation, reduction, or reimbursement from
Landlord as a result of any damage, destruction, repair, or restoration of or
to the Property.
SECTION 7.04. WAIVER. Tenant waives the protection of any statute, code or
judicial decision which grants a tenant the right to terminate a lease in the
event of the substantial or total destruction of the leased property. Tenant
agrees that the provisions of Section 7.02 above shall govern the rights and
obligations of Landlord and Tenant in the event of any substantial or total
destruction to the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the property is taken under the power of eminent
domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on
the date the condemning authority takes title or possession, whichever occurs
first. If more than twenty percent (20%) of the floor area of the building in
which the Property is located, or which is located on the Property, is taken,
either Landlord or Tenant may terminate this Lease as of the date the
condemning authority takes title or possession, by delivering written notice
to the other within ten (10) days after receipt of written notice of such
taking (or in the absence of such notice, within ten (10) days after the
condemning authority takes title or possession). If neither Landlord nor
Tenant terminates this Lease, this Lease shall remain in effect as to the
portion of the Property not taken, except that the Base Rent and Additional
Rent shall be reduced in proportion to the reduction in the floor area of the
Property. Any Condemnation award or payment shall be distributed in the
following order: (a) first, to any ground lessor, mortgagee or beneficiary
under a deed of trust encumbering the Property, the amount of its interest in
the Property; (b) second, to Tenant, only the amount of any award
specifically designated for loss of or damage to Tenant's trade fixtures or
removable personal property; and (c) third, to Landlord, the remainder of
such award, whether as compensation for reduction in the value of the
leasehold, the taking of the fee, or otherwise. If this Lease is not
terminated, Landlord shall repair any damage to the Property caused by
Condemnation, except that Landlord shall not
13
be obligated to repair any damage for which Xxxxxx has been reimbursed by the
condemning authority. If the severance damages received by Landlord are not
sufficient to pay for such repair, Landlord shall have the right to either
terminate this Lease or make such repair at Landlord's expense.
ARTICLE NINE: ASSIGNMENT AND SUBLETTING
SECTION 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the Property or of
Tenant's interest in this Lease may be acquired by any other person or
entity, whether by sale, assignment, mortgage, sublease, transfer, operation
of law, or act of Tenant, without Xxxxxxxx's prior written consent, except as
provided in Section 9.02 below. Landlord has the right to grant or withhold
its consent as provided in Section 9.05 below. Any attempted transfer without
consent shall be void and shall constitute a non-curable breach of this
Lease. If Tenant is a partnership, any cumulative transfer of more than
twenty percent (20%) of the partnership interests shall require Landlord's
consent. Tenant is a corporation, any change in the ownership of a
controlling interest of the voting stock of the corporation all require
Landlord's consent.
SECTION 9.02. TENANT AFFILIATE. Tenant may assign this Lease or sublease the
Property, without Landlord's consent, to any corporation which controls, is
controlled by or is under common control with Tenant, or to any corporation
resulting from the merger of or consolidation with Tenant ("Tenant's
Affiliate"). In such case, any Tenant's Affiliate shall assume in writing all
of Tenant's obligations under this Lease.
SECTION 9.03. NO RELEASE OF TENANT. No transfer permitted by this Article
Nine, whether with or without Landlord's consent, shall release Tenant or
change Tenant's primary liability to pay the rent and to perform all other
obligations of Tenant under this Lease. Xxxxxxxx's acceptance of rent from
any other person is not a waiver of any provision of this Article Nine.
Consent to one transfer is not a consent to any subsequent transfer. If
Xxxxxx's transferee defaults under this Lease, Landlord may proceed directly
against Tenant without pursuing remedies against the transferee. Landlord may
consent to subsequent assignments or modifications of this Lease by Xxxxxx's
transferee, without notifying Tenant or obtaining its consent. Such action
shall not relieve Xxxxxx's liability under this Lease.
SECTION 9.04. OFFER TO TERMINATE. If Tenant desires to assign the Lease or
sublease the Property, Tenant shall have the right to offer, in writing, to
terminate the Lease as of a date specified in the offer. If Landlord elects
in writing to accept the offer to terminate within twenty (20) days after
notice of the offer, the Lease shall terminate as of the date specified and
all the terms and provisions of the Lease governing termination shall apply.
If Landlord does not so elect, the Lease shall continue in effect until
otherwise terminated and the provisions of Section 9.05 with respect to any
proposed transfer shall continue to apply.
SECTION 9.05. LANDLORD'S CONSENT.
(a) Xxxxxx's request for consent to any transfer described in
Section 9.01 shall set forth in writing the details of the proposed transfer,
including the name, business and financial condition of the prospective
transferee, financial details of the proposed transfer (e.g., the term of and
the rent and security deposit payable under any proposed assignment or
sublease), and any other information Landlord deems relevant. Landlord shall
have the right to withhold consent, if reasonable, or to grant consent, based
on the following factors: (i) the business of the proposed assignee or
subtenant and the
14
proposed use of the Property; (ii) the net worth and financial reputation of
the proposed assignee or subtenant; (iii) Tenant's compliance with all of its
obligations under the Lease; and (iv) such other factors as Landlord may
reasonably deem relevant. If Landlord objects to a proposed assignment solely
because of the net worth and/or financial reputation of the proposed
assignee, Tenant may nonetheless sublease (but not assign), all or a portion
of the Property to the proposed transferee, but only on the terms of the
proposed transfer.
(b) If Tenant assigns or subleases, the following shall apply:
(i) Tenant shall pay to Landlord as Additional Rent under the
Lease the Landlord's Share (stated in Section 1.13) of the Profit
(defined below) on such transaction as and when received by Xxxxxx,
unless Xxxxxxxx gives written notice to Xxxxxx and the assignee or
subtenant that Landlord's Share shall be paid by the assignee or
subtenant to Landlord directly. The "Profit" means (A) all amounts paid
to Tenant for such assignment or sublease, including "key" money,
monthly rent in excess of the monthly rent payable under the Lease, and
all fees and other consideration paid for the assignment or sublease,
including fees under any collateral agreements, less (B) costs and
expenses directly incurred by Tenant in connection with the execution
and performance of such assignment or sublease for real estate broker's
commissions and costs of renovation or construction of tenant
improvements required under such assignment or sublease. Tenant is
entitled to recover such costs and expenses before Tenant is obligated
to pay the Landlord's Share to Landlord. The Profit in the case of a
sublease of less than all the Property is the rent allocable to the
subleased space as a percentage on a square footage basis.
(ii) Tenant shall provide Landlord a written statement
certifying all amounts to be paid from any assignment or sublease of
the Property within thirty (30) days after the transaction
documentation is signed, and Landlord may inspect Tenant's books and
records to verify the accuracy of such statement. On written request,
Tenant shall promptly furnish to Landlord copies of all the transaction
documentation, all of which shall be certified by Tenant to be
complete, true and correct. Xxxxxxxx's receipt of Landlord's Share
shall not be a consent to any further assignment or subletting. The
breach of Tenant's obligation under this Paragraph 9.05(b) shall be a
material default of the Lease.
SECTION 9.06. NO MERGER. No merger shall result from Xxxxxx's sublease of the
Property under this Article Nine, Xxxxxx's surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord
may terminate any or all subtenancies or succeed to the interest of Xxxxxx as
sublandlord under any or all subtenancies.
ARTICLE TEN: DEFAULTS; REMEDIES
SECTION 10.01. COVENANTS AND CONDITIONS. Xxxxxx's performance of each of
Tenant's obligations under this Lease is a condition as well as a covenant.
Xxxxxx's right to continue in possession of the Property is conditioned upon
such performance. Time is of the essence in the performance of all covenants
and conditions.
SECTION 10.02. DEFAULTS. Tenant shall be in material default under this Lease:
15
(a) If Xxxxxx abandons the Property or if Xxxxxx's vacation of the
Property results in the cancellation of any insurance described in Section
4.04;
(b) If Tenant fails to pay rent or any other charge when due;
(c) If Tenant fails to perform any of Xxxxxx's non-monetary
obligations under this Lease for a period of thirty (30) days after written
notice from Landlord; provided that if more than thirty (30) days are
required to complete such performance, Tenant shall not be in default if
Tenant commences such performance within the thirty (30)-day period and
thereafter diligently pursues its completion. However, Landlord shall not be
required to give such notice if Xxxxxx's failure to perform constitutes a
non-curable breach of this Lease. The notice required by this Paragraph is
intended to satisfy any and all notice requirements imposed by law on
Landlord and is not in addition to any such requirement.
(d) (i) If Tenant makes a general assignment or general arrangement
for the benefit of creditors; (ii) if a petition for adjudication of
bankruptcy or for reorganization or rearrangement is filed by or against
Tenant and is not dismissed within thirty (30) days; (iii) if a trustee or
receiver is appointed to take possession of substantially all of Tenant's
assets located at the Property or of Tenant's interest in this Lease and
possession is not restored to Tenant within thirty (30) days; or (iv) if
substantially all of the Tenant's assets located at the Property or of
Tenant's interest in this Lease is subjected to attachment, execution or
other judicial seizure which is not discharged within thirty (30) days. If a
court of competent jurisdiction determines that any of the acts described in
this subparagraph (d) is not a default under this Lease, and a trustee is
appointed to take possession (or if Tenant remains a debtor in possession)
and such trustee or Tenant transfers Tenant's interest hereunder, then
Landlord shall receive, as Additional Rent, the excess, if any, of the rent
(or any other consideration) paid in connection with such assignment or
sublease over the rent payable by Tenant under this Lease.
(e) If any guarantor of the Lease revokes or otherwise terminates,
or purports to revoke or otherwise terminate, any guaranty of all or any
portion of Tenant's obligations under the Lease. Unless otherwise expressly
provided, no guaranty of the Lease is revocable.
SECTION 10.03. REMEDIES. On the occurrence of any material default by Tenant,
Landlord may, at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which
Landlord may have:
(a) Terminate Xxxxxx's right to possession of the Property by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Property to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including (i) the worth at the time
of the award of the unpaid Base Rent, Additional Rent and other charges which
Landlord had earned at the time of the termination; (ii) the worth at the
time of the award of the amount by which the unpaid Base Rent, Additional
Rent and other charges which Xxxxxxxx would have earned after termination
until the time of the award exceeds the amount of such rental loss that
Tenant proves Landlord could have reasonably avoided; (iii) the worth at the
time of the award of the amount by which the unpaid Base Rent, Additional
Rent and other charges which Xxxxxx would have paid for the balance of the
Lease term after the time of award
16
exceeds the amount of such rental loss that Tenant proves Landlord could have
reasonably avoided; and (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to
perform its obligations under the Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to,
any costs or expenses Landlord incurs in maintaining or preserving the
Property after such default, the cost of recovering possession of the
Property, expenses of reletting, including necessary renovation or alteration
of the Property, Landlord's reasonable attorneys' fees incurred in connection
therewith, and any real estate commission paid or payable. As used in
subparts (i) and (ii) above, the "worth at the time of the award" is computed
by allowing interest on unpaid amounts at the rate of fifteen percent (15%)
per annum, or such lesser amount as may then be the maximum lawful rate. As
used in subpart (iii) above, the "worth at the time of the award" is computed
by discounting such amount at the discount rate of the Federal Reserve Bank
of San Francisco at the time of the award, plus one percent (1%). If Tenant
has abandoned the Property, Landlord shall have the option of (i) retaking
possession of the Property and recovering from Tenant the amount specified in
this Paragraph 10.03(a), or (ii) proceeding under Paragraph 10.03(b);
(b) Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant has abandoned the Property. In
such event, Landlord shall be entitled to enforce all of Landlord's rights
and remedies under this Lease, including the right to recover the rent as it
becomes due;
(c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state in which the Property is
located.
SECTION 10.04. REPAYMENT OF "FREE" RENT. If this Lease provides for a
postponement of any monthly rental payments, a period of "free" rent or other
rent concession, such postponed rent or "free" rent is called the "Abated
Rent". Tenant shall be credited with having paid all of the Abated Rent on
the expiration of the Lease Term only if Xxxxxx has fully, faithfully, and
punctually performed all of Tenant's obligations hereunder, including the
payment of all rent (other than the Abated Rent) and all other monetary
obligations and the surrender of the Property in the physical condition
required by this Lease. Tenant acknowledges that its right to receive credit
for the Abated Rent is absolutely conditioned upon Tenant's full, faithful
and punctual performance of its obligations under this Lease. If Tenant
defaults and does not cure within any applicable grace period, the Abated
Rent shall immediately become due and payable in full and this Lease shall be
enforced as if there were no such rent abatement or other rent concession. In
such case Abated Rent shall be calculated based on the full initial rent
payable under this Lease.
SECTION 10.05. AUTOMATIC TERMINATION. Notwithstanding any other term or
provision hereof to the contrary, the Lease shall terminate on the occurrence
of any act which affirms the Landlord's intention to terminate the Lease as
provided in Section 10.03 hereof, including the filing of an unlawful
detainer action against Tenant. On such termination, Xxxxxxxx's damages for
default shall include all costs and fees, including reasonable attorneys'
fees that Landlord incurs in connection with the filing, commencement,
pursuing and/or defending of any action in any bankruptcy court or other
court with respect to the Lease; the obtaining of relief from any stay in
bankruptcy restraining any action to evict Tenant; or the pursuing of any
action with respect to Landlord's right to possession of the Property. All
such damages suffered (apart from Base Rent and other rent payable hereunder)
shall constitute
17
pecuniary damages which must be reimbursed to Landlord prior to assumption of
the Lease by Xxxxxx or any successor to Tenant in any bankruptcy or other
proceeding.
SECTION 10.06. CUMULATIVE REMEDIES. Xxxxxxxx's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.
ARTICLE ELEVEN: PROTECTION OF LENDERS
SECTION 11.01. SUBORDINATION. Landlord shall have the right to subordinate
this Lease to any ground lease, deed of trust or mortgage encumbering the
Property, any advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever
made or recorded. Tenant shall cooperate with Landlord and any lender which
is acquiring a security interest in the Property or the Lease. Tenant shall
execute such further documents and assurances as such lender may require,
provided that Tenant's obligations under this Lease shall not be increased in
any material way (the performance of ministerial acts shall not be deemed
material), and Tenant shall not be deprived of its rights under this Lease.
Xxxxxx's right to quiet possession of the Property during the Lease Term
shall not be disturbed if Tenant pays the rent and performs all of Tenant's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien
of its ground lease, deed of trust or mortgage and gives written notice
thereof to Tenant, this Lease shall be deemed prior to such ground lease,
deed of trust or mortgage whether this Lease is dated prior or subsequent to
the date of said ground lease, deed of trust or mortgage or the date of
recording thereof.
SECTION 11.02. ATTORNMENT. If Xxxxxxxx's interest in the Property is acquired
by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale, Tenant shall attorn to the transferee of or
successor to Xxxxxxxx's interest in the Property and recognize such
transferee or successor as Landlord under this Lease. Tenant waives the
protection of any statute or rule of law which gives or purports to give
Tenant any right to terminate this Lease or surrender possession of the
Property upon the transfer of Landlord's interest.
SECTION 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any such
attornment or subordination or agreement to do so. If Tenant fails to do so
within ten (10) days after written request, Tenant hereby makes, constitutes
and irrevocably appoints Landlord, or any transferee or successor of
Landlord, the attorney-in-fact of Tenant to execute and deliver any such
instrument or document.
SECTION 11.04. ESTOPPEL CERTIFICATES.
(a) Upon Landlord's written request, Tenant shall execute,
acknowledge and deliver to Landlord a written statement certifying: (i) that
none of the terms or provisions of this Lease have been changed (or if they
have been changed, stating how they have been changed); (ii) that this Lease
has not been cancelled or terminated; (iii) the last date of payment of the
Base Rent and other charges and the time period covered by such payment; (iv)
that Landlord is not in default under this Lease (or, if Landlord is claimed
to be in default, stating why); and (v) such other representations or
information with respect to Tenant or the Lease as Landlord may reasonably
request or which any prospective purchaser or encumbrancer of the Property
may require. Tenant shall deliver such statement to Landlord within ten (10)
days after Xxxxxxxx's
18
request. Landlord may give any such statement by Tenant to any prospective
purchaser or encumbrancer of the Property. Such purchaser or encumbrancer may
rely conclusively upon such statement as true and correct.
(b) If Tenant does not deliver such statement to Landlord within
such ten (10)-day period, Landlord, and any prospective purchaser or
encumbrancer, may conclusively presume and rely upon the following facts: (i)
that the terms and provisions of this Lease have not been changed except as
otherwise represented by Landlord; (ii) that this Lease has not been
cancelled or terminated except as otherwise represented by Landlord; (iii)
that not more than one month's Base Rent or other charges have been paid in
advance; and (iv) that Landlord is not in default under the Lease. In such
event, Tenant shall be stopped from denying the truth of such facts.
SECTION 11.05. TENANT'S FINANCIAL CONDITION. Within ten (10) days after
written request from Landlord, Tenant shall deliver to Landlord such
financial statements as Landlord reasonably requires to verify the net worth
of Tenant or any assignee, subtenant, or guarantor of Tenant. In addition,
Tenant shall deliver to any lender designated by Landlord any financial
statements required by such lender to facilitate the financing or refinancing
of the Property. Tenant represents and warrants to Landlord that each such
financial statement is a true and accurate statement as of the date of such
statement. All financial statements shall be confidential and shall be used
only for the purposes set forth in this Lease.
ARTICLE TWELVE: LEGAL COSTS
SECTION 12.01. LEGAL PROCEEDINGS. If Tenant or Landlord shall be in breach or
default under this Lease, such party (the "Defaulting Party") shall reimburse
the other party (the "Nondefaulting Party") upon demand for any costs or
expenses that the Nondefaulting Party incurs in connection with any breach or
default of the Defaulting Party under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise. Furthermore, if any action for breach of or to enforce the
provisions of this Lease is commenced, the court in such action shall award
to the party in whose favor a judgment is entered, a reasonable sum as
attorneys' fees and costs. The losing party in such action shall pay such
attorneys' fees and costs. Tenant shall also indemnify Landlord against and
hold Landlord harmless from all costs, expenses, demands and liability
Landlord may incur if Landlord becomes or is made a party to any claim or
action (a) instituted by Tenant against any third party, or by any third
party against Tenant, or by or against any person holding any interest under
or using the Property by license of or agreement with Tenant; (b) for
foreclosure of any lien for labor or material furnished to or for Tenant or
such other person; (c) otherwise arising out of or resulting from any act or
transaction of Tenant or such other person; or (d) necessary to protect
Landlord's interest under this Lease in a bankruptcy proceeding, or other
proceeding under Title 11 of the United States Code, as amended. Tenant shall
defend Landlord against any such claim or action at Tenant's expense with
counsel reasonably acceptable to Landlord or, at Landlord's election, Tenant
shall reimburse Landlord for any legal fees or costs Landlord incurs in any
such claim or action.
SECTION 12.02. LANDLORD'S CONSENT. Tenant shall pay Xxxxxxxx's reasonable
attorney's fees incurred in connection with Xxxxxx's request for Xxxxxxxx's
consent under Article Nine (Assignment and Subletting), or in connection with
any other act which Xxxxxx proposes to do and which requires Xxxxxxxx's
consent.
19
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
SECTION 13.01. NON-DISCRIMINATION. Tenant promises, and it is a condition to
the continuance of this Lease, that there will be no discrimination against,
or segregation of, any person or group of persons on the basis of race,
color, sex, creed, national origin or ancestry in the leasing, subleasing,
transferring, occupancy, tenure or use of the Property or any portion thereof.
SECTION 13.02. LANDLORD'S LIABILITY; CERTAIN DUTIES.
(a) As used in this Lease, the term "Landlord" means only the
current owner or owners of the fee title to the Property or Project or the
leasehold estate under a ground lease of the Property or Project at the time
in question. Each Landlord is obligated to perform the obligations of
Landlord under this Lease only during the time such Landlord owns such
interest or title. Any Landlord who transfers its title or interest is
relieved of all liability with respect to the obligations of Landlord under
this Lease to be performed on or after the date of transfer. However, each
Landlord shall deliver to its transferee all funds that Tenant previously
paid if such funds have not yet been applied under the terms of this Lease.
(b) Tenant shall give written notice of any failure by Landlord to
perform any of its obligations under this Lease to Landlord and to any ground
lessor, mortgagee or beneficiary under any deed of trust encumbering the
Property whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of Tenant's notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure,
Landlord shall not be in default if such cure is commenced within such thirty
(30)-day period and thereafter diligently pursued to completion.
(c) Notwithstanding any term or provision herein to the contrary,
the liability of Landlord for the performance of its duties and obligations
under this Lease is limited to Landlord's interest in the Property and the
Project, and neither the Landlord nor its partners, shareholders, officers or
other principals shall have any personal liability under this Lease.
SECTION 13.03. SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal
or unenforceable shall not cancel or invalidate the remainder of such
provision or this Lease, which shall remain in full force and effect.
SECTION 13.04. INTERPRETATION. The captions of the Articles or Sections of
this Lease are to assist the parties in reading this Lease and are not a part
of the terms or provisions of this Lease. Whenever required by the context of
this Lease, the singular shall include the plural and the plural shall
include the singular. The masculine, feminine and neuter genders shall each
include the other. In any provision relating to the conduct, acts or
omissions of Tenant, the term "Tenant" shall include Tenant's agents,
employees, contractors, invitees, successors or others using the Property
with Xxxxxx's expressed or implied permission.
SECTION 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This Lease
is the only agreement between the parties pertaining to the lease of the
Property and no other agreements are effective. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.
20
SECTION 13.06. NOTICES. All notices required or permitted under this Lease
shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be
delivered to the address specified in Section 1.03 above, except that upon
Xxxxxx's taking possession of the Property, the Property shall be Tenant's
address for notice purposes. Notices to Landlord shall be delivered to the
address specified in Section 1.02 above. All notices shall be effective upon
delivery. Either party may change its notice address upon written notice to
the other party. Notices may also be sent by facsimile.
SECTION 13.07. WAIVERS. All waivers must be in writing and signed by the
waiving party. Landlord's failure to enforce any provision of this Lease or
its acceptance of rent shall not be a waiver and shall not prevent Landlord
from enforcing that provision or any other provision of this Lease in the
future. No statement on a payment check from Tenant or in a letter
accompanying a payment check shall be binding on Landlord. Landlord may, with
or without notice to Tenant, negotiate such check without being bound to the
conditions of such statement.
SECTION 13.08. NO RECORDATION. Tenant shall not record this Lease without
prior written consent from Landlord. However, either Landlord or Tenant may
require that a "Short Form" memorandum of this Lease executed by both parties
be recorded. The party requiring such recording shall pay all transfer taxes
and recording fees.
SECTION 13.09. BINDING EFFECT; CHOICE OF LAW. This Lease binds any party who
legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Xxxxxx's successor
unless the rights or interests of Xxxxxx's successor are acquired in
accordance with the terms of this Lease. The laws of the state of California
shall govern this Lease.
SECTION 13.10. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant is a
corporation, each person signing this Lease on behalf of Tenant represents
and warrants that he has full authority to do so and that this Lease binds
the corporation. Within thirty (30) days after this Lease is signed, Tenant
shall deliver to Landlord a certified copy of a resolution of Tenant's Board
of Directors authorizing the execution of this Lease or other evidence of
such authority reasonably acceptable to Landlord. If Tenant is a partnership,
each person or entity signing this Lease for Tenant represents and warrants
that he or it is a general partner of the partnership, that he or it has full
authority to sign for the partnership and that this Lease binds the
partnership and all general partners of the partnership. Tenant shall give
written notice to Landlord of any general partner's withdrawal or addition.
Within thirty (30) days after this Lease is signed, Xxxxxx shall deliver to
Landlord a copy of Xxxxxx's recorded statement of partnership or certificate
of limited partnership.
SECTION 13.11. JOINT AND SEVERAL LIABILITY. All parties signing this Lease as
Tenant shall be jointly and severally liable for all obligations of Tenant.
SECTION 13.12. FORCE MAJEURE. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to
the duration of such events. Events beyond Xxxxxxxx's control include, but
are not limited to, acts of God, war, civil commotion, labor disputes,
strikes, fire, flood or other casualty, shortages of labor or material,
government regulation or restriction and weather conditions.
21
SECTION 13.13. EXECUTION OF LEASE. This Lease may be executed in counterparts
and, when all counterpart documents are executed, the counterparts shall
constitute a single binding instrument. Xxxxxxxx's delivery of this Lease to
Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.
SECTION 13.14. SURVIVAL. All representations and warranties of Landlord and
Tenant shall survive the termination of this Lease.
ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED HERETO
OR IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISIONS ARE INSERTED, PLEASE
DRAW A LINE THROUGH THE SPACE BELOW.
Landlord and Xxxxxx have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialed all Riders
which are attached to or incorporated by reference in this Lease.
"LANDLORD"
Signed on June 29, 2000 MDC Land, LLC
at Santa Ana, California
/s/ Xxxxxxx Xxxxxxxxx
---------------------------------------
By: Xxxxxxx Xxxxxxxxx
Its: President
"TENANT"
Signed on June 29, 2000 Simple Technology, Inc.
at Santa Ana, California
/s/ Xxxxxxx Xxxxxxxxx
---------------------------------------
By: Xxxxxxx Xxxxxxxxx
Its: CEO
22
EXHIBIT "A"
ADDENDUM TO REAL ESTATE LEASE
1. BASE RENT DURING INITIAL TERM OF THE LEASE. Base monthly rent shall be
paid throughout the initial term of this Lease in the following amount with
the first rental payment due April 1, 2000, as rent for April 2000:
April 1,2000 through March 31, 2005 $17,150.00/month.
2. OPTION TO EXTEND TERM.
a. Tenant is given the option to extend the term on all the
provisions contained in this Lease, except for the monthly rent, for one
five-year period ("extended term") following expiration of the initial term,
by giving notice of exercise of the option ("option notice") to Landlord at
least six (6) months before the expiration of the initial term. Provided
that, if Tenant is in default on the date of giving the option notice, the
option notice shall be totally ineffective, or if Tenant is in default on the
date the extended term is to commence, the extended term shall not commence,
and this Lease shall expire at the end of the initial term.
b. The base monthly rent for each year of the extended term (April 1
through March 31 of the following year) shall be determined by the parties
hereto through good faith negotiations.
3. RIGHT OF FIRST REFUSAL TO PURCHASE THE PROPERTY. If, during the time this
Lease is in effect, Landlord determines to sell the real property in which
the premises are located, Landlord shall notify Tenant of the terms on which
Landlord will be willing to sell.
If Tenant, within fifteen days after receipt of Landlord's notice, indicates
in writing its agreement to purchase the real property on the terms stated in
Landlord's notice, Landlord shall sell and convey the real property to Tenant
on the terms stated in the notice. If Tenant does not indicate its agreement
within fifteen days, Landlord thereafter shall have the right to sell and
convey the real property to a third party on the same terms stated in the
notice. If Landlord does not sell and convey the premises or a part of the
premises within six months, any further transaction shall be deemed a new
determination by Landlord to sell and convey the real property, and the
provisions of this paragraph shall be applicable.
If Tenant purchases the real property, this Lease shall terminate on the date
title vests in Tenant, and Landlord shall remit to Tenant all prepaid and
unearned rent.
This Right of First Refusal shall terminate upon the termination of this Lease.
4. TENANT IMPROVEMENTS. All tenant improvements shall be made by Tenant at
Tenant's sole cost, and Tenant shall indemnify and hold Landlord harmless
from all costs and consequences of the tenant improvement work. Tenant shall
obtain Landlord's written consent to Xxxxxx's proposed tenant improvements
before any work commences. Landlord shall not unreasonably withhold or delay
granting his consent. Landlord may post and record a Notice of
Nonresponsibility pursuant to California Civil Code Section 3094.
23
IN WITNESS WHEREOF, this Addendum to Xxxxx has been executed by Xxxxxxxx and
Xxxxxx concurrently with their execution of the Lease.
"LANDLORD"
Signed on June 29, 2000 MDC Land, LLC
at Santa Ana, California
/s/ Xxxxxxx Xxxxxxxxx
------------------------------------
By: Xxxxxxx Xxxxxxxxx
Its: President
"TENANT"
Signed on June 29, 2000 Simple Technology, Inc.
at Santa Ana, California
/s/ Xxxxxxx Xxxxxxxxx
------------------------------------
By: Xxxxxxx Xxxxxxxxx
Its: CEO
24
