AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1. PARTIES: This Lease ("Lease"), dated for reference purposes only
March 1, 1998, is made by and between Sanwa Bank California, Trustee of
the Xxxxxxx Xxxxx Trust, for the Benefit of Xxxxxxx Xxxxx Trust, No.
00X000000 and the Xxxxxx Xxxxx Trust, for the Benefit of
_______________ ("Lessor") and XCD, Inc., a California corporation
("Lessee"), (collectively the "Parties," or individually a "Party").
1.2. PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and
commonly known as 1692 Xxxxxxxx located in the County of Orange, State
of California and generally described as (describe briefly the nature of
the property) an approximate 13,631 square foot building located at
Orange County Tax Assessor's Parcel 000-000-00 ("Premises"). (See also
Paragraph 2).
1.3. TERM: Five (5) years and 0 months ("Original Term") commencing
April 1, 1998 ("Commencement Date") and ending March 31, 2003
("Expiration Date"). (See also Paragraph 3).
1.4. EARLY POSSESSION: Upon mutual execution and delivery of the
lease to each party ("Early Possession Date"). (See also Paragraphs
3.2 and 3.3).
1.5. BASE RENT: $9,746.17 per month ("Base Rent"), payable on the
first (1st) day of each month commencing April 1, 1998. (See also
Paragraph 4) [X] If this box is checked, there are provisions in this
Lease for the Base Rent to be adjusted.
1.6. BASE RENT PAID UPON EXECUTION: $9,746.17 as Base Rent for the
period April, 1998.
1.7. SECURITY DEPOSIT: $11,401.63 ("Security Deposit"). (See also
Paragraph 5).
1.8. AGREED USE: Design, development, assembly and related office
uses related to network printer interface cards. (See also Paragraph 6).
1.9. INSURING PARTY: Lessee is the "Insuring Party." (See also
Paragraph 8).
1.10. REAL ESTATE BROKERS: (See also Paragraph 15)
(a) REPRESENTATION: The following real estate brokers (collectively,
the "Brokers") and brokerage relationships exist in this transaction
(check applicable boxes):
[X] Xxxxx & Xxxxx Company (Xxxx Xxxxxx/Xxxxx Xxx) represents Lessor
exclusively ("Lessor's Broker");
[X] Xxxx Commercial (Xxx Xxxxx) represents Lessee exclusively ("Lessee's
Broker");
(b) PAYMENT TO BROKERS: Upon execution and delivery of this Lease by
both Parties, Lessor shall pay to the Broker the fee agreed to in their
separate written agreement.
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1.11. GUARANTOR: The obligations of the Lessee under this Lease are to
be guaranteed by N/A ("Guarantor"). (See also Paragraph
37).
1.12. ADDENDA AND EXHIBITS: Attached hereto is an Addendum or Addenda
consisting of Paragraphs 50 through 60 and Exhibits A - Site Plan, all of
which are incorporated herein by this reference and constitute a part of
this Lease.
2. PREMISES.
2.1. LETTING. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises, for the term, at the rental, and an
upon all of the terms, covenants and conditions set forth in this Lease.
Unless otherwise provided herein, any statement of size set forth in
this Lease, or that may have been used in calculating rental, is an
approximation which the Parties agree is reasonable and the rental based
thereon is not subject to revision whether or not the actual size is
more or less.
2.2. CONDITION. Lessor shall deliver the Premises to Lessee broom
clean and free of debris on the Commencement Date or the Early
Possession Date, whichever first occurs ("Start Date"), and, so long as
the required service contracts described in Paragraph 7.1(b) below are
obtained by Lessee within thirty (30) days following the Start Date,
warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems ("HVAC"),
loading doors, if any, and all other such elements in the Premises,
other than those constructed by Lessee, shall be in good operating
condition on said date and that the structural elements of the roof,
bearing walls and foundation of any buildings on the Premises (the
"Building") shall be free of material defects. If a non-compliance with
said warranty exists as of the Start Date, Lessor shall, as Lessor's
sole obligation with respect to such matter, except as otherwise
provided in this Lease, promptly after receipt of written notice from
Lessee setting forth with specificity the nature and extent of such
non-compliance, rectify same at Lessor's expense. If, after the Start
Date, Lessee does not give Lessor written notice of any non-compliance
with this warranty within: (i) one year as to the surface of the root
and the structural portions of the roof, foundations and bearing wails,
(ii) six (6) months as to the HVAC systems, (iii) thirty (30) days as to
the remaining systems and other elements of the Building, correction of
such non-compliance shall be the obligation of Lessee at Lessee's sole
cost and expense.
2.3. COMPLIANCE. Lessor warrants that the improvements on the
Premises comply with all applicable laws, covenants or restrictions of
record, building codes, regulations and ordinances ("Applicable
Requirements") in effect on the Start Date. Said warranty does not apply
to the use to which Lessee will put the Premises or to any Alterations
or Utility Installations (as defined in Paragraph 7.3(a)) made or to be
made by Lessee. NOTE: Lessee is responsible for determining whether or
not the zoning is appropriate for Lessee's intended use, and
acknowledges that past uses of the Premises may no longer be allowed. If
the Premises do not comply with said warranty, Lessor shall, except as
otherwise provided, promptly after receipt of written notice from Lessee
setting forth with specificity the nature and extent of such
non-compliance, rectify the same at Lessor's expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within
six (6) months following the Start Date, correction of that
non-compliance shall be the obligation of Lessee at Lessee's sole cost
and expense. If the Applicable Requirements are hereafter changed (as
opposed to being in existence at the Start Date, which is addressed in
Paragraph 6.2(e) below) so as to require during the term of this Lease
the construction of an addition to or an alteration of the Building, the
remediation of any Hazardous Substance, or the
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reinforcement or other physical modification of the Building ("Capital
Expenditure"), Lessor and Lessee shall allocate the cost of such work
as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital
Expenditures are required as a result of the specific and unique
use of the Premises by Lessee as compared with uses by tenants in
general, Lessee shall be fully responsible for the cost thereof,
provided, however that if such Capital Expenditure is required
during the last two (2) years of this Lease and the cost thereof
exceeds six (6) months' Base Rent, Lessee may instead terminate
this Lease unless Lessor notifies Lessee, in writing, within ten
(10) days after receipt of Lessee's termination notice that Lessor
has elected to pay the difference between the actual cost thereof
and the amount equal to six (6) months' Base Rent. If Lessee elects
termination, Lessee shall immediately cease the use of the Premises
which requires such Capital Expenditure and deliver to Lessor
written notice specifying a termination date at least ninety (90)
days thereafter. Such termination date shall, however, in no event
be earlier than the last day that Lessee could legally utilize the
Premises without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the specific
and unique use of the Premises by Lessee (such as, governmentally
mandated seismic modifications), then Lessor and Lessee shall
allocate the obligation to pay for such costs pursuant to the
provisions of Paragraph 7.1(c); provided, however, that if such
Capital Expenditure is required during the last two years of this
Lease or if Lessor reasonably determines that it is not
economically feasible to pay its share thereof, Lessor shall have
the option to terminate this Lease upon ninety (90) days prior
written notice to Lessee unless Lessee notifies Lessor, in writing,
within ten (10) days after receipt of Lessor's termination notice
that Lessee will pay for such Capital Expenditure. If Lessor does
not elect to terminate, and fails to tender its share of any such
Capital Expenditure, Lessee may advance such funds and deduct same,
with Interest, from Rent until Lessor's share of such costs have
been fully paid. If Lessee is unable to finance Lessor's share, or
if the balance of the Rent due and payable for the remainder of
this Lease is not sufficient to fully reimburse Lessee on an offset
basis, Lessee shall have the right to terminate this Lease upon
thirty (30) days written notice to Lessor.
(c) Notwithstanding the above, the provisions concerning Capital
expenditures are intended to apply only to non-voluntary,
unexpected, and new Applicable Requirements. If the Capital
Expenditures are instead triggered by Lessee as a result of an
actual or proposed change in use, change in intensity of use, or
modification to the Premises then, and in that event, Lessee shall
be fully responsible for the cost thereof, and Lessee shall not
have any right to terminate this Lease.
2.4. ACKNOWLEDGMENTS. Lessee acknowledges that: (a) it has been
advised by Lessor and/or Brokers to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical,
HVAC and fire sprinkler systems, security, environmental aspects, and
compliance with Applicable Requirements), and their suitability for
Lessee's intended use, (b) Lessee has made such investigation as it
deems necessary with reference to such matters and assumes all
responsibility therefor as the same relate to its occupancy of the
Premises, and (c) neither Lessor, Lessor's agents, nor any Broker has
made any oral or written representations or warranties with respect to
said matters other than as set forth in this Lease. In addition, Lessor
acknowledges that: (a) Broker has made no representations, promises or
warranties concerning Lessee's ability to
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honor the Lease or suitability to occupy the Premises, and (b) it is
Lessor's sole responsibility to investigate the financial capability
and/or suitability of all proposed tenants.
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.
3. TERM.
3.1. TERM. The Commencement Date, Expiration Date and Original Term
of this Lease are as specified in Paragraph 1.3.
3.2. EARLY POSSESSION. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent
shall be abated for the period of such early possession. All other
terms of this Lease (including but not limited to the obligations to pay
Real Property Taxes and insurance premiums and to maintain the Premises)
shall, however, be in effect during such period. Any such early
possession shall not affect the Expiration Date.
3.3. DELAY IN POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by
the Commencement Date, if, despite said efforts, Lessor is unable to
deliver possession as agreed, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this
Lease. Lessee shall not, however, be obligated to pay Rent or perform
its other obligations until it receives possession of the Premises. If
possession is not delivered within sixty (60) days after the
Commencement Date, Lessee may, at its option, by notice in writing
within ten (10) days after the end of such sixty (60) day period, cancel
this Lease, in which event the Parties shall be discharged from all
obligations hereunder. If such written notice is not received by Lessor
within said ten (10) day period, Lessee's right to cancel shall
terminate. Except as otherwise provided, if possession is not tendered
to Lessee by the Start Date and Lessee does not terminate this Lease, as
aforesaid, any period of rent abatement that Lessee would otherwise have
enjoyed shall run from the date of delivery of possession and continue
for a period equal to what Lessee would otherwise have enjoyed under the
terms hereof, but minus any days of delay caused by the acts or
omissions of Lessee. If possession of the Premises is not delivered
within four (4) months after the Commencement Date, this Lease shall
terminate unless other agreements are reached between Lessor and Lessee,
in writing.
3.4. LESSEE COMPLIANCE. Lessor shall not be required to tender
possession of the Premises to Lessee until Lessee complies with its
obligation to provide evidence of insurance (Paragraph 8.5). Pending
delivery of such evidence, Lessee shall be required to perform all of
its obligations under this Lease from and after the Start Date,
including the payment of Rent, notwithstanding Lessor's election to
withhold possession pending receipt of such evidence of insurance.
Further, if Lessee is required to perform any other conditions prior to
or concurrent with the Start Date, the Start Date shall occur but Lessor
may elect to withhold possession until such conditions are satisfied,
4. RENT.
4.1. RENT DEFINED. All monetary obligations of Lessee to Lessor under
the terms of this Lease (except for the Security Deposit) are deemed to
be rent ("Rent").
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4.2. PAYMENT. Lessee shall cause payment of Rent to be received by
Lessor in lawful money of the United States, without offset or deduction
(except as specifically permitted in this Lease), on or before the day
on which it is due. Rent for any period during the term hereof which is
for less than one (1) full calendar month shall be prorated based upon
the actual number of days of said month. Payment of Rent shall be made
to Lessor at its address stated herein or to such other persons or place
as Lessor may from time to time designate in writing. Acceptance of a
payment which is less than the amount then due shall not be a waiver of
Lessor's rights to the balance of such Rent, regardless of Lessor's
endorsement of any check so stating.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon
execution hereof the Security Deposit as security for Lessee's faithful
performance of its obligations under this Lease. If Lessee fails to pay
Rent, or otherwise Defaults under this Lease, Lessor may use, apply or
retain all or any portion of said Security Deposit for the payment of
any amount due Lessor or to reimburse or compensate Lessor for any
liability, expense, loss or damage which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of said
Security Deposit, Lessee shall within ten (10) days after written
request therefor deposit monies with Lessor sufficient to restore said
Security Deposit to the full amount required by this Lease. If the Base
Rent increases during the term of this Lease, Lessee shall, upon written
request from Lessor, deposit additional 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 said change in financial
condition. Lessor shall not be required to keep the Security Deposit
separate from its general accounts. Within fourteen (14) days after the
expiration or termination of this Lease, if Lessor elects to apply the
Security Deposit only to unpaid Rent, and otherwise within thirty (30)
days after the Premises have been vacated pursuant to Paragraph 7.4(c)
below, Lessor shall return that portion of the Security Deposit not used
or applied by Lessor. No part of the Security Deposit shall be
considered to be held in trust, to bear interest or to be prepayment for
any monies to be paid by Lessee under this Lease.
6. USE.
6.1. USE. Lessee shall use and occupy the Premises only for the
Agreed Use, or any other legal use which is reasonably comparable
thereto, and for no other purpose. Lessee shall not use or permit the
use of the Premises in a manner that is unlawful, creates damage, waste
or a nuisance, or that disturbs owners and/or occupants of, or causes
damage to neighboring properties. Lessor shall not unreasonably withhold
or delay its consent to any written request for a modification of the
Agreed Use, so long as the same will not impair the structural integrity
of the improvements on the Premises or the mechanical or electrical
systems therein, is not significantly more burdensome to the Premises.
If Lessor elects to withhold consent, Lessor shall within five (5)
business days after such request give written notification of same,
which notice shall include an explanation of Lessor's objections to the
change in use.
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6.2. HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "Hazardous
Substance" as used in this Lease shall mean any product, substance,
or waste whose presence, use, manufacture, disposal,
transportation, or release, either by itself or in combination with
other materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any
governmental authority, or (iii) a basis for potential liability of
Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substances shall
include, but not be limited to, hydrocarbons, petroleum, gasoline,
and/or crude oil or any products, by-products or fractions thereof.
Lessee shall not engage in any activity in or on the Premises which
constitutes a Reportable Use of Hazardous Substances without the
express prior written consent of Lessor and timely compliance (at
Lessee's expense) with all Applicable Requirements. "Reportable
Use" shall mean (i) the installation or use of any above or below
ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice,
registration or business plan is required to be filed with, any
governmental authority, and/or (iii) the presence at the Premises
of a Hazardous Substance with respect to which any Applicable
Requirements requires that a notice be given to persons entering or
occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials
reasonably required to be used in the normal course of the Agreed
Use, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the
Premises or neighboring property to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor.
In addition, Lessor may condition its consent to any Reportable Use
upon receiving such additional assurances as Lessor reasonably
deems necessary to protect itself, the public, the Premises and/or
the environment against damage, contamination, injury and/or
liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasements) 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, 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.
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(d) LESSEE INDEMNIFICATION. Lessee shall indemnify, defend and
hold Lessor, the trusts of which Lessor is trustee and their
successors, agents, employees, lenders and ground lessor, if any,
harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, claims, expenses, penalties, and attorneys'
and consultants' fees arising out of or involving any Hazardous
Substance brought onto the Premises by or for Lessee, or any third
party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous
Substance under the Premises from adjacent properties). Lessee's
obligations shall include, but not be limited to, the effects of
any contamination or injury to person, property or the environment
created or suffered by Lessee, and the cost of investigation,
removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease. NO
TERMINATION, CANCELLATION OR RELEASE AGREEMENT ENTERED INTO BY
LESSOR AND LESSEE SHALL RELEASE LESSEE FROM ITS OBLIGATIONS UNDER
THIS LEASE WITH RESPECT TO HAZARDOUS SUBSTANCES, UNLESS
SPECIFICALLY SO AGREED BY LESSOR IN WRITING AT THE TIME OF SUCH
AGREEMENT.
(e) LESSOR INDEMNIFICATION. Lessor and its successors and
assigns shall indemnify, defend, reimburse and hold Lessee, its
employees and lenders, harmless from and against any and all
environmental damages, including the cost of remediation, which
existed as a result of Hazardous Substances on the Premises prior
to the Start Date or which are caused by the gross negligence or
willful misconduct of Lessor, its agents or employees. Lessor's
obligations, as and when required by the Applicable Requirements,
shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease.
(f) INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the
responsibility and pay for any investigations or remediation
measures required by governmental entities having jurisdiction with
respect to the existence of Hazardous Substances on the Premises
prior to the Start Date, 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 occurs during the term of this Lease, unless Lessee is
legally responsible therefor (in which case Lessee shall make the
investigation and remediation thereof required by the Applicable
Requirements and this Lease shall continue in full force and
effect, but subject to Lessor's rights under Paragraph 6.2(d) and
Paragraph 13), Lessor may, at Lessor's option, either (i)
investigate and remediate such Hazardous Substance Condition, if
required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or
(ii) if the estimated cost to remediate such condition exceeds
twelve (12) times the then monthly Base Rent or $100,000, whichever
is greater, give written notice to Lessee, within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition, of Lessor's desire to terminate this
Lease as of the date sixty (60) days following the date of such
notice. In the event Lessor elects to give a termination notice,
Lessee may, within ten (10) days thereafter, give written notice to
Lessor of Lessee's commitment to pay the amount by which the cost of
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the remediation of such Hazardous Substance Condition exceeds an
amount equal to twelve (12) times the then monthly Base Rent or
$100,000, whichever is greater. Lessee shall provide Lessor with
said funds or satisfactory assurance thereof within thirty (30)
days following such commitment. In such event, this Lease shall
continue in full force and effect, and Lessor shall proceed to
make such remediation as soon as reasonably possible after the
required funds are available. If Lessee does not give such notice
and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date
specified in Lessor's notice of termination.
6.3. LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise provided in this Lease, Lessee shall, at Lessee's sole
expense, fully, diligently and in a timely manner, materially comply
with all Applicable Requirements, the requirements of any applicable
fire insurance underwriter or rating bureau, and the recommendations of
Lessor's engineers and/or consultants which relate in any manner to the
Premises, without regard to whether said requirements are now in effect
or become effective after the Start Date. Lessee shall, within ten (10)
days after receipt of Lessor's written request, provide Lessor with
copies of all permits and other documents, and other information
evidencing Lessee's compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor
in writing (with copies of any documents involved) of any threatened or
actual claim, notice, citation, warning, complaint or report pertaining
to or involving the failure of Lessee or the Premises to comply with any
Applicable Requirements.
6.4. INSPECTION; COMPLIANCE. Lessor and Lessor's "Lender" (as defined
in Paragraph 30 below) and consultants shall have the right to enter
into Premises at any time, in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the
Premises and for verifying compliance by Lessee with this Lease. The
cost of any such inspections shall be paid by Lessor, unless a violation
of Applicable Requirements, or a contamination is found to exist or be
imminent, or the inspection is requested or ordered by a governmental
authority. In such case, Lessee shall upon request reimburse Lessor for
the cost of such inspections, so long as such inspection is reasonably
related to the violation or contamination.
7. MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1. LESSEE'S OBLIGATIONS.
(a) IN GENERAL. Subject to the provisions of Paragraph 2.2
(Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with
Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage or
Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole
expense, keep the Premises, Utility Installations, and Alterations
in good order, condition and repair (whether or not the portion of
the Premises requiring repairs, or the means of repairing the same,
are reasonably or readily accessible to Lessee, and whether or not
the need for such repairs occurs as a result of Lessee's use, any
prior use, the elements or the age of such portion of the
Premises), including, but not limited to, all equipment or
facilities, such as plumbing, heating, ventilating,
air-conditioning, electrical, lighting facilities, boilers,
pressure vessels, fire protection system, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, floors, windows,
doors, plate glass, skylights, landscaping, driveways, parking
lots, fences, retaining walls, signs, sidewalks and parkways
located in, on, or adjacent to the Premises. Lessee, in keeping the
Premises in good order, condition and repair, shall exercise and
perform good maintenance practices,
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specifically including the procurement and maintenance of the
service contracts required by Paragraph 7.1(b) below. Lessee's
obligations shall include restorations, replacements or renewals
when necessary to keep the Premises and all improvements thereon or
a part thereof in good order, condition and state of repair. Lessee
shall, during the term of this Lease, keep the exterior appearance
of the Building in a first-class condition consistent with the
exterior appearance of other similar facilities of comparable age
and size in the vicinity, including, when necessary, the exterior
repainting of the Building.
(b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole expense,
procure and maintain contracts, with copies to Lessor, in customary
form and substance for, and with contractors specializing and
experienced in the maintenance of the following equipment and
improvements, if any, if and when installed on the Premises: (i)
HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire
extinguishing systems, including fire alarm and/or smoke detection,
(iv) landscaping and irrigation systems, (v) roof covering and
drains, (vi) driveways and parking lots, (vii) clarifiers (viii)
basic utility feed to the perimeter of the Building, and (ix) any
other equipment, if reasonably required by Lessor.
(c) REPLACEMENT. Subject to Lessee's indemnification of Lessor
as set forth in Paragraph 8.7 below, and without relieving Lessee
of liability resulting from Lessee's failure to exercise and
perform good maintenance practices, if the Basic Elements described
in Paragraph 7.1(b) cannot be repaired other than at a cost which
is in excess of 50% of the cost of replacing such Basic Elements,
then such Basic Elements shall be replaced by Lessor, and the cost
thereof shall be prorated between the Parties and Lessee shall only
be obligated to pay, each month during the remainder of the term of
this Lease, on the date on which Base Rent is due, an amount equal
to the product of multiplying the cost of such replacement by a
fraction, the numerator of which is one, and the denominator of
which is the number of months of the useful life of such
replacement as such useful life is specified pursuant to Federal
income tax regulations or guidelines for depreciation thereof
(including interest on the unamortized balance as is then
commercially reasonable in the judgment of Lessor's accountants),
with Lessee reserving the right to prepay its obligation at any
time.
7.2. LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14
(Condemnation), it is intended by the Parties hereto that Lessor have no
obligation, in any manner whatsoever, to repair and maintain the
Premises, or the equipment therein, all of which obligations are
intended to be that of the Lessee. It is the intention of the Parties
that the terms of this Lease govern the respective obligations of the
Parties as to maintenance and repair of the Premises, and they expressly
waive the benefit of any statute now or hereafter in effect to the
extent it is inconsistent with the terms of this Lease.
7.3. UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "Utility
Installations" refers to all floor and window coverings, air lines,
power panels, electrical distribution, security and fire protection
systems, communication systems, lighting fixtures, HVAC equipment,
plumbing, and fencing in or on the Premises. The term "Trade
Fixtures" shall mean Lessee's machinery and equipment that can be
removed without doing material damage to the Premises. The term
"Alterations" shall mean any modification of the improvements,
other than Utility installations or Trade Fixtures, whether by
addition or deletion. "Lessee
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Owned Alterations and/or Utility Installations" are defined as
Alterations and/or Utility installations made by Lessee that are
not yet owned by Lessor pursuant to Paragraph 7.4(a). Lessee shall
not make any Alterations or Utility Installations to the Premises
without Lessor's prior written consent. Lessee may, however, make
non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice
to Lessor, as long as they are not visible from the outside, do not
involve puncturing, relocating or removing the roof or any existing
walls, and the cumulative cost thereof during this Lease as
extended does not exceed $50,000 in the aggregate or $10,000 in any
one year.
(b) CONSENT. Any Alterations or Utility Installations that
Lessee shall desire to make and which require the consent of the
Lessor shall be presented to Lessor in written form with detailed
plans. Consent shall be deemed conditioned upon Lessee's: (i)
acquiring all applicable governmental permits, (ii) furnishing
Lessor with copies of both the permits and the plans and
specifications prior to commencement of the work, and (iii)
compliance with all conditions of said permits and other Applicable
Requirements in a prompt and expeditious manner. Any Alterations or
Utility Installations shall be performed in a workmanlike manner
with good and sufficient materials. Lessee shall promptly upon
completion furnish Lessor with as-built plans and specifications.
For work which costs an amount equal to the greater of one month's
Base Rent, or $10,000, Lessor may condition its consent upon Lessee
providing a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such Alteration or Utility
Installation and/or upon Lessee's posting an additional Security
Deposit with Lessor.
(c) INDEMNIFICATION. Lessee shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to
or for Lessee at or for use on the Premises, which claims are or
may be secured by any mechanic's or materialmen's lien against the
Premises or any interest therein. Lessee shall give Lessor not less
than ten (10) days' notice prior to the commencement of any work
in, on or about the Premises, and Lessor shall have the right to
post notices of non-responsibility. If Lessee shall contest the
validity of any such lien, claim or demand, then Lessee shall, at
its sole expense defend and protect itself, Lessor and the Premises
against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement
thereof. If Lessor shall require, Lessee shall furnish a surety
bond in an amount equal to one and one-half times the amount of
such contested lien, claim or demand, indemnifying Lessor against
liability for the same. If Lessor elects to participate in any
such action, Lessee shall pay Lessor's attorneys' fees and costs.
7.4. OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to Lessor's right to require removal or
elect ownership as hereinafter provided, all Alterations and
Utility Installations made by Lessee shall be the property of
Lessee, but considered a part of the Premises. Lessor may, at any
time, elect in writing to be the owner of all or any specified part
of the Lessee Owned Alterations and Utility Installations. Unless
otherwise instructed per Paragraph 7.4(b) hereof, all Lessee Owned
Alterations and Utility Installations shall, at the expiration or
termination of this Lease, become the property of Lessor and be
surrendered by Lessee with the Premises.
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(b) REMOVAL. By delivery to Lessee of written notice from
Lessor not earlier than ninety (90) and not later than thirty (30)
days prior to the end of the term of this Lease, Lessor may require
that any or all Lessee Owned Alterations or Utility Installations
be removed by the expiration or termination of this Lease. Lessor
may require the removal at any time of all or any part of any
Lessee Owned Alterations or Utility Installations made without the
required consent.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises
by the Expiration Date or any earlier termination date, with all of
the improvements, parts and surfaces thereof broom clean and free
of debris, and in good operating order, condition and state of
repair, ordinary wear and tear excepted. "Ordinary wear and tear"
shall not include any damage or deterioration that would have been
prevented by good maintenance practice. Lessee shall repair any
damage occasioned by the Installation, maintenance or removal of
Trade Fixtures, Lessee Owned Alterations and/or Utility
Installations, furnishings, and equipment as well as the removal of
any storage tank installed by or for Lessee, and the removal,
replacement, or remediation of any soil, material or groundwater
contaminated by Lessee. Trade Fixtures shall remain the property of
Lessee and shall be removed by Lessee. The failure by Lessee to
timely vacate the Premises pursuant to this Paragraph 7.4(c)
without the express written consent of Lessor shall constitute a
holdover under the provisions of Paragraph 26 below.
8. INSURANCE; INDEMNITY.
8.1. PAYMENT FOR INSURANCE. Lessee shall maintain and pay for all
insurance required under Paragraph 8.
8.2. LIABILITY INSURANCE.
(a) Carried by Lessee. Lessee shall obtain and keep in force a
Commercial General Liability Policy of Insurance protecting Lessee
and Lessor against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant
thereto. Such Insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $2,000,000 per
occurrence with an "ADDITIONAL INSURED-MANAGERS OR LESSORS OF
PREMISES ENDORSEMENT" and contain the "Amendment of the Pollution
Exclusion Endorsement" for damage caused by heat, smoke or fumes
from a hostile fire. The Policy shall not contain any intra-insured
exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under this Lease as an
"insured contract" for the performance of Lessee's indemnity
obligations under this Lease. The limits of said insurance shall
not, however limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All Insurance carried by Lessee shall be
primary to and not contributory with any similar insurance carried
by Lessor, whose insurance shall be considered excess insurance
only.
8.3. PROPERTY INSURANCE -- BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain
and keep in force a policy or policies in the name of Lessor, with
loss payable to Lessor, any groundlessor, and to any Lender(s)
insuring loss or damage to the Premises. The amount of such
insurance
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shall be equal to the full replacement cost of the Premises, as the
same shall exist from time to time, or the amount required by any
Lenders, but in no event more than the commercially reasonable and
available insurable value thereof. If Lessor is the Insuring Party,
however, Lessee Owned Alterations and Utility Installations, Trade
Fixtures, and Lessee's personal property shall be insured by Lessee
under Paragraph 8.4 rather than by Lessor. If the coverage is
available and commercially appropriate, such policy or policies
shall insure against all risks of direct physical loss or damage
(except the perils of flood and/or earthquake unless required by a
Lender), including coverage for debris removal and the enforcement
of any Applicable Requirements requiring the upgrading, demolition,
reconstruction or replacement of any portion of the Premises as the
result of a covered loss. Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance
clause, waiver of subrogation, and inflation guard protection
causing an increase in the annual property insurance coverage
amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city
nearest to where the Premises are located. If such insurance
coverage has a deductible clause, the deductible amount shall not
exceed $1,000 per occurrence, and Lessee shall be liable for such
deductible amount in the event of an Insured Loss.
(b) RENTAL VALUE. The Insuring Party shall obtain and keep in
force a policy or policies in the name of Lessor with loss payable
to Lessor and any Lender, insuring the loss of the full Rent for
one (1) year. Said insurance shall provide that in the event the
Lease is terminated by reason of an insured loss, the period of
indemnity for such coverage shall be extended beyond the date of
the completion of repairs or replacement of the Premises, to
provide for one full year's loss of Rent from the date of any such
loss. Said insurance shall contain an agreed valuation provision in
lieu of any coinsurance clause, and the amount of coverage shall be
adjusted annually to reflect the projected Rent otherwise payable
by Lessee, for the next twelve (12) month period. Lessee shall be
liable for any deductible amount in the event of such loss.
(c) ADJACENT PREMISES. If the Premises are part of a larger
building, or of a group of buildings owned by Lessor which are
adjacent to the Premises, the Lessee shall pay for any increase in
the premiums for the property insurance of such building or
buildings if said increase is caused by Lessee's acts, omissions,
use or occupancy of the Premises.
8.4. LESSEE'S PROPERTY/BUSINESS INTERRUPTION INSURANCE.
(a) PROPERTY DAMAGE. Lessee shall obtain and maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures, and
Lessee Owned Alterations and Utility Installations. Such insurance
shall be full replacement cost coverage with a deductible of not to
exceed $1,000 per occurrence. The proceeds from any such insurance
shall be used by Lessee for the replacement of personal property,
Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence
that such insurance is in force.
(b) BUSINESS INTERRUPTION. 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.
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(c) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance
specified herein are adequate to cover Lessee's property, business
operations or obligations under this Lease.
8.5. INSURANCE POLICIES. Insurance required herein shall be by
companies duly licensed or admitted to transact business in the
state where the Premises are located, and maintaining during the
policy term a "General Policyholders Rating" of at least B+, V, as
set forth in the most current issue of "Best's Insurance Guide", or
such other rating as may be required by a Lender. Lessee shall not
do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Start Date, deliver
to Lessor certified copies of policies of such insurance or
certificates evidencing the existence and amounts of the required
insurance. No such policy shall be cancelable or subject to
modification except after thirty (30) days prior written notice to
Lessor. Lessee shall, at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with evidence of
renewals or "insurance binders" evidencing renewal thereof, or
Lessor may order such insurance and charge the cost thereof to
Lessee, which amount shall be payable by Lessee to Lessor upon
demand. Such policies shall be for a term of at least one year, or
the length of the remaining term of this Lease, whichever is less.
If Lessee shall fail to procure and maintain the insurance required
to be carried by it, Lessor may, but shall not be required to,
procure and maintain the same.
8.6. WAIVER OF SUBROGATION. Without affecting any other rights
or remedies, Lessee and Lessor each hereby release and relieve the
other, and waive their entire right to recover damages against the
other, for loss of or damage to its property arising out of or
incident to the perils required to be insured against herein. The
effect of such releases and waivers is not limited by the amount of
insurance carried or required, or by any deductibles applicable
hereto. The Parties agree to have their respective property damage
insurance carriers waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so
long as the insurance is not invalidated thereby.
8.7. INDEMNITY. Except for Lessor's gross negligence or willful
misconduct, Lessee shall indemnify, protect, defend and hold
harmless the Premises, Lessor the trusts of which Lessor is trustee
and their successors, assigns, and agents, Lessor's master or
ground lessor, partners and Lenders, from and against any and all
claims, loss of rents and/or damages, liens, judgments, penalties,
attorneys' and consultants' fees, expenses and/or liabilities
arising out of, involving, or in connection with, the use and/or
occupancy of the Premises by Lessee. If any action or proceeding is
brought against Lessor by reason of any of the foregoing matters,
Lessee shall upon notice defend the same at Lessee's expense by
counsel reasonably satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense. Lessor need not have first
paid any such claim in order to be defended or indemnified.
8.8. EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be
liable for injury or damage to the person or goods, wares,
merchandise or other property of Lessee, Lessee's employees,
contractors, invitees, customers, or any other person in or about
the Premises, whether such damage or injury is caused by or results
from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, fire
sprinklers, wires, appliances, plumbing, HVAC, or lighting
fixtures, or from any other cause, whether the said injury or
damage results from conditions arising upon the Premises or upon
other portions of the Building of which the Premises are a part, or
from other sources or places. Lessor shall not be liable for any
damages arising from any act or neglect of any other tenant of
Lessor. Notwithstanding Lessor's negligence
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or breach of this Lease, Lessor shall under no circumstances be liable
for injury to Lessee's business or for any loss of income or profit
therefrom.
9. DAMAGE OR DESTRUCTION.
9.1. DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction
to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations, which can reasonably be
repaired in six (6) months or less from the date of the damage or
destruction. Lessor shall notify Lessee in writing within thirty
(30) days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or
destruction to the Premises, other than Lessee Owned Alterations
and Utility Installations and Trade Fixtures, which cannot
reasonably be repaired in six (6) months or less from the date of
the damage or destruction. Lessor shall notify Lessee in writing
within thirty (30) days from the date of the damage or
destruction as to whether or not the damage is Partial or Total.
(c) "INSURED LOSS" shall mean damage or destruction to
improvements on the Premises, other than Lessee Owned Alterations
and Utility Installations and Trade Fixtures, which was caused by
an event required to be covered by the insurance described in
Paragraph 8.3(a), irrespective of any deductible amounts or
coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or
rebuild the improvements owned by Lessor at the time of the
occurrence to their condition existing immediately prior thereto,
including demolition, debris removal and upgrading required by
the operation of Applicable Requirements, and without deduction
for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence
or discovery of a condition involving the presence of, or a
contamination by, a Hazardous Substance as defined in Paragraph
6.2(a), in, on, or under the Premises.
9.2. PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that
is an Insured Loss occurs, then Lessor shall, at Lessor's expense,
repair such damage (but not Lessee's Trade Fixtures or Lessee Owned
Alterations and Utility Installations) as soon as reasonably possible
and this Lease shall continue in full force and effect; provided,
however, that Lessee shall, at Lessor's election, make the repair of any
damage or destruction the total cost to repair of which is $10,000 or
less, and, in such event, Lessor shall make any applicable insurance
proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, If the required insurance was not in
force or the insurance proceeds are not sufficient to effect such
repair, the Insuring Party shall promptly contribute the shortage in
proceeds (except as to the deductible which is Lessee's responsibility)
as and when required to complete said repairs. In the event, however,
such shortage was due to the fact that, by reason of the unique nature
of the improvements, full replacement cost insurance coverage was not
commercially reasonable and available, Lessor shall have no obligation
to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises unless Lessee provides Lessor with the
funds to cover same, or adequate assurance thereof, within ten (10) days
following receipt of written notice of
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such shortage and request therefor. If Lessor receives said funds or
adequate assurance thereof within said ten (10) day period, the party
responsible for making the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and
effect. If such funds or assurance are not received, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days
thereafter to: (i) make such restoration and repair as is commercially
reasonable with Lessor paying any shortage in proceeds, in which case
this Lease shall remain in full force and effect, or have this Lease
terminate thirty (30) days thereafter. Lessee shall not be entitled to
reimbursement of any funds contributed by Lessee to repair any such
damage or destruction. Premises Partial Damage due to flood or
earthquake shall be subject to Paragraph 9.3, notwithstanding that there
may be some insurance coverage, but the net proceeds of any such
insurance shall be made available for the repairs if made by either
Party.
9.3. PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage
that is not an Insured Loss occurs, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at
Lessee's expense), Lessor may either: (i) repair such damage as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) terminate this Lease by
giving written notice to Lessee within thirty (30) days after receipt by
Lessor of knowledge of the occurrence of such damage. Such termination
shall be effective sixty (60) days following the date of such notice. In
the event Lessor elects to terminate this Lease, Lessee shall have the
right within ten (10) days after receipt of the termination notice to
give written notice to Lessor of Lessee's commitment to pay for the
repair of such damage without reimbursement from Lessor. Lessee shall
provide Lessor with said funds or satisfactory assurance thereof within
thirty (30) days after making such commitment. In such event this Lease
shall continue in full force and effect, and Lessor shall proceed to
make such repairs as soon as reasonably possible after the required
funds are available. If Lessee does not make the required commitment,
this Lease shall terminate as of the date specified in the termination
notice.
9.4. TOTAL DESTRUCTION. Notwithstanding any other provision hereof,
if a Premises Total Destruction occurs, this Lease shall terminate sixty
(60) days following such Destruction. If the damage or destruction was
caused by the gross negligence or willful misconduct of Lessee, Lessor
shall have the right to recover Lessor's damages from Lessee, except as
provided in Paragraph 8.6.
9.5. DAMAGE NEAR END OF TERM. If at any time during the last six (6)
months of this Lease there is damage for which the cost to repair
exceeds one (1) month's Base Rent, whether or not an Insured Loss,
Lessor may terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving a written termination notice
to Lessee within thirty (30) days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Lessee at that time has an
exercisable option to extend this Lease or to purchase the Premises,
then Lessee may preserve this Lease by, (a) exercising such option and
(b) providing Lessor with any shortage in insurance proceeds (or
adequate assurance thereof) needed to make the repairs on or before the
earlier of (i) the date which is ten days after Lessee's receipt of
Lessor's written notice purporting to terminate this Lease, or (ii) the
day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds
(or adequate assurance thereof) to cover any shortage in insurance
proceeds, Lessor shall, at Lessor's commercially reasonable expense,
repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such
option and provide such funds or assurance during such period, then this
Lease shall terminate on the date specified in the termination notice
and Lessee's option shall be extinguished.
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9.6. ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) ABATEMENT. In the event of Premises Partial Damage or
Premises Total Destruction or a Hazardous Substance Condition for
which Lessee is not responsible under this Lease, the Rent
payable by Lessee for the period required for the repair,
remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is
impaired, but not to exceed the proceeds received from the Rental
Value insurance. All other obligations of Lessee hereunder shall
be performed by Lessee, and Lessor shall have no liability for
any such damage, destruction, remediation, repair or restoration
except as provided herein.
(b) REMEDIES. If Lessor shall be obligated to repair or
restore the Premises and does not commence, in a substantial and
meaningful way, such repair or restoration within ninety (90)
days after such obligation shall accrue, Lessee may, at any time
prior to the commencement of such repair or restoration, give
written notice to Lessor and to any Lenders of which Lessee has
actual notice, of Lessee's election to terminate this Lease on a
date not less than sixty (60) days following the giving of such
notice. If Lessee gives such notice and such repair or
restoration is not commenced within thirty (30) days thereafter,
this Lease shall terminate as of the date specified in said
notice. If the repair or restoration is commenced within said
thirty (30) days, this Lease shall continue in full force and
effect. "Commence" shall mean either the unconditional
authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first
occurs.
9.7. TERMINATION-ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment
shall be made concerning advance Base Rent and any other advance
payments made by Lessee to Lessor. Lessor shall, in addition, return to
Lessee so much of Lessee's Security Deposit as has not been, or is not
then required to be, used by Lessor.
9.8. WAIVE STATUTES. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the
Premises with respect to the termination of this Lease and hereby waive
the provisions of any present or future statute to the extent
inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1. DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term
"Real Property Taxes" shall include any form of assessment; real estate,
general, special, ordinary or extraordinary, or rental levy or tax
(other than inheritance, personal income or estate taxes); improvement
bond; and/or license fee imposed upon or levied against any legal or
equitable interest of Lessor in the Premises, Lessor's right to other
income therefrom, and/or Lessor's business of leasing, by any authority
having the direct or indirect power to tax and where the funds are
generated with reference to the Building address and where the proceeds
so generated are to be applied by the city, county or other local taxing
authority of a jurisdiction within which the Premises are located. The
term "Real Property Taxes" shall also include any tax, fee, levy,
assessment or charge, or any increase therein, imposed by reason of
events occurring during the term of this Lease, including but not
limited to, a change in the ownership of the Premises.
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10.2.
(a) PAYMENT OF TAXES. Lessee shall pay the Real Property
Taxes applicable to the Premises during the term of this Lease.
Subject to Paragraph 10.2(b), all such payments shall be made at
least ten (10) days prior to any delinquency date. Lessee shall
promptly furnish Lessor with satisfactory evidence that such
taxes have been paid. If any such taxes shall cover any period of
time prior to or after the expiration or termination of this
Lease, Lessee's share of such taxes shall be prorated to cover
only that portion of the tax xxxx applicable to the period that
this Lease is in effect, and Lessor shall reimburse Lessee for
any overpayment. if Lessee shall fail to pay any required Real
Property Taxes, Lessor shall have the right to pay the same, and
Lessee shall reimburse Lessor therefor upon demand.
(b) ADVANCE PAYMENT. In the event Lessee incurs a late charge
on any Rent payment, Lessor may, at Lessor's option, estimate the
current Real Property Taxes, and require that such taxes be paid
in advance to Lessor by Lessee, either: (i) in a lump sum amount
equal to the installment due, at least twenty (20) days prior to
the applicable delinquency date, or (ii) monthly in advance with
the payment of the Base Rent. If Lessor elects to require payment
monthly in advance, the monthly payment shall be an amount equal
to the amount of the estimated installment of taxes divided by
the number of months remaining before the month in which said
installment becomes delinquent. When the actual amount of the
applicable tax xxxx is known, the amount of such equal monthly
advance payments shall be adjusted as required to provide the
funds needed to pay the applicable taxes. If the amount collected
by Lessor is insufficient to pay such Real Property Taxes when
due, Lessee shall pay Lessor, upon demand, such additional sums
as are necessary to pay such obligations. All monies paid to
Lessor under this Paragraph may be intermingled with other monies
of Lessor and shall not bear interest. In the event of a Breach
by Lessee in the performance of its obligations under this Lease,
then any balance of funds paid to Lessor under the provisions of
this Paragraph may at the option of Lessor, be treated as an
additional Security Deposit.
10.3. JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be conclusively determined by Lessor
from the respective valuations assigned in the assessor's work sheets or
such other information as may be reasonably available.
10.4. PERSONAL PROPERTY TAXES. Lessee shall pay, prior to delinquency,
all taxes assessed against and levied upon Lessee Owned Alterations,
Utility Installations, Trade Fixtures, furnishings, equipment and all
personal property of Lessee. When possible, Lessee shall cause such
property to be assessed and billed separately from the real property of
Lessor. If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay Lessor the taxes attributable
to Lessee's property within ten (10) days after receipt of a written
statement.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered.
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12. ASSIGNMENT AND SUBLETTING.
12.1. LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law
assign, transfer, mortgage or encumber (collectively, "assign or
assignment") or sublet all or any part of Lessee's interest in
this Lease or in the Premises without Lessor's prior written
consent.
(b) A change in the control of Lessee shall constitute an
assignment requiring consent. The transfer, on a cumulative
basis, of twenty-five percent (25%) or more of the voting control
of Lessee shall constitute a change in control for this purpose.
(c) The involvement of Lessee or its assets in any
transaction, or series of transactions (by way of merger, sale,
acquisition, financing, transfer, leveraged buy-out or
otherwise), whether or not a formal assignment or hypothecation
of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee by an amount
greater than twenty-five percent (25%) of such Net Worth as it
was represented at the time of the execution of this Lease or at
the time of the most recent assignment to which Lessor has
consented, or as it exists immediately prior to said transaction
or transactions constituting such reduction, whichever was or is
greater, shall be considered an assignment of this Lease to which
Lessor may withhold its consent. "Net Worth of Lessee" shall mean
the net worth of Lessee (excluding any guarantors) established
under generally accepted accounting principles.
(d) An assignment or subletting without consent shall, at
Lessor's option, be a Default curable after notice per Paragraph
13.1(c), or a noncurable Breach without the necessity of any
notice and grace period. If Lessor elects to treat such
unapproved assignment or subletting as a noncurable Breach,
Lessor may either: (i) terminate this Lease, or (ii) upon thirty
(30) days written notice, increase the monthly Base Rent to one
hundred ten percent (110%) of the Base Rent then in affect.
Further, in the event of such Breach and rental adjustment, (i)
the purchase price of any option to purchase the Premises held by
Lessee shall be subject to similar adjustment to one hundred ten
percent (110%) of the price previously in effect, and (ii) all
fixed and non-fixed rental adjustments scheduled during the
remainder of the Lease term shall be increased to One Hundred Ten
Percent (110%) of the scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief.
12.2. TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or
subletting shall not: (i) be effective without the express
written assumption by such assignee or sublessee of the
obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, or (iii) alter the primary liability
of Lessee for the payment of Rent or for the performance of any
other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's
obligations from any person other than Lessee pending approval or
disapproval of an assignment. Neither a delay in the
18
approval or disapproval of such assignment nor the acceptance of
Rent or performance shall constitute a waiver or estoppel of
Lessor's right to exercise its remedies for Lessee's Default or
Breach.
(c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor
may proceed directly against Lessee, any Guarantors or anyone
else responsible for the performance of Lessee's obligations
under this Lease, including any assignee or sublessee, without
first exhausting Lessor's remedies against any other person or
entity responsible therefore to Lessor, or any security held by
Lessor.
(e) Each request for consent to an assignment or subletting
shall be in writing, accompanied by information relevant to
Lessor's determination as to the financial and operational
responsibility and appropriateness of the proposed assignee or
sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a
fee of $1,000 or ten percent (10%) of the current monthly Base
Rent applicable to the portion of the Premises which is the
subject of the proposed assignment or sublease, whichever is
greater, as consideration for Lessor's considering and processing
said request. Lessee agrees to provide Lessor with such other or
additional information and/or documentation as may be reasonably
requested.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such
sublease, be deemed to have assumed and agreed to conform and
comply with each and every term, covenant, condition and
obligation herein to be observed or performed by Lessee during
the term of said assignment or sublease, other than such
obligations as are contrary to or inconsistent with provisions of
an assignment or sublease to which Lessor has specifically
consented to in writing.
12.3. ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee
of all or any part of the Premises and shall be deemed included in all
subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all Rent payable on any sublease, and Lessor
may collect such Rent and apply same toward Lessee's obligations
under this Lease; provided, however, that until a Breach shall
occur in the performance of Lessee's obligations, Lessee may
collect said Rent. Lessor shall not, by reason of the foregoing
or any assignment of such sublease, nor by reason of the
collection of Rent, be deemed liable to the sublessee for any
failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee. Lessee hereby irrevocably
authorizes and directs any such sublessee, upon receipt of a
written notice from Lessor stating that a Breach exists in the
performance of Lessee's obligations under this Lease, to pay to
Lessor all Rent due and to become due under the sublease.
Sublessee shall rely upon any such notice from Lessor and shall
pay all Rents to Lessor without any obligation or right to
inquire as to whether such Breach exists, notwithstanding any
claim from Lessee to the contrary.
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(b) In the event of a Breach by Lessee, Lessor may, at its
option, require sublessee to attorn to Lessor, in which event
Lessor shall undertake the obligations of the sublessor under
such sublease from the time of the exercise of said option to the
expiration of such sublease; provided, however, Lessor shall not
be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches
of such sublessor.
(c) Any matter requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor.
(d) No sublessee shall further assign or sublet all or any
part of the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or
Breach by Lessee to the sublessee, who shall have the right to
cure the Default of Lessee within the grace period, if any,
specified in such notice. The sublessee shall have a right of
reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES.
13.1. DEFAULT; BREACH. A "Default" is defined as a failure by the
Lessee to comply with or perform any of the terms, covenants, conditions
or rules under this Lease. A "Breach" is defined as the occurrence of
one or more of the following Defaults, and the failure of Lessee to cure
such Default within any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the
Premises without providing a commercially reasonable level of
security, or where the coverage of the property insurance
described in Paragraph 8.3 is jeopardized as a result thereof, or
without providing reasonable assurances to minimize potential
vandalism.
(b) The failure of Lessee to make any payment of Rent or any
Security Deposit required to be made by Lessee hereunder, whether
to Lessor or to a third party, when due, to provide reasonable
evidence of insurance or surety bond, or to fulfill any
obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of three (3)
business days following written notice to Lessee.
(c) The failure by Lessee to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the
service contracts, (iii) the rescission of an unauthorized
assignment or subletting, (iv) a Tenancy Statement, (v) a
requested subordination, (vi) evidence concerning any guaranty
and/or Guarantor, (vii) any document requested under Paragraph 42
(easements), or (viii) any other documentation or information
which Lessor may reasonably require of Lessee under the terms of
this Lease, where any such failure continues for a period of ten
(10) days following written notice to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions
or provisions of this Lease, or of the rules adopted under
Paragraph 40 hereof, other than those described in subparagraphs
13.1(a), (b) or (c), above, where such Default continues for a
period of thirty (30) days after written notice; provided,
however, that if the nature of Lessee's
20
Default is such that more than thirty (30) days are reasonably
required for its cure, then it shall not be deemed to be a Breach
if Lessee commences such cure within said thirty (30) day period
and thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the
making of any general arrangement or assignment for the benefit
of creditors; (ii) becoming a "debtor" as defined in 11 U.S.C.
Section 101 or any successor statute thereto (unless, in the case
of a petition filed against Lessee, the same is dismissed within
sixty (60) days); (iii) the appointment of a trustee or receiver
to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease,
where possession is not restored to Lessee within thirty (30)
days; or (iv) the attachment, execution or other judicial seizure
of substantially all of Lessee's assets located at the Premises
or of Lessee's interest in this Lease, where such seizure is not
discharged within thirty (30) days; provided, however, in the
event that any provision of this subparagraph (e) is contrary to
any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of Lessee or of
any Guarantor given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this
Lease is guaranteed: (i) the death of a Guarantor, (ii) the
termination of a Guarantor's liability with respect to this Lease
other than in accordance with the terms of such guaranty, (iii) a
Guarantor's becoming insolvent or the subject of a bankruptcy
filing, (iv) a Guarantor's refusal to honor the guaranty, or (v)
a Guarantor's breach of its guaranty obligation on an
anticipatory basis, and Lessee's failure, within sixty (60) days
following written notice of any such event, to provide written
alternative assurance or security, which, when coupled with the
then existing resources of Lessee, equals or exceeds the combined
financial resources of Lessee and the Guarantors that existed at
the time of execution of this Lease.
13.2. REMEDIES. If Lessee fails to perform any of its affirmative
duties or obligations, within ten (10) days after written notice (or in
case of an emergency, without notice), Lessor may, at its option,
perform such duty or obligation on Lessee's behalf, including but not
limited to the obtaining of reasonably required bonds, insurance
policies, or governmental licenses, permits or approvals. The costs and
expenses of any such performance by Lessor shall be due and payable by
Lessee upon receipt of invoice therefor. If any check given to Lessor by
Lessee shall not be honored by the bank upon which it is drawn, Lessor,
at its option, may require all future payments to be made by Lessee to
be by cashiers check. In the event of a Breach, Lessor may, with or
without further notice or demand, and without limiting Lessor in the
exercise of any right or remedy which Lessor may have by reason of such
Breach:
(a) Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease shall terminate and
Lessee shall immediately surrender possession to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the
unpaid Rent which had been earned at the time of termination;
(ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until
the time of award exceeds the amount of such
21
rental loss that the Lessee proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time
of award exceeds the amount of such rental loss that the Lessee
proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Lessor for all the detriment proximately
caused by the Lessee's failure to perform its obligations under
this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost
of recovering possession of the Premises, expenses of reletting,
including necessary renovation and alteration of the Premises,
reasonable attorneys' fees, and that portion of any leasing
commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the
time of award of the amount referred to in provision (iii) of the
immediately preceding sentence shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of
the District within which the Premises are located at the time of
award plus one percent (1%). Efforts by Lessor to mitigate
damages caused by Lessee's Breach of this Lease shall not waive
Lessor's right to recover damages under Paragraph 12. If
termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to
recover in such proceeding any unpaid Rent and damages as are
recoverable therein, or Lessor may reserve the right to recover
all or any part thereof in a separate suit. If a notice and grace
period required under Paragraph 13.1 was not previously given, a
notice to pay rent or quit, or to perform or quit given to Lessee
under the unlawful detainer statute shall also constitute the
notice required by Paragraph 13.1. In such case, the applicable
grace period required by Paragraph 13.1 and the unlawful detainer
statute shall run concurrently, and the failure of Lessee to cure
the Default within the greater of the two such grace periods
shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease
and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and
recover the Rent as it becomes due, in which event Lessee may
sublet or assign, subject only to reasonable limitations. Acts of
maintenance, efforts to relet, and/or the appointment of a
receiver to protect the Lessor's interests, shall not constitute
a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under
the laws or judicial decisions of the state wherein the Premises
are located. The expiration or termination of this Lease and/or
the termination of Lessee's right to possession shall not relieve
Lessee from liability under any indemnity provisions of this
Lease as to matters occurring or accruing during the term hereof
or by reason of Lessee's occupancy of the Premises.
13.3. INDUCEMENT RECAPTURE. Any agreement for free or abated rent or
other charges, or for the giving or paying by Lessor to or for Lessee of
any cash or other bonus, inducement or consideration for Lessee's
entering into this Lease, all of which concessions are hereinafter
referred to as "Inducement Provisions," shall be deemed conditioned upon
Lessee's full and faithful performance of all of the terms, covenants
and conditions of this Lease. Upon Breach of this Lease by Lessee, any
such Inducement Provision shall automatically be deemed deleted from
this Lease and of no further force or effect, and any rent, other
charge, bonus, inducement or consideration theretofore abated, given or
paid by Lessor under such an Inducement Provision shall be immediately
due and payable by Lessee to Lessor, notwithstanding any subsequent cure
of said Breach by Lessee. The acceptance by Lessor of rent or the cure
of the Breach which initiated the operation of this paragraph shall not
be deemed a waiver by Lessor of the provisions of this paragraph unless
specifically so stated in writing by Lessor at the time of such
acceptance.
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13.4. LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee of Rent will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by
any Lender. Accordingly, if any Rent shall not be received by Lessor
within five (5) days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay to Lessor a one-time
late charge equal to ten percent (10%) of each such overdue amount. The
parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of such
late payment. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's Default or Breach with respect to such
overdue amount, nor prevent the exercise of any of the other rights and
remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding any provision of this
Lease to the contrary, Base Rent shall, at Lessors option, become due
and payable quarterly in advance.
13.5. INTEREST. Any monetary payment due Lessor hereunder, other than
late charges, not received by Lessor, when due as to scheduled payments
(such as Base Rent) or within thirty (30) days following the date on
which it was due for non-scheduled payment, shall bear interest from the
date when due, as to scheduled payments, or the thirty-first (31st) day
after it was due as to non-scheduled payments. The interest ("Interest")
charged shall be equal to the prime rate reported in the Wall Street
Journal as published closest prior to the date when due plus four
percent (4%), but shall not exceed the maximum rate allowed by law.
Interest is payable in addition to the potential late charge provided
for in Paragraph 13.4.
13.6. BREACH BY LESSOR.
(a) NOTICE OF BREACH. Lessor shall not be deemed in breach of
this Lease unless Lessor fails within a reasonable time to
perform an obligation required to be performed by Lessor. For
purposes of this Paragraph, a reasonable time shall in no event
be less than thirty (30) days after receipt by Lessor, and any
Lender whose name and address shall have been furnished Lessee in
writing for such purpose, of written notice specifying wherein
such obligation of Lessor has not been performed; provided,
however, that if the nature of Lessor's obligation is such that
more than thirty (30) days are reasonably required for its
performance, then Lessor shall not be in breach if performance is
commenced within such thirty (30) day period and thereafter
diligently pursued to completion.
(b) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event
that neither Lessor nor Lender cures said breach within thirty
(30) days after receipt of said notice, or if having commenced
said cure they do not diligently pursue it to completion, then
Lessee may elect to cure said breach at Lessee's expense and
offset from Rent an amount equal to the greater of one month's
Base Rent or the Security Deposit, and to pay an excess of such
expense under protest, reserving Lessee's right to reimbursement
from Lessor. Lessee shall document the cost of said cure and
supply said documentation to Lessor.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "Condemnation"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than ten percent (10%) of any building portion of the
premises, or more
23
than twenty-five percent (25%) of the land area portion of the premises not
occupied by any building, is taken by Condemnation, Lessee may, at Lessee's
option, to be exercised in writing within ten (10) days after Lessor shall
have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority
takes such possession. If Lessee does not terminate this Lease in accordance
with the foregoing, this Lease shall remain in full force and effect as to
the portion of the Premises remaining, except that the Base Rent shall be
reduced in proportion to the reduction in utility of the Premises caused by
such Condemnation. Condemnation awards and/or payments shall be the property
of Lessor, whether such award shall be made as compensation for diminution in
value of the leasehold, the value of the part taken, or for severance
damages; provided, however, that Lessee shall be entitled to any compensation
for Lessee's relocation expenses, loss of business goodwill and/or Trade
Fixtures, without regard to whether or not this Lease is terminated pursuant
to the provisions of this Paragraph. All Alterations and Utility
Installations made to the Premises by Lessee, for purposes of Condemnation
only, shall be considered the property of the Lessee and Lessee shall be
entitled to any and all compensation which is payable therefor. In the event
that this Lease is not terminated by reason of the Condemnation, Lessor shall
repair any damage to the Premises caused by such Condemnation.
15. BROKERS
15.1. REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Lessee
and Lessor each represent and warrant to the other that it has had no
dealings with any person, firm, broker or finder (other than the Brokers,
if any) in connection with this Lease, and that no one other than said
named Brokers is entitled to any commission or finder's fee in connection
herewith. Lessee and Lessor do each hereby agree to indemnify, protect,
defend and hold the other harmless from and against liability for
compensation or charges which may be claimed by any such unnamed broker,
finder or other similar party by reason of any dealings or actions of the
indemnifying Party, including any costs, expenses, attorneys' fees
reasonably incurred with respect thereto.
16. ESTOPPEL CERTIFICATES.
(a) Each Party (as "Responding Party") shall within ten
(10) days after written notice from the other Party (the
"Requesting Party") execute, acknowledge and deliver to the
Requesting Party 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 ten 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
24
purchaser, including but not limited to Lessee's financial
statements for the past three (3) years. All such financial
statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the
purposes herein set forth.
17. DEFINITION OF LESSOR. The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, or, if
this is a sublease, of the Lessee's interest in the prior lease. In the event of
a transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Upon such transfer or assignment and delivery
of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all
liability with respect to the obligations and/or covenants under this Lease
thereafter to be performed by the Lessor. Subject to the foregoing, the
obligations and/or covenants in this Lease to be performed by the Lessor shall
be binding only upon the Lessor as hereinabove defined.
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. Subject to the provisions of Paragraph 17
above, the obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, the individual partners of Lessor or its or their
individual partners, directors, officers or shareholders, and Lessee shall look
to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse
against the individual partners of Lessor, or its or their individual partners,
directors, officers or shareholders, or any of their personal assets for such
satisfaction.
21. TIME OF ESSENCE. Time is of the essence with respect to the performance
of all obligations to be performed or observed by the Parties under this Lease.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party.
23. NOTICES.
23.1. NOTICE REQUIREMENTS. All notices required or permitted by this
Lease shall be in writing and may be delivered in person (by hand or by
courier) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile
transmission, and shall be deemed sufficiently given if served in a
manner specified in this Paragraph 23. The addresses noted adjacent to a
Party's signature on this Lease shall be that Party's address for
delivery or mailing of notices. Either Party may by written notice to the
other specify a different address for notice, except that upon Lessee's
taking possession of the Premises, the Premises shall constitute Lessee's
address for notice. A copy of all notices to Lessor shall be concurrently
transmitted to such party or parties at such addresses as Lessor may from
time to time hereafter designate in writing.
25
23.2. DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark
thereon. If sent by regular mail the notice shall be deemed given
forty-eight (48) hours after the same is addressed as required herein
and mailed with postage prepaid. Notices delivered by United States
Express Mail or overnight courier that guarantee next day delivery
shall be deemed given twenty-four (24) hours after delivery of the
same to the Postal Service or courier. Notices transmitted by
facsimile transmission or similar means shall be deemed delivered upon
telephone confirmation of receipt, provided a copy is also delivered
via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or of any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any act shall not be deemed to render unnecessary
the obtaining of Lessor's consent to, or approval of, any subsequent or similar
act by Lessee, or be construed as the basis of an estoppel to enforce the
provision or provisions of this Lease requiring such consent. The acceptance of
Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any
payment by Lessee may be accepted by Lessor on account of monies or damages due
Lessor, notwithstanding any qualifying statements or conditions made by Lessee
in connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
25. RECORDING. Lessee shall, upon request of Lessor execute, acknowledge and
deliver to Lessor a short form memorandum of this Lease for recording purposes.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
one hundred fifty percent (150%) of the Base Rent applicable during the month
immediately preceding the expiration or termination. Nothing contained herein
shall be construed as consent by Lessor to any holding over by Lessee.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT. All provisions of
this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the
convenience of the parties only and shall not be considered a part of this
Lease. Whenever required by the context, the singular shall include the plural
and vice versa. This Lease shall not be construed as if prepared by one of the
parties, but rather according to its fair meaning as a whole, as if both parties
had prepared it.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
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30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1. SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "Security Device"),
now or hereafter placed upon the Premises, to any and all advances made
on the security thereof, and to all renewals, modifications, and
extensions thereof. Lessee agrees that the holders of any such Security
Devices (in this Lease together referred to as "Lessor's Lender") shall
have no liability or obligation to perform any of the obligations of
Lessor under 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. Subject to the non-disturbance provisions of
Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party
who acquires ownership of the Premises by reason of a foreclosure of a
Security Device, and that in the event of such foreclosure such new owner
shall not: (i) be liable for any act or omission of any prior lessor or
with respect to events occurring prior to acquisition of ownership; (ii)
be subject to any offsets or defenses which Lessee might have against any
prior lessor, or (iii) be bound by prepayment of more than one (1)
month's rent.
30.3. NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall be subject to receiving a commercially reasonable
non-disturbance agreement (a "Non-Disturbance Agreement") from the
Lender which Non-Disturbance Agreement provides that Lessee's
possession of the Premises, and this Lease, including any options to
extend the term hereof, will not be disturbed so long as Lessee is not
in Breach hereof and attorns to the record owner of the Premises.
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 brings an action or proceeding involving
the Premises to enforce the terms hereof or to declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding, action, or
appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may
be awarded in the same suit or recovered in a separate suit, whether or not such
action or proceeding is pursued to decision or judgment. The term, "Prevailing
Party" shall include, without limitation, a Party who substantially obtains or
defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party of its claim or
defense. The attorneys' fees award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred. In addition, Lessor shall be entitled to attorneys' fees,
costs and expenses incurred in the preparation and service of notices of Default
and consultations in connection therewith, whether or not a legal action is
subsequently commenced in connection with such Default or resulting Breach.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or lessees, and making such alterations,
27
repairs, improvements or additions to the Premises as Lessor may deem necessary.
All such activities shall be without abatement of rent or liability to Lessee.
Lessor may at any time place on the Premises any ordinary "For Sale" signs and
Lesser may during the last six (6) months of the term hereof place on the
Premises any ordinary "For Lease" signs. Lessee may at any time place on or
about the Premises any ordinary "For Sublease" sign.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, any
auction upon the Premises without Lessor's prior written consent. Lessor shall
not be obligated to exercise any standard of reasonableness in determining
whether to permit an auction.
34. SIGNS. Except for ordinary "For Sublease" signs, Lessee shall not place
any sign upon the Premises without Lessor's prior written consent. All signs
must comply with all Applicable Requirements.
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor's failure within ten (10) days following any such
event to elect to the contrary by written notice to the holder of any such
lesser interest, shall constitute Lessor's election to have such event
constitute the termination of such interest.
36. CONSENTS. Except as otherwise provided herein, wherever in this Lease
the consent of a Party is required to an act by or for the other Party, such
consent shall not be unreasonably withheld or delayed. Lessor's actual
reasonable costs and expenses (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 references to the particular matter
for which consent is being given. In the event that either Party disagrees with
any determination made by the other hereunder and reasonably requests the
reasons for such determination, the determining party shall furnish its reasons
in writing and in reasonable detail within ten (10) business days following such
request.
37. GUARANTOR.
37.1. EXECUTION. The Guarantors, if any, shall each execute a guaranty
in the form most recently published by the American Industrial Real
Estate Association, and each such Guarantor shall have the same
obligations as Lessee under this Lease.
37.2. DEFAULT. It shall constitute a Default of the Lessee if any
Guarantor fails or refuses, upon request to provide: (a) evidence of the
execution of the guaranty, including the authority of the party signing
on Guarantor's behalf to obligate Guarantor, and in the case of a
corporate Guarantor, a certified copy of a resolution of its board of
directors authorizing the making of such
28
guaranty, (b) current financial statements, (c) a Tenancy Statement,
or (d) written confirmation that the guaranty is still in effect.
38. QUIET POSSESSION. Subject to payment by Lessee of the Rent and
performance of all of the covenants, conditions and provisions on Lessee's part
to be observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during the term hereof.
39. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
40. RESERVATIONS. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.
41. 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.
42. AUTHORITY. If either Party hereto is a corporation, trust, limited
liability company, partnership, or similar entity, each individual executing
this Lease on behalf of such entity represents and warrants that he or she is
duly authorized to execute and deliver this Lease on its behalf. Each party
shall, within thirty (30) days after request, deliver to the other party
satisfactory evidence of such authority.
43. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
44. OFFER. Preparation of this Lease by either Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease to
the other Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto.
45. 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.
46. 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.
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
29
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND
LESSEE WITH RESPECT TO THE PREMISES.
--------------------------------------------------------------------------------
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE
CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE
LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF
THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND
OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S
INTENDED USE.
WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED.
--------------------------------------------------------------------------------
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at Newport Beach, California Executed at:
on March __, 1998. ------------------------
on:
---------------------------------
By LESSOR: SANWA BANK CALIFORNIA, a By LESSEE: XCD, Inc., a California corporation
California corporation, as Trustee of
the XXXXXXX XXXXX TRUST, for the Benefit
of XXXXXXX XXXXX, TRUST No. 00X000000
and the XXXXXX XXXXX TRUST for the
Benefit of XXXXXXX XXXXX, TRUST No.
00X000000*
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxx
---------------------------- --------------------
Name Printed: Xxxxxx Xxxxxx Name Printed: Xxxxx Xxxxxxxx
----------------- --------------
Title: Vice President Title: President
------------------------- ---------
By: /s/ Xxxxx Xxx Xxxxxxx By:
--------------------------------
Name Printed: Xxxxx Xxx Xxxxxxx Name Printed:
----------------- ----------------------
Title: Vice President Title:
------------------------- ----------------------------
Address: Sanwa Bank California, Sanwa Trust & Address: 0000 Xxx Xxxxxx
------------------------------------ --------------------------
Investment, 0000 XxxXxxxxx Xxxx., Xxxxx 000, Xxxxxx, XX 00000
--------------------------------------------- --------------------------
30
Xxxxxxx Xxxxx, XX 00000
-------------------------------------
-------------------------------------- -----------------------------------
Telephone: (000) 000-0000 Telephone: (000) 000-0000
---------------------------- -------------------------
Facsimile: (000) 000-0000 Facsimile: ( )
---------------------------- -------------------------
Federal ID No. Federal ID No.
------------------------ ---------------------
NOTE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the
most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 000 Xx.
Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000. (000) 000-0000.
Fax No. (000) 000-0000.
It is understood and mutually agreed that Lessor in executing this Lease, as
Lessor, is acting in a fiduciary capacity and Lessor shall not be liable
hereunder directly or indirectly, in its individual capacity, the rights and
claims of Lessee hereunder are and shall be limited exclusively to such rights
as Lessee may have against Lessor in its fiduciary capacity and recourse by
Lessee shall be limited to recourse against the assets of the particular
trust(s) or estate(s) involved. It is further understood and agreed that in the
event the fiduciary relationship shall terminate or in the event Lessor shall be
discharged of its fiduciary capacity, Lessee shall have no claim against Lessor
on account of such termination or discharge.
31
ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-TENANT LEASE-NET BY AND BETWEEN
SANWA BANK CALIFORNIA, AS
TRUSTEE OF THE XXXXXXX XXXXX TRUST,
FOR THE BENEFIT OF XXXXXXX XXXXX
TRUST NO. 00X000000 AND THE XXXXXX XXXXX TRUST, FOR THE BENEFIT OF XXXXXXX
XXXXX, TRUST NO. 00X000000, AS LESSOR,
AND XCD, INC., A CALIFORNIA CORPORATION, AS LESSEE
47. INCORPORATION. This Addendum to Standard Industrial/Commercial
Single-Tenant Lease-Net by and between Sanwa Bank California, as trustee of
the Xxxxxxx Xxxxx Trust for the Benefit of Xxxxxxx Xxxxx, Trust No. 00X000000
and the Xxxxxx Xxxxx Trust, for the Benefit of Xxxxxxx Xxxxx, Trust No.
00X000000, as Lessor, and XCD, Inc., a California corporation, as Lessee
dated March 1, 1998 ("Addendum"), is incorporated into the attached Standard
Industrial/Commercial Single-Tenant Lease-Net by and between Lessor and
Lessee and dated March 1, 1998 (the "Lease"). Unless defined in this
Addendum, all words commencing with initial capital letters in this Addendum
shall have the same meaning prescribed to such words in the Lease. This
Addendum and the Lease are herein collectively referred to as this Lease.
48. ABATEMENT OF BASE RENT. Notwithstanding any other term or provision of
this Lease and provided Lessee is not in default pursuant to any term or
provision of this Lease, Lessee shall not be required to pay Base Rent for the
months of May and June of 1998.
49. ADJUSTMENT OF BASE RENT. Base Rent shall be increased, but never decreased,
effective as of April 1, 1999 and each April 1 thereafter during the Original
Term (collectively "Adjustment Date"), in accordance with percentage increase,
if any, in the Consumer Price Index (All Urban Consumers) (Los
Angeles-Anaheim-Riverside Consolidated Metropolitan Statistical Area;
1982-1984=100) (the "Index"), as published by the United States Department of
Labor, Bureau of Labor Statistics. The Index for the month that is two (2)
months prior to each Adjustment Date ("Comparison Month") will be compared
with the Index for the Comparison Month for the immediately preceding year
and monthly Base Rent will be increased on each Adjustment Date in accordance
with the percentage increase, if any, between such Comparison Month indices.
Notwithstanding the foregoing, in no event shall Base Rent increase by less
than four percent (4%) or by more than seven percent (7%) of the Base Rent
immediately in effect prior to each Adjustment Date.
By way of illustration only, as to the Base Rent adjustment that is to
occur on April 1, 1999, the initial Comparison Month Index would be that for
January 1999 (assume such Index at 130) which shall be compared with the Index
for January 1998 (assume such Index at 136), and because the Index for January
1999 is 4.6% higher than the Index for January 1998, based on the assumptions of
136 and 130, respectively, monthly Base Rent commencing as of April 1, 1999,
would be 4.6% higher than the installment of monthly Base Rent for the month of
March 1999; likewise, on April 1, 2000, the Index for January 2000 shall be
compared with the Index for January 1999, and the April 1, 2000, installment of
monthly Base Rent shall be adjusted accordingly. Should the Bureau of Labor
Statistics discontinue the publication of the Index, publish the Index less
frequently or alter the Index in some other manner, then Lessor shall adopt a
substitute Index or substitute procedure, which reasonably reflects and monitors
consumer prices.
1
50. TENANT IMPROVEMENTS. Except as expressly provided in this Lease to the
contrary, Lessee acknowledges and agrees Lessor shall have no responsibility to
perform any improvements to the Premises, which Lessee agrees to accept in its
current and "as is" condition. Notwithstanding the foregoing, Lessor agrees to
reimburse Lessee the maximum amount of Twenty Thousand Dollars ($20,000.00) for
improvements performed to the Premises by Lessee. Lessor shall have no
obligation to reimburse Lessee the cost of any improvements to the Premises,
unless Lessee provides Lessor with the plans and specifications for the
improvements and obtains Lessor's prior written consent to the performance of
such improvements, which shall not be unreasonably withheld or delayed. In
addition, reimbursement shall be conditioned upon Lessee providing Lessor with
all information reasonably requested by Lessor, including, without limitation,
detailed invoices for the work performed, canceled checks and lien releases from
all contractors and suppliers that performed the work or provided materials for
which reimbursement is being sought. In addition, Lessee shall comply with all
the terms and provisions of this Lease relating to the improvement or alteration
of the Premises. Lessee acknowledges and agrees that upon the termination of
this Lease, if requested by Lessor, Lessee shall replace any drop ceilings
removed by Lessee.
51. SIGNS. Lessee shall be entitled, at Lessee's sole cost and expense, to
erect signage on the Premises, subject to all applicable laws, rules and
regulations. Lessee covenants and agrees, at the termination of this Lease, to
remove Lessee's signs and to repair any damage to the Premises caused by such
removal.
CK KAL KS
----------------- -----------------
Lessor's Initials Lessee's Initials
2
52. PARKING. Lessee shall have the exclusive use of all parking on the
Premises during the term of this Lease, at no additional cost.
53. AMERICANS WITH DISABILITIES ACT. Lessee acknowledges and agrees,
notwithstanding any term or provision of this Lease or California law to the
contrary, Lessee shall be solely responsible, at Lessee's cost and expense, to
perform any improvements or alterations to the Premises required by the
Americans With Disabilities Act.
54. EXCULPATION OF LESSOR. Notwithstanding any other provision of this Lease,
Lessor shall not have any personal liability hereunder. If Lessor shall fail to
perform any covenant, term or condition of this Lease upon Lessor's part to be
performed, and if as a consequence of such default Lessee shall recover a money
judgment against Lessor, such judgment shall be satisfied only out of the net
income received by Lessor from the Premises (after payment of taxes, insurance,
maintenance and debt service). Lessee acknowledges that the obligations of
Lessor under this Lease do not constitute the personal obligations of Lessor or
the trusts of which Lessor is the trustee (collectively the "Trust") and, except
for the net income from the Premises, no other assets of Lessor or the Trust
shall be subject to recourse for the satisfaction of any liability arising from
or in connection with this Lease.
55. TERMINATION. If Lessor has not executed and delivered this Lease to Lessee
within three (3) business days from the date Lessor receives this Lease executed
by Lessee, Lessee shall have the right to terminate this Lease by delivering
written notice to Lessor. Upon Lessor's execution and delivery of this Lease to
Lessee, Lessee shall immediately pay to Lessor the Security Deposit and Base
Rent for April 1998. Lessee shall have no right to possession of the Premises
unless and until Lessee has paid the foregoing amounts to Lessor.
56. NO MODIFICATION OF THIS LEASE. Except as expressly provided in this
Addendum, the preprinted form portion of this Lease shall remain in full force
and effect and unmodified. In the event of a conflict between the terms and
provisions of the preprinted form portion of this Lease and this Addendum, the
terms and provisions of this Addendum shall control.
[ADDENDUM CONTINUES ON THE NEXT PAGE]
CK KAL KS
----------------- -----------------
Lessor's Initials Lessee's Initials
3
57. LESSOR'S INSURANCE. Notwithstanding any term or provision of this Lease
to the contrary, Lessor shall provide Lessee with a certificate of insurance,
naming Lessee as an additional insured on the blanket general liability
insurance policy maintained by Lessor, from time to time, in the minimum
amount of $2,000,000. Lessor covenants and agrees to maintain, throughout the
term of this Lease, the insurance provided for in this Paragraph 57.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum to be
effective concurrent with the date of this Lease.
LESSEE
LESSOR
SANWA BANK CALIFORNIA, XCD, INC.,
a California corporation, as Trustee of a California corporation
the XXXXXXX XXXXX TRUST, for the
Benefit of XXXXXXX XXXXX, TRUST No.
00X000000 and the XXXXXX XXXXX TRUST,
for the Benefit of XXXXXXX XXXXX, TRUST
No. 00X000000
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxx
--------------------- -----------------------
Its: Vice President Its: President
-------------- -------------------
By: /s/ Xxxxx Xxx Xxxxxxx By:
--------------------- -----------------------
Its: Vice President Its:
-------------- -------------------
* It is understood and mutually agreed that Lessor in executing this Addendum,
as Lessor, is acting in a fiduciary capacity and Lessor shall not be liable
hereunder directly or indirectly in its individual capacity, the rights and
claims of Lessee hereunder are and shall be limited exclusively to such rights
as Lessee may have against Lessor in its fiduciary capacity and recourse by
Lessee shall be limited to recourse against the assets of the particular
trust(s) or estate(s) involved. It is further understood and agreed that in the
event the fiduciary relationship shall terminate or in the event Lessor shall be
discharged of its fiduciary capacity, Lessee shall have no claim against Lessor
on account of such termination or discharge.
4
CONSENT TO ASSIGNMENT OF LEASE, ASSIGNMENT AND ACCEPTANCE
THIS CONSENT TO ASSIGNMENT OF LEASE, ASSIGNMENT AND ACCEPTANCE
("Agreement") made and entered into as of this 23rd day of October, 1998 (the
"Effective Date"), by and among SANWA BANK CALIFORNIA, a California corporation,
as Trustee of the Xxxxxxx Xxxxx Trust, for the Benefit of Xxxxxxx Xxxxx, Trust
No. 4 1N093004 and the Xxxxxx Xxxxx Trust, for the Benefit of Xxxxxxx Xxxxx,
Trust No. 51N094010 ("Lessor"), XCD, INC., a California corporation
("Assignor"), and XXXX XCD, INC., a Delaware corporation ("Assignee").
RECITALS
A. Lessor, as lessor, and Assignor, as lessee, entered into that certain
Standard Industrial/Commercial Single-Tenant Lease - Net dated on or about March
1, 1998 (the "Lease"), pursuant to which Lessor leased to Assignor the improved
real property located in the City of Irvine, County of Orange, State of
California and commonly known as 1692 Xxxxxxxx (the "Premises").
B. Assignor desires to assign to Assignee all of the interests, rights
and obligations of Assignor or pursuant to the Lease and Assignee desires to
assume all interests, rights and obligations of Assignor under the Lease.
X. Xxxxxx has agreed to consent to assignment of the Lease by Assignor or
to Assignee, pursuant to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises set forth herein
and other valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Assignor and Assignee agree as follows.
1. ASSIGNMENT OF THE LEASE. As of the Effective Date, Assignor hereby
assigns all of the interests, rights and obligations under the Lease to
Assignee, pursuant to the provisions of this Agreement.
2. ACCEPTANCE OF THE LEASE. In connection with the foregoing assignment,
Assignee hereby accepts the assignment of all of the interests, rights and
obligations of Assignor under the Lease, pursuant to the provisions of this
Agreement. Assignee, on behalf of Assignee and the successors and assigns of
Assignee, hereby agrees to be bound by and perform and abide by all of the
terms, covenants and conditions of the Lease.
3. LESSOR'S CONSENT TO ASSIGNMENT. Lessor hereby consents and agrees to
the assignment of the Lease by Assignor to Assignee, pursuant to the provisions
of this Agreement. Notwithstanding the foregoing, nothing in this Agreement
shall be construed as releasing Assignee from any obligation or liability under
the Lease. In addition, nothing in this Agreement shall be construed as the
consent of Lessor to an assignment of this Lease by Assignee.
1
4. NO MODIFICATION. Lessor, Assignor and Assignee acknowledge and agree,
except as expressly provided to the contrary in this Agreement, the Lease shall
remain in full force and effect and unmodified.
5. GENERAL PROVISIONS.
5.1 NOTICES. All notices or other communications required or
permitted hereunder shall be in writing, and shall be personally delivered or
sent by registered or certified mail, postage prepaid, return receipt requested,
telegraphed, delivered or sent by facsimile, telex, telecopy or cable and shall
be deemed received upon the earlier of: (a) if personally delivered, the date of
delivery to the address of the person to receive such notice; (b) if mailed,
four (4) business days after the date of posting by the United States post
office; (c) if given by telegraph or cable, when delivered to the telegraph
company with charges prepaid; or (d) if given by facsimile, telex or telecopy,
when sent. Any notice, request, demand, direction or other communication sent by
cable, facsimile, telex or telecopy must be confirmed within forty-eight (48)
hours by letter mailed or delivered in accordance with the foregoing.
Lessor: SANWA BANK CALIFORNIA
Sanwa Trust & Investment
0000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
Assignor: XCD, INC.
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
Assignee: XXXX XCD, INC.
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
Notice of change of address shall be given by written notice in the manner
detailed in this Paragraph. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given
shall be deemed to constitute receipt of the notice, demand, request or
communication sent.
5.2 ENTIRE AGREEMENT. This Agreement contains the entire agreement
among Lessor, Assignor and Assignee relating to the subject matter hereof and no
addition to or modification of any term or provisions of this Agreement shall be
effective unless set forth in writing, signed by all of the parties hereto.
5.3 RECITALS. The recitals of this Agreement are deemed to be part of
this Agreement.
5.4 SEVERABILITY. If any term, covenant, condition or provision of
this Agreement, or the application thereof to any person or circumstance, shall
to any extent be held by a court of competent
2
jurisdiction to be invalid, void or unenforceable, the remainder of the
terms, covenants, conditions or provisions of this Agreement, or the
application thereof to any person or circumstance, shall remain in full force
and effect and shall in
5.5 ATTORNEY FEES. If any party to this Agreement shall bring any
action or proceeding against any other party arising out of or relating to this
Agreement, the prevailing party(ies) in such action shall be entitled to receive
from the nonprevailing party(ies) reasonable attorney's fees and costs incurred
in connection therewith, including the costs of reasonable investigation,
preparation and professional or expert consultation incurred by reason of such
litigation.
5.6 AUTHORITY. Each party represents and warrants it has full power
and authority to execute this Agreement and perform their respective obligations
pursuant to this Agreement and the Lease. Furthermore, the persons executing
this Agreement have been duly authorized and empowered to execute this Agreement
on behalf of such party. Upon request, the parties agree to immediately provide
each other with any resolutions or documents confirming the representations
contained in this Section 5.6.
5.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. Notwithstanding the
foregoing, this Agreement shall not be binding on any party until Lessor,
Assignor and Assignee have each executed counterparts of this Agreement and
delivered one (1) executed original counterpart to each of the other parties.
3
Lessor, Assignor and Assignee have caused this Agreement to be executed by
their duly authorized representatives to be effective as of the Effective Date.
LESSOR ASSIGNOR
SANWA BANK CALIFORNIA, a California XCD, INC., a
corporation, as Trustee of the Xxxxxxx California corporation
Pathe Trust, for the Benefit of Xxxxxxx
Xxxxx, Trust No. 00X000000, and the
Xxxxxx Xxxxx Trust, for the Benefit of
Xxxxxxx Xxxxx, Trust No. 51N094010
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxx
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Its: Vice President Its: President
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By: /s/ Don R. Souce By:
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Its: Vice President Its:
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ASSIGNEE
XXXX XCD, INC., a
Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
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Its: President
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By:
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Its:
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