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Exhibit 10.57
STANDARD FORM
INDUSTRIAL LEASE
(SINGLE TENANT)
Landlord H-B TEMPE, L.L.C., an Arizona limited liability company
Tenant ACTION PERFORMANCE COMPANIES, INC., an Arizona corporation
Dated as of June 28, 1999
TABLE OF CONTENTS
1. Defined Terms ......................................................................................... 1
2. Leased Premises ....................................................................................... 2
(a) Property to be Leased ............................................................... 2
(b) Reserved Rights of Landlord ......................................................... 2
3. Completion of Premises ................................................................................ 2
(a) Plans ............................................................................... 2
(b) Scheduled Commencement Date; Delays Caused by Tenant ................................ 3
(c) Remedy .............................................................................. 3
(d) Changes ............................................................................. 3
(e) Ready for Occupancy ................................................................. 4
(f) Construction Representative ......................................................... 4
(g) Early Entry ......................................................................... 4
(h) Quality of Construction ............................................................. 4
(i) Tenant Improvement Allowance ........................................................ 4
4. Term .................................................................................................. 5
5. Rent .................................................................................................. 5
(a) Fixed Rent .......................................................................... 5
(b) Adjustments ......................................................................... 6
(c) Pro Rata Rent ....................................................................... 6
(d) Net Lease ........................................................................... 6
6. Security .............................................................................................. 6
(a) Security Deposit .................................................................... 6
(b) Lien and Security Interest .......................................................... 6
7. Use ................................................................................................... 6
(a) General ............................................................................. 6
(b) Compliance with Law ................................................................. 6
(c) Existing Title and Condition of Premises ............................................ 7
(d) Signs ............................................................................... 7
(e) Governmental Regulation ............................................................. 7
8. Maintenance and Repairs ............................................................................... 7
(a) Tenant's Maintenance ................................................................ 7
(b) Landlord's Obligations to Repair .................................................... 8
(c) Surrender ........................................................................... 8
9. Utilities ............................................................................................. 8
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10. Alterations and Additions ............................................................................. 9
(a) Limitation .......................................................................... 9
(b) Liens ............................................................................... 9
(c) Removal ............................................................................. 9
11. Insurance.............................................................................................. 9
(a) General Liability ................................................................... 9
(b) Extended Coverage ................................................................... 9
(c) Policies ............................................................................ 10
(d) Waiver of Subrogation ............................................................... 10
(e) Tenant's Contents ................................................................... 10
(f) Workmen's Compensation .............................................................. 11
(g) Rental Income Insurance ............................................................. 11
12. Indemnity; Exemption of Landlord from Liability ....................................................... 11
(a) General ............................................................................. 11
(b) Tenant's Business ................................................................... 11
13. Damage or Destruction; Obligation to Rebuild .......................................................... 11
(a) Landlord's Obligation to Rebuild .................................................... 12
(b) Abatement of Rent ................................................................... 12
(c) Option to Terminate ................................................................. 12
(d) Uninsured Casualties ................................................................ 12
(e) Damage Near End of Term ............................................................. 12
(f) Tenant's Waiver ..................................................................... 13
14. Taxes and Assessments ................................................................................. 13
(a) Payment ............................................................................. 13
(b) Definition .......................................................................... 13
(c) Separate Assessment ................................................................. 13
(d) Personal Property ................................................................... 13
(e) Rent Tax ............................................................................ 13
(f) Declaration ......................................................................... 14
(g) Project Assessments ................................................................. 14
(h) Right to Contest .................................................................... 14
15. Condemnation .......................................................................................... 14
(a) Rent Reduction or Lease Termination ................................................. 14
(b) Award ............................................................................... 14
(c) Temporary Condemnation .............................................................. 15
16 Assignment and Subletting ............................................................................. 15
(a) Consent ............................................................................. 15
(b) Tenant's Continuing Liability ....................................................... 15
(c) Information ......................................................................... 15
(d) Excess Sublease Rental .............................................................. 16
(e) Release ............................................................................. 16
(f) Controlled Entity ................................................................... 16
(g) Attorneys' Fees ..................................................................... 16
17. Defaults; Remedies .................................................................................... 16
(a) Defaults ............................................................................ 16
(b) Remedies ............................................................................ 17
(c) Late Charges ........................................................................ 20
(d) Payment or Performance by Landlord .................................................. 20
18. Miscellaneous ......................................................................................... 20
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(a) Estoppel Certificates ............................................................... 20
(b) Landlord's Liability ................................................................ 21
(c) Construction ........................................................................ 21
(d) Interest on Past-Due Obligations .................................................... 21
(e) Time of Essence ..................................................................... 21
(f) Counterparts......................................................................... 21
(g) Incorporation of Prior Agreements; Amendments ....................................... 21
(h) Notices ............................................................................. 21
(i) Waivers ............................................................................. 22
(j) Recording ........................................................................... 22
(k) Holding Over ........................................................................ 22
(1) Covenants and Conditions ............................................................ 22
(m) Binding Effect ...................................................................... 22
(n) Subordination ....................................................................... 22
(o) Attorneys' Fee ...................................................................... 23
(p) Landlord's Access ................................................................... 23
(q) Auctions ............................................................................ 23
(r) Merger .............................................................................. 23
(s) Joint and Several Liability ......................................................... 23
(t) Individual Liability ................................................................ 23
(u) Attornment .......................................................................... 23
(v) Lenders Right to Cure ............................................................... 23
(w) Revisions to Lease................................................................... 24
(x) Administrative Charge ............................................................... 24
(y) Estimated Payments .................................................................. 24
19. Toxic Materials ....................................................................................... 24
(a) Definitions ......................................................................... 24
(b) Prohibition on Hazardous Materials .................................................. 25
(c) Exception to Prohibition ............................................................ 25
(d) Compliance with Environmental Laws .................................................. 25
(e) Environmental Notices ............................................................... 26
(f) Tenant's Environmental Indemnity .................................................... 26
(g) Remedial Work at Tenant's Expense ................................................... 26
(h) Landlord's Option ................................................................... 27
(i) Injunctive Relief ................................................................... 27
(j) Self-Help ........................................................................... 27
(k) Other Tenants and Owners ............................................................ 27
(1) Environmental Inspection ............................................................ 27
(m) Surrender of Premises - Environmental Considerations ................................ 28
(n) Landlord's Environmental Indemnity .................................................. 28
(o) Remedial Work at Landlord's Expense ................................................. 28
Exhibit A The Site Plan for Premises
Exhibit B Legal Description of Property
Exhibit C Space Plan for Tenant Improvements
Exhibit D Certain Tenant Improvements to be Furnished by Landlord
Exhibit E Option to Extend Term
Exhibit F Tenant's Sign Plan
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1. Defined Terms. Each reference in this Lease to any of the following
terms shall incorporate the data stated for that term. Other terms are as
defined in the Lease.
(a) Landlord and Landlord's H-B TEMPE, L.L.C.
Address (subparagraph c/o Hewson Properties, Inc.
18(h)): ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) Tenant and Tenant's ACTION PERFORMANCE COMPANIES, INC.,
Address for Notices an Arizona corporation
(subparagraph 18(h)): ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
See subparagraph 18(h) for additional notices
(c) Street Address of Pre- ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
mises (paragraph 2): ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(d) Leased Premises The real property described in Exhibit B attached
hereto and all improvements now or hereafter located
thereon, including an existing building (the
"Building") which contains approximately 65,018
square feet of rentable space, all as shown on the Site
Plan attached hereto as Exhibit A (the "Premises").
(e) Landlord's Construction ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Representative (subpara-
graph 3(f)):
(f) Tenant's Construction
Representative (subpara-
graph 3(f)):
(g) Term (paragraph 4): One hundred twenty (120) months
(h) Scheduled Commencement 12:01 a.m. on November 1, 1999
Date (paragraph 4):
(i) Fixed Rent (subpara- Months 1-60 $78,563.00
graph 5(a)): Months 61-120 $94,817.00
(j) Rental Period (sub- Monthly
paragraph 5(a)):
(k) Security Deposit (sub- Waived
paragraph 6(a)):
(l) Permitted Uses (para- General office use, together with any other uses
graph 7): permitted by law upon the prior written consent of the
Landlord as provided in paragraph 7
(m) Liability Insurance $2,000,000
(subparagraph 11(a)):
(n) Project Hohokam Business Park
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2. Leased Premises.
(a) Property to be Leased. Landlord hereby leases to Tenant, and
Tenant hereby leases from Landlord, subject to the terms and conditions
contained herein, (i) that certain real property located at the street address
set forth in paragraph 1 hereof and more particularly described in Exhibit B
attached hereto and incorporated herein by this reference (the "Property"); (ii)
the improvements located on the Property, including the Building (the "Existing
Improvements"); and (iii) those improvements to be constructed on the Property
in accordance with the provisions of paragraph 3 below and more particularly
described in Exhibits C and D attached hereto and incorporated herein by this
reference. The Existing Improvements and the Tenant Improvements are hereinafter
sometimes referred to collectively as the "Improvements", and the Property and
the Improvements are sometimes hereinafter collectively referred to as the
"Premises".
(b) Reserved Rights of Landlord. Notwithstanding the foregoing,
Landlord reserves the right from time to time, without unreasonable interference
with Tenant's use, to grant easements on, or dedicate portions of, the Premises
for public utilities without Tenant's consent, provided that no such grant or
dedication shall unreasonably interfere with Tenant's use of the Premises or
otherwise cause Tenant to incur cost or expense.
3. Completion of Premises.
(a) Plans. Landlord and Tenant have approved the space plan attached
hereto as Exhibit C for the interior of the Building. Landlord's architect will
also prepare preliminary plans and outline specifications (the "Preliminary
Tenant Improvement Plans") for the construction of improvements (the "Tenant
Improvements") in and to the Building in accordance with the space plan, which
Tenant Improvements are described on Exhibit D attached hereto and by this
reference made a part hereof. Landlord and Tenant will expeditiously review the
Preliminary Tenant Improvement Plans prepared by Landlord's architect. Within
ten (10) days after delivery to Tenant of the Preliminary Tenant Improvement
Plans, as approved by Landlord, which approval shall not be unreasonably
withheld, Tenant shall set forth in writing, with particularity and precision,
any revisions which Tenant wishes to have made to the Preliminary Tenant
Improvement Plans, which revisions shall be subject to Landlord's approval,
which approval shall not be unreasonably withheld. Landlord's architect will
then make the appropriate revisions and submit the revised Preliminary Tenant
Improvement Plans to both Landlord and Tenant. If Tenant wishes to have any
additional revisions made to the revised Preliminary Tenant Improvement Plans,
Tenant shall set forth such revisions in writing, with precision and
particularity, and deliver the revisions to Landlord and Landlord's architect
within ten (10) days after delivery to Tenant of such revised Preliminary Tenant
Improvement Plans. Landlord's architect shall make the appropriate revisions and
the further revised plans shall be deemed the Preliminary Tenant Improvement
Plans for the following provisions and paragraphs of this Article 3 and
subparagraph 3(a).
Landlord shall thereafter cause to be prepared final plans and
specifications (the "Final Tenant Improvement Plans") substantially in
conformity with the Preliminary Tenant Improvement Plans and Exhibits C and D,
which need not include working detail drawings. The term "Tenant Improvement
Plans" shall hereinafter mean the Preliminary Tenant Improvement Plans and, when
prepared, the Final Tenant Improvement Plans. The Final Tenant Improvement Plans
shall be delivered to Tenant as soon as reasonably possible after preparation
thereof, subject to any period of delay encountered by Landlord in such
preparation as a result of requests by Tenant for changes in the Final Tenant
Improvement Plans after preparation thereof. Within ten (10) days after delivery
of the Final Tenant Improvement Plans, Tenant shall set forth in writing, with
particularity and precision, any corrections or changes necessary to bring the
Final Tenant Improvement Plans into substantial conformity with the Preliminary
Tenant Improvement Plans and Exhibits C and D, except that Tenant may not object
to any logical development or refinement of the Preliminary Tenant Improvement
Plans. Failure to deliver to Landlord written notice of any such corrections or
changes within said ten (10) day period shall constitute approval of the Final
Tenant Improvement Plans by Tenant. Following such approval of the Final Tenant
Improvement Plans, both parties shall endorse approval for filing purposes
thereon, in duplicate; thereafter changes may be made only in
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accordance with subparagraph (d) below; and Landlord shall employ Landlord's
contractor to construct the Tenant Improvements.
(b) Scheduled Commencement Date; Delays Caused by Tenant. Landlord,
at its sole expense, shall proceed diligently with construction and completion
of the Tenant Improvements substantially in accordance with the Tenant
Improvement Plans ("Landlord's Work"). Landlord shall complete the Tenant
Improvements and they shall be Ready for Occupancy (as defined below) by Tenant
not later than the Scheduled Commencement Date set forth in paragraph 1 above;
provided, however, that such Scheduled Commencement Date shall be extended for a
period of time equal to the period of any delay or delays encountered by
Landlord affecting construction because of fire, earthquake, inclement weather,
or other acts of God, acts of the public enemy, riot, insurrection, governmental
regulations of the sales of materials or supplies or the transportation thereof,
strikes or boycotts, shortages of material or labor, Tenant's early entry under
the provisions of subparagraph (g) below, changes in the Tenant Improvement
Plans pursuant to subparagraph (d) below, or any other cause beyond the control
of Landlord; and provided, further, the financial inability of Landlord to
perform Landlord's construction obligations shall not be deemed a cause beyond
the control of the Landlord.
(c) Remedy. If the Premises are not Ready for Occupancy on or before
the Scheduled Commencement Date as extended pursuant to subparagraph (b) above,
the sole remedy of Tenant shall be the option to terminate this Lease by the
delivery to Landlord of written notice within ten (10) days after the day three
(3) months following the Scheduled Commencement Date, as extended, if the
Premises are not Ready for Occupancy prior to the giving of such written notice.
Anything in the foregoing to the contrary notwithstanding, if periods of delay
attributable solely to events described in the second sentence of subparagraph
(b) above (exclusive of those described in subparagraphs (d) or (g) or otherwise
caused by Tenant or Tenant's agents, employees, contractors or licensees) cause
the Scheduled Commencement Date to be extended for periods totaling more than
six (6) months after the initial Scheduled Commencement Date, then Tenant, as
Tenant's sole remedy, shall also have the option to terminate this Lease by the
delivery to Landlord of written notice within ten (10) days after the Scheduled
Commencement Date has been extended for periods totaling six (6) months solely
as a result of events described in the second sentence of subparagraph (d) above
(exclusive of those described in subparagraphs (d) or (g) or otherwise caused by
Tenant or Tenant's agents, employees, contractors or licensees).
(d) Changes. Tenant shall have the right to request changes in the
Tenant Improvement Plans (including but not limited to changes intended to
reduce the anticipated costs of constructing the Tenant Improvements), which
request shall not be unreasonably denied; provided, however, (i) such right
shall not be exercised unreasonably, (ii) no such request shall effect any
structural change in the Building, (iii) Tenant shall pay any additional cost
incurred by Landlord required to implement such change, including without
limitation loss of rents calculated as provided in subparagraph 5(a) below for
any delay period, architectural fees, increase in construction costs and any
other charges payable hereunder caused by delay, with all said costs to be paid
immediately upon demand by Landlord (except that any payment for loss of rents
shall be payable at the time provided in subparagraph 5(a) below that such rents
would have been payable if such delay had not occurred), (iv) except as provided
in clause (v) below, such requests shall constitute an agreement on the part of
Tenant to accept any delay in completion caused by reviewing, processing and
implementing any such request and/or changes, and (v) changes in the Tenant
Improvement Plans will be authorized only by written agreement setting forth any
additional cost and expense and additional time required to complete the Tenant
Improvements as a result thereof. If Landlord believes that any such change may
cause a delay in completion of the Tenant Improvements, Landlord will notify
Tenant and such change shall be performed only if the parties agree in writing
to extend the date for completion of the Tenant Improvements by the number of
days of such anticipated delay and set forth the effect of such delay upon the
commencement of rent. If Landlord and Tenant do not enter into such an
agreement, Tenant may withdraw its request for a change and the Scheduled
Commencement Date shall not be extended except to the extent of any temporary
delay resulting from the cessation of those activities, if any, which (A) would
have been inconsistent with the requested change or (B) could not be engaged in
because the subject work would have been affected by the pending change
requested.
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(e) Ready for Occupancy. The Premises shall be deemed to be ready
for occupancy ("Ready for Occupancy") when the architect or engineer in charge
of the work of construction certifies: (i) that the work of construction has
been substantially completed in accordance with the Tenant Improvement Plans;
and (ii) the date of such completion. Landlord shall diligently complete, as
soon as reasonably possible, any items of work and adjustment not completed when
the Premises are Ready for Occupancy.
(f) Construction Representative. In connection with the original
construction of the Premises each party shall be bound by its Construction
Representative set forth in paragraph 1 above. A party may designate a
substitute Construction Representative by giving written notice to the other
party.
(g) Early Entry. With the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed, Tenant may, at any time
prior to the commencement of the Term, at its sole risk, enter upon and install
such trade fixtures and equipment in the Premises as it may elect; provided,
however, that (i) Tenant's early entry shall not interfere with Landlord's work
of construction or cause labor difficulties; (ii) Tenant shall execute an
indemnity agreement in favor of Landlord in form and substance reasonably
satisfactory to Landlord; and (iii) Tenant shall pay for and provide evidence of
insurance reasonably satisfactory to Landlord. Tenant shall not use the Premises
for the storage of inventory or otherwise commence the operation of business
prior to the commencement of the Term without the express prior written consent
of Landlord.
(h) Quality of Construction. All work shall be done in a good and
workmanlike manner and in compliance with all applicable laws and lawful
ordinances, bylaws, regulations and orders of governmental authority and of the
insurers of the Improvements. No part of the Building or the Improvements shall
encroach on adjacent properties and the construction thereof shall not violate
any recorded covenants, conditions or restrictions applicable to the Project or
the Premises. Landlord assumes no liability for special, consequential or
incidental damages of any kind. There are no representations, warranties or
guaranties, express or implied, including warranties of merchantability or use
of the Premises, except as are expressly set forth herein. Tenant hereby waives
the benefit of any rule that disclaimers of warranty shall be construed against
Landlord.
For one (1) year from the Commencement Date, Landlord, at its cost
and expense, will promptly correct: (i) any of the Landlord's Work found to be
defective or failing to conform to this Lease; (ii) any defects in the
construction, design, workmanship or materials used in the Premises or the
plumbing, electrical, heating, ventilation, air conditioning or building
equipment serving the Premises; and (iii) any defects in Landlord's Work or the
structural elements of the Premises required to be corrected by governmental
authorities. Landlord hereby assigns to Tenant, for the term of the Lease and to
the extent of Tenant's obligations hereunder, all warranties relating to the
equipment and facilities required to be maintained by Tenant, and Landlord, at
the request and expense of Tenant, will cooperate with Tenant to enforce same.
Landlord will execute such further instruments of assignment of such warranties
as may be reasonably requested by Tenant from time to time.
(i) Tenant Improvement Allowance. The cost of constructing the
Tenant Improvements (including but not limited to the costs for plans, permits
and fees as more particularly described in Exhibit D) shall be paid by Landlord;
provided, however, if the amount expended for constructing the Tenant
Improvements is or will be more than $1,537,500, Tenant hereby agrees to
reimburse Landlord for all costs incurred in connection with the Tenant
Improvements except for $1,537,500 which is the Landlord's allowance (the
"Allowance") and, except as otherwise provided herein, is Landlord's entire
monetary obligation for the Tenant Improvements; and provided, further, any
excess costs incurred as a result of the fault or neglect of Landlord or of
Landlord's contractors, employees or agents shall be borne entirely by Landlord
and Tenant shall be responsible for all costs incurred in connection with
Landlord's Work as a result of the fault or neglect of Tenant. Tenant shall pay
any costs which are Tenant's responsibility hereunder (the "Excess Costs") on a
pro rata basis with Landlord's payments for design and construction of the
Tenant Improvements, so that Landlord will always have paid a share of the total
costs then incurred which is equal to the percentage which the Allowance is of
the sum of the Allowance and Excess Costs, as then
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determined, and Tenant will always have paid a share of the total costs for the
Tenant Improvements then incurred which is equal to the percentage which the
Excess Costs, as then determined, is to the sum of the Allowance and the Excess
Costs, as then determined. Determination(s) of the amount of the Excess Costs
may be made from time to time prior to, during or after construction. Tenant
shall make such payments, including any adjustments necessary to maintain the
Tenant's appropriate share of the total costs as a result of subsequent
determinations, based upon requisitions setting forth in reasonable detail the
reason for such Excess Costs and the amount thereof, together with any other
information reasonably requested by Tenant, and the amounts owing by Tenant
shall be paid by Tenant to Landlord within ten (10) days after receipt of each
such requisition and other information. Except as otherwise provided herein,
Tenant shall have complete responsibility for the cost of the Tenant
Improvements and for the construction by Tenant of any other improvements and
alterations to the Premises in connection with Tenant's occupancy thereof,
Tenant agreeing to accept the same "AS IS", subject only to the construction by
Landlord of the Tenant Improvements and any other obligation of Landlord under
this Lease. Landlord shall promptly furnish to Tenant estimates of the
anticipated costs of the various elements of the Tenant Improvements as such
estimates are received by Landlord. If Tenant believes that the amount of any
estimate is excessive Tenant may request changes in the Tenant Improvement Plans
in accordance with subparagraph (d) above. On or before sixty (60) days after
completion of the Tenant Improvements, Landlord will provide a final
reconciliation of the Allowance, the Excess Costs and the total costs of the
Tenant Improvements and each party shall promptly thereafter make any payment to
the other party which is necessary to effect the correct allocation of the total
costs of the Tenant Improvements as provided in this subparagraph.
(j) Permits. Landlord shall be solely responsible for the procuring
of all building and other permits, licenses and approvals and certificates of
occupancy necessary for construction of the Tenant Improvements and for the
occupancy of the Premises as constructed in accordance with the Tenant
Improvement Plans. If Landlord determines that any activities or installations
by Tenant or Tenant's agents, employees, contractors or licensees have, will or
are likely to result in any delays or failures to obtain any such permits,
licenses or approvals, Landlord will promptly notify Tenant in writing and
Landlord will not be responsible for any delays caused by such activities or
installations.
4. Term. The Term of this Lease, which shall be for the period set
forth in paragraph 1 above (sometimes hereinafter referred to as the "Initial
Term"), shall commence on the first to occur of the following dates (the
"Commencement Date"):
(a) The Scheduled Commencement Date set forth in paragraph 1 above
(as it may be extended pursuant to the terms of paragraph 3 above); or
(b) The date upon which Tenant actually commences to do business in
the Premises.
Notwithstanding the foregoing, in the event that the Premises are not Ready for
Occupancy by the Scheduled Commencement Date, then such Scheduled Commencement
Date shall be extended until such time as the Premises are Ready for Occupancy,
but Tenant shall pay to Landlord amounts equal to the Fixed Rent which would
have been owing during the period of any delays in the Commencement Date caused
by Tenant or Tenant's agents, employees, contractors or licensees, including but
not limited to delays resulting from the exercise of Tenant's rights under
subparagraph 3(d) above. In addition, the Term of this Lease shall be subject to
extension as provided in Exhibit E attached hereto.
5. Rent.
(a) Fixed Rent. Tenant shall pay Landlord as fixed rent for the
Premises a sum equal to the Fixed Rent set forth in paragraph 1 on or before the
first day of each and every calendar month during the Term of this Lease, except
that Fixed Rent for the first full calendar month of the Term shall be payable
simultaneously with the execution of this Lease by Tenant.
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(b) Adjustments. INTENTIONALLY DELETED.
(c) Pro Rata Rent. Rent for any period during the Term which is for
less than one month shall be a pro rata portion of the Rental Period
installment. Rent shall be payable, without deduction or offset, in lawful money
of the United States to Landlord at the address stated herein or to such other
persons or at such other places as Landlord may designate in writing; provided,
however, if Tenant obtains a judgment against Landlord on the basis of a default
by Landlord in the performance of Landlord's obligations under this Lease,
Tenant may offset amounts owing under such judgment against amounts owing by
Tenant to Landlord under this Lease, but such offset rights may not be exercised
against any lender holding a lien on the Premises, either before or after an
acquisition of the Premises by such lender, or after any sale of the Premises at
a foreclosure or other sale of the Premises pursuant to exercise of the lender's
lien rights against the Property.
(d) Net Lease. This Lease is what is commonly called a "net lease",
it being understood that Landlord shall receive the Rent set forth in this
paragraph free and clear of any and all impositions, taxes, liens, charges or
expenses of any nature whatsoever in connection with its ownership and leasing
of the Premises except those expenses specifically designated in this Lease to
be borne by Landlord. In addition to the Rent provided in this paragraph, Tenant
shall pay all impositions, taxes, insurance premiums, operating charges, costs
and expenses which arise or may be contemplated under any provisions of this
Lease during the Term. All of such charges, costs and expenses shall constitute
additional rent, and upon the failure of Tenant to pay any of such costs,
charges or expenses, Landlord shall have the same rights and remedies as
otherwise provided in this Lease for the failure of Tenant to pay Rent. It is
the intention of the parties hereto that Tenant shall in no event be entitled to
any abatement of or reduction in Rent or additional rent payable hereunder,
except as expressly provided herein. Any present or future law to the contrary
shall not alter this agreement of the parties.
6. Security.
(a) Security Deposit. INTENTIONALLY DELETED.
(b) Lien and Security Interest. INTENTIONALLY DELETED.
7. Use.
(a) General. The Premises shall be used and occupied only for
the Permitted Uses set forth in paragraph 1 above and for no other purpose
without Landlord's prior written consent. Landlord, upon request for such
consent, shall not withhold such consent so long as Landlord is given such
information as Landlord may reasonably request concerning such other use and
such other use shall not increase materially the amount of, scope of or
potential liability to Landlord from Environmental Activities (as defined in
subparagraph 19(a) below) on the Premises.
(b) Compliance with Law. Tenant shall, at Tenant's sole cost
and expense, comply with all present and future laws, ordinances, orders,
declarations of covenants and restrictions, rules, regulations and requirements
of all federal, state and municipal governments, courts, departments,
commissions, boards and officers, and any national or local Board of Fire
Underwriters, or any other body exercising functions similar to those of any of
the foregoing, foreseen or unforeseen, ordinary as well as extraordinary, which
may be applicable to the Premises, and the sidewalk, curbs and vaults adjoining
the Premises or to the use or manner of use of the Premises, whether or not such
law, ordinance, order, rule, regulation or requirement shall necessitate
structural changes or improvements, or the removal of any encroachments or
projections, ornamental, structural or otherwise, onto or over the streets or
sidewalks adjacent to the Premises, or onto or over other property contiguous or
adjacent thereto. Tenant shall obtain any required certificates or permits with
respect to its particular use of the Premises, the Improvements and the Property
within thirty (30) days from the Commencement Date and shall deliver a copy
thereof to Landlord within such thirty (30) day period; provided, however,
Landlord shall obtain any certificate of occupancy required for the shell of the
Building and the general occupancy of any improvements
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to the Premises to be made by Landlord pursuant to paragraph 3 above. Tenant
shall not use or permit the use of the Premises in any manner that will tend to
create waste or a nuisance.
(c) Existing Title and Condition of Premises. Tenant hereby
accepts the Premises and this Lease subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, subject to all covenants, conditions and restrictions
affecting the Property, Project or Premises and subject to all liens, claims and
encumbrances currently existing against the Premises or any part thereof,
including all matters disclosed by any of the foregoing or by any exhibits
attached hereto; provided, however, such acceptance shall not negate any
obligations of Landlord with respect to the Premises under this Lease. Landlord,
in accordance with (and except as otherwise provided in) subparagraph 8(b)
below, shall be responsible for causing the roof and bearing walls of the
Premises to be in good condition and repair at the Commencement Date and shall
also cause the heating, ventilating and air conditioning system, the plumbing
system and the electrical system to be in good operating condition as of the
Commencement Date. All such systems shall be deemed in the condition required at
the Commencement Date unless Tenant gives Landlord written notice of any defects
in such systems on or before one hundred twenty (120) days after the
Commencement Date. Except for any representation or warranty which may be
specifically set forth in this Lease, Tenant acknowledges that neither Landlord
nor Landlord's agents have made any representations or warranties as to the
Premises, including without limitation, any representation or warranty as to
condition or fitness of the Building or the suitability of the Building for the
conduct of Tenant's business.
(d) Signs. Tenant shall not erect or install on any exterior
or interior window, any door, or any exterior wall signs, advertising media,
placards, trademarks, drapes, screens, tinting materials, shades, blinds or
similar items, without first securing Landlord's written permission, which
permission shall not be unreasonably withheld if the signs comply with the
following standards. All signs shall comply with all applicable governmental
requirements, shall conform to the design, motif and decor of the Project and
shall be in good taste, as determined in Landlord's reasonable discretion.
Landlord hereby approves the sign plan for the Premises attached hereto as
Exhibit F. Tenant shall properly maintain all approved signs. Upon expiration of
the Lease, Tenant promptly shall remove all signs placed in and around the
Premises by Tenant and shall repair any damage to the Premises caused by the
removal of such signs. Landlord may also require Tenant to erect an exterior
identifying sign in form and substance satisfactory to Landlord, which sign
shall also be subject to all of the other provisions of this subparagraph (d).
(e) Governmental Regulation. In addition to the general
obligation of Tenant to comply with laws and without limitation thereof,
Landlord shall not be liable to Tenant nor shall this Lease be affected if any
parking privileges appurtenant to or on the Premises or the Building are
impaired by reason of any moratorium, initiative, referendum, statute,
regulation, or other governmental decree or action which could in any manner
prevent or limit the parking rights of Tenant hereunder. Any governmental
charges or surcharges or other monetary obligations imposed relative to parking
rights with respect to the Premises or the Building shall be considered as
Property Taxes and shall be payable by Tenant under the provisions of paragraph
14 hereof.
8. Maintenance and Repairs.
(a) Tenant's Maintenance. Tenant shall, at Tenant's sole cost
and expense, keep and maintain the Premises, including, without limitation, the
roof and outside wall surfaces, the subfloors and floor coverings, any and all
alterations and additions made by Tenant pursuant to the provisions hereof, all
walks, driveways, parking and loading areas, lawns and landscaping, fences and
signs located in the areas which are adjacent to or included with the Premises,
in all respects in good repair and in a clean and safe condition. Tenant shall,
at Tenant's own expense, immediately replace all interior, exterior or other
glass in or about the Premises that may be broken during the Term with glass at
least equal to the specification and quality of the glass so replaced. If Tenant
fails to perform Tenant's obligations under this subparagraph, Landlord may at
its option enter upon the Premises after ten (10) days prior written notice to
Tenant and put the same in good order, condition and repair, and the cost
thereof together with interest thereon at the rate of fifteen percent (15%) per
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annum shall become due and payable as additional rental to Landlord together
with Tenant's next monthly Rent payment. Nothing herein shall imply any duty
upon the part of Landlord to do any such work and the performance thereof by
Landlord shall not constitute a waiver of Tenant's default in failing to perform
the same. Landlord may, during the progress of any such work in or on the
Premises, keep and store therein all necessary materials, tools, supplies and
equipment. Landlord shall not be liable for the inconvenience, annoyance,
disturbance, loss of business or other damage of Tenant by reason of making such
repairs or the performance of any such work, or on account of bringing
materials, tools, supplies or equipment into or through the Premises during the
course thereof, and the obligations of Tenant under this Lease shall not be
affected thereby.
(b) Landlord's Obligations to Repair. Landlord shall, at its
expense, after written notice from Tenant, repair in a prompt and diligent
manner any damage to structural portions of the roof and bearing walls of the
Premises; provided, however, that if such damage is caused by an act or omission
of Tenant or Tenant's agents, invitees, employees or contractors, then such
repairs shall, to the extent not covered by the insurance maintained by Tenant
under the provisions of this Lease, be at Tenant's expense, payable to Landlord
pursuant to this paragraph. There shall be no abatement of Rent during the
performance of such work. Landlord shall not be liable to Tenant for injury or
damage that may result from any defect in the construction or conditions of the
Premises and Tenant shall seek recovery for such injury or damage solely from
Tenant's insurance and/or any other persons or entities which may be liable to
Tenant; provided, however, Landlord shall comply with its warranty obligations
under paragraph 3 of this Lease. Tenant waives any right to make repairs at the
expense of Landlord under any law, statute or ordinance now or hereafter in
effect unless Tenant has given Landlord written notice of the need for such
repairs, such repairs are the obligation of Landlord under this Lease and
Landlord has failed to make the needed repairs within a reasonable period of
time after the receipt of such notice. Tenant expressly acknowledges that any
repairs to the walls of the Improvements relating to maturity or weathering of
construction materials, as contrasted to damage to the structural integrity of
the bearing walls, shall be the responsibility of the Tenant. If Landlord or
Tenant performs any repairs or replacement work pursuant to this subparagraph
(b) or other provisions of this Lease (except paragraph 3) which would be deemed
a capital expenditure to the Premises under generally accepted accounting
principles, then (i) the cost of the capital expenditure shall be amortized,
with interest at the rate of ten percent (10%) per annum, over the period of
their useful life; (ii) the cost, with interest, attributable on such amortized
basis to the remaining Term of the Lease, including, if applicable, the First
and Second Extended Terms, shall be payable by Tenant to Landlord; and (iii)
such amount shall be payable in equal monthly installments at the time each
payment of Fixed Rent is due under this Lease, including but not limited to
payments during the First or Second Extended Terms if Tenant exercises its
option(s) to extend the Term of this Lease under Exhibit E.
(c) Surrender. On the last day of the Term, or on any sooner
termination of this Lease, Tenant shall surrender the Premises to Landlord in
the same condition as when received, broom clean, ordinary wear and tear alone
excepted; provided, however, Tenant may leave certain alterations and
improvements on the Premises in accordance with subparagraphs 10(a) and 10(c)
below. Tenant shall repair any damage to the Premises occasioned by the removal
of Tenant's alterations and improvements (including, without limitation, its
trade fixtures, furnishings and equipment), which repair shall include, without
limitation, the patching and filling of holes and repair of structural damage.
9. Utilities. Tenant shall pay for water, gas, heat, light,
power, telephone and other utilities and services supplied to the Premises,
together with any taxes thereon. Landlord represents and warrants that each
utility now supplied to the Premises or to be supplied upon completion of the
Tenant Improvements will be separately metered. Landlord reserves the right to
grant easements on the Premises for public utilities, and to dedicate for public
utility purposes portions thereof, without Tenant's consent provided that no
such grant or dedication shall interfere with Tenant's use of the Premises or
otherwise cause Tenant to incur cost or expense. From time to time upon
Landlord's demand, Tenant shall execute, acknowledge and deliver to Landlord, in
accordance with Landlord's instructions, any and all documents or instruments
necessary to effect Tenant's covenants herein.
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10. Alterations and Additions.
(a) Limitation. Tenant shall not, without Landlord's prior
written consent, make any alterations, improvements, additions, or utility
installations (which term "utility installations" shall include ducting, power
panels, fluorescent fixtures, space heaters, conduits and wiring) in, on or
about the Premises, except for interior nonstructural alterations to the
Premises costing less than Fifty Thousand Dollars ($50,000) in the aggregate
over any one (1) year period. As a condition to giving such consent, Landlord
may require that Tenant agree to (i) remove any such alterations, improvements,
additions or utility installations at the expiration of the Term and restore the
Premises to their prior condition or, in the alternative, (ii) require that such
alterations, improvements, additions or utility installations shall become the
property of Landlord and shall be left by Tenant upon the expiration of the
Term; provided, however, Landlord may not require that Tenant remove any of the
foregoing items which are typically installed for office and/or warehouse use
such as normal partitions, offices and shelving, but items such as, without
limitation, foundations, hoists and refrigeration equipment shall not be deemed
items typically installed in an office or warehouse. As a further condition to
giving such consent, Landlord may require Tenant to provide Landlord, at
Tenant's sole cost and expense, lien and completion bonds or other adequate
security in an amount equal to one hundred five percent (105%) of the estimated
cost of such improvements to insure Landlord against any liability for
mechanics' and materialmen's liens and to insure completion of the work.
(b) Liens. Tenant shall keep the Premises, the Building and
the Property free from any liens arising out of any work performed or alleged to
have been performed for Tenant's account on the Premises or materials furnished
to the Premises for Tenant's account. Tenant shall give Landlord not less than
ten (10) days notice prior to the commencement of any work on the Premises, and
Landlord shall have the right to post notices of non-responsibility in or on
the Premises as provided by law.
(c) Removal. Unless Landlord requires their removal as set
forth in subparagraph (a) above or otherwise consents to such removal, all
alterations, improvements, additions and utility installations which may be made
on or to the Premises shall become the property of Landlord and remain upon and
be surrendered with the Premises at the expiration of the Term. Notwithstanding
the provisions of this subparagraph (c), Tenant's shelving, machinery and
equipment, other than that which is affixed to the Premises so that it cannot be
removed without material damage to the Premises, shall remain the property of
Tenant and may be removed by Tenant subject to the provisions of subparagraph
8(c) above.
11. Insurance.
(a) General Liability. Tenant at its sole cost and expense,
but for the mutual benefit of Landlord, Landlord's property manager (if any) and
Tenant as named insureds, shall maintain commercial general liability insurance
("Liability Insurance") on an "occurrence basis" against claims for "personal
injury," including without limitation, bodily injury, death or property damage,
occurring upon, in or about the Premises and on, in or about the adjoining
sidewalks, streets and passageways and for all other areas appurtenant thereto,
such insurance to afford immediate minimum protection, at the time of the
inception of this Lease, and at all times during the Term, to a limit of not
less than Two Million Dollars ($2,000,000) with respect to personal injury or
death to any one or more persons or to damage to property. Such insurance shall
also include coverage against liability for bodily injury or property damage
arising out of the use, by or on behalf of Tenant, or any other person or
organization, of any owned, non-owned, leased or hired automotive equipment in
the conduct of any and all operations called for under this Lease. The limits of
said insurance shall not, however, limit the liability of Tenant hereunder.
(b) Extended Coverage. Tenant, at its sole cost and expense,
shall keep the Improvements insured during the Term for the mutual benefit of
Landlord and Tenant as named insureds, against loss or damage by fire and
lightning and against loss or damage by other risks embraced by coverage, of the
type now known as the broad form of extended coverage, including but not limited
to fire, riot and civil commotion, vandalism and malicious mischief, special
extended
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perils (all risk) and sprinkler leakage, and against such other risks or hazards
as Landlord may from time to time reasonably designate, in amounts sufficient to
prevent Landlord or Tenant from becoming a co-insurer under the terms of the
applicable policies, but in any event in an amount not less than the full
replacement cost of the Improvements, without deduction for physical
depreciation, and with not more than Two Thousand Five Hundred Dollars ($2,500)
deductible from the loss payable for any casualty. The policies of insurance
carried in accordance with this paragraph shall contain a "Replacement Cost
Endorsement." Such full replacement cost shall be determined from time to time,
but not more frequently than once in any twelve (12) consecutive calendar months
(except in the event of substantial changes or alterations to the Improvements
undertaken by Tenant as permitted hereunder) upon the written request of
Landlord by an appraiser, architect or contractor who shall be mutually and
reasonably acceptable to Landlord and Tenant. A copy of any such determination
shall promptly be sent to Landlord, and subject to the approval of such
determination by Landlord, the insurance maintained in this paragraph shall be
adjusted to the new full replacement cost. Said insurance shall provide for
payment for loss thereunder to Landlord or, at Landlord's request, to the holder
of any mortgage or deed of trust on the Premises but the proceeds thereof shall
be applied as provided in paragraph 13 below.
(c) Policies. Insurance required hereunder shall be by
companies rated AX or better in "Best's Insurance Guide" licensed to do
business in the state in which the Premises are located and acceptable to
Landlord and the holder of any mortgage or deed of trust on the Premises or any
part or portion thereof. Tenant shall deliver to Landlord copies of policies of
such insurance or certificates evidencing the existence and amounts of such
insurance with loss payable clauses satisfactory to Landlord. No such policy
shall be cancelable or subject to reduction of coverage or other modification
except after thirty (30) days written notice to Landlord. Tenant shall, within
ten (10) days of the expiration of such policies, furnished Landlord with
renewals or "binders" thereof, or Landlord may order such insurance and charge
the cost thereof to Tenant, which amount shall be payable by Tenant upon demand.
Each such policy or certificate therefor issued by the insurer shall to the
extent obtainable contain (i) a provision that no act or omission of Tenant
which would otherwise result in forfeiture or reduction of the insurance therein
provided shall affect or limit the obligation of the insurance company to pay
the amount of any loss sustained and (ii) an agreement by the insurer that such
policy shall not be canceled without at least thirty (30) days prior written
notice by registered mail to Landlord. Tenant shall not do or permit to be done
anything which shall invalidate the insurance policies referred to herein. If
Tenant shall fail to procure and maintain any insurance required to be
maintained by it by virtue of any provision of this paragraph, Landlord may, but
shall not be required to, procure and maintain the same, but at the expense of
Tenant.
(d) Waiver of Subrogation. Landlord and Tenant each hereby
waive any and all rights of recovery against the other, or against the partners,
officers, employees, agents and representatives of the other, for loss of or
damage to such waiving party or its property or the property of the other under
its control to the extent that such loss or damage is insured against under any
insurance policy in force at the time of such loss or damage. Tenant shall, upon
obtaining the policies of insurance required hereunder, give notice to the
insurance carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this Lease.
(e) Tenant's Contents. Tenant shall assume the risk of damage
to any fixtures, goods, inventory, merchandise, equipment, furniture and
leasehold improvements which remain the property of Tenant or as to which Tenant
retains the right of removal from the Premises, and Landlord shall not be liable
for injury to Tenant's business or any loss of income therefrom relative to such
damage. Tenant shall maintain the following insurance coverage with respect to
such items during the Term:
(i) Against fire, extended coverage, and vandalism and
malicious mischief perils in an amount not less than ninety percent (90%)
of the full replacement cost thereof;
(ii) Broad form boiler and machinery insurance on a
blanket repair and replacement basis with limits per accident not less
than the replacement cost of all leasehold improvements and of all
boilers, pressure vessels, air conditioning equipment, miscellaneous
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electrical apparatus and all other insurable objects owned or operated by
the Tenant or by others (other than Landlord) on behalf of Tenant in the
Premises, or relating to or serving the Premises; and;
(iii) Business interruption insurance in such an amount
as will reimburse Tenant for direct or indirect loss of earnings
attributable to all such perils insured against in subparagraphs 11(e)(i)
and (ii) hereinabove.
(f) Workmen's Compensation. Tenant shall, at its own cost and
expense, keep and maintain in full force and effect during the Term, a policy or
policies of workmen's compensation insurance covering all Tenant's employees
working in the Premises, and shall furnish Landlord with certificates thereof.
(g) Rental Income Insurance. Tenant shall obtain and keep in
force during the term of this Lease a policy of rental income insurance in an
amount adequate to cover Fixed Rent and Adjustments for a period of twelve (12)
months, with loss payable to Landlord, which insurance shall also cover all real
estate taxes and insurance costs for which Tenant is obligated hereunder during
such twelve (12) month period.
12. Indemnity; Exemption of Landlord from Liability.
(a) General. In addition to any other obligations of Tenant
hereunder, including the obligations of Tenant to provide insurance, Tenant
shall indemnify and hold Landlord harmless for, from and against any and all
claims arising from Tenant's use of the Premises, or from the conduct of
Tenant's business or from any activity, work or things done, permitted or
suffered by Tenant in or about the Premises or elsewhere and shall further
indemnify and hold Landlord harmless for, from and against any and all claims
arising from any breach or default in the performance of any obligation on
Tenant's part to be performed under the terms of this Lease, or arising from any
negligence of Tenant, or any of Tenant's agents, contractors, or employees, and
for, from and against all costs, attorneys' fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon; and in case any action or proceeding be brought against Landlord by
reason of any such claim, Tenant upon notice from Landlord shall defend the same
at Tenant's expense by counsel satisfactory to Landlord; provided, however, the
foregoing indemnity shall not apply to claims made as a result of the active
negligence or intentional misconduct of Landlord. Tenant, as a material part of
the consideration to Landlord for Landlord's execution of this Lease, also
hereby assumes all risk of damage to property or injury to persons in, upon or
about the Premises arising from any cause whatsoever; hereby waives all claims
in respect thereof against Landlord; and agrees that all claims with respect
thereto shall be made solely against any insurance carried by Tenant and/or
against any other persons or entities which may be liable for such claims;
provided, however, the assumption, waiver and agreement set forth in this
sentence shall not negate or diminish the warranty obligations of Landlord set
forth in paragraph 3 of this Lease.
(b). Tenant's Business. In addition to any other obligation of
Tenant hereunder, including any obligation of Tenant to provide insurance,
Tenant hereby agrees that Landlord shall not be liable for injury to Tenant's
business or any loss of income therefrom or for damage to the goods, wares,
merchandise or other property of Tenant, Tenant's employees, invitees,
customers, or any other person in or about the Premises, nor shall Landlord be
liable for injury to the person of Tenant or Tenant's employees, agents or
contractors, 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, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause whatsoever,
resulting from conditions arising upon the Premises, or from other sources or
places, and regardless of whether the cause of such damage or injury or the
means of repairing the same is inaccessible to Tenant. Instead, Tenant shall
seek recovery for any such injury, loss or damage solely from any insurance
carried by Tenant and/or from any other persons or entities which may be liable
to Tenant for such injury, loss or damage.
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13. Damage or Destruction; Obligation to Rebuild.
(a) Landlord's Obligation to Rebuild. If the Premises are
damaged or destroyed during the Term, Landlord shall, except as hereinafter
provided, diligently repair or rebuild them to substantially the condition in
which they existed immediately prior to such damage or destruction; provided
that any damage which is estimated in good faith by Landlord to be under Two
Thousand Five Hundred Dollars ($2,500.00) shall be repaired by Tenant, and
Landlord shall reimburse Tenant upon demand for expenses incurred in such repair
work to the extent of any proceeds received by Landlord from extended coverage
insurance maintained pursuant to paragraph 11 above.
(b) Abatement of Rent. Rent due and payable hereunder shall be
abated, but only to the extent of any proceeds received by Landlord from rental
income insurance maintained pursuant to paragraph 11 above, during the period
commencing with such damage or destruction and ending with the substantial
completion by Landlord of the work of repair or reconstruction which Landlord is
obligated or undertakes to do; provided, however, if such abatement period is
sixty (60) days or more, Tenant's obligation to pay Rent shall not commence
until the earlier of (i) occupancy of the damaged portion of the Premises by
Tenant, or (ii) thirty (30) days after Landlord gives Tenant written notice of
the approximate date that the work of repair or restoration will be
substantially complete.
(c) Option to Terminate. If the Improvements are damaged or
destroyed to the extent that the same cannot, with reasonable diligence, be
fully repaired or restored by Landlord within one hundred eighty (180) days
after the date of the damage or destruction, Tenant shall have the option to
terminate this Lease by written notice given to Landlord within thirty (30) days
after the date of the damage or destruction. If the Building, including the
Premises, can be fully repaired or restored within the one hundred eighty (180)
day period, or if it is determined that such repair or restoration cannot be
made within said period but Tenant does not elect to terminate within thirty
(30) days from the date of said damage or destruction, this Lease shall remain
in full force and effect and Landlord shall diligently repair and restore the
damage as soon as reasonably possible.
(d) Uninsured Casualties. Notwithstanding anything contained
herein to the contrary, in the event of damage to or destruction of all or any
portion of the Improvements which is not fully covered (except for deductible
amounts) by the insurance proceeds received by Landlord under the insurance
policies required to be maintained pursuant to paragraph 11 above, or in the
event that any portion of such insurance proceeds must be paid over to or are
retained by the holder of any mortgage or deed of trust on the Property or
Premises, Landlord may terminate this Lease by written notice to Tenant, given
within thirty (30) days after the date of notice to Landlord that said damage or
destruction is not so covered or that the proceeds are not available for repair
of the damage or destruction; provided, however, within a period of twenty (20)
days after receipt of Landlord's termination notice, Tenant may, by written
notice given to Landlord, make available to Landlord, for repair or restoration
but without any reimbursement by Landlord, the funds necessary to effect the
complete repair and restoration and, in such event, Landlord's notice of
termination shall be rescinded. If Landlord does not elect to terminate this
Lease or Tenant makes available the funds for repair or restoration as above
provided, the Lease shall remain in full force and effect and the Improvements
shall be repaired and rebuilt in accordance with the provisions for repair set
forth in subparagraph 13(a) above.
(e) Damage Near End of Term. If the Improvements are partially
destroyed or damaged during the last eighteen (18) months of the Term, as such
Term may have been extended pursuant to Exhibit E to this Lease, and the cost to
repair or restore the Premises shall be Three Hundred Fifty Thousand Dollars
($350,000) or greater, either Landlord or Tenant may, at its option, cancel and
terminate this Lease as of the date of occurrence of such damage by giving
written notice to the other party of such election to do so within thirty (30)
days after the date of occurrence of such damage; provided, however, if the
damage or destruction occurs during the thirteenth (13th) to eighteenth (18th)
month prior to the expiration of the Initial Term or First Extended Term (as
defined in Exhibit E) and Tenant then retains, but has not yet exercised, its
option to extend the Term for an additional five-year period pursuant to Exhibit
E, Tenant may elect, by written notice to Landlord
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given on or before the earlier of (i) the date which is sixty (60) days after
receipt of Landlord's notice of termination, or (ii) one (1) year prior to
expiration of the Initial Term or First Extended Term, as applicable, to
exercise its option to extend the Term for an additional five-year period as
provided in Exhibit E and, in such event, any notice of termination given by
Landlord shall be rescinded and this Lease shall continue in full force and
effect.
(f) Tenant's Waiver. With respect to any destruction which
Landlord is obligated to repair or may elect to repair under the terms of this
paragraph, Tenant hereby waives all right to terminate this Lease pursuant to
rights otherwise presently or hereafter accorded by the provisions of Arizona
Revised Statutes Section 33-343 or other applicable laws to tenants, except as
expressly otherwise provided herein.
14. Taxes and Assessments.
(a) Payment. Tenant shall pay all Property Taxes (as defined
below) applicable to the Premises during the Term. Each payment shall be made at
least ten (10) days prior to the delinquency date of such payment; provided,
however, that if (i) in connection with any financing obtained by Landlord on
the Premises or any portion thereof, Landlord is required to pay into an impound
account any sums due as Property Taxes, and (ii) Tenant has at any time
committed a default under paragraph 17 of this Lease by failing to pay when due
and prior to the expiration of any applicable cure period any monetary amounts
to be paid by Tenant under this Lease, then Tenant shall pay such sums to
Landlord in satisfaction of Tenant's obligations to pay such sums due as
Property Taxes as additional rent and without deduction or offset on or before
the first day of each and every month during which said sums are required to be
impounded. Tenant shall promptly furnish Landlord with evidence satisfactory to
Landlord that Property Taxes have been paid. If any Property Taxes due with
respect to the Premises shall cover any period of time prior to or after the
expiration of the Term, Tenant's share of such Property Taxes shall be equitably
prorated to cover only the period of time within the tax fiscal year during
which this Lease shall be in effect. If Tenant shall fail to pay any Property
Taxes, Landlord shall have the right, but not the obligation, to pay the same,
in which case Tenant shall repay such amount to Landlord with Tenant's next Rent
installment.
(b) Definition. As used herein, the term "Property Taxes"
shall include any form of general or special assessment, license fee, levy
penalty, or tax (other than inheritance or estate taxes) imposed by any
authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, lighting,
drainage or other improvement district, or any part or parts thereof, or against
any legal or equitable interest of Landlord in the Premises or any part thereof
or against Landlord's right to rent or other income therefrom (but exclusive of
taxes levied on or computed by reference to Landlord's net income as a whole),
or against Landlord's business of leasing the Premises, it being the intention
of the parties hereto that the Rent to be paid hereunder shall be paid to
Landlord absolutely net, without deduction of any nature whatsoever, foreseeable
or unforeseeable.
(c) Separate Assessment. Landlord warrants that the Premises
constitutes all of one or more tax parcels for the purposes of assessment of
real property taxes by the State of Arizona, and that no portion of the Premises
is jointly assessed with any other real property as a single tax parcel.
(d) Personal Property. tenant shall pay prior to delinquency
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment and all other personal property contained on the Premises or
elsewhere. Tenant shall cause such trade fixtures, furnishings, equipment and
all other personal property to be assessed and billed separately from the
Premises.
(e) Rent Tax. Tenant shall pay to Landlord a sum equal to the
amount which Landlord is required to pay or collect by reason of any privilege
tax, sales tax, gross proceeds tax, rent tax, or like tax levied, assessed or
imposed by any governmental authority or subdivision thereof, upon or measured
by any Rent, Reimbursable Expense, or other charges or sums required to be paid
or improvements to be made by Tenant under this Lease. Such sum shall be paid
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simultaneously with the payment by Tenant to Landlord of the Fixed Rent or other
charge to which such tax is attributable or, in the case of a tax not
attributable to Fixed Rent or other charges, at such time as Landlord shall
demand payment thereof. Nothing contained in this Lease shall require Tenant to
pay any franchise, corporate, estate, inheritance, succession, or transfer tax
of Landlord or any tax upon the net income of Landlord.
(f) Declaration. INTENTIONALLY DELETED.
(g) Project Assessments. Tenant shall pay to Landlord or the
owner or manager of the Project, as Landlord may direct, prior to delinquency
any and all charges, assessments, fees or other costs of any type which are due
and payable by Landlord or other occupant of the Premises as a result of the
inclusion of the Premises in the Project, including but not limited to those
payable under any covenants, conditions, restrictions or declarations affecting
the Premises.
(h) Right to Contest. Either party, at its expense, will have
the right to contest the legality, validity or amount of any Property Taxes or
the assessments or valuations upon which same are based by appropriate
proceedings prosecuted in good faith. Such contest may be made in the name of
Landlord or Tenant, or both, and if requested by Tenant, Landlord will actively
at Tenant's expense participate in such contest. Landlord will be notified of
any such contest by Tenant and will cooperate with Tenant and, if required, join
Tenant in any such proceedings. No such contest, however, shall permit any tax
owing to become delinquent or subject the Premises to a lien for delinquent
taxes alleged to be due and owing.
15. Condemnation.
(a) Rent Reduction or Lease Termination. If the Premises or
any portion thereof is taken under the power of eminent domain, or sold under
the threat of the exercise of said power (all of which are herein called
"condemnation"), this Lease shall terminate as to the part so taken as of the
date the condemning authority takes title or possession, whichever first occurs
(the "Condemnation Date") and the Rent shall be reduced (as of the Condemnation
Date) as provided below. If (i) more than ten percent (10%) of the floor area of
any building comprising the Improvements or more than twenty-five percent (25%)
of the land area of the Property which is not occupied by any such building is
taken by condemnation, and (ii) as a result of such taking by condemnation the
balance of the Premises remaining after such condemnation is not reasonably
suitable for the use to which the Premises were being put immediately prior to
the condemnation, Tenant may, at Tenant's option, to be exercised in writing
only within ten (10) days after Landlord shall have given Tenant written notice
of such taking (or in the absence of such notice, within ten (10) days of the
Condemnation Date) terminate this Lease as of the Condemnation Date. If Tenant
does not terminate this Lease in accordance with the foregoing, or in the event
that that portion of the Premises taken by condemnation is not sufficiently
large so as to give rise to the right to terminate this Lease as above provided,
this Lease shall remain in full force and effect as to the portion of the
Premises remaining, except that the Fixed Rent shall be reduced (as of the
Condemnation Date) in the proportion that the floor area of the Building taken
by condemnation bears to the total floor area of the Building.
(b) Award. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Landlord, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that Tenant
shall be entitled to any award specifically attributed by the condemning
authority to loss or damage to Tenant's trade fixtures and removable personal
property or to Tenant's relocation costs. In the event that this Lease is not
terminated by reason of such condemnation, Landlord shall, to the extent of
severance damages received by Landlord in connection with such condemnation and
not paid to or retained by the holder of any mortgage or deed of trust on the
Property or the Premises, repair any damage to the Premises caused by such
condemnation except to the extent that Tenant has been reimbursed therefor by
the condemning authority (in which event such reimbursement to Tenant shall also
be applied to such repair). Tenant shall pay any amount in excess of such
severance damages required to complete such repair; provided, however, if the
severance damages are not
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sufficient to pay all of the repair costs and if any specific item of repair
work shall be expected to have a useful life which extends beyond the term of
this Lease (including the term of any options which Tenant may have the right to
exercise), then Tenant shall be obligated to pay with respect to the
identifiable cost of such item of repair only the portion of the total cost of
such item of repair which bears the same ratio to the total cost of such item of
repair as the remaining term of this Lease (as determined on the Condemnation
Date and including the term of any options which the Tenant may have the right
to exercise) bears to the reasonably anticipated useful life of such item of
repair.
(c) Temporary Condemnation. If the temporary use of the whole
or any part of the Premises shall be taken by condemnation, the Term shall not,
except as hereinafter specifically provided, be reduced or affected in any way,
and Tenant in such event shall continue to pay in full the Rent and other
charges herein reserved, without reduction or abatement, and, except to the
extent that Tenant is prevented from so doing by reason of any order of the
condemning authority, shall continue to perform and observe all of the other
covenants, conditions and agreements of this Lease to be performed or observed
by Tenant as though such taking had not occurred. In the event of any such
temporary condemnation Tenant shall, so long as it is otherwise in compliance
with the provisions of this Lease, be entitled to receive for itself any and all
awards or payments made for such use of that portion of the Premises so taken;
provided, however, that Tenant shall repair any and all damages to the Premises
(whether or not covered by any award to Tenant) caused by such temporary
condemnation. Anything in the foregoing to the contrary notwithstanding, if the
period of any temporary condemnation exceeds twelve (12) months and the
temporary condemnation materially interferes with Tenant's use of the Premises,
Tenant may, at any time thereafter prior to the termination of such temporary
condemnation, terminate this Lease by written notice to Landlord, with such
termination to have the same force and effect as if the Term of the Lease had
expired as of such date of termination.
16. Assignment and Subletting.
(a) Consent. Tenant shall not voluntarily or by operation of
law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or
any part of Tenant's interest in this Lease or in the Premises without
Landlord's prior written consent, which consent Landlord shall not unreasonably
withhold; provided, however, (a) Landlord may withhold its consent to such
assignment, transfer, mortgage, subletting or other transfer or encumbrance
pursuant to the preceding sentence for substantive reasons including, without
limitation, the financial condition of the proposed assignee or transferee; and
(b) Landlord shall be obligated to consent to any transfer or assignment which
is part of a merger transaction involving Tenant or which is to a person or
entity which controls Tenant, is controlled by Tenant or is controlled by the
same entity as Tenant. Any attempted assignment, transfer, mortgage, subletting
or encumbrance without such consent shall be void and shall constitute a breach
of this Lease. The consent of Landlord to any one assignment, transfer,
mortgage, subletting, or encumbrance shall not be deemed to be a consent to any
subsequent assignment, transfer, mortgage, subletting, or encumbrance.
(b) Tenant's Continuing Liability. Regardless of Landlord's
consent, no subletting or assignment shall alter the primary liability of Tenant
to pay the Rent or release Tenant of Tenant's obligation to perform all other
obligations to be performed by Tenant hereunder unless Landlord's written
consent shall so specifically provide, and Landlord under no circumstances shall
be obligated to release Tenant from any such liability. The acceptance of rent
by Landlord from any other person shall not be deemed to be a waiver by Landlord
of any provision hereof.
(c) Information. In connection with any proposed assignment or
sublease, Tenant shall submit to Landlord in writing:
(i) The name of the proposed assignee or sublessee;
(ii) Such information as to the financial responsibility
and standing of said assignee or sublessee as Landlord may
reasonably require; and
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(iii) All of the terms and conditions upon which the
proposed assignment or subletting is to be made.
(d) Excess Sublease Rental. If for any sublease or assignment,
Tenant receives rent or other consideration, either directly or indirectly (by
performance of Tenant's obligations or otherwise) and either initially or over
the Term of the sublease or assignment, in excess of the Fixed Rent, Adjustments
and additional rent called for hereunder, or in the case of the sublease or
assignment of a portion of the Premises, in excess of such Fixed Rent,
Adjustments and additional rent fairly allocable to such portion, after
appropriate adjustments to assure that all other payments called for hereunder
are appropriately taken into account, Tenant shall pay to Landlord, at the same
time as Fixed Rent is due hereunder, one-half (1/2) of the excess of each such
payment of rent or other consideration received by Tenant promptly after its
receipt; provided, however, such payment shall be required only with respect to
sums received by Tenant which are attributable to periods in an Extended Term
(as defined in Exhibit E) during which Tenant has assigned and/or sublet all or
substantially all of the Premises; and provided further, such payment shall not
be required in connection with a sublease or assignment which may be effected
under subparagraph 16(f) below without Landlord's consent.
(e) Release. Whenever Landlord conveys its interest in the
Premises, Landlord shall be automatically released from the further performance
of covenants on the part of Landlord herein contained, and from any and all
further liability, obligations, costs and expenses, demands, causes of action,
claims or judgments arising from or growing out of, or connected with this Lease
after the effective date of said release. The effective date of said release
shall be the date the assignee executes an assumption of such an assignment
whereby the assignee expressly agrees to assume all of Landlord's obligations,
duties, responsibilities and liabilities with respect to this Lease. If
requested, Tenant shall execute a form of release and such other documentation
as may be required to effect the provisions of this paragraph.
(f) Controlled Entity. Notwithstanding the provisions of this
paragraph 16, Tenant may assign or sublet the Premises, or any portion thereof,
without Landlord's consent, after written notice to Landlord, to any entity
which controls, is controlled by, or is under common ownership with Tenant, or
to any entity resulting from the merger or consolidation with Tenant, or to any
person or entity which acquires all the assets of Tenant as a going concern of
the business that is being conducted on the Premises or all of the outstanding
stock of Tenant, provided that said assignee assumes, in full, the obligations
of Tenant under this Lease. Any such assignment shall not, in any way, affect or
limit the liability of Tenant under the terms of this Lease even if after such
assignment or subletting the terms of this Lease are materially changed or
altered without the consent of Tenant, the consent of whom shall not be
necessary for such change or alteration.
(g) Attorneys' Fees. In the event that Landlord shall consent
to a sublease or assignment under subparagraph (a) above, Tenant shall pay
Landlord's reasonable attorneys' fees incurred in connection with the giving of
such consent and review of the information submitted by Tenant; provided,
however, the amount of such fees which Tenant shall be obligated to pay in
connection with any single consent shall not exceed Five Hundred Dollars ($500).
17. Defaults; Remedies.
(a) Defaults. The occurrence of any one or more of the
following events shall constitute a material default and material breach of this
Lease by Tenant:
(i) INTENTIONALLY DELETED.
(ii) The failure by Tenant to make any payment of Rent
or any other payment required to be made by Tenant hereunder,
as and when due, where such failure shall continue for a
period of five (5) working days after written notice thereof
from Landlord to Tenant;
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(iii) The failure by Tenant to observe or perform any of
the covenants, conditions or provisions of this Lease to be
observed or performed by Tenant, other than those described in
subparagraph (ii) above, where such failure shall continue for
a period of thirty (30) days after written notice thereof from
Landlord to Tenant; provided, however, that if the nature of
Tenant's default is such that it is capable of being cured but
more than thirty (30) days are reasonably required for its
cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within such thirty (30) day period
and thereafter diligently prosecutes such cure to completion;
or
(iv) The making by Tenant of any general assignment for
the benefit of creditors, the filing by or against Tenant of a
petition for order of relief in bankruptcy for the purpose of
bankruptcy liquidation or reorganization under any law
relating to bankruptcy whether now existing or hereafter
enacted (including, without limitation, any petition filed by
or against Tenant under any one or more of the following
Chapters of the Bankruptcy Reform Act of 1978, 11 U.S.C.
Sections 101-1330 ("Bankruptcy Code") as amended: Chapter 7 or
Chapter 9 or Chapter 11 or Chapter 12 or Chapter 13) except
that, in the case of a filing against Tenant of such a
petition, such filing shall not be a default if the petition
is dismissed or discharged on or before ninety (90) days after
the filing thereof; the appointment of a trustee or receiver
to take possession of all or substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within
ninety (90) days; or the attachment, execution or other
judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged within ninety (90) days.
Unless Landlord's express written consent thereto is first
obtained, in no event shall this Lease, or any interest herein
or hereunder or any estate created hereby, be assigned or
assignable by operation of law or by, in or under voluntary or
involuntary bankruptcy liquidation or reorganization
proceedings or otherwise and in no event shall this Lease or
any rights or privileges hereunder be an asset of Tenant under
any bankruptcy liquidation or reorganization proceedings. Any
purported assignment or transfer in violation of the
provisions of this subparagraph (iv) shall constitute a
material default and breach of this Lease by Tenant and in
connection with any such default and breach Landlord shall
have the rights and remedies described in subparagraph (b)
below, including, without limitation, the election to
terminate this Lease. As used in this subparagraph (iv) the
words "bankruptcy liquidation or reorganization proceedings"
shall include any proceedings under any law relating to
bankruptcy whether now existing or hereafter enacted
(including, without limitation, proceedings under any one or
more of the Bankruptcy Code as amended: Chapter 7 or Chapter 9
or Chapter 11 or Chapter 12 or Chapter 13).
(b) Remedies.
(i) In the event of any default and breach by Tenant of
any of its obligations under this Lease and notwithstanding
the vacation or abandonment of the Premises by Tenant, this
Lease shall continue in effect so long as Landlord does not
expressly terminate Tenant's right to possession in any of the
manners specified in this paragraph and Landlord may, at
Landlord's option and without limiting Landlord in the
exercise of any other rights or remedies which it may have by
reason of such default and breach, exercise all of its rights
and remedies hereunder, including, without limitation:
(A) the right to declare the Term ended and to
reenter the Premises and take possession thereof and
remove all persons therefrom, and Tenant shall have no
further claim in or to the Premises or under this Lease;
or
(B) the right without declaring this Lease ended
to reenter the Premises, take possession thereof, remove
all persons therefrom and occupy or lease the whole or
any part thereof for and on account of Tenant and upon
such terms and conditions and for such rent as Landlord
may deem proper and to collect such rent or any other
rent that may hereafter become payable and apply the
same as provided in subparagraph (ii) below; or
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(C) the right, even though Landlord may have relet
the Premises or brought an action to collect Rent and
other charges without terminating this Lease, to
thereafter elect to terminate this Lease and all of the
rights of Tenant in or to the Premises; or
(D) the right, without terminating this Lease, to
bring an action or actions to collect Rent and other
charges hereunder which are from time to time past due
and unpaid or to enforce any other provisions of this
Lease imposing obligations on Tenant, it being
understood that the bringing of any such action or
actions shall not terminate this Lease unless written
notice of termination is given;
provided, however;
(Y) if Tenant is in possession of the Premises,
Landlord shall not be entitled to recover possession of
the Premises by means of a lock-out or other self-help
remedy until there has been a determination by a court
of appropriate jurisdiction that Landlord is entitled to
possession or that Tenant is no longer entitled to
possession; and
(Z) Landlord shall not be entitled to exercise,
and hereby waives, any statutory landlord liens with
respect to Tenant's personal property, equipment and
fixtures.
(ii) Should Landlord relet the Premises under the
provisions of subparagraph (b)(i)(B) above, Landlord may
execute any lease either in its own name or in the name of
Tenant, but Tenant hereunder shall have no right or authority
whatever to collect any rent from the new tenant. The proceeds
of any such reletting shall first be applied to the payment of
the costs and expenses of reletting the Premises, including
without limitation, reasonable brokerage commissions and
alterations and repairs which Landlord, in its sole
discretion, deems reasonably necessary and advisable and to
the payment of reasonable attorneys' fees incurred by Landlord
in connection with the Tenant's default, the retaking of the
Premises and such reletting and, second, to the payment of any
indebtedness, other than Rent, due hereunder, including,
without limitation, storage charges owing from Tenant to
Landlord; provided, however, the amount of the proceeds which
may be applied to reimburse Landlord for the cost of repair
and restoration of the Premises in connection with a reletting
shall not exceed the costs necessary to restore the Premises
to the condition which would otherwise have been required at
the expiration of the Term of this Lease, but Tenant
acknowledges that Landlord will have no duty to make any other
improvements to the Premises in order to satisfy any
obligation Landlord may have under applicable law to use good
faith efforts to relet the Premises in order to mitigate
damages. When such costs and expenses of reletting have been
paid, and if there is no such indebtedness or such
indebtedness has been paid, Tenant shall be entitled to a
credit for the net amount of rental received from such
reletting each month during the unexpired balance of the Term,
and Tenant shall pay Landlord monthly on the first day of each
month as specified herein such sums as may be required to make
up the rentals provided for in this Lease. Nothing contained
herein shall be construed as obligating Landlord to relet the
whole or any part of the Premises.
(iii) Should Landlord elect to terminate this Lease
under the provisions of subparagraphs (b)(i)(A) or (C) above,
Landlord shall be entitled to recover immediately from Tenant
(in addition to any other amounts recoverable by Landlord as
provided by law), the following amounts:
(A) the worth at the time of award of the unpaid
rent which had been earned at the time of termination;
(B) 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
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exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided;
(C) 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 Tenant proves could be reasonably
avoided; and
(D) any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its
obligations under the Lease or which in the ordinary course of things
would be likely to result therefrom.
For purposes of computing "the worth at the time of the award" of the
amount specified in subparagraph (b)(iii)(C) above, such amount shall be
discounted at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award. For purposes of computing "the worth at the time of the
award" under subparagraphs (b)(iii)(A) and (b)(iii)(B) above, an interest rate
of ten percent (10%) per annum shall be utilized.
(iv) If Landlord shall elect to reenter the Premises as provided
above, Landlord shall not be liable for damages by reason of any reentry so long
as Landlord has acted in a reasonable manner in effecting such reentry. Except
for claims based on negligent, malicious, reckless or willful and wanton acts of
Landlord, Tenant hereby waives all claims and demands against Landlord for
damages or loss arising out of or in connection with any reentering and taking
possession of the Premises and waives all claims for damages or loss arising out
of or in connection with any destruction of or damage to the Premises and any
loss of property belonging to Tenant or to any other person, firm or corporation
which may be in or upon the Premises at the time of such reentry.
(v) Landlord shall not be deemed to have terminated this Lease,
Tenant's right to possession of the Premises or the liability of Tenant to pay
Rent thereafter to accrue or its liability for damages under any of the
provisions hereof by any reentry hereunder or by any action in unlawful detainer
or otherwise to obtain possession of the Premises, unless Landlord shall notify
Tenant in writing that Landlord has so elected to terminate this Lease. Tenant
agrees that the service by Landlord of any notice pursuant to the unlawful
detainer statutes or comparable statutes of the state or locality in which the
Premises are located and the surrender of possession pursuant to such notice
shall not (unless Landlord elects to the contrary at the time of or at any time
subsequent to the service of such notice and such election shall be evidenced by
a written notice to Tenant) be deemed to be a termination of this Lease or of
Tenant's obligations hereunder. No reentry or reletting under this paragraph
shall be deemed to constitute a surrender or termination of this Lease, or of
any of the rights, options, elections, powers and remedies reserved by Landlord
hereunder, or a release of Tenant from any of its obligations hereunder, unless
Landlord shall specifically notify Tenant, in writing, to that effect. No such
reletting shall preclude Landlord from thereafter at any time terminating this
Lease as herein provided.
(vi) All fixtures, furnishings, goods, equipment, chattels or other
personal property of Tenant remaining on the Premises at the time that Landlord
takes possession thereof may at Landlord's election be stored at Tenant's
expense or sold or otherwise disposed of by Landlord in any manner permitted by
applicable law.
(vii) All rights, options, elections, powers and remedies of
Landlord under the provisions of this Lease are cumulative of each other and of
every other right, option, election, power or remedy which Landlord may
otherwise have at law or in equity and all or any of which Landlord is hereby
authorized to exercise. The exercise of one or more rights, options, elections,
powers or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies Landlord may have upon a breach and default
under this Lease and shall not be deemed to be a waiver of Landlord's rights or
remedies thereupon or to be a release of Tenant from Tenant's obligations
thereon unless such waiver or release is expressed in writing and signed by
Landlord.
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(viii) INTENTIONALLY DELETED.
(c) LATE CHARGES. Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent and other sums due hereunder will cause Landlord
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 on
Landlord by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within ten (10) days after
such amount shall be due, Tenant shall pay to Landlord a late charge equal to
five percent (5%) of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.
(d) PAYMENT OR PERFORMANCE BY LANDLORD. Landlord may, at
Landlord's option and without any obligation to do so, pay any sum or do any act
which Tenant has failed to pay or do at the time Tenant was obligated to make
such payment or perform such act and Landlord shall be entitled to recover from
Tenant, upon demand, all sums expended by Landlord in making such payment or
performing such act, together with interest thereon at the rate provided in
subparagraph 18(d) from the date of expenditure until repaid by Tenant;
provided, however, unless Landlord reasonably deems such payment or performance
by Landlord to be necessary prior to expiration of any applicable cure period
set forth in subparagraph (a) above in order to protect Landlord's interest,
Landlord shall not be entitled to recover such sums and interest from Tenant
unless Landlord waited until after expiration of any applicable cure period for
such non-payment or non-performance set forth in subparagraph (a) above. Any sum
and interest payable by Tenant under this subparagraph (d) shall be deemed
additional rent under this Lease.
18. MISCELLANEOUS.
(a) ESTOPPEL CERTIFICATES.
(i) Tenant shall at any time upon not less than ten
(10) days prior written notice from Landlord execute, acknowledge,
and deliver to Landlord a statement in writing certifying that this
Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the date to
which the Rent and other charges are paid in advance, if any, and
acknowledging that there are not, to Tenant's knowledge, any uncured
defaults on the part of Landlord hereunder, or specifying such
defaults if any are claimed. Any such statement may be conclusively
relied upon by any person to whom it shall be delivered by Landlord
including any prospective purchaser or encumbrancer of the Premises,
the Building, the Property, or any part thereof.
(ii) Tenant's failure to deliver such statement
within such time shall be conclusive upon Tenant that this Lease is
in full force and effect, without modification except as may be
represented by Landlord; that there are no uncured defaults in
Landlord's performance; and that not more than one month's Rent has
been paid in advance.
(iii) If Landlord desires to finance or refinance
the Premises, the Building, the Property, or any part thereof, Tenant
hereby agrees to deliver to any lender designated by Landlord such
financial statements of Tenant as may be reasonably required by such
lender. Such statements shall include the past three years financial
statements of Tenant. All such financial statements shall be received
by Landlord in confidence and shall be used only for the purposes
herein set forth.
(iv) Landlord shall at any time upon not less than
ten (10) days prior written notice from Tenant execute, acknowledge,
and deliver to Tenant a statement in writing certifying that this
Lease is unmodified and in full force and effect (or, if modified,
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stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the date to
which the Rent and other charges are paid in advance, if any, and
acknowledging that there are not, to Landlord's knowledge, any uncured
defaults on the part of Tenant hereunder, or specifying such defaults
if any are claimed. Any such statement may be conclusively relied upon
by any person to whom it shall be delivered by Tenant including any
prospective encumbrancer of Tenant's inventory or any part thereof.
Landlord's failure to deliver such statement within such time shall be
conclusive in favor of the prospective encumbrancer that this Lease is
in full force and effect, without modification except as may be
represented by Tenant; that there are no uncured defaults in Tenant's
performance; and that not more than one month's Rent has been paid in
advance.
(b) LANDLORD'S LIABILITY. The term "Landlord" as used herein
shall mean only the owner or owners at the time in question of the fee title to
the Premises and in the event of any transfer of such title, Landlord herein
named (and in case of any subsequent transfers, the then grantor) shall be
relieved from and after the date of such transfer of all liability as respects
Landlord's obligations thereafter to be performed, provided that any funds in
the hands of Landlord or the then grantor at the time of such transfer in which
Tenant has an interest shall be delivered to the grantee. The obligations
contained in this Lease to be performed by Landlord shall, subject as aforesaid,
be binding on Landlord's successors and assigns only during their respective
periods of ownership.
(c) CONSTRUCTION. Paragraph captions are solely for the
convenience of the parties and shall not be deemed to or be used to define,
construe, or limit the terms hereof. As used in this Lease, the masculine,
feminine and neuter genders shall be deemed to include the others, and the
singular number shall be deemed to include the plural, whenever the context so
requires. The invalidity of any provisions of this Lease as determined by a
court of competent jurisdiction shall in no way affect the validity of any other
provision hereof. This Lease shall be governed by the laws of the state in which
the Premises are located.
(d) INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly
herein provided, any amount due to Landlord or Tenant and not paid when due
shall bear interest at the lesser of (i) fifteen percent (15%) per annum or (ii)
the maximum rate permitted by law, from the date due until the date such amount
is paid. Payment of such interest shall be made when such amount is paid.
Payment of such interest shall not excuse or cure any default by Tenant under
this Lease.
(e) TIME OF ESSENCE. Time is of the essence of this Lease and
all of the covenants and obligations hereof.
(f) COUNTERPARTS. INTENTIONALLY DELETED.
(g) INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease
contains all agreements of the parties with respect to any matter mentioned
herein. No prior agreement or understanding pertaining to any such matter shall
be effective. This Lease may be modified in writing only, which writing shall be
signed by the parties in interest at the time of the modification.
(h) NOTICES. Any notices, approvals, agreements, certificates,
other documents or communications between the parties hereto required or
permitted under this Lease shall be in writing. Any such communications shall
be deemed to have been duly given or served if delivered in hand or forty-eight
(48) hours after deposit in the United States mail, certified or registered,
postage and fees prepaid, return receipt requested, addressed to the parties at
the addresses set forth in paragraph 1 of this Lease. The address to which any
such communications shall be sent may be changed by either party hereto from
time to time by a notice mailed as aforesaid. A copy of each notice to Tenant
shall also be sent to:
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇'▇▇▇▇▇▇, Cavanagh, Anderson, ▇▇▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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but copies of notices sent in accordance with this sentence are informational
and are not required in order for the notices given to Landlord or Tenant to be
effective.
(i) WAIVERS. No waiver by Landlord or Tenant of any provision
hereof shall be deemed a waiver of any other provision hereof or of any
subsequent breach by the other party of the same or any other provision.
Landlord's or Tenant's consent to or approval of any act shall not be deemed to
render unnecessary the obtaining of Landlord's or Tenant's consent to or
approval of any subsequent act by the other party. The acceptance of Rent
hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of
any provision hereof, other than the failure of Tenant to pay the particular
Rent so accepted, regardless of Landlord's knowledge of such preceding breach at
the time of acceptance of such Rent.
(j) RECORDING. Landlord and Tenant shall, upon the request of
either party, execute, acknowledge and deliver to the other a "short form"
memorandum of this Lease for recording purposes.
(k) HOLDING OVER. If Tenant remains in possession of the
Premises or any part thereof after the expiration of the Term or sooner
termination of this Lease with the express written consent of Landlord and
without executing a new lease, such occupancy shall be construed as a tenancy
from month-to-month at a rental equal to one hundred fifty percent (150%) of the
last monthly Rent plus all other charges payable hereunder, and upon all the
terms hereof insofar as the same are applicable to a month-to-month tenancy.
Nothing contained in this subparagraph shall be construed to grant Tenant the
right to holdover without the express written consent of Landlord.
(l) COVENANTS AND CONDITIONS. Each provision of this Lease
performable by Tenant shall be deemed both a covenant and a condition.
(m) BINDING EFFECT. Subject to any provisions hereof
restricting assignment or subletting by Tenant and subject to the provision of
subparagraph (b) above, this Lease shall bind the parties and their personal
representatives, successors and assigns.
(n) SUBORDINATION.
(i) This Lease, at Landlord's option, shall be subordinate
to any ground lease, mortgage, deed of trust, or any other
hypothecation for security now or hereafter placed upon the Premises,
the Building or the Property, or any part or parts thereof, and to any
and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof;
provided, however, such subordination shall not be binding on Tenant
unless the holder of the mortgage, deed of trust or other interest to
which this Lease is to be subordinate agrees that, so long as Tenant is
not in default hereunder:
(A) the holder will not disturb Tenant's possession
of the Premises;
(B) the holder agrees that, while it is in possession
of the Premises, it will perform Landlord's obligations under
this Lease which are attributable to the period of such
possession; and
(C) the holder will permit insurance proceeds to be
used for repair and restoration as provided in this Lease.
If any present or future mortgagee, trustee or ground lessor shall at
any time elect to have this Lease prior to the lien of its mortgage,
deed of trust or ground lease, and written notice of such election
shall be given to Tenant, this Lease shall be deemed prior to such
mortgage, deed of trust, or ground lease, whether this Lease is dated
prior or subsequent to the date of said mortgage, deed of trust or
ground lease or the date of recording thereof.
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(ii) Tenant agrees to execute any documents required to
effectuate such subordination or to make this Lease prior to the lien
of any mortgage, deed of trust or ground lease, as the case may be, and
failing to do so within ten (10) days after written demand, does hereby
make, constitute and irrevocably appoint Landlord as Tenant's attorney
in fact and in Tenant's name, place and stead, to do so; provided,
however, such documents shall grant to Tenant the benefits and rights
described in clauses (A), (B) and (C) of subparagraph (n)(i) above.
(o) ATTORNEYS' FEE. If either party brings an action to
enforce the terms hereof or declare rights under this Lease, the prevailing
party in the final adjudication of any such action, on trial or appeal, shall be
entitled to its costs and expenses of suit, including, without limitation, its
actual attorneys' fees, to be paid by the losing party as fixed by the court. In
any situation in which a dispute is settled other than by action or proceeding,
Tenant shall pay all Landlord's costs and attorneys' fees relating thereto.
(p) LANDLORD'S ACCESS. Landlord and Landlord's agents shall
have the right to enter the Premises at reasonable times for the purpose of
inspecting the same, showing the same to prospective purchasers or lenders, and
making such alterations, repairs, improvements or additions to the Premises or
the improvements as Landlord may deem necessary or desirable; provided, however,
except in a situation reasonably deemed by Landlord to be an emergency, Landlord
shall give Tenant not less than twenty-four (24) hours prior written notice of
Landlord's planned entry. Landlord may at any time during the last one hundred
twenty (120) days of the Term place on or about the Premises any ordinary "For
Lease" signs, all without rebate of rent or liability to Tenant.
(q) AUCTIONS. INTENTIONALLY DELETED.
(r) MERGER. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at
the option of Landlord, terminate all or any existing subtenancies or may, at
the option of Landlord, operate as an assignment to Landlord of any or all of
such subtenancies. During any period while Tenant is in default under this
Lease, Landlord, in addition to any other rights and remedies it may have under
this Lease, shall have the right to collect directly from any subtenant all
rentals owing to Tenant under any subtenancy and to apply such rentals to any
amounts owing to Landlord by Tenant and the payment of such amounts by the
subtenant directly to Landlord shall not be a default under the subtenancy.
(s) JOINT AND SEVERAL LIABILITY. Each party signing this
Lease as Tenant shall be jointly and severally liable for the failure on the
part of Tenant to pay any sums due under the terms of this Lease or for the
breach by Tenant or any of the covenants or obligations of Tenant contained
herein.
(t) INDIVIDUAL LIABILITY. The obligations of Landlord under
this Lease do not constitute personal obligations of the individual partners,
directors, officers, or shareholders of Landlord, and Tenant shall look solely
to the real estate that is the subject of this Lease and to no other assets of
Landlord for satisfaction of any liability in respect of this Lease and will not
seek recourse against the individual partners, directors, officers or
shareholders of Landlord or any of their personal assets for such satisfaction.
(u) ATTORNMENT. Tenant shall, in the event any proceedings are
brought for the foreclosure of, or in the event of exercise of the power of sale
under any mortgage or deed of trust made by the Landlord, its successors or
assigns, encumbering the Premises, or any part thereof, or in the event of
termination of the ground lease, if any, and if so requested, attorn to the
purchaser upon such foreclosure or sale or upon any grant of a deed in lieu of
foreclosure, and shall recognize such purchaser as the Landlord under this
Lease, so long as such purchaser grants to Tenant the rights and benefits set
forth in clauses (A), (B) and (C) of subparagraph 18(n)(i) above.
(v) LENDERS RIGHT TO CURE. Tenant agrees to give the holder of
any mortgage or trust deed encumbering the Premises, by registered mail, a copy
of any notice of default or nonperformance served upon Landlord, provided that
prior to such notice, Tenant has been notified
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in writing (by way of Assignment of Rents and Leases or otherwise) of the
address of such mortgagee or trust deed holder. Tenant further agrees that
landlord shall not be in default under this Lease unless (i) tenant has given
a written notice to Landlord stating that Landlord has failed to perform
landlord's obligations under this lease and (ii) specifying with particularity
the obligations which Landlord has failed to perform, and Landlord thereafter
(A) fails to commence the cure of such default within thirty (30) days after
receipt of such notice or (B) fails to perform any of its obligations so
specified within a reasonable time after Landlord's receipt of such notice. If
Landlord shall fail to commence or cure such nonperformance in a timely manner
as above provided, then such mortgagee or trust deed holder shall have an
additional thirty (30) days within which to cure the default, or, if such
default cannot be cured within that time, then such additional time as may be
necessary if within such thirty (30) days such mortgagee or trust deed holder
has commenced and is diligently pursuing the remedies necessary to cure such
default (including but not limited to commencement of foreclosure proceedings,
if necessary to effect such cure), in which event this Lease shall not be
terminated by Tenant while such remedies are being so diligently pursued.
(w) REVISIONS TO LEASE. INTENTIONALLY DELETED.
(x) ADMINISTRATIVE CHARGE. In addition to Fixed Rent,
Adjustments and other charges hereunder, Tenant shall pay to Landlord an overall
administrative charge of five percent (5%) of any charge which is Tenant's
responsibility to pay, which Landlord pays on behalf of Tenant and for which
Landlord subsequently bills Tenant.
(y) ESTIMATED PAYMENTS. If Tenant has at any time during the
Term of this Lease committed a default under paragraph 17 of this Lease by
failing to pay when due and prior to the expiration of any applicable cure
period any monetary amount to be paid by Tenant under this Lease, Landlord may
require that Tenant thereafter during the remaining Term of this Lease pay to
Landlord, in monthly payments due at the time payments of Fixed Rent are due
hereunder, the estimated amounts of the annual premiums for all or a portion of
the insurance to be carried by Tenant and payments of Property Taxes to be made
by Tenant under this Lease; provided, however, if the Landlord requires such
estimated payments and Tenant, for a period of twenty-four (24) consecutive
months after the first time Landlord requires such estimated payments, does not
commit a default under paragraph 17 of this Lease by failing to pay when due and
prior to the expiration of any applicable cure period any monetary amount to be
paid by Tenant under this Lease (including but not limited to such estimated
payments), Tenant, except as otherwise provided in subparagraph 14(a), shall no
longer be required to make such estimated payments unless and until Tenant at
any time thereafter commits a default under paragraph 17 of this Lease by
failing to pay when due and prior to expiration of any applicable cure period
any monetary amount to be paid by Tenant under this Lease. The estimated
payments required by this subparagraph (y) shall be in addition to any impound
payments required by subparagraph 14(a), but Tenant may credit against payments
due under this subparagraph (y) any impound payments made by Tenant pursuant to
subparagraph 14(a) to the extent such impound payments apply to the same expense
item as an estimated payment under this subparagraph (y). The amount of each
estimated monthly payment shall be determined by dividing the Landlord's
estimate of the annual amount of the applicable payment, as determined in the
exercise of Landlord's reasonable discretion, by twelve (12). Landlord shall
then use the estimated payments to pay the amounts owing if Tenant is not in
default under this Lease; provided, however, Tenant shall remain fully obligated
to pay to Landlord or directly to the applicable entity, as Landlord may direct,
any deficiency between the amount owing for the applicable insurance premium or
Property Tax and the amount of the estimated payments held by Landlord for
application to such premium or Property Tax. The amount of estimated payments
paid and to be paid by Tenant shall be reconciled on an annual basis, with
appropriate deficiency payments and adjustments to be made or credits given in
the event that the estimated payments result in any underpayment or overpayment
to Landlord by Tenant when the amount of the actual charges for the applicable
premiums and/or Property Taxes are actually determined.
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19. TOXIC MATERIALS.
(a) DEFINITIONS.
(i) As used in this Lease, the term "Hazardous
Material[s]" means any oil, flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials including, without limitation, any substances that pose a
hazard to the Premises or to persons on or about the Premises and any
substances defined as or included in the definition of "hazardous
substance," "hazardous waste," "hazardous material," "toxic
substance," "extremely hazardous waste," "restricted hazardous waste"
or words of similar import, now or subsequently regulated in any way
under applicable federal, state or local laws or regulations,
including without limitation, petroleum-based products, paints,
solvents, lead, cyanide, DDT, printing inks, acids, pesticides,
ammonia compounds and other chemical products, asbestos, PCBs, urea
formaldehyde foam insulation, transformers or other equipment
containing dielectric fluid, levels of polychlorinated biphenyls, or
radon gas, and similar compounds, and including any different products
and materials which are subsequently found to have adverse effects on
the environment or the health and safety of persons.
(ii) As used herein, the term "Environmental Law[s]"
means any one or all of the following: the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (42 U.S.C. Sections 9601
seq.); the Resource Conservation and Recovery Act as amended (42 U.S.C.
Sections 6901 et seq.); the Safe Drinking Water Act as amended (42
U.S.C. Sections 300f et seq.); the Clean Water Act as amended (33
U.S.C. Sections 1251 et seq.); the Clean Air Act as amended (42 U.S.C.
Sections 7401 et seq.); the Toxic Substances Control Act as amended (15
U.S.C . Sections 136 et seq.); the Solid Waste Disposal Act as amended
(42 U.S.C. Sections 3251 et seq.); the Hazardous Materials
Transportation Act (49 U.S.C. Sections 1801 et seq.); the regulations
promulgated under any of the foregoing; and all other laws,
regulations, ordinances, standards, policies, and guidelines now in
effect or hereinafter enacted by any governmental entity (whether
local, state or federal) having jurisdiction or regulatory authority
over the Premises or the Project or over activities conducted therein
and which deal with the regulation or protection of human health,
industrial hygiene or the environment, including the soil, subsurface
soil, ambient air, groundwater, surface water, and land use.
(iii) As used herein, the term "Environmental
Activity[ies]" means any generation, manufacture, production, pumping,
bringing upon, use, storage, treatment, release, discharge, escaping,
emitting, leaching, disposal or transportation of Hazardous Materials.
(b) PROHIBITION ON HAZARDOUS MATERIALS. Except as specifically
provided in subparagraph (c) below, Tenant shall not cause or permit any
Environmental Activities in, on or about the Premises by Tenant or Tenant's
agents, employees, contractors, assignees, sublessees or invitees (hereinafter
cumulatively referred to as "Tenant's Agents") without the prior written consent
of Landlord. Landlord shall be entitled to take into account such factors or
facts as Landlord may reasonably determine to be relevant in determining whether
to consent to Tenant's proposed Environmental Activity and Landlord may attach
conditions to any such consent if such conditions are reasonably necessary to
protect Landlord's interests in avoiding potential liability upon Landlord or
damage to Landlord's property arising from any Environmental Activity by Tenant
or Tenant's Agents. In no event shall Landlord be required to consent to the
installation or use of any storage tanks on the Premises.
(c) EXCEPTION TO PROHIBITION. Notwithstanding the prohibition
set forth in subparagraph (b) above, but subject to Tenant's covenant to comply
with all Environmental Laws and with the other provisions of this paragraph 19,
Tenant may bring upon, keep and use in the Improvements (but not outside the
Improvements) general office supplies typically used in an office in the
ordinary course of business, such as copier toner, liquid paper, glue, ink and
janitorial
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supplies, so long as such supplies are used in the manner for which they were
designed and in such amounts as may be normal for the business operations
conducted by Tenant in the Premises.
(d) COMPLIANCE WITH ENVIRONMENTAL LAWS. Tenant shall keep and
maintain the Premises in compliance with, and shall not cause or permit the
Premises to be in violation of, any Environmental Laws. All Tenant's activities
at the Premises shall be in accordance with all Environmental Laws.
Additionally, Tenant shall obtain any and all necessary permits for Tenant's
activities at the Premises. Tenant's obligations and liabilities under this
paragraph 19 shall continue so long as Landlord bears any liability or
responsibility under the Environmental Laws for any, action that occurs on the
Premises during the term of this Lease.
(e) ENVIRONMENTAL NOTICES. Each party shall immediately notify
the other party of, and upon request from the other party shall provide such
other party with copies of, the following:
(i) Any correspondence, communication or notice, oral
or written, to or from any governmental entity regarding the
application of Environmental Laws to the Premises or Tenant's
operations on the Premises including, without limitation,
notices of violation, notices to comply and citations;
(ii) Any reports filed pursuant to any Environmental
Law or self-reporting requirements;
(iii) Any permits and permit applications; and
(iv) Any change in Tenant's operations on the
Premises that will change or has the potential to change
Tenant's or Landlord's obligations or liabilities under
Environmental Laws.
Tenant shall also notify the Landlord of the release of any Hazardous Material
in, on, under, about or above the Premises or the Project.
(f) TENANT'S ENVIRONMENTAL INDEMNITY. Tenant shall protect,
indemnify, defend (with counsel satisfactory to Landlord) and hold harmless
Landlord and its directors, officers, partners, employees, agents, lenders, and
ground lessees, if any, and their respective successors and assigns for, from
and against any and all losses, damages, claims, costs, expenses, penalties,
fines and liabilities of any kind (including, without limitation, the cost of
any investigation, remediation and cleanup, and attorneys' fees) which are
attributable to (i) any Environmental Activity on the Premises undertaken or
committed by Tenant or Tenant's Agents or caused by the negligence of such
persons during the Term of this Lease, (ii) any remedial or clean-up work
undertaken by or for Tenant in connection with Tenant's Environmental Activities
or Tenant's compliance with Environmental Laws, or (iii) the breach by Tenant of
any of its obligations and covenants set forth in this paragraph 19. Landlord
shall have the right but not the obligation to join and participate in, and
control, if it so elects, any legal proceedings initiated in connection with the
Environmental Activities of Tenant or Tenant's Agents. Landlord may also
negotiate, defend, approve and appeal any action taken or issued by any
applicable governmental authority with regard to contamination of the Premises
or Project by a Hazardous Material. Any costs or expenses incurred by Landlord
for which Tenant is responsible under this paragraph 19 or for which Tenant has
indemnified Landlord shall be reimbursed by Tenant on demand, as additional rent
and with interest thereon, as provided by subparagraph 17(d) of this Lease. This
indemnity shall survive the termination of this Lease.
(g) REMEDIAL WORK AT TENANT'S EXPENSE. If (i) any
Environmental Activity undertaken by Tenant or Tenant's Agents results in
contamination of the Premises or Project or any portion thereof, or the soil or
groundwater thereunder, or (ii) any investigation, site monitoring, containment,
cleanup, removal, restoration or other remedial work of any kind or nature
("Remedial Work") is necessary or appropriate due to or in connection with
Tenant's use or occupancy of the Premises, then, subject to Landlord's prior
written approval and any conditions imposed by
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Landlord, Tenant shall promptly perform all Remedial Work, at Tenant's sole
expense and without abatement of rent, as is necessary to return the affected
portion of the Premises and/or Project and the soil and groundwater to the
condition existing prior to the introduction of the contaminating Hazardous
Material and to otherwise comply with all applicable Environmental Laws.
Landlord's approval of such Remedial Work shall not be unreasonably withheld so
long as such actions will not cause a material adverse effect on the Premises or
the Project during or after expiration of the Lease Term. Landlord shall also
have the right to approve any and all contractors hired by Tenant to perform
such Remedial Work. All such Remedial Work shall be performed in compliance with
all applicable laws, ordinances and regulations and in such a manner as to
minimize any interference with the use and enjoyment of the Premises and
Project. All costs and expenses of such Remedial Work shall be paid by Tenant
including, without limitation, the charges of such contractor(s), and the
reasonable fees and costs of the attorneys and consultants for Landlord incurred
in connection with monitoring or review of such Remedial Work.
(h) LANDLORD'S OPTION. Landlord may elect, at Landlord's sole
discretion, to perform any Remedial Work. Landlord and Landlord's agents shall
have the right to enter the Premises at all reasonable times to inspect, monitor
and/or perform Remedial Work. All expenses incurred by Landlord in connection
with performing Remedial Work pursuant to subparagraph (g) above are payable by
Tenant, upon Landlord's demand, with interest thereon, as provided by
subparagraph 17(d).
(i) INJUNCTIVE RELIEF. Tenant's failure to abide by the terms
of this paragraph 19 shall be restrainable by injunction.
(j) SELF-HELP. Landlord shall have the right of "self-help"
or similar remedy in order to minimize any damages, expenses, penalties and
related fees or costs arising from or related to a violation of any
Environmental Law with respect to the Premises or the Project.
(k) OTHER TENANTS AND OWNERS. Other tenants or owners of
property in the Project may be using, handling or storing certain Hazardous
Materials in connection with such tenants' or owners' use of their premises or
property. The failure of another tenant or owner to comply with applicable laws
and procedures could result in a release of Hazardous Materials and
contamination to improvements within the Project or the soil and groundwater
thereunder. In the event of such a release, the tenant or owner responsible for
the release, and not Landlord, shall be responsible for any claim, damage or
expense incurred by Tenant by reason of such contamination and Tenant and
Landlord shall each exhaust all of their respective remedies against such other
tenant or owner with respect to any claim the Tenant or Landlord, as applicable,
may have against the other tenants or owners without any right to seek any
recovery against the other party to this Lease.
(l) ENVIRONMENTAL INSPECTION. Tenant shall, if reasonably
required by Landlord on account of the activities or suspected activities of
Tenant or Tenant's Agents, retain a recognized environmental consultant (the
"Consultant") acceptable to Landlord to conduct an investigation of the Premises
and of other portions of the Project deemed appropriate by Landlord
("Environmental Assessment") (i) for Hazardous Materials contamination in,
about or beneath the Premises or the Project as a result of such activities
and (ii) to assess all Environmental Activities of Tenant and Tenant's Agents on
the Premises or the Project for compliance with all applicable laws, ordinances
and regulations and for the use of procedures intended to reasonably reduce the
risk of a release of Hazardous Materials. The Environmental Assessment shall be
performed in a manner reasonably calculated to discover the presence of
Hazardous Materials contamination and shall be of a scope and intensity
reflective of the general standards of professional environmental consultants
who regularly provide environmental assessment services in connection with the
transfer or leasing of real property. Additionally, the Environmental Assessment
shall take into full consideration the past and present uses of the Premises and
Project and other factors unique to the Premises and Project. If Landlord
obtains the Environmental Assessment because of the activities of Tenant or
Tenant's Agents, as reasonably demonstrated by Landlord or indicated in the
Environmental Assessment, Tenant shall pay Landlord on demand the cost of the
Environmental Assessment, with interest thereon, as additional rent and in
accordance with subparagraph 17(d). If Landlord so requires, Tenant shall
comply, at its sole cost and expense, with all reasonable recommendations
contained
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in the Environmental Assessment with respect to Environmental Activities by
Tenant or Tenant's agents including any recommendation with respect to the
precautions which should be taken with respect to environmental activities on
the premises or the Project or any recommendations for additional testing and
studies to detect the presence of Hazardous Materials. Tenant covenants to
reasonably cooperate with the Consultant and to allow entry and reasonable
access to all portions of the Premises for the purpose of Consultant's
investigation.
(m) SURRENDER OF PREMISES - ENVIRONMENTAL CONSIDERATIONS.
Prior to or after the expiration or termination of the Lease Term, Landlord may
have an Environmental Assessment of the Premises performed in accordance with
subparagraph (l) above. Tenant shall perform, at its sole cost and expense, any
Remedial Work recommended by the Consultant which is necessary to remove,
mitigate or remediate any Hazardous Materials contamination of the Premises or
Project in connection with any Environmental Activities of Tenant or Tenant's
Agents; provided, however, if no such Remedial Work is recommended by the
Consultant as necessary for the above specified reasons, Landlord, and not
Tenant as provided in subparagraph (l) above, shall pay for the cost of the
Environmental Assessment. Prior to surrendering possession of the Premises,
Tenant shall also, unless otherwise directed by Landlord, remove any personal
property, equipment, fixture (except for any fixture installed by Landlord)
and/or storage device or vessel on or about the Premises and/or Project which is
contaminated by or contains Hazardous Materials as a result of the activities of
Tenant or Tenant's Agents and repair all damage to the Premises and the Project
caused by such removal.
(n) LANDLORD'S ENVIRONMENTAL INDEMNITY. Landlord shall
protect, indemnify, defend (with counsel satisfactory to Tenant) and hold
harmless Tenant and its directors, officers, partners, employees and agents,
for, from and against any and all losses, damages, claims, costs, expenses,
penalties, fines and liabilities of any kind (including, without limitation, the
cost of any investigation, remediation and cleanup, and attorneys' fees) which
are attributable to any Environmental Activity on the Premises undertaken or
committed by Landlord or Landlord's Agents (except for Environmental Activities
undertaken by or on behalf of Landlord in the exercise of Landlord's rights
under this paragraph 19) or caused by the negligence of such persons during the
Term of this Lease.
(o) REMEDIAL WORK AT LANDLORD'S EXPENSE. If (i) any
Environmental Activity undertaken by Landlord or Landlord's Agents results in
contamination of the Premises or any portion thereof, or the soil or groundwater
thereunder, or (ii) any Remedial Work is necessary or appropriate on the
Premises due to or in connection with Environmental Activities by Landlord or
Landlord's Agents, and if such contamination may have any material adverse
effect on Tenant's use and enjoyment of the Premises or impose any liability on
Tenant, then Landlord shall promptly perform all Remedial Work, at Landlord's
sole expense, as is necessary to return the affected portion of the Premises to
a condition which no longer has any material adverse effect on Tenant's use and
enjoyment thereof and no longer exposes potential liability on Tenant. All such
Remedial Work shall be performed in compliance with all applicable laws,
ordinances and regulations and in such a manner as to minimize any interference
with the use and enjoyment of the Premises. All costs and expenses of such
Remedial Work shall be paid by Landlord.
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IN WITNESS WHEREOF, the undersigned have executed this Lease as of the
date and year first above written.
LANDLORD
H-B TEMPE, L.L.C.,
an Arizona limited liability company
By: ▇▇▇▇▇▇ PROPERTIES, INC.,
a California corporation,
its Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Its: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇, VP/CFO
TENANT
ACTION PERFORMANCE COMPANIES, INC.,
an Arizona corporation
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO
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TENANT ACKNOWLEDGMENTS:
STATE OF ARIZONA )
) ss:
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this 28th day of
June, 1999, by ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the CFO of ACTION PERFORMANCE COMPANIES,
INC., an Arizona corporation, on behalf of the corporation.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
NOTARY PUBLIC
[SEAL OF AZ]
My Commission Expires: "OFFICIAL SEAL"
4/10/200 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public-Arizona
LANDLORD ACKNOWLEDGMENTS: Maricopa County
My Commission Expires 4/10/2000
STATE OF ARIZONA )y
) ss:
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this 28th day of June,
1999, by ▇▇▇▇▇▇ ▇▇▇▇▇, the Vice President / CFO of ▇▇▇▇▇▇ PROPERTIES, INC., a
California corporation and Manager of H-B TEMPE, L.L.C., an Arizona limited
liability company, on behalf of the limited liability company.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
NOTARY PUBLIC
[SEAL OF AZ]
"OFFICIAL SEAL"
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Notary Public-State of Arizona
MARICOPA COUNTY
My Comm. Expires 11-04-02
My Commission Expires:
November 4, 2002
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