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EXHIBIT 10.27
STANDARD OFFICE LEASE-NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Basic Lease Provisions ("Basic Lease Provisions")
1.1 Parties: This Lease, dated, for reference purposes only, May 14, 1998
Is made by and between Xxxxxx Properties, Inc. (herein called "Lessor") and
Simulations Plus, Inc. Doing business under the name of Simulations Plus, Inc.
(herein called "Lessee")
1.2 Premises: Suite Number(s) N/A, 2 floors, consisting of approximately 15,600
square feet, more or less as defined In paragraph 2 and as shown on Exhibit "A"
hereto (the "Premises").
1.3 Building: Commonly described as being located at 0000 Xxxx Xxxxxx J
In the City of Lancaster, County of Los Angeles, State of California as more
particularly described in Exhibit_____ hereto, and as defined in paragraph 2.
1.4 Use: Professional Office/Incidental Assembly of Electronic Components
subject to paragraph 6.
1.5 Term: 3 years commencing September 1 1998("Delivery Date") and ending August
31, as defined In paragraph 3.
1.6 Base Rent: _______ See addendum per month, payable on the first day of each
month, per paragraph 4.1
1.7 Base Rent increase: On (See addendum) the monthly Base Rent payable under
paragraph 1.6 above shall be adjusted as provided in paragraph 4.3 below.
1.8 Rent Paid Upon Execution: $13,588 see addendum for $10,000
1.9 Security Deposit: $10,000 see addendum
1.10 Lessee's Share of Operating Expenses: 100% as defined in paragraph 4.2.
2. Premises, Parking and Common Areas.
2.1 Premises: The Premises herein sometimes referred to as the "Building"
identified in paragraph 1.3 of the Basic Lease Provisions. "Building" shall
include adjacent parking structures used in connection therewith. The Premises,
the Building, the Common Areas, the land upon which the same are located, along
with all other buildings and improvements thereon or thereunder, are herein
collectively referred to as the "Office Building Project" Lessor hereby leases
to Lessee and Lessee leases from Lessor for the term, at the rental, and upon
all of the conditions set forth herein, the real property referred to in the
Basic Lease Provisions, paragraph 1.2, as the "Premises": including rights to
the Common Areas as hereinafter specified.
2.2 Deleted
2.2.1 If Leessee commits, permits or allows any of the prohibited activities
described in the Lease or the rules then in effect, then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
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have, to remove or tow away the vehicle involved and charge the cost to Lessee,
which cost shall be immediately payable upon demand by Lessor.
2.2.2 Deleted
2.3 Common Areas-Definition. The term "Common Areas" is defined as all areas and
facilities outside the Premises and within the exterior boundary line of the
Office Building Project that are provided and designated by the Lessor from time
to time for the general non-exclusive use of Lessor, Lessee and of other lessees
of the Office Building Project and their respective employees, suppliers,
shippers, customers and invitees, including but not limited to common entrances,
lobbies, corridors, stairways and stairwells, public restrooms, elevators,
escalators, parking areas to the extent not otherwise prohibited by this Lease,
loading and unloading areas, trash areas, roadways, sidewalks, walkways
parkways, ramps, driveways, landscaped areas and decorative walls.
2.4 Common Areas-Rules and Regulations. Lessee agrees to abide by and conform to
the rules and regulations attached hereto as Exhibit B with respect to the
Office Building Project and Common Areas, and to cause its employees, suppliers,
shippers, customers, and invitees to so abide and conform. Lessor or such other
person(s) as Lessor may appoint shall have the exclusive control and management
of the Common Areas and shall have the right, from time to time, to modify amend
and enforce said rules and regulations. Lessor shall not be responsible to
Lessee for the non-compliance with said rules and regulations by other lessees,
their agents, employees and invitees of the Office Building Project.
2.5 Common Areas-Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Building interior and exterior and Common Areas,
including, without limitation, changes in the location, size, shape, number, and
appearance thereof, including but not limited to the lobbies, windows,
stairways, air shafts, elevators, escalators, restrooms, driveways, entrances,
parking spaces, parking areas, loading and unloading areas, ingress, egress,
direction of traffic, decorative walls, landscaped areas and walkways; provided,
however, Lessor shall at all times provide the parking facilities required by
applicable law;
(b) To close temporarily any of the Common Areas for maintenance purposes so
long as reasonable access to the Premises remains available;
(c) Deleted
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged in making additional Improvements,
repairs or alterations to the Office Building Project, or an portion thereof;
(f) To do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and Office Building Project as Lessor may, in the
exercise of sound business judgment deem to be appropriate.
3. Term
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3.1 Term. The term and Commencement Date of this Lease shall be as specified in
paragraph 1.5 of the Basic Lease Provisions.
3.2 Delay in Possession. Notwithstanding said delivery Date if for any reason
Lessor cannot deliver possession of the Premises to Lessee on said delivery date
and subject to paragraph 3.2.2, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or the
obligations of Lessee hereunder or extend the term hereof; but in such case,
Lessee shall not be obligated to pay rent or perform any other obligation of
Lessee under the terms of this Lease, except as may be otherwise provided in
this Lease, until possession of the premises is tendered to Lessee, as
hereinafter defined; provided, however, that it Lessor shall not have delivered
possession of the Premises within thirty (30) days following said delivery Date,
as the same may be extended under the terms of a Work Letter executed by Lessor
and Lessee, Lessee may, at Lessee's option. by notice in writing to Lessor
within ten (10) days thereafter, cancel this Lease, in which event the parties
shall be discharged from all obligations hereunder; provided, however, that, as
to Lessee's obligations, Lessee first reimburses Lessor for all costs incurred
for Non-Standard Improvements and, as to Lessor's obligations, Lessor shall
return any money previously deposited by Lessee (less any offsets due Lessor for
Non-Standard Improvements); and provided further, that it such written notice
by Lessee is not received by Lessor within said ten (10) day period, Lessee's
right to cancel this Lease hereunder shall terminate and be of no further force
or effect.
3.2.1 Possession Tendered-Defined. Possession of the Premises shall be deemed
tendered to Lessee ("Tender of Possession") when (1) the improvements to be
provided by Lessor under this Lease are substantially completed, (2) the
Building utilities are ready for use in the Premises, (3) Lessee has reasonable
access to the Premises, and (4) ten (10) days shall have expired following
advance written notice to Lessee of the occurrence of the matters described in
(1), (2) and (3), above of this paragraph 3.2.1.
3.2.2 Delays Caused by Lessee. There shall be no abatement of rent, and the
sixty (60) day period following the Commencement Date before which Lessee's
right to cancel this Lease accrues under paragraph 3.2, shall be deemed extended
to the extent of any delays caused by acts or omissions of Lessee, its agents,
employees and contractors.
3.3 Early Possession. If Lessee occupies the Premises prior to said Commencement
Date, such occupancy shall be subject to all provisions of this Lease, such
occupancy shall not change the termination date.
3.4 Deleted
4. Rent
4.1 Base Rent. Subject to adjustment as hereinafter provided In paragraph 4.3,
and except as may be otherwise expressly provided in this Lease, Lessee shall
pay to Lessor the Base Rent for the Premises set forth in paragraph 1.6 of the
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Basic Lease Provisions, without offset or deduction. Lessee shall pay Lessor
upon execution hereof the advance Base Rent described in paragraph 1.8 of the
Basic Lease Provisions. Rent for any period during the term hereof which is for
less than one month shall be prorated based upon the actual number of days of
the calendar month involved. Rent shall be payable in lawful money of the United
States to Lessor at the address stated herein or to such other persons or at
such other places as Lessor may designate in writing.
4.2 Operating Expenses. Lessee shall pay to Lessor during the term hereof, In
addition to the Base Rent, Lessee's Share, as hereinafter defined, of all
Operating Expenses, as hereinafter defined, during each calendar year of the
term of this Lease, in accordance with the following provisions:
(a) "Lessee's Share" is defined, for purposes of this Lease, as the percentage
set forth In paragraph 1.10 of the Basic Lease Provisions, which percentage has
been determined by dividing the approximate square footage of the Premises by
the total approximate square footage of the rentable space contained in the
Office Building Project. It is understood and agreed that the square footage
figures set forth in the Basic Lease Provisions are approximations which Lessor
and Lessee agree are reasonable and shall not be subject to revision except in
connection with an actual change in the size of the Premises or a change in the
space available for lease in the Office Building Project.
(b) "Operating Expenses" is defined, for purposes of this Lease, to include all
costs, if any, incurred by Lessor in the exercise of its reasonable discretion.
for:
(I) The operation, repair, maintenance, and replacement, in neat, clean,
safe, good order and condition, of the Office Building Project, including but
not limited to, the following:
(aa) The Common Areas, Including their surfaces, coverings, decorative items,
and including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, stairways, parkways, driveways, landscaped areas,
striping,bumpers, irrigation systems, Common area lighting facilities, building
exteriors, fences and gates;
(bb) All heating, air conditioning, plumbing, electrical systems, life safety
equipment, telecommunication and other equipment used in common by, or for the
benefit of Lessee including elevators and escalators, tenant directories, fire
detection systems including sprinkler system maintenance and repair.
(ii) Trash disposal, janitorial and security services;
(iii) Any other service to be provided by Lessor that is elsewhere in this Lease
stated to be an "Operating Expense";
(iv) The cost of the premiums for the liability and property insurance policies
to be maintained by Lessor under paragraph 8 hereof;
(v) The amount of the real property taxes to be paid by Lessor under paragraph
10.1 hereof;
(vi) The cost of water, sewer, gas, electricity, and other publicly mandated
services to the Office Building Project;
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(vii) Labor, salaries and applicable fringe benefits and costs, materials,
supplies and tools used in maintaining and/or cleaning the Office Building
Project and accounting and a management fee attributable to the operation of the
office Building Project; no management fee shall be charged on taxes and
insurance.
(viii) Replacing and/or adding improvements mandated by any governmental agency
and any repairs or removals necessitated thereby amortized over its useful life
according to Federal income tax regulations or guidelines for depreciation
thereof (including interest on the unamortized balance as is then reasonable in
the judgment of Lessor's accountants);
(ix) Replacements of equipment or improvements that have a useful life for
depreciation purposes according to Federal income tax guidelines of five (5)
years or less, as amortized over such life.
(c) Operating Expenses shall not include the costs of replacements of equipment
or improvements that have a useful life for Federal Income tax purposes in
excess of five (5) years unless it is of the type described in paragraph
4.2(b)(viii), in which case their cost shall be included as above provided.
(d) Operating Expenses shall not Include any expenses paid by any lessee
directly to third parties, or as to which Lessor is otherwise reimbursed by any
third party, other tenant, or by insurance proceeds.
(e) Lessee's Share of Operating Expenses shall be payable by Lessee within ten
(10) days after a reasonably detailed statement of actual expenses is presented
to Lessee by Lessor At Lessor's option, however, an amount may be estimated by
Lessor from time to time of Lessee's Share of annual Operating Expenses and the
same shall be payable monthly or quarterly, as Lessor shall designate, during
each calendar year of the Lease term, on the same day as the Base Rent is due
hereunder. In the event that Lessee pays Lessor's estimate of Lessee's Share of
Operating Expenses as aforesaid, Lessor shall deliver to Lessee within sixty
(60) days after the expiration of each calendar year a reasonably detailed
statement showing Lessee's Share of the actual Operating Expenses incurred
during the preceding year. It Lessee's payments under this paragraph 4.2(e)
during said preceding calendar year exceed Lessee's Share as indicated Qn said
statement, Lessee shall be entitled to credit the amount of such overpayment
against Lessee's Share of Operating Expenses next falling due or refund of
overpayment at Lessee's option. If Lessee's payments under this paragraph during
said preceding calendar year were less than Lessee's Share as indicated on said
statement, Lessee shall pay to Lessor the amount of the deficiency within ten
(10) days after delivery by Lessor to Lessee of said statement. or refund of
overpayment at Lessee's option
4.3 Rent Increase. "See Addendum"
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the
security deposit set forth in paragraph 1.9 of the Basic Lease Provisions as
security for Lessee's faithful performance of Lessee's obligations hereunder If
Lessee fails to pay rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Lessor may use, apply or retain all
or any portion of said deposit for the payment of any rent or other charge in
default for the payment of any other sum to which Lessor may become obligated by
reason of Lessee's default, or to compensate Lessor
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for any loss or damage which Lessor may suffer thereby It Lessor so uses or
applies all or any portion of said deposit, Lessee shall within ten (10) days
after written demand therefor deposit cash with Lessor in an amount sufficient
to restore said deposit to the full amount then required of Lessee. Lessor shall
not be required to keep said security deposit separate from its general
accounts. If Lessee performs all of Lessee's obligations hereunder, said
deposit, or so much thereof as has not heretofore b een applied by Lessor, shall
be returned, without payment of interest or other increment for its use, to
Lessee (or, at Lessor's option, to the last assignee, if any, of Lessee's
interest hereunder) at the expiration of the term hereof, and no more than ten
(10) days after Lessee has vacated the Premises. No trust relationship is
created herein between Lessor and Lessee with respect to said Security Deposit.
6. Use.
6.1 Use. The Premises shall be used and occupied only for the purpose set forth
in paragraph l.4 of the Basic Lease Provisions or any other use which is
reasonably comparable to that use and for no other purpose.
6.2 Compliance with Law.
(a) Lessor warrants to Lessee that the Premises, in the state existing on the
date that the Lease term commences, but without regard to alterations or
improvements made by Lessee or the use for which Lessee will occupy the
Premises, does not violate any covenants or restrictions of record, or any
applicable building code, regulation or ordinance in effect an such Lease term
Commencement Date. In the event it is determined that this warranty has been
violated, then it shall be the obligation of the Lessor, after written notice
from Lessee, to promptly, at Lessor's sole cost and expense, rectify any such
violation.
(b) Except as provided In paragraph 6.2(a) Lessee shall, at Lessee's expense,
promptly comply with all applicable statutes, ordinances, rules, regulations,
orders, covenants and restrictions of record, and requirements of any fire
insurance underwriters or rating bureaus, now in effect or which may hereafter
come into effect, whether or not they reflect a change in policy from that now
existing, during the term or any part of the term hereof, relating in any manner
to the Premises and the occupation and use by Lessee of the Premises. Lessee
shall conduct its business in a lawful manner and shall not use or permit the
use of the Premises or the Common Areas in any manner that will tend to create
waste or a nuisance or shall tend to disturb other occupants of the Office
Building Project.
6.3 Condition of Premises.
(a) Lessor shall deliver the Premises to Lessee in a clean condition on the
Lease Delivery Date (unless Lessee is already in possession) and Lessor warrants
to Lessee that the plumbing, lighting, air conditioning, and heating system in
the Premises shall be in good operating condition. In the event that it is
determined that this warranty has been violated, then it shall be the obligation
of Lessor, after receipt of written notice from Lessee setting forth with
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specificity the nature of the violation, to promptly, at Lessor's sole cost,
rectify such violation.
(b) Except as otherwise provided in this Lease, Lessee hereby accepts the
Premises and the Office Building Project in their condition existing as of the
Lease Commencement Date or the date that Lessee takes possession of the
Premises, whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and any easements, covenants or restrictions of record, and
accepts this Lease subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Lessee acknowledges that it has satisfied itself
by its own independent investigation that the Premises are suitable for its
intended use, and that neither Lessor nor Lessor's agent or agents has made any
representation or warranty as to the present or future suitability of the
Premises, Common Areas, or Office Building Project for the conduct of Lessee's
business.
7. Maintenance, Repairs, Alterations and Common Area Services.
7.1 Lessor's Obligations. Lessor shall keep the Office Building Project,
including the Premises interior and exterior walls, roof, and common areas, and
the equipment whether used exclusively for the Premises or in common with other
premises, in good condition and repair; provided, however, Lessor shall not be
obligated to paint, repair or replace wall coverings, or to repair or replace
any improvements that are not ordinarily a part of the Building or are above
then Building standards. Except as provided in paragraph 9.5, there shall be no
abatement of rent or liability of Lessee on account of any injury or
interference with Lessee's business with respect to any improvements,
alterations or repairs made by Lessor to the Office Building Project or any part
thereof.
7.2 Lessee's Obligations.
(a) Notwithstanding Lessor's obligation to keep the Premises in good condition
and repair, Lessee shall be responsible for payment of the cost thereof to
Lessor as additional rent for that portion of the cost of any maintenance and
repair of the Premises, or any equipment (wherever located) that serves only
Lessee or the Premises, to the extent such cost is attributable to causes beyond
normal wear and tear. Lessee shall be responsible for the cost of painting,
repairing or replacing wall coverings, and to repair or replace any Premises
improvements that are not ordinarily a part of the Building or that are above
then Building standards. Lessor may, at its option, upon reasonable notice,
elect to have Lessee perform any particular such maintenance or repairs the cost
of which is otherwise Lessee's responsibility hereunder.
(b) On the last day of the term hereof, or on any sooner termination, Lessee
shall surrender the Premises to Lessor in the same condition as received,
ordinary wear and tear excepted, clean and free of debris. Any damage or
deterioration of the Premises shall not be deemed ordinary wear and tear if the
same could have been prevented by good maintenance practices by Lessee. Lessee
shall repair any damage to the Premises occasioned by the installation or
removal of Lessee's trade fixtures, alterations, furnishings and equipment.
Except as otherwise stated in this Lease, Lessee shall leave the air lines,
power panels, electrical distribution systems, lighting fixtures, air
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conditioning, window coverings, wall coverings, carpets, wall panelling,
ceilings and plumbing on the Premises and in good operating condition.
7.3 Alterations and Additions.
(a) Lessee shall not, without Lessor's prior written consent make any
alterations, improvements, additions, Utility Installations or repairs in, on or
about the Premises, or the Office Building Project. As used in this paragraph
7.3 the term "Utility Installation" shall mean carpeting, window and wall
coverings, power panels, electrical distribution systems, lighting fixtures, air
conditioning, plumbing, and telephone and telecommunication wiring and
equipment. At the expiration of the term, Lessor may require the removal of any
or all of said alterations, improvements, additions or Utility Installations,
and the restoration of the Premises and the Office Building Project to their
prior condition, at Lessee's expense. Should Lessor permit Lessee to make its
own alterations, improvements, additions or Utility Installations, Lessee shall
use only such contractor as has been expressly approved by Lessor, and Lessor
may require Lessee to provide Lessor, at Lessee's sole cost and expense, a lien
and completion bond in an amount equal to one and one-half times the estimated
cost of such improvements, to insure Lessor against any liability for mechanic's
and materialmen's liens and to insure completion of the work. Should Lessee make
any alterations, improvements, additions or Utility Installations without the
prior approval of Lessor, or use a contractor not expressly approved by Lessor,
Lessor may, at any time during the term of this Lease, require that Lessee
remove any part or all of the same.
(b) Any alterations, improvements, additions or Utility Installations in or
about the Premises or the Office Building Project that Lessee shall desire to
make shall be presented to Lessor in written form, with proposed detailed plans.
If Lessor shall give its consent to Lessee's making such alteration,
improvement, addition or Utility Installation, the consent shall be deemed
conditioned upon Lessee acquiring a permit to do so from the applicable
governmental agencies, furnishing a copy thereof to Lessor prior to the
commencement of the work, and compliance by Lessee with all conditions of said
permit in a prompt and expeditious manner.
(c) Lessee shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished to or for Lessee at or for use in the Premises,
which claims are or may be secured by any mechanic's or materialmen's lien
against the Premises, the Building or the Office Building Project, or any
interest therein.
(d) Lessee shall give Lessor not less than ten (10) days' notice prior to the
commencement of any work in the Premises by Lessee, and Lessor shall have the
right to post notices of non-responsibility in or on the Premises or the
Building as provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend itself and Lessor against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon be fore the enforcement
thereof against the Lessor or the Premises, the Building or the, Office Building
Project, upon the condition that if Lessor shall require, Lessee shall furnish
to Lessor a surety bond satisfactory to Lessor in an amount equal to such
contested lien claim or demand indemnifying Lessor against liability for the
same and holding the Premises, the Building and the Office Building Project free
from the effect of such lien or claim. In addition, Lessor may require Lessee
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to pay Lessor's reasonable attorneys fees and costs in participating in such
action if Lessor shall decide it is to Lessor's best interest so to do.
(e) All alterations, improvements, additions and Utility Installations (whether
or not such Utility Installations constitute trade fixtures of Lessee), which
may be made to the Premises by Lessee, including but not limited to, floor
coverings, panellings, doors, drapes, built-ins, moldings, sound attenuation,
and lighting and telephone or communication conduit, wiring and outlets, shall
be made and done in a good and workmanlike manner and of good and sufficient
quality and materials and shall be the property of Lessor and remain upon and
be surrendered with the Premises at the expiration of the Lease term. unless
Lessor requires their removal pursuant to paragraph 7.3(a). Provided Lessee is
not in default, notwithstanding the provisions of this paragraph 7.3(e),
Lessee's personal. property and equipment, other than that which is affixed to
the Premises so that it cannot be removed without material damage to the
Premises or the Building, and other than Utility Installations, shall remain the
property of Lessee and may be removed by Lessee subject to the provisions of
paragraph 7.2.
(f) Lessee shall provide Lessor with as-built plans and specifications for any
alterations, improvements, additions or Utility Installations.
7.4 Utility Additions. Lessor reserves the right to Install new or additional
utility facilities throughout the Office Building Project for the benefit of
Lessor or Lessee, or any other lessee of the Office Building Project, including,
but not by way of limitation, such utilities as plumbing, electrical systems,
security systems, communication systems. and fire protection and detection
systems, so long as such installations do not unreasonably interfere with
Lessee's use of the Premises.
8. Insurance; Indemnity.
8.1 Liability Insurance-Lessee. Lessee shall, at Lessee's expense, obtain and
keep in force during the term of this Lease a policy of Comprehensive General
Liability insurance utilizing an Insurance Services Office standard form with
Broad Form General Liability Endorsement (GLO404), or equivalent, in an amount
of not less than $1,000,000 per occurrence of bodily injury and property damage
combined or in a greater amount a reasonably determined by Lessor and shall
insure Lessee with Lessor as an additional insured against liability arising
out of the use, occupancy or maintenance of the Premises. Compliance with the
above requirement shall not, however, limit the liability of Lessee hereunder.
8.2 Liability Insurance-Lessor. Lessor shall obtain and keep in force during the
term of this Lease a policy of Combined Single Limit Bodily Injury and Broad
Form Property Damage Insurance, plus coverage against such other risks Lessor
deems advisable from time to time, insuring Lessor, but not Lessee, against
liability arising out of the ownership, use, occupancy or maintenance of the
Office Building Project in an amount not less than $5,000,000.00 per occurrence.
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8.3 Property insurance-Lessee. Lessee shall, at Lessee's expense, obtain and
keep in force during the term of this Lease for the benefit of Lessee,
replacement cost fire and extended coverage insurance, with vandalism and
malicious mischief, sprinkler leakage and earthquake sprinkler leakage
endorsements, in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, of all of Lessee's
personal property, fixtures, equipment and tenant improvements .
8.4 Property Insurance-Lessor. Lessor shall obtain and keep in force during the
term of this Lease a policy or policies of insurance covering loss or damage to
the Office Building Project improvements, but not Lessee's personal property,
fixtures, equipment or tenant improvements, in the amount of the full
replacement cost thereof, as the same may exist from time to time, utilizing
Insurance Services Office standard form, or equivalent, providing protection
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, plate glass, and such other perils as
Lessor deems advisable or may be required by a lender having a lien on the
Office Building Project. In addition, Lessor shall obtain and keep in force,
during the term of this Lease, a policy of rental value insurance covering a
period of one year, with loss payable to Lessor, which insurance shall also
cover all Operating Expenses for said period. Lessee will not be named in any
such policies carried by Lessor and shall have no right to any proceeds
therefrom. The policies required by these paragraphs 8.2 and 8.4 shall contain
such deductibles as Lessor or the aforesaid lender may determine. In the event
that the Premises shall suffer an insured loss as defined in paragraph 9.1(f)
hereof, the deductible amounts under the applicable insurance policies shall be
deemed an Operating Expense. Lessee shall not do or permit to be done anything
which shall invalidate the insurance policies carried by Lessor. Lessee shall
pay the entirety of any increase in the property insurance premium for the
Building over what it was Immediately prior to the commencement of the term of
this Lease if the increase is specified by Lessor's insurance carrier as being
caused by the nature of Lessee's occupancy or any act or omission of Lessee.
8.5 Insurance Policies. Lessee shall deliver to Lessor copies of liability
insurance policies required under paragraph 8.1 or certificates evidencing the
existence and amounts of such Insurance within seven (7) days after the
Commencement Date of this Lease. No such policy shall be cancellable or subject
to reduction of coverage or other modification except after thirty (30) days
prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to
the expiration of such policies, furnish Lessor with renewals thereof.
8.6 Waiver of Subrogation. Lessee and Lessor each hereby release and relieve the
other and waive their entire right of recovery against the other, for direct or
consequential loss or damage arising out of or incident to the perils covered by
property insurance carried by such party, whether due to the negligence of
Lessor or Lessee or their agents, employees, contractors and/or invitees. If
necessary all property insurance policies required under this Lease shall be
endorsed to so provide.
8.7 Indemnity. Lessee shall indemnity and hold harmless Lessor and its agents,
Lessor's master or ground lessor partners and lenders, from and against any and
all claims for damage to the person or property of anyone or any entity arising
from Lessee's use of the Office Building Project, or from the conduct of
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Lessee's business or from any activity, work or things done, permitted or
suffered by Lessee in or about the Premises or else-where and shall further
indemnify and hold harmless Lessor from and against any and all claims, costs
and expenses arising from any breach or default in the performance of any
obligation on Lessee's part to be performed under the terms of this Lease, or
arising from any act or omission of Lessee, or any of Lessee's agents,
contractors, employees or invitees and from and against all costs, attorney's
fees, expenses and liabilities incurred by Lessor as the result of any such use,
conduct, activity, work, things done, permitted or suffered, breach, default or
negligence, and in dealing reasonably therewith, including but not limited to
the defense or pursuit of any claim or any action or proceeding involved
therein; and in case any action or proceeding be brought against Lessor by
reason of any such matter. Lessee upon notice from Lessor shall defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to property of Lessee
or injury to persons, in, upon or about the Office Building Project arising from
any cause and Lessee hereby waives all claims in respect thereof against Lessor.
8.8 Exemption of Lessor from Liability. Lessee hereby agrees that Lessor shall
not be liable for injury to Lessee's business or any loss of income therefrom or
for loss of or damage to the goods, wares, merchandise or other property of
Lessee, Lessee's employees, invitees, customers, in or about the Premises or the
Office Building Project, nor shall Lessor be liable for injury to the person of
Lessee, Lessee's employees, agents or contractors, whether such damage or injury
is caused by or results from theft, 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,
whether said damage or injury results from conditions arising upon the Premises
or upon other portions of the Office Building Project, or from other sources or
places, or from new construction or the repair, alteration or improvement of any
part of the Office Building Project, or of the equipment, fixtures or
appurtenances applicable thereto, and regardless of whether the cause of such
damage or injury or the means of repairing the same is inaccessible, Lessor
shall not be liable for any damages arising from any act or neglect of any other
lessee, occupant or user of the Office Building Project, nor from the failure of
Lessor to enforce the provisions of any other lease of any other lessee of the
Office Building Project.
8.9 No Representation of Adequate Coverage. Lessor makes no representation that
the limits or forms of coverage of insurance specified in this paragraph 8 are
adequate to cover Lessee's property or obligations under this Lease.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Damage" shall mean if the Premises are damaged or destroyed to any
extent.
(b) "Premises Building Partial Damage" shall mean if the Building of which the
Premises are a part is damaged or destroyed to the extent that the cost to
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repair is less than fifty percent (50%) of the then Replacement Cost of the
Building.
(c) "Premises Building Total Destruction" shall mean if the Building of which
the Premises are a part is damaged or destroyed to the extent that the cost to
repair is fifty percent (50%) or more of the then Replacement Cost of the
Building.
(d) "Office Building Project Buildings" shall mean all of the buildings on the
Office Building Project site.
(e) "Office Building Project Buildings Total Destruction" shall mean it the
Office Building Project Buildings are damaged or destroyed to the extent that
the cost of repair is fifty percent (50%) or more of the then Replacement Cost
of the Office Building Project Buildings.
(f) "Insured Loss" shall mean damage or destruction which was caused by an event
required to be covered by the insurance described in paragraph 8. The fact that
an Insured Loss has a deductible amount shall not make the loss an uninsured
loss.
(g) "Replacement Cost" shall mean the amount of money necessary to be spent in
order to repair or rebuild the damaged area to the condition that existed
immediately prior to the damage occurring, excluding all improvements made by
lessees, other than those installed by Lessor at Lessee's expense.
9.2 Premises Damage; Premises Building Partial Damage.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and 9.5, if at any
time during the term of this Lease there is damage which is an Insured Loss and
which falls into the classification of either Premises Damage or Premises
Building Partial Damage, then Lessor shall, as soon as reasonably possible and
to the extent the required materials and labor are readily available through
usual commercial channels, at Lessor's expense, repair such damage (but not
Lessee's fixtures, equipment or tenant improvements originally paid for by
Lessee) to its condition existing at the time of the damage, and this Lease
shall continue in full force and effect.
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and 9.5, if at
any time during the term of this Lease there is damage which is not an Insured
Loss and which falls within the classification of Premises Damage or Premises
Building Partial Damage, unless caused by a negligent or willful act of Lessee
(in which event Lessee shall make the repairs at Lessee's expense), which damage
prevents Lessee from making any substantial use of the Premises, Lessor may at
Lessor's option either (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) give written notice to Lessee within thirty (30) days after the
date of the occurrence of such damage of Lessor's intention to cancel and
terminate this Lease as of the date of the occurrence of such damage, in which
event this Lease shall terminate as of the date of the occurrence of such
damage.
9.3 Premises Building Total Destruction; Office Building Project Total
Destruction. Subject to the provisions of paragraphs 9.4 and 9.5, it at any
13
time during the term of this Lease there is damage, whether or not it is an
Insured Loss, which falls into the classifications of either (i) Premises.
Building Total Destruction, or (ii) Office Building Project Total Destruction,
then Lessor may at Lessor's option either (i) repair such damage or destruction
as soon as reasonably possible at Lessor's expense (to the extent the required
materials are readily available through usual commercial channels) to its
condition existing at the time of the damage, but not Lessee's fixtures.
equipment or tenant improvements, and this Lease shall continue in full force
and effect, or (ii) give written notice to Lessee within thirty (30) days after
the date of occurrence of such damage of Lessor's intention to cancel and
terminate this Lease, in which case this Lease shall terminate as of the date of
the occurrence of such damage.
9.4 Damage Near End of Term.
(a) Subject to paragraph 9.4(b), if at any time during the last twelve (12)
months of the term of this Lease there is substantial damage to the Premises,
Lessor may at Lessor's option cancel and terminate this Lease as of the date of
occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within 30 days after the date of occurrence of such damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an option to
extend or renew this Lease, and the time within which said option may be
exercised has not yet expired, Lessee shall exercise such option, if it is to be
exercised at all, no later than twenty (20) days after the occurrence of an
Insured Loss falling within the classification of Premises Damage during the
last twelve (12) months of the term of this Lease. If Lessee duly exercises
such option during said twenty (20) day period, Lessor shall, at Lessor's
expense, repair such damage, but not Lessee's fixtures, equipment or tenant
improvements, as soon as reasonably possible and this Lease shall continue in
full force and effect. If Lessee fails to exercise such option during said
twenty (20) day period, then Lessor may at Lessor's option terminate and cancel
this Lease as of the expiration of said twenty (20) day period by giving written
notice to Lessee of Lessor's election to do so within ten (10) days after the
expiration of said twenty (20) day period, notwithstanding any term or
provision In the grant of option to the contrary.
9.5 Abatement of Rent; Lessee's Remedies.
(a) In the event Lessor repairs or restores the Building or Premises pursuant to
the provisions of this paragraph 9, and any part of the Premises are not usable
(including loss of use due to loss of access or essential services), the rent
payable hereunder (including Lessee's Share of Operating Expenses) for the
period during which such damage, repair or restoration continues shall be
abated, provided (1) the damage was not the result of the negligence of Lessee,
and (2) such abatement shall only be to the extent the operation and
profitability of Lessee's business as operated from the Premises is adversely
affected. Except for said abatement of rent, if any, Lessee shall have no claim
against Lessor for any damage suffered by reason of any such damage,
destruction, repair or restoration.
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(b) If Lessor shall be obligated to repair or restore the Premises or the
Building under the provisions of this Paragraph 9 and shall not commence such
repair or restoration within ninety (90) days after such occurrence, or if
Lessor shall not complete the restoration and repair within six (6) months after
such occurrence, Lessee may at Lessee's option cancel and terminate this Lease
by giving Lessor written notice of Lessee's election to do so at any time prior
to the commencement or completion, respectively, of such repair or
restoration. In such event this Lease shall terminate as of the date of such
notice.
(c) Lessee agrees to cooperate with Lessor In connection with any such
restoration and repair, Including but not limited to the approval and/or
execution of plans and specifications required.
9.6 Termination-Advance Payments. Upon termination of this Lease pursuant to
this paragraph 9, an equitable adjustment shall be made concerning advance rent
and any advance payments made by Lessee to Lessor. Lessor shall, within ten (10)
days in addition, return to Lessee so much of Lessee's security deposit as has
not theretofore been applied by Lessor.
9.7 Waiver. Lessor and Lessee waive the provisions of any statute which relate
to termination of leases when leased property Is destroyed and agree that such
event shall be governed by the terms of this Lease.
10. Real Property Taxes.
10.1 Payment of Taxes. Lessor shall pay the real property tax, as defined In
paragraph 10.3, applicable to the Office Building Project subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with the
provisions of paragraph 4.2, except as otherwise provided In paragraph 10.2.
10.2 Additional Improvements. Lessee shall not be responsible for paying any
increase in real property tax specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Office
Building Project by other lessees or by Lessor for the exclusive enjoyment of
any other lessee. Lessee shall, however, pay to Lessor at the time that
Operating Expenses are payable under paragraph 4.2(c) the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Lessee or at Lessee's request.
10.3 Definition of "Real Property Tax". As used herein, the term "real property
tax" shall include any form of real estate tax or assessment, general, special,
ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Office Building Project or any portion thereof
by any authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school. agricultural, sanitary,
fire, street, drainage or other improvement district thereof, as against any
legal or equitable interest of Lessor in the Office Building Project or in any
portion thereof, as against Lessor's right to rent or other income therefrom,
and as against Lessor's business of leasing the Office Building Project. The
term "real property tax" shall also include any tax, fee, levy, assessment or
charge (i) in substitution of, partially or totally, any tax, fee, levy,
15
assessment or charge hereinabove included within the definition of "real
property tax:' or (ii) the nature of which was hereinbefore included within the
definition of "real property tax:' or (iii) which is imposed for a service or
right not charged prior to June 1, 1978, or, if previously charged, has been
increased since June 1, 1978, or (iv) which is imposed as a result of a change
in ownership, as defined by applicable local statutes for property tax purposes,
of the Office Building Project or which is added to a tax or charge hereinbefore
included within the definition of real property tax by reason of such change of
ownership, or (v) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.
10.4 Joint Assessment. If the improvements or property, the taxes for which are
to be paid separately by Lessee under paragraph 10.2 or 10.5 are not separately
assessed, Lessee's portion of that tax shall be equitably determined by Lessor
from the respective valuations assigned in the assessor's work sheets or such
other information (which may include the cost of construction) as may be
reasonably available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.
10.5 Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes assessed against and levied
upon trade fixtures, furnishings, equipment and all other personal property of
Lessee contained In the Premises or elsewhere.
(b) If any of Lessee's said personal property shall be assessed with Lessor's
real property, Lessee shall pay to Lessor the taxes attributable to Lessee
within ten (10) days after receipt of a written statement setting forth the
taxes applicable to Lessee's property.
11. Utilities.
11.1 Deleted
11.2 Services Exclusive to Lessee. Lessee shall pay for all water, gas, heat,
light, power, telephone and other utilities and services specially exclusively
supplied and/or metered exclusively to the Premises or to Lessee, together with
any taxes thereon. If any such services are not separately metered to the
Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises in the Building.
11.3 Deleted
11.4 Excess Usage by Losses. Lessee shall not make connection to the utilities
except by or through existing outlets and shall not install or use machinery or
equipment in or about the Premises that uses excess water, lighting or power, or
suffer or permit any act that causes extra burden upon the utilities or
services, including but not limited to security services, over standard office
usage for the Office Building Project. Lessor shall require Lessee to reimburse
Lessor for any excess expenses or costs that may arise out of a breach of this
subparagraph by Lessee. Lessor may, in its sole discretion, install at Lessee's
16
expense supplemental equipment and/or separate metering applicable to Lessee's
excess usage or loading.
11.5 Interruptions. There shall be no abatement of rent and Lessor shall not be
liable in any respect whatsoever for the inadequacy, stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyond Lessor's reasonable control or
in cooperation with governmental request or directions.
12. Assignment and Subletting.
12.1 Lessor's Consent Required. Lessee shall not voluntarily or by operation of
law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or
any part of Lessee's interest in the Lease or in the Premises, without Lessor's
prior written consent, which Lessor shall not unreasonably withhold. Lessor
shall respond to Lessee's request for consent hereunder in a timely manner and
any attempted assignment, transfer, mortgage, encumbrance or subletting without
such consent shall be void, and shall constitute a material default and breach
of this Lease without the need for notice to Lessee under paragraph 13.1.
"Transfer" within the meaning of this paragraph 12 shall include the transfer or
transfers aggregating: (a) if Lessee, is a corporation, more than twenty-five
percent (25%) of the voting stock of such corporation, or (b) If Lessee 13 a
partnership, more then twenty-five percent (25%) of the profit and loss
participation In such partnership.
12.2 Losses Affiliate. Notwithstanding the provisions of paragraph 12.1 hereof,
Lessee may assign or sublet the Premises, or any portion thereof, without
Lessor's consent, to any corporation which controls, is controlled by or is
under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, or to any person or entity which acquires
all the assets of Lessee as a going concern of the business that is being
conducted on the Premises, all of which are referred to as "Lessee Affiliate";
provided that before such assignment shall be effective, (a) said assignee shall
assume, in full, the obligations of Lessee under this Lease and (b) Lessor shall
be given written notice of such assignment and assumption. Any such assignment
shall not, in any way, affect or limit the liability of Lessee 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 Lessee, the
consent of whom shall not be necessary.
12.3 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, no assignment or subletting shall release
Lessee of Lessee's obligations hereunder or alter the primary liability of
Lessee to pay the rent and other sums due Lessor hereunder Including Lessee's
Share of Operating Expenses, and to perform all other obligations to be
performed by Lessee hereunder.
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(b) Lessor may accept rent from any person other than Lessee pending approval or
disapproval of such assignment.
(c) Neither a delay in the approval or disapproval of such assignment or
subletting, nor the acceptance of rent, shall constitute a waiver or estoppel of
Lessor's right to exercise its remedies for the breach of any of the terms or
conditions of this paragraph 12 or this Lease.
(d) If Lessee's obligations under this Lease have been guaranteed by third
parties, then an assignment or sublease, and Lessor's consent thereto, shall not
be effective unless said guarantors give their written consent to such sublease
and the terms thereof.
(e) The consent by Lessor to any assignment or subletting shall not constitute a
consent to any subsequent assignment or subletting by Lessee or to any
subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent and such
action shall not relieve such persons from liability under this Lease or said
sublease; provided, however, such persons shall not be responsible to the extent
any such amendment or modification enlarges or increases the obligations of the
Lessee or subleases under this Lease or such sublease.
(f) In the event of any default under this Lease, Lessor may proceed directly
against Lessee, any guarantors or any one else responsible for the performance
of this Lease, including the subleases, without first exhausting Lessor's
remedies against any other person or entity responsible therefor to Lessor, or
any security held by Lessor or Lessee.
(g) Lessor's written consent to any assignment or subletting of the Premises by
Lessee shall not constitute an acknowledgement that no default then exists under
this Lease of the obligations to be performed by Lessee nor shall such consent
be deemed a waiver of any then existing default, except as may be otherwise
stated by Lessor at the time.
(h) The discovery of the fact that any financial statement relied upon by Lessor
in giving Its consent to an assignment or subletting was materially false shall,
at Lessor's election, render Lessor's said consent null and void.
12.4 Additional Terms and Conditions Applicable to Subletting. Regardless of
Lessor's consent, the following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly Incorporated
therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in
all rentals and Income arising from any sublease heretofore or hereafter made by
Lessee, and Lessor may collect such rent and income and apply same toward
Lessee's obligations under this Lease; provided, however, that until a default
shall occur in the performance of Lessee's obligations under this Lease, Lessee
may receive, collect and enjoy the rents accruing under such sublease. Lessor
shall not, by reason of this or any other assignment of such sublease to Lessor
nor by reason of the collection of the rents from a subleases, be deemed liable
to the subleases for any failure of Lessee to perform and comply with any of
Lessee's obligations to such subleases under such sublease. Lessee hereby
18
irrevocably authorizes and directs any such subleases, upon receipt of a written
notice from Lessor stating that a default exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor the rents due and to become due
under the sublease. Lessee agrees that such subleases shall have the right to
rely upon any such statement and request from Lessor, and that such subleases
shall pay such rents to Lessor without any obligation or right to inquire as to
whether such default exists and notwithstanding any notice from or claim from
Lessee to the contrary. Lessee shall have no right or claim against said
subleases or Lessor for any such rents so paid by said subleases to Lessor.
(b) No sublease entered Into by Lessee shall be effective unless and until it
has been approved in writing by Lessor. In entering into any sublease, Lessee
shall use only such form of sublease as is satisfactory to Lessor, and once
approved by Lessor, such sublease shall not be changed or modified without
Lessor's prior written consent. Any subleases shall, by reason of entering into
a sublease under this Lease, be deemed, for the benefit of Lessor, to have
assumed and agreed to conform and comply with each and every obligation herein
to be performed by Lessee other than such obligations as are contrary to or
inconsistent with provisions contained in a sublease to which Lessor has
expressly consented in writing.
(c) In the event Lessee shall default in the performance of its obligations
under this Lease, Lessor, at Its option and without any obligation to do so, may
require any subleases to attorn to Lessor, in which event Lessor shall undertake
the obligations of Lessee under such sublease from the time of the exercise of
said option to the termination of such sublease; provided, however, Lessor shall
not be liable for any prepaid rents or security deposit paid by such subleases
to Lessee or for any other prior defaults of Lessee under such sublease.
(d) No subleases shall further assign or sublet all or any part of the Premises
without Lessor's prior written consent.
(e) With respect to any subletting to which Lessor has consented, Lessor agrees
to deliver a copy of any notice of default by Lessee to the subleases. Such
subleases shall have the right to cure a default of Lessee within three (3) days
after service of said notice of default upon such subleases, and the subleases
shall have a right of reimbursement and offset from and against Lessee for any
such defaults cured by the subleases.
12.5 Lessor's Expenses. In the event Lessee shall assign or sublet the Premises
or request the consent of Lessor to any assignment or subletting or If Lessee
shall request the consent of Lessor for any act Lessee proposes to do then
Lessee shall pay Lessor's reasonable costs and expenses incurred in connection
therewith, including attorneys: architects: engineers' or other consultants'
fees.
12.6 Conditions to Consent. Lessor reserves the right to condition any approval
to assign or sublet upon Lessor's determination that (a) the proposed assignee
or subleases shall conduct a business on the Premises of a quality substantially
equal to that of Lessee and consistent with the general character of the other
occupants of the Office Building Project and not in violation of any exclusives
or rights then held by other tenants, and (b) the proposed assignee or subleases
be at least as financially responsible as Lessee was expected to be at the time
of the execution of this Lease or of such assignment or subletting, whichever is
greater.
19
13. Default; Remedies.
13.1 Default. The occurrence of any one or more of the following events shall
constitute a material default of this Lease by Lessee:
(a) The vacation or abandonment of the Premises by Lessee. Vacation of the
Premises shall include the failure to occupy the Premises for a continuous
period of sixty (60) days or more, whether or not the rent is paid.
(b) The breach by Lessee of any of the covenants, conditions or provisions of
paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment or subletting),
13.1(a) (vacation or abandonment), 13.1(e) (insolvency), 13.1(f) (false
statement), 16(a) (estoppel certificate), 30(b) (subordination), 13.3
(auctions), or 41.1 (easements), all of which are hereby deemed to be material,
non-curable defaults without the necessity of any notice by Lessor to Lessee
thereof.
(c) The failure by Lessee to make any payment of rent or any other payment
required to be made by Lessee hereunder, as and when due, where such failure
shall continue for a period of three (3) days after written notice thereof from
Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay
Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to
Pay Rent or Quit shall also constitute the notice required b this subparagraph.
(d) The failure by Lessee to observe or perform any of the covenants, conditions
or provisions of this Lease to be observed or performed by Lessee other than
those referenced in subparagraphs (b) and (c), above, where such failure shall
continue for a period of thirty (30) days after written notice thereof from
Lessor to Lessee; provided, however, that it the nature of Lessee's
noncompliance is such that more than thirty (30) days are reasonably required
for its cure, then Lessee shall not be deemed to be in default it Lessee
commenced such cure within said thirty (30) day period and thereafter diligently
pursues such cure to completion. To the extent permitted by law, such thirty
(30) day notice shall constitute the sole and exclusive notice required to be
given to Lessee under applicable Unlawful Detainer statutes.
(e) (i) The making by Lessee of any general arrangement or general assignment
for the benefit of creditors; (ii) Lessee becoming a "debtor" as defined in 11
U.S.C. Section 101 or any successor statute thereto (unless, in the case of a
petition filed against Lessee, the same is dismissed within sixty (60) days;
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored restored Lessee within
thirty (30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of this paragraph 13.1(e) is contrary to
any applicable law, such provision shall be of no force or effect.
20
(f) The discovery by Lessor that any financial statement given to Lessor by
Lessee, or its successor in interest or by any quarantor of Lessee's obligation
hereunder, was materially false.
13.2 Remedies. In the event of any material default or breach of this Lease by
Lessee, Lessor may at any time thereafter, with or without notice or demand and
without limiting Lessor in the exercise of any right or remedy which Lessor may
have by reason of such default:
(a) Terminate Lessee's right to possession of the Premises by any lawful means,
in which case this Lease and the term hereof shall terminate and Lessee shall
immediately surrender possession of the Premises to Lessor. In such event Lessor
shall be entitled to recover from Lessee all damages incurred by Lessor by
reason of Lessee's default including, but not limited to, the cost of recovering
possession of the Premises; expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and any
real estate commission actually paid; the worth at the time of award by the
court having jurisdiction thereof of the amount by which the unpaid rent for the
balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably avoided;
that portion of the leasing commission paid by Lessor pursuant to paragraph 15
applicable to the unexpired term of this Lease.
(b) Maintain Lessee's right to possession in which case this Lease shall
continue in effect whether or not Lessee shall have vacated or abandoned the
Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor under the laws
or judicial decisions of the state wherein the Premises are located. Unpaid
installments of rent and other unpaid monetary obligations of Lessee under the
terms of this Lease shall bear Interest from the date due at the maximum rate
then allowable by law.
13.3 Default by Lessor. Lessor shall not be in default unless Lessor fails to
perform obligations required of Lessor within a reasonable time, but in no event
later than thirty (30) days after written notice by Lessee to Lessor specifying
wherein Lessor has failed to perform such obligation; provided, however, that if
the nature of Lessor's obligation is such that more than thirty (30) days are
required for performance then Lessor shall not be in default if Lessor commences
performance within such 30-day period and thereafter diligently pursues the
same to completion.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to
Lessor of Base Rent, Lessee's Share of Operating Expenses or other sums due
hereunder will cause Lessor to incur costs not contemplated by this Lease. the
exact amount of which will be extremely difficult to ascertain, Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Lessor by the terms of any mortgage or trust
deed covering the Office Building Project. Accordingly, if any installment of
Base Rent, Operating Expenses, or any other sum due from Lessee shall not be
received by Lessor or Lessor's designee within ten (10) days after such amount
21
shall be due, then, without any requirement for notice to Lessee, Lessee shall
pay to Lessor a late charge equal to 5% of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable estimate of
the costs Lessor will incur by reason of late payment by Lessee. Acceptance of
such late charge by Lessor shall in no event constitute a waiver of Lessee's
default with respect to such overdue amount, nor prevent Lessor from exercising
any of the other rights and remedies granted hereunder.
14. Condemnation. If the Premises or any portion thereof or the Office Building
Project are 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; provided that if so
much of the Premises or the Office Building Project are taken by such
condemnation as would substantially and a diversely affect the operation and
profitability of Lessee's business conducted from the Premises, Lessee shall
have the option, to be exercised only in writing within thirty (30) days after
Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice, within thirty (30) days after the condemning authority shall
have taken possession), to terminate this Lease as of the date the condemning
authority takes such possession. Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the rent and Lessee's
Share of Operating Expenses shall be reduced in the proportion that the floor
area of the Premises taken bears to the total floor area of the Premises. Common
Areas taken shall be excluded from the Common Areas usable by Lessee and no
reduction of rent shall occur with respect thereto or by reason thereof. Lessor
shall have the option in its sole discretion to terminate this Lease as of the
taking of possession by the condemning authority, by giving written notice to
Lessee of such election within thirty (30) days after receipt of notice of a
taking by condemnation of any part of the Premises or the Office Building
Project. Any award for the taking of all or any part of the Premises or the
Office Building Project under the power of eminent domain or any payment made
under threat of the exercise of such power shall be the property of Lessor,
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 Lessee shall be entitled to any separate award for loss of or
damage to Lessee's trade fixtures, removable personal property and unamortized
tenant improvements that have been paid for by Lessee. For that purpose the cost
of such improvements shall be amortized over the original term of this Lease
excluding any options. In the event that this Lease is not terminated by reason
of such condemnation, Lessor shall to the extent of severance damages received
by Lessor in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall pay any amount in
excess of such severance damages required to complete such repair.
15. Brokers Fee.
(a) The brokers involved in this transaction are Xxxxxx Properties, Inc. as
"listing broker" and Century 21 "cooperating broker," licensed real estate
broker(s). A "cooperating broker" is defined as any broker other than the
listing broker entitled to a share of any commission arising under this Lease.
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Upon execution of this Lease by both parties, Lessor shall pay to said brokers
jointly. or In such separate shares as they may mutually designate in writing, a
fee as set forth in a separate agreement between Lessor and said broker(s), or
in the event there Is no separate agreement between Lessor and said broker(s),
the sum of $ per separate agreement for brokerage services rendered by said
brokers to Lessor in this transaction.
(b) Lessor further agrees that (i) if Lessee exercises any Option, as defined in
paragraph 39.1 of this Lease, which Is granted to Lessee under this Lease, or
any subsequently granted option which is substantially similar to an Option
granted to Lessee under this Lease, or (ii) If Lessee acquires any rights to the
Premises or other premises described in this Lease which are substantially
similar to what Lessee would have acquired had an Option herein granted to
Lessee been exercised, or (iii) if Lessee remains in possession of the Premises
after the expiration of the term of this Lease after having failed to exercise
an Option, or (iv) if said broker(s) are the procuring cause of any other lease
or sale entered into between the parties pertaining to the Premises and/or any
adjacent property in which Lessor has an interest, or (v) if the Base Rent is
increased, whether by agreement or operation of an escalation clause contained
herein, then as to any of said transactions or rent increases, Lessor shall pay
said broker(s) a fee in accordance with the schedule of said broker(s) in
effect at the time of execution of this Lease. Said fee shall be paid at the
time such increased rental is determined.
(c) Lessor agrees to pay said fee not only on behalf of Lessor but also on
behalf of any person, corporation, association. or other entity having an
ownership interest in said real property or any part thereof, when such fee is
due hereunder. Any transferee of Lessor's Interest In this Lease, whether such
transfer Is by agreement or by operation of law, shall be deemed to have assumed
Lessor's obligation under this paragraph 15. Each listing and cooperating broker
shall be a third party beneficiary of the provisions of this paragraph 15 to the
extent of their interest in any commission arising under this Lease and may
enforce that right directly against Lessor; provided, however, that all brokers
having a right to any part of such total commission shall be a necessary party
to any suit with respect thereto.
(d) Lessee and Lessor each represent and warrant to the other that neither has
had any dealings with any person, firm, broker or finder (other than the
person(s), If any, whose names are set forth In paragraph 15(a), above) in
connection with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby. and no other broker or other person, firm or
entity Is entitled to any commission or finder's fee In connection with said
transaction and Lessee and Lessor do each hereby indemnify and hold the other
harmless from and against any costs, expenses, attorneys' fees or liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
party.
16. Estoppel Certificate.
(a) Each party (as "responding party") shall at any time upon not less than ten
(10) days' prior written notice from the other party ("requesting party")
execute, acknowledge and deliver to the requesting party a statement in writing
(i) certifying that this Lease is unmodified and In full force and effect (or,
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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 (II) acknowledging that
there are not, to the responding party's knowledge, any uncured defaults on the
part of the requesting party, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Office Building Project or of the business of Lessee.
(b) At the requesting party's option, the failure to deliver such statement
within such time shall be a material default of this Lease by the party who is
to respond, without any further notice to such party, or it shall be conclusive
upon such party that (i) this Lease is in full force and effect, without
modification except as may be represented by the requesting party, (ii) there
are no uncured defaults in the requesting party's performance, and (iii) if
Lessor is the requesting party, not more than one month's rent has been paid in
advance.
(c) If Lessor desires to finance, refinance, or sell the Office Building
Project, or any part thereof, Lessee hereby agrees to deliver to any lender or
purchaser designated by Lessor such financial statements of Lessee as may be
reasonably required by such lender or purchaser. Such statements shall include
the past three (3) years' financial statements of Lessee. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes he rein set forth.
17. Lessor's Liability. The term "Lessor" as used herein shall mean only the
owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Office Building Project, and except as
expressly provided in paragraph 15, in the event of any transfer of such title
or interest, Lessor herein named (and in case of any subsequent transfers then
the grantor) shall be relieved from and after the xxxx of such transfer of all
liability as respects Lessor's obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during their
respective periods of ownership.
18. Severabiity. The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
19. Interest on Post-due Obligations. Except as expressly herein provided, any
amount due to Lessor not paid when due shall bear Interest at the maximum rate
then allowable by law or judgments from the date due. Payment of such interest
shall not excuse or cure any default by Lessee under this Lease; provided,
however, that Interest shall not be payable on late charges incurred by Lessee
nor on any amounts upon which late charges are paid by Lessee.
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20. Time of Essence. Time 13 of the essence with respect to the obligations to
be performed under this Lease.
21. Additional Rent. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expense and any other expenses payable by Lessee hereunder shall be deemed to be
rent.
22. Incorporation of Prior Agreements; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein, No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction
nor the Lessor or any employee or agents of any of said persons has made any
oral or written warranties or representations to Lessee relative to the
condition or use by Lessee of the Premises or the Office Building Project and
Lessee acknowledges that Lessee assumes all responsibility regarding the
Occupational Safety Health Act, the legal use and adaptability of the Premises
and the compliance thereof with all applicable laws and regulations in effect
during the term of this Lease.
23. Notices. Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery or by certified or registered
mail, and shall be deemed sufficiently given if delivered or addressed to Lessee
or to Lessor at the address noted below or adjacent to the signature of the
respective parties, as the case may be. Mailed notices shall be deemed given
upon actual receipt at the address required, or forty-eight hours following
deposit in the mail, postage prepaid, whichever first occurs. Either party may
by notice to the other specify a different address for notice purposes except
that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for notice purposes. A copy of all notices required
or permitted to be given to Lessor hereunder shall be concurrently transmitted
to such party or parties at such addresses as Lessor may from time to time
hereafter designate by notice to Lessee.
24. Waivers. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.
25. Recording. Either Lessor or Lessee shall, upon request of the other.
execute, acknowledge and deliver to the other a "short form" memorandum of this
Lease for recording purposes.
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26. Holding Over. If Lessee, with Lessor's consent, remains in possession of the
Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Lessee, except that the rent payable
shall be one hundred ten percent (110%)of the rent payable immediately preceding
the termination date of this Lease, and all Options, If any, granted under the
terms of this Lease shall be deemed terminated and be of no further effect
during said month to month tenancy.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions. Each provision of this Lease performable by either
party shall be deemed both a covenant and a condition.
29. Binding Effect; Choice of Law. Subject to any provisions hereof restricting
assignment or subletting by Lessee and subject to the provisions of paragraph
17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the States
where the Office Building Project is located and any litigation concerning this
Lease between the parties hereto shall be initiated In the county in which the
Office Building Project is located.
30. Subordination.
(a) This Lease, and any Option or right of first refusal granted hereby, at
Lessor's option, shall be subordinate to any ground lease, mortgage, deed of
trust, or any other hypothecation or security now or hereafter placed upon the
Building and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Lessee's right to quiet possession of the
Premises shall not be disturbed it Lessee is not in default and so long as
Lessee shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee or ground lessor shall elect to have this Lease and any
Options granted hereby prior to the lien of its mortgage, deed of trust or
ground lease, and shall give written notice thereof to Lessee, this Lease and
such Options shall be deemed prior to such mortgage, deed of trust or ground
lease, whether this Lease or such Options are dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of recording
thereof.
(b) Lessee agrees to execute any documents required to effectuate an attornment,
a subordination, or to make this Lease or any Option granted herein prior to the
lien of any mortgage, deed of trust or ground lease, as the case may be.
Lessee's failure to execute such documents within ten (10) days after written
demand shall constitute a material default by Lessee hereunder without further
notice to Lessee or, at Lessor's option, Lessor shall execute such documents on
behalf of Lessee as Lessee's attorney-in-fact. Lessee does hereby make,
constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact and in
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Lessee's name, place and stead, to execute such documents in accordance with
this paragraph 30(b).
31. Attorneys' Fees.
31.1 If either party or the broker(s) named herein bring an action to enforce
the terms hereof or declare rights hereunder, the prevailing party in any such
action, trial or appeal thereon, shall be entitled to his reasonable attorneys'
fees to be paid by the losing party as fixed by the court In the same or a
separate suit, and whether or not such action is pursued to decision or
judgment. The provisions of this paragraph shall inure to the benefit of the
broker named herein who seeks to enforce a right hereunder
31.2 The attorneys' fee award shall not be computed in accordance with any court
fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred in good faith.
31.3 Lessor shall be entitled to reasonable attorneys' fees and all other costs
and expenses incurred in the preparation and service of notices of default and
consultations in connection therewith, whether or not a legal action is
subsequently commenced in connection with such default.
32. Lessor's Access.
32.1 Lessor and Lessor's agents shall have the right to enter the Premises at
reasonable times for the purpose of Inspecting the same, performing any services
required of Lessor, showing the same to prospective purchasers, lenders, or
lessees, taking such safety measures, erecting such scaffolding or other
necessary structures, making such alterations, repairs, improvements or
additions to the Premises or to the Office Building Project as Lessor may
reasonably deem necessary or desirable and the erecting, using and maintaining
of utilities, services, pipes and conduits through the Premises and/or other
premises as long as there is no material adverse effect to Lessee's use of the
Premises. Lessor may at any time place on or about the Premises or the Building
any ordinary "For Sale" signs and Lessor may at any time during the last 120
days of the term hereof place on or about the Premises an ordinary "For Lease"
signs.
32.2 All activities of Lessor pursuant to this paragraph shall be without
abatement of rent, nor shall Lessor have any liability to Lessee for the same.
32.3 Lessor shall have the right to retain keys to the Premises and to unlock
all doors in or upon the Premises other than to files, vaults and safes, and in
27
the case of emergency to enter the Premises by any reasonably appropriate means,
and any such entry shall not be deemed a forceable or unlawful entry or detainer
of the Premises or an eviction. Lessee waives any charges for damages or
injuries or interference with Lessee's property or business in connection
therewith.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent. The holding of any auction on the Premises or Common Areas in violation
of this paragraph shall constitute a material default of this Lease.
34. Signs. Lessee shall not place any sign upon the Premises or the Office
Building Project without Lessor's prior written consent. Under no circum-
stances shall Lessee place a sign on any roof of the Office Building Project.
35. Merger. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.
36. Consents. Except for paragraphs 33 (auctions) and 34 (signs) hereof,
wherever in this Lease the consent of one party is required to an act of the
other party such consent shall not be unreasonably withheld or delayed.
37. Guarantor. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.
38. Quiet Possession. Upon Lessee paying the rent for the Premises and observing
and performing all of the covenants, conditions and provisions on Lessee's part
to be observed and performed hereunder, Lessee shall have quiet possession of
the Premises for the entire term hereof subject to all of the provisions of this
Lease. The individuals executing this Lease on behalf of Lessor represent and
warrant to Lessee that they are fully authorized and legally capable of
executing this Lease on behalf of Lessor and that such execution is binding upon
all parties holding an ownership interest in the Office Building Project.
39. Options.
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39.1 Definition. As used in this paragraph the word "Option" has the following
meaning: (1) the right or option to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other property of
Lessor; (2) the option or right of first refusal to lease the Premises or the
right of first offer to lease the Premises or the right of first refusal to
lease other space within the Office Building Project or other property of Lessor
or the right of first offer to lease other space within the Office Building
Project or other property of Lessor; (3) the right or option to purchase the
Premises or the Office Building Project, or the right of first refusal to
purchase the Premises or the Office Building Project or the right of first offer
to purchase the Premises or the Office Building Project, or the right or option
to purchase other property of Lessor, or the right of first refusal to purchase
other property of Lessor or the right of first offer to purchase other property
of Lessor.
39.2 Options Personal. Each Option granted to Lessee In this Lease is personal
to the original Lessee and may be exercised only by the original Lessee while
occupying the Premises who does so without the intent of thereafter assigning
this Lease or subletting the Premises or any portion thereof, and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any person or
entity other than Lessee; provided, however, that an Option may be exercised by
or assigned to any Lessee Affiliate as defined in paragraph 12.2 of this Lease.
The Options, if any, herein granted to Lessee are not assignable separate and
apart from this Lease, nor may any Option be separated from this Lease in any
manner, either by reservation or otherwise.
39.3 Multiple Options. In the event that Losses has any multiple options to
extend or renew this Lease a later option cannot be exercised unless the prior
option to extend or renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option, notwithstanding any
provision In the grant of Option to the contrary, (i) during the time commencing
from the date Lessor gives to Lessee a notice of default pursuant to paragraph
13.1 (c) or 13.1 (d) and continuing until the noncompliance alleged in said
notice of default is cured. Or (ii) during the period of time commencing on the
day after a monetary obligation to Lessor is due from Lessee and unpaid (without
any necessity for notice thereof to Lessee) and continuing until the obligation
is paid, or (iii) in the event that Lessor has given to Lessee three or more
notices of default under paragraph 13.1(c), or paragraph 13.1(d), whether or not
the defaults are cured, during the 12 month period of time immediately prior to
the time that Lessee attempts to exercise the subject Option, (iv) if Lessee has
committed any non-curable breach, including without limitation those described
in paragraph 13.1(b), or is otherwise in default of any of the terms, covenants
or conditions of this Lease.
(b) The period of time within which an Option may be exercised shall not be
extended or enlarged by reason of Lessee's Inability to exercise an Option
because of the provisions of paragraph 39.4(a).
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(c) All rights of Lessee under the provisions of an Option shall terminate and
be of no further force or effect, notwithstanding Lessee's due and timely
exercise of the Option, if, after such exercise and during the term of this
Lease, (i) Lessee falls to pay to Lessor a monetary obligation of Lessee for a
period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessee fails to
commence to cure a default specified in paragraph 13.1 (d) within thirty (30)
days after the date that Lessor gives notice to Lessee of such default and/or
Lessee fails thereafter to diligently prosecute said cure to completion, (iii)
Lessor gives to Lessee three or more notices of default under paragraph 13.1(c).
or paragraph 13.1(d), whether or not the defaults are cured, or (iv) if Lessee
has committed any non-curable breach, including without limitation those
described in paragraph 13.1(b), or is otherwise in default of any of the terms,
covenants and conditions of this Lease.
40. Security Measures-Lessor's Reservations.
40.1 Lessee hereby acknowledges that Lessor shall have no obligation whatsoever
to provide guard service or other security measures for the benefit of the
Premises or the Office Building Project. Lessee assumes all responsibility for
the protection of Lessee, its agents, and Invitees and the property of Lessee
and of Lessee's agents and invitees from acts of third parties. Nothing herein
contained shall prevent Lessor, at Lessor's Sole option, from providing security
protection for the Office Building Project or any part thereof, in which event
the cost thereof shall be included within the definition of Operating Expenses,
as set forth in paragraph 4.2(b).
40.2 Lessor shall have the following rights:
(a) To change the name, address or title of the Office Building Project or
building In which the Premises are located upon not less than 90 days prior
written notice;
(b) To, at Lessee's expense, provide and Install Building standard graphics on
the door of the Premises and such portions of the Common Areas as Lessor shall
reasonably deem appropriate;
(c) To permit any lessee the exclusive right to conduct any business as long as
such exclusive does not conflict with any rights expressly given herein;
(d) To place such signs, notices or displays as Lessor reasonably deems
necessary or advisable upon the root, exterior of the buildings or the Office
Building Project or on Xxxx signs In the Common Areas:
40.3 Losses shall not:
(a) Deleted
30
(b) Suffer or permit anyone, except In emergency, to go upon the roof of the
Building.
41. Easements.
41.1 Lessor reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Lessor deems necessary or desirable, and
to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not unreasonably
Interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material default of this Lease by Lessee without the need for
further notice to Lessee.
41.2 The obstruction of Lessee's view, air, or light by any structure erected in
the vicinity of the Building, whether by Lessor or third parties, shall in no
way affect this Lease or impose any liability upon Lessor.
42. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the part
of said party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said party to pay
such sum or any part thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
43. Authority. If Lessee is a corporation, trust, or general or limited
partnership, Lessee, and each individual executing this Lease on behalf of such
entity, represent and warrant that such individual is duly authorized to execute
and deliver this Lease on behalf of said entity If Lessee is a corporation,
trust or partnership, Lessee shall, within thirty (30) days after execution of
this Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
44. Conflict. Any conflict between the printed provisions, Exhibits or Addenda
of this Lease and the typewritten or handwritten provisions, It any, shall be
controlled by the typewritten or handwritten provisions.
45. No Offer. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lessee to lease.
This Lease shall become binding upon Lessor and Lessee only when fully executed
by both parties.
46. Lender Modification. Lessee agrees to make such reasonable modifications to
this Lease as may be reasonably required by an institutional lender in
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connection with the obtaining of normal financing or refinancing of the Office
Building Project.
47. Multiple Parties. It more than one person or entity is named as either
Lessor or Lessee herein, accept as otherwise expressly provided herein, the
obligations of the Lessor or Lessee herein shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee,
respectively.
48. Deleted
49. Attachments. Attached hereto are the following documents which constitute a
part of this Lease.
See Addendum
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR
ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS
AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO: THE PARTIES
SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND
TAX CONSEQUENCES OF THIS LEASE.
XXXXXX
Xxxxxx Properties, Inc.
By: (Signature of Xxx Xxxxxx, President of Xxxxxx Properties)
LESSEE
Simulations Plus, Inc.
By: (Signature of Xxxxxx X. Xxxxxxx, President & CEO of Simulations Plus, Inc.)
C 1984 American industrial Real Estate Association FULL SERVICE-NET
32
NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are utilizing the
Most Current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 000 Xx. Xxxxxxxx
Xx., X-0, Xxx Xxxxxxx, XX 00000. (000) 000-0000.
33
Addendum to Standard Office Lease - Net
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
In conjunction with the Standard Office Lease - Net dated May 14, 1998 by and
between XXXXXX PROPERTIES, INC., as the Lessor and, SIMULATIONS PLUS. INC., as
the Lessee, the following terms and conditions are hereby incorporated and made
part of said lease:
50. POSSESSION: The premises shall be delivered to the Lessee on or before July
1, 1998. Lessee and Lessor shall execute an amendment to this lease establishing
the date of Tender of Possession or the actual taking of possession by Lessee.
Tenant shall have two months of free rent regardless of the possession date. The
lease shall be for thirty-six (36) months from the rental commencement date.
51. RENT PAYMENTS & NOTIFICATIONS: Accordance with paragraph 1.6, commencing on
September 1st, 1998 and on the 1st day of each subsequent month without demand
from Lessor, Lessee agrees to mail or deliver the rent payments to the following
address:
XXXXXX PROPERTIES, INC.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
52. BASE RENT AND INCREASES: Monthly Base Rent for the Lease Term will be as
follows:
Year 1 $10,000 per month $.64 S.F. NNN
Year 2 $10,920 per month $.70 S.F. NNN
Year 3 $11,700 per month $.75 S.F. NNN
Lessee shall be responsible for all utilities and services that are separately
metered to their space and shall pay their pro-rata share of the common area
maintenance expenses, real estate taxes and insurance.
53. OPTION TO RENEW: Provided that Lessee Is not then in default of any of the
terms, covenants or conditions of the Lease, Lessee shall be provided two (2)
two (2) year Options to Renew term by providing Lessor with not less than three
(3) months prior written notice of its intention to exercise these options. All
other terms shall remain the same. The base Rent shall increase four (4) per
cent per annum.
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54. TENANT IMPROVEMENTS: Lessee is solely responsible for any and all costs for
tenant improvement work required (if any) for its occupancy in the premises,
following those guidelines set forth in paragraph 7. Lessee shall have the right
to construct at Lessee's sole cost and expense any additional Tenant
Improvements in the premises with Lessor's prior consent, said consent not to be
unreasonable withheld or delayed. Lessee warrants to Lessor that any such Tenant
Improvements initially or subsequently constructed in the premises will conform
to the applicable building and safety codes of the City of Lancaster. Lessee
shall apply and obtain a building permit for said Tenant Improvements if one is
required.
55. CONDITION OF THE PREMISES AND REPAIRS: Lessor shall deliver HVAC system,
plumbing and electrical in working order and shall warrant these systems for a
period of 90 days from the delivery date. Lessor shall repair defective and
missing floor tiles and roof shall be free of leaks and warrant same for the
term of the lease in accordance with paragraph 6.3, Lessee is aware and has read
those provisions contained in paragraphs 7 and 9, and understands Lessor's
obligations for repair and maintenance extend to the structural portions of the
premises only. Lessee is responsible for any and all repairs required within the
interior of the leased premises during its occupancy in the Premises, other than
structural elements contained therein. Lessor to repair and paint holes in walls
where sinks/cabinets were removed prior to Lessee's occupancy of the building.
56. SIGNAGE: Notwithstanding paragraph 34, page 8 of the lease, Lessee, at
Lessee's sole cost may install a sign on the leased premises which follows those
guidelines set forth by the City of Lancaster's Code and the standards for
Centerpoint Business Park.
57. ADA: Please be advised that an owner or Lessee of real property may be
subject to the Americans With Disabilities Act (the ADA), a Federal law codified
at 42 USC Section 12101 et. seq. Requirements of the ADA that could apply to
your property include Title III. Title III requires owners and tenants of
"public accommodations" to remove barriers to access by disabled persons and to
provide auxiliary aids and services for vision or speech impaired persons by
January 26, 1992. The regulations under Title III of the ADA are codified at 28
CFR Part 36. We recommend that you and your attorney review the ADA and the
regulations, and, if appropriate, your proposed lease or purchase agreement, to
determine if this law would apply to you, and the nature of the requirements.
These are legal issues. You are responsible for conducting your own independent
investigation of these issues, and Lessor and Brokers shall be held harmless and
indemnified from the impacts on Lessee's business and use within the Premises.
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58. COMPLIANCE WITH ENVIRONMENTAL LAW: Lessee hereby represents, warrants,
covenants and agrees with Lessor, as follows:
Lessee agrees that it will not intentionally permit the use, generation,
manufacture, disposal or storage of any toxic and/or "Hazardous Materials" in,
on and/or around the Leased premises now or at any future time. For the purposes
of this Lease, "Hazardous Materials" shall include, but shall not be limited to,
any substances, material or waste which is or becomes regulated by any state or
local governmental or quasi-governmental authority, or by the United States
government, or any agency thereof, including but not limited to the United
States Environmental Protection Agency (collectively referred to herein as the
"Governmental Authorities"). Notwithstanding the representations set forth in
subparagraph above, Lessor, and Lessee acknowledge and agree that should Lessee
use, store or maintain materials in the ordinary course of Lessee's business
operations, which constitute Hazardous Materials, Lessee will:
Obtain all required licenses, permits and other necessary agreements
with respect to the permitted Materials from all applicable Governmental
Authorities before using, storing or maintaining such materials in or about the
Leased Premises, and;
Lessee shall comply with all laws, statutes, ordinances, regulations,
rules, court or administrative orders or decrees, licenses or permits, ("The
Applicable Laws") of all applicable Governmental Authorities with respect to the
Permitted Materials; and;
Lessee shall maintain detailed and accurate books and records of receipt
and disposal of the Permitted Material on the Leased Premises in accordance with
the general standards of the industry in which Lessee operates, and such books
and records shall account for and shall reveal no discrepancies between the
receipt and disposal of such Permitted Materials; and
Lessee shall immediately notify Lessor of any notice from any
Governmental Authority received by lessee, or if Lessor should have reason to
believe, that the Permitted Materials are being used, or stored in violation of
Applicable Laws, or that there are hazardous materials other than the Permitted
materials affecting any all or any portion of the Leased Premises. Lessee shall
thereafter immediately commence, at its sole expense, all remedial action
necessary to eradicate the violations and to bring the Leased Premises in full
compliance with all Applicable Laws, and shall diligently pursue to completion
such necessary actions. In order to verify Lessee's compliance with this
section, Lessor, at any time after receipt of notice of a violation of any
Applicable Laws, may contract for the services of persons to perform
environmental site assessments on the Leased Premises at Lessor's expense, to be
performed at any time or times upon reasonable notice, and under reasonable
conditions. Lessor shall have the option to require specific performance of
Lessee's obligations hereunder. Lessee hereby indemnities and holds Lessor and
lessor's
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Lender harmless from and against any loss, liability, cost expense, penalty,
litigation, demand, defense, action, proceeding or disbursement (including
reasonable attorneys' fees) which may be imposed upon Lessor in connection with
the use or storage of the Permitted Materials, or which may result in connection
with Materials other than the Permitted Materials, as they relate to the leased
Premises or any surrounding areas.
It is expressly agreed and understood that upon Lessee's vacation of the Leased
Premises, Lessee, at Lessee's expense, shall leave the leased Premises
"environmentally clean", as when delivered to Lessee.
59. SUBJECT TO LESSOR ACQUIRING TITLE: Lessee is aware that Lessor is currently
in escrow to purchase the subject property and this lease is subject to Lessor
acquiring title to the subject property. Should Lessor not obtain title to the
subject property by July 30, 1998 than this lease shall be null and void and
both parties shall mutually release each party from any obligation or claim.
60. RENT PAID UPON EXECUTION AND SECURITY DEPOSIT: Shall be paid to Century 21
and shall be deposited into their trust account, and shall be paid to Lessor
upon close of escrow. Should escrow fail to close by July 30, 1998 then deposits
shall be returned to Lessee.
61. Lessee hereby accepts the premises, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations governing and
regulating the use of the premises. Lessor and Lessee acknowledge that they have
reviewed the Covenants, Conditions, and Restrictions of Centerpoint Business
Park, and believe the Lessee's intended use of the premises does not conflict
with said Covenants, Conditions and Restrictions. However, should legal actions
be brought against Lessee by any of the owners or occupants of Centerpoint
Business Park, which legal action results in a final judgement that interferes
with Lessee's uses and occupancy of the premises, then Lessee shall be relieved
of any further obligation to Lessor under the said Lease Agreement, and the
Lease shall be of no further force and effect. Under such circumstances, Lessor
shall pay to Lessee an amount equal to Lessee's cost expended in leasehold
improvements (but not trade fixtures) with respect to the premises multiplied by
a fraction, the numerator of which is the number of months which Lessee has
occupied the premises, and the denominator of which is the total number of
months of the Lease term. Lessee shall provide to Lessor a detailed list of the
proposed leasehold improvements within ten (10) days from the execution of the
Lease. Lessor shall have three business days to approve said improvements. Upon
completion of the leasehold improvements, Lessee shall provide Lessor with a
detailed schedule of all the costs supported by invoices therefor.
Attachments:
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Exhibit 'A' Site Plan
Exhibit 'B' Floor Plan
Exhibit 'C' Rules and Regulations
Exhibit 'D' Sign Criteria
"LESSEE"
SIMULATIONS PLUS, INC.
By:
Xxxxxx X. Xxxxxxx
Its President and CEO
"LESSOR"
XXXXXX PROPERTIES, INC.
By:
Xxx Xxxxxx
Its President.
38
9. Landlord will have the right to approve where and how telephone wires are to
be Introduced. No boring or cutting for wires or any kind will be allowed
without the consent or Landlord. The location of telephone, call boxes and other
equipment affixed to the Premises shall be subject to the approval of Landlord.
10. No Tenant shall lay linoleum, tile, carpet or other similar Floor covering
so that the same shall be affixed to the floor of the Premises in any manner
except as approved by the Landlord. The expenses of repairing any damage
resulting from any violation of this rule shall be borne by the Tenant by whom,
or by whose contractors, employees or invitees, the damage shall have been
caused.
11. Deleted
12. No Tenant shall make, or permit to be made any unseemly or disturbing noises
or disturb or Interfere with occupants of neighboring buildings or Premises or
those having business within them whether by the use of musical instruments,
radio, phonograph, unusual noise, or in any other way. No Tenant shall throw
anything out of doors, windows or skylight or down the passage ways.
13. No Tenant nor any Tenant's servants, employees agents, visitors or
licensees, shall at any time bring or keep upon the Premises any inflammable,
combustible or, explosive fluid, chemical or substance, except for ordinary
office supplies and small quantities of cleaning fluids and glues used in light
electronic assembly.
14. Landlord reserves the right to exclude or expel from the Building any person
who, in the judgment of Landlord is intoxicated or under the influence of liquor
or drugs, or who shall in any manner do any act in violation of any of the rules
and regulations of the Building.
15. The requirements Of Tenant will be attended to only upon application at the
office of the Landlord. Employees of Landlord shall not perform any work or do
anything outside of their regular duties unless under special instructions from
the Landlord and no employee shall admit any person (Tenant or other wise) to
any office without specific instructions from the Landlord.
16. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name and the street address of the Building
of which the Premises are a part.
17. The word "Building" as used herein means the building of which the Premises
are a part.
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18. Landlord reserves the right to make such other and further rules and
regulations as in its judgement may be for the safety, care and cleanliness of
the Premises and for the preservation of good order therein. Tenant agrees to
abide by all such additional rules and regulations which are adopted.
19. No air conditioning unit or similar apparatus shall be installed or used by
Tenant without the written consent of Landlord.
20. No vending machines shall be installed, maintained or operated on the
Premises without the written consent of the Landlord.
21. Deleted
22. Canvassing, soliciting and peddling in the building are prohibited and each
Tenant shall cooperate to prevent the same.
23. Deleted
24. Deleted
40
SIGN CRITERIA
FOR
OFFICE/SHOP BUILDING TENANTS/OWNERS
LOCATED IN
CENTERPOINT BUSINESS PARK
LANCASTER, CALIFORNIA
LHA JOB NO. 8643
NOVEMBER 20, 1990
DEVELOPER
XXXXX DEVELOPMENT CORPORATION
0000 XXXXXXXXX XXXXX, XXXXX 000
XXXXXXX, XXXXXXXXXX 00000
(000) 000-0000
ARCHITECT
LEIDENPROST/XXXXXXXX, AIA & ASSOCIATES
0000 X. XXXXXXX XXXXXXXXX
XXXXXXXX, XXXXXXXXXX 00000
(000) 000-0000
Subject to City of Lancaster's Approval
41
SIGN CRITERIA
These criteria have been established for the purpose of assuring an outstanding
business park, and for the mutual benefit of all tenants. Conformance will be
strictly enforced and any installed non-conforming or unapproved signs must be
brought into conformance at the expense of the tenant.
A. GENERAL REQUIREMENTS
1. Each tenant shall submit or cause to be submitted to the Landlord/Developer
for approval before fabrication at least four copies of detailed drawings
indicating the location, size, layout, design and color of the proposed signs,
including all lettering and/or graphics. The tenant shall submit or cause to be
submitted to the City of Lancaster, Department of Community Development, three
(3) copies of the Landlord approved and signed drawings for review and approval
before fabrication and installation.
2. All permits for signs and their installation shall be obtained by the tenant
or tenant's representative prior to installation.
3. Tenant shall be responsible for the fulfillment of all requirements and
specifications.
4. All signs shall be constructed and installed at tenant's expense.
5. All signs shall be reviewed by the Landlord/Developer and his designed
Project Architect for conformance with this criteria and overall design quality.
With this Approval or disapproval of sign submittals based on aesthetics of
design shall remain the sole right of the Landlord/Developer.
6. Tenant's sign contractor to be responsible for obtaining all required City
Approvals.
7. All signs shall be installed no later than 30 days following the date tenant
opens for business.
8. Tenant shall repair all damage made by installation and/or removal of all
signs.
9. Tenant shall keep all signs in good repair and all electrified signs fully
illuminated (as to operating condition) and in good working order and shall
promptly repair or replace any broken or damaged sign surfaces, enclosures, and
electrical parts.
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SIGN CRITERIA
Page 2 of 4
B. GENERAL SPECIFICATIONS
1. Tenant signs will be as shown on the attached detail sheet drawings.
2. No audible, flashing, animated, or Neon type (except for "open" window sign)
signs will be permitted.
3. No projections above or below the sign panel will be permitted. Sign must be
within dimensional limits as indicated on the attached drawings.
4. All wall signs shall be internally illuminated and the source of illumination
shall not be visible.
5. Style of letter other than that detailed may be permitted after written
approval by Landlord/Developer and governing agency.
6. Under-canopy signs: None.
7. Tenant shall be responsible for the installation and maintenance of all
signs.
8. Wording of signs shall not include the product sold except as part of the
tenant's trade name or insignia unless approved by Landlord/Developer and
governing agency.
9. Where applicable, width of tenant's fascia sign shall not exceed 70% of width
of the office of storefront except where office or storefront is 16 feed or
less. In such case 75% maximum is allowable on buildings with sign type E, the
sign shall not exceed 10 feet in length. Building L and H shall be permitted no
more than four fascia signs per building. All other buildings will be permitted
no more than two fascia signs per building.
10. Letters on building "G", "E", "A", "L" (north face), shall be a maximum of
24 inches in height. All other buildings shall be allowed a maximum letter
height of 18 inches.
11. All tenant signs on building G, E, A, L (north face) shall be of a color
chosen by tenant and approved by Landlord/Developer and governing agency. All
other building fascia signs shall be constructed in accordance with sign type
"C" in the color of blue chosen by Landlord/Developer.
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SIGN CRITERIA
Page 3 of 4
12. Electrical service to all, signs where necessary will be connected to
tenant's meter.
13. All lettering on monument signs shall be black block letters.
14. With the exception of building "L", no one tenant shall be allowed two
different sign types.
C. CONSTRUCTION REQUIREMENTS
1. Letter fastening and clips are to be concealed with stucco and be of
galvanized, stainless steel aluminum, brass or bronze metals. Letters may be
attached with approved adhesives.
2. No labels will be permitted on the exposed surface of signs, except those
required by local ordinance which shall be placed in an inconspicuous location.
3. Where applicable, tenants shall have identification signs designed in a
manner compatible with and complimentary to adjacent and facing office or
storefronts and the overall design concept of the park.
4. Design, layout and materials for tenants' signs shall conform in all respects
with the sign design drawings included with this criteria. The maximum height
for letters in the body of the sign shall be as indicated in these documents.
5. All monument signs to be finished with stucco, and have non-illuminated block
letters in accordance with "Sign B".
6. All penetrations of the building structure required for sign installation
shall be sealed in a water-tight condition and shall be patched to match
adjacent finish.
D. MISCELLANEOUS REQUIREMENTS
1. Each tenant shall be permitted to place upon each entrance of its demised
premises not more than 144 square inches of gold leaf or decal application
lettering not to exceed two inches in height, indicating hours of business,
emergency telephone numbers, etc.
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SIGN CRITERIA
Page 4 of 4
2. Except as provided herein, no advertising placards, banners, pennants, names,
insignia, trademarks, or other descriptive material shall be affixed or
maintained upon the glass panes and supports of the show windows and doors, or
upon the exterior walls of buildings without the written previous approval of
the Landlord and the City of Lancaster.
3. Each tenant who has a non-customer door for receiving merchandise may have
uniformly applied on said door the tenant's name and address, in three (3) inch
high block letters, as directed by the Landlord/Developer. Where more than one
tenant uses the same door, each name and address shall be applied. Colors of
letters shall match Ameritone Black. No other rear entry signs shall be
permitted.
4. Contractors installing signs are to be State registered contractors and are
to have a current City business license.
E. INDIVIDUAL TENANT IDENTIFICATION WINDOW SIGNS
1. Location: On the right of left side of main entrance to tenant's space, no
higher than eye level.
2. Hand painted white Helveticia letters with a six inch maximum letter height.
3. Submit to Landlord/Developer for approval.
4. Not to exceed four feet in length.
