1
Exhibit 10.10
XXXXXXX INVESTMENT COMPANY
0000 Xxxxxxxxxx Xxxxx, #000, Xxx Xxxx, XX 00000-0000 (000) 000-0000
Fax (000) 000-0000
[COMPANY LOGO]
FULL SERVICE LEASE-GROSS
1. BASIC LEASE PROVISIONS. ("Basic Lease Provisions")
1.1 PARTIES. This Lease, dated for reference purposes only, August 17,
2000, is made by and between, Clay Street Capital, Inc., a California
Corporation (herein called "Lessor") and National Scientific Corporation,
a Texas Corporation doing business under the same name (herein called
"Lessee").
1.2 PREMISES. Suite Number(s) 214, consisting of approximately 1,551
rentable square feet, more or less, as defined in paragraph 2 and as shown
as Exhibit "A" hereto (the "premises").
1.3 BUILDING. Commonly described as being located at 0000 Xxxxxxxx
Xxxxxxxxxx in the city of San Xxxx, County of Santa Xxxxx, State of
California, as more particularly described in Exhibit "A" hereto, and as
defined paragraph 2.
1.4 USE. General office use and related legal uses, subject to paragraph
6.
1.5 TERM. Three (3) years commencing on September 1, 2000 ("Commencement
Date") and ending August 31, 2003 as defined in paragraph 3.
1.6 BASE RENT. Payable on the first day of each month in accordance with
paragraph 4.1 herein shall be as follows:
09-01-00 to 08-31-2001 $3,878.00 per month
09-01-01 to 08-31-2002 $4,071.00 per month
09-01-02 to 08-31-2003 $4,275.00 per month
1.7 BASE RENT INCREASE. N/A
1.8 RENT PAID UPON EXECUTION. $3,878.00 for first month's rent.
1.9 SECURITY DEPOSIT. $10,000.00 pursuant to the terms and conditions of
paragraph 5 herein.
1.10 LESSEE'S SHARE OF OPERATING EXPENSES INCREASE. 2.43% as defined in
paragraph 4.2
Page 1
2
2. PREMISES, PARKING AND COMMON AREAS.
2.1 PREMISES. The Premises are a portion of a building 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 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 VEHICLE PARKING. So long as Lessee is not in default, and subject to
the rules and regulations attached hereto, and as established by Lessor
from time to time, Lessee shall be entitled to rent and use six (6)
parking spaces in the Office Building Project.
(a) If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect,
then Lessor shall have the right, without notice, in addition
to such other rights and remedies that it may have, to remove
or tow away the vehicle involved and charge the cost to
Lessee, which cost shall be immediately payable upon demand by
Lessee.
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
Lessor from time to time for the general non-exclusive use of Lessor,
Lessee and of other lessors 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, 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 lessee's 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:
Page 2
3
(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 time provide the parking
facilities required by applicable law;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long a reasonable access to the Premises remains
available;
(c) To designate other land and improvements outside the
boundaries of the Office Building Project to be a part of the
Common Areas, provided that such other land and improvements
have a reasonable and functional relationship to the Office
Building Project;
(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 any portion thereof;
(f) To do and perform such other act 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.
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 Commencement Date, if for
any reason Lessor cannot deliver possession of the Premises to Lessee on
said date and subject to paragraph 3.2(b), 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 if
Lessor shall not have delivered possession of the Premises within sixty
(60) days following said Commencement 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 if
Page 3
4
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 and effect.
(a) 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, and (3) Lessee has
reasonable access to the Premises.
(b) 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 32.2, shall be deemed extended to the extent of any
delays caused by acts or omissions of Lessee, Lessee's 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, and
Lessee shall pay rent for such occupancy.
3.4 UNCERTAIN COMMENCEMENT. In the event commencement of the Lease term
is defined as the completion of the improvements, Lessee and Lessor shall
execute an amendment to this Lease establishing the date of Tender of
Possession (as defined in paragraph 3.2(a)) or the actual taking of
possession by Lessee, whichever first occurs, as the Commencement Date.
3.5 LESSEE COMPLIANCE. Lessor shall not be required to tender possession
of the Premises to Lessee until Lessee complies with its obligation to
provide evidence of Insurance (Paragraph 8.3). Pending delivery of such
evidence, Lessee shall be required to perform all of its obligations under
this Lease from and after the Commencement Date, including the payment of
Rent, notwithstanding Lessor's election to withhold possession pending
receipt of such evidence of insurance. Further, if Lessee is required to
perform any other conditions prior to or concurrent with the Commencement
Date, the Commencement Date shall occur but Lessor may elect to withhold
possession until such conditions are satisfied.
4. RENT.
4.1 BASE RENT. Subject to adjustment as provided in paragraph 1.7, 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 Basic lease Provisions, without offset or deduction. Lessee shall pay
Lessor upon execution hereof the advance Base Rent described in paragraph
1.6 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.
Page 4
5
4.2 OPERATING EXPENSE INCREASE. Lessee shall pay to Lessor during the
term hereof, in addition to Base Rent, Lessee's Share, as hereinafter
defined, of the amount by which individual operating expense categories,
as hereinafter defined, for each Comparison Year exceeds the amount of
individual operating expense categories for the Base Year, such excess
being hereinafter referred to as the "Operating Expense Increase". In
accordance with the following provisions:
(a) "Lessee's Share" is defined for purposes of this Lease, as set
forth in paragraph 1.10, 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 changes in the size of the
Premises or a change in the space available for lease in the
Office Building Project.
(b) "Base Year" is defined as the calendar year in which the Lease
Term commences.
(c) "Comparison Year" is defined as each calendar year during the
term of this Lease subsequent to the Base Year; provided,
however, Lessee shall have no obligation to pay a share of the
Operating Expense Increase applicable to the first twelve (12)
months of the Lease Term (other than such as are mandated by a
governmental authority, as to which government mandated
expenses Lessee shall pay lessee's Share, notwithstanding they
occur during the first twelve (12) months). Lessee's Share of
the Operating Expense increase for the first and last
Comparison Years of the Lease Term shall be prorated according
to that portion of such Comparison Year as to which Lessee is
responsible for a share of such increase.
(d) "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,
covering, decorative items, carpets, drapes and
window coverings, and including parking areas,
loading and unloading areas, trash areas,
roadways, sidewalks, walkways, stairways,
parkways, driveways, landscaped areas, striping,
bumpers, irrigation systems, Common Area lighting
facilities, building exteriors and roofs, fences
and dates;
Page 5
6
(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's or
occupants of the Office Building Project,
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 water, sewer, gas, electricity, and other
publicly mandated services to the Office Building
Project;
(v) 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.
(e) Operating Expenses shall not include any expenses paid by any
lessee directly to their parties, or as to which Lessor is
otherwise reimbursed by any third party, other tenant, or by
insurance proceeds.
(f) Lessee's Share of Operating Expense Increase shall be payable
by Lessee within ten (10) days after a reasonable detailed
statement of actual expenses is presented to Lessee by Lessor.
At Lessor's option, however, an amount may be estimated by
Lessor from time to time in advance of Lessee's Share of the
Operating Expense Increase for any Comparison Year, and the
same shall be payable monthly or quarterly, as Lessor shall
designate during each Comparison Year of the Lease term, on
the same day as the Base Rent is due hereunder. In the event
that Lessee pays Lessor's estimate of Lessee's Share of
Operating Expense Increase as aforesaid, Lessor shall deliver
to Lessee within ninety (90) days after the expiration of each
Comparison Year a reasonably detailed statement showing
Lessee's Share of the actual Operating Expense increase
incurred during such year. If Lessee's payments under this
paragraph (g) during said Comparison Year exceed Lessee's
Share as indicated on said statement, Lessee shall be entitled
to credit the amount of such overpayment against Lessee's
Share of Operating Expense Increase next falling due. If
Lessee's payments under this paragraph during said Comparison
Year were less than Lessee's Share as indicated on said
statement, Lessee shall pay to Lessor the amount of the
deficiency within ten (10) days after delivery by Lessor to
Lessee of said statement. Lessor and Lessee shall forthwith
adjust between them by cash payment any balance determined to
exist with respect to that portion of the last
Page 6
7
Comparison Year for which Lessee is responsible as to
Operating Expense Increases, notwithstanding that the Lease
term may have terminated before the end of such Comparison
Year.
4.3 CAPITAL EXPENSE INCREASE. Lessee shall pay to Lessor during the term
hereof in addition to base rent, Lessee's share, as defined in paragraph
4.2(a), of the amount by which the cost of any capital improvement (such
cost or allocable portion thereof to be amortized over such reasonable
period as Lessor shall determine in accordance with generally accepted
accounting principles), for each comparison year that exceeds the amount
of capital expenses for the base year, such excess being hereafter
referred to as "Capital Expense Increase". Sums representing Capital
Expense INCREASE SHALL BE PAID IN THE SAME MANNER AND IN CONJUNCTION WITH
Operating Expense Increase as set forth in paragraph 4.2(g). Capital
Expense Increase shall constitute a separate expense category from
Operating Expense Increase. Capital Improvements shall not include the
cost of any Capital Improvements relating only to a single tenant in the
Office Building Project.
4.4 INSURANCE PREMIUM INCREASE. Lessee shall pay to lessor during the
term hereof, in addition to base rent, Lessee's share, as defined in
paragraph 4.2(a) of the amount by which the cost of any premium for
insurance carried by lessor pursuant to paragraph 8.1(b), for each
comparison year that exceeds the amount of insurance premium for the base
year, such excess being hereafter referred to as "Insurance Premium
Increase". Sums representing Insurance Premium Increase shall be paid in
the same manner and in conjunction with Operating Expense Increase as set
forth in paragraph 4.2(g). Insurance Premium Increase shall constitute a
separate expense category from Operating Expense Increase.
4.5 REAL PROPERTY TAX INCREASE. Lessee shall pay to Lessor during the
term hereof, in addition to base rent, Lessee's share, as defined in
paragraph 4.2(a), of the amount by which the cost of any real property tax
as defined in paragraph 10 for each comparison year that exceeds the
amount of real property tax for the base year, such excess being hereafter
referred to as "Real Property Tax Increase". Sums representing Real
Property Tax Increase shall be paid in the same manner and in conjunction
with Operating Expense Increase as set forth in paragraph 4.2(g). Real
Property Tax Increase shall constitute a separate expense category from
Operating Expense Increase.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise
Defaults under this Lease, Lessor may use, apply or retain all or any
portion of said Security Deposit for the payment of any amount due Lessor,
including alter charges, or to reimburse or compensate Lessor for any
liability, expense, loss or damage which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of said
Security Deposit, Lessee shall within ten (10) days after written request
therefor deposit monies with lessor sufficient to restore said Security
Deposit to the full amount required by this Lease. If the Base Rent
increases during the term of this Lease, Lessee shall upon written request
from Lessor, deposit additional moneys with Lessor so that the total
amount of the Security Deposit
Page 7
8
shall at all times bear the same proportion to the increased Base Rent as
the initial Security Deposit bore to the initial Base Rent. Should the Use
(Paragraph 1.4) be amended to accommodate a material change in the
business of Lessee or to accommodate a sublessee or assignee, Lessor shall
have the right to increase the Security Deposit to the extent necessary,
in Lessor's reasonable judgment to account for any increased wear and tear
that the Premises may suffer as a result thereof. If a change in control
of Lessee occurs during this Lease and following such change the financial
condition of Lessee is, in Lessor's reasonable judgment significantly
reduced, Lessee shall deposit such additional monies with Lessor as shall
be sufficient to cause the Security Deposit to be at a commercially
reasonable level based on said change in financial condition. Lessor shall
not be required to keep the Security Deposit separate from its general
accounts. Within fourteen (14) days after the expiration or termination of
this Lease, if Lessor elects to apply the Security Deposit only to unpaid
Rent, and otherwise within thirty (30) days after the Premises have been
vacated pursuant to Paragraph 7.2(b) below, Lessor shall return that
portion of the Security Deposit not used or applied by Lessor. No part of
the Security Deposit shall be considered to be held in trust to bear
interest or to be prepayment for any monies to be paid by Lessee under
this Lease. Lessee understands and agrees that the Security Deposit is not
prepaid rent and, specifically, that such Security Deposit may not be
applied by Lessee as rent for the last month of the term of this lease.
6. USE.
6.1 USE. The Premises shall be used and occupied only for the Use
specified in Paragraph 1.4, or any other legal use, which is reasonably
comparable thereto, and for no other purpose. Lessee shall not xxx or
permit the use of the Premises in a manner that is unlawful, creates
damage, waste or a nuisance, or that disturbs owners and/or occupants of
or causes damage to neighboring properties. Lessor shall not unreasonably
withhold or delay its consent to any written request for a modification of
the Use, so long as the same will not impair the structural integrity of
the improvements on the Premises or the mechanical or electrical systems
therein, or is not significantly more burdensome to the Premises. If
Lessor elects to withhold consent, Lessor shall within five (5) business
days after such request give written notification of same, which notice
shall include an explanation of Lessor's objections to the change in use.
6.2 COMPLIANCE.
(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 in effect on
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. In the event Lessee does not give
to Lessor written notice of the violation of this warranty
within six (6) months from the date that the Lease term
commences, the correction of
Page 8
9
same shall be the obligation of the Lessee at Lessee's sole
cost. The warranty contained din this paragraph 6.2(a) shall
be of no force or effect if, prior to the date of this Lease,
Lessee was an owner or occupant of the Premises and, in such
event, Lessee shall correct any such violation at Lessee's
sole cost.
(b) Except as provided in paragraph 6.2(a) Lessee shall, at
Lessee's expense, promptly comply with all applicable statutes
(including Americans with Disabilities Act and O.S.H.A.),
ordinances, rules, regulations, orders, covenants and
restrictions of record, and requirements of any fire insurance
underwriters or rating bureaus, not 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 Area
in any manner that will tend to create waster 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 Commencement 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
specificity the nature of the violation to promptly, at
Lessor's sole cost, rectify such violation.
(b) Except as other 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,
country and state laws, ordinances and regulations governing
and regulating the use of he 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.
6.4 WASTE; NUISANCE. Lessee shall not use the premises in any manner
that will constitute waste, nuisance, or unreasonable annoyance
(including, without limitation, unreasonable noise, the use of
loudspeakers or sound or light apparatus that can be heard
Page 9
10
or seem outside the Premises) to other tenants in the Building or
occupants of neighboring properties. Lessee shall not use the Premises for
vehicle repair, sleeping, washing clothes, cooking, or the preparation,
manufacturing or mixing of anything that might emit any odor or
objectionable noises or lights into the Building or into neighboring
properties.
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, 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. 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 of any part thereof.
Lessee expressly waives the benefits of any statute now or hereafter in
effect which would otherwise afford Lessee the right to make repairs at
Lessor's expense or to terminate this lease because of Lessor's failure to
keep the Premises in good order, condition and repair.
7.2 LESSEE'S OBLIGATIONS.
(a) Notwithstanding Lessor's obligations 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 nay 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 cases 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.
Lessor may, at its option, upon reasonable notice, elect to
have Lessee perform any particular such maintenance or repair
costs of which are otherwise Lessee's responsibility
hereunder.
(b) On the last of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises in 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 all penetrations and damage (including markings)
to walls and stains in carpet. 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 conditioning,
window coverings, wall
Page 10
11
covering, carpets, wall paneling, ceilings and plumbing on the
Premises 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 elect ownership or 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, improvement, 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 written form, with proposed detailed plans. If Lessor
shall give its consent to Lessee's making such alteration,
improvements, addition to 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
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.
Page 11
12
(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 before 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 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 no limited to, floor
covering, panelings, doors, drapes, built-ins, moldings, sound
attenuation, and lighting and telephone or communication
systems, 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(c), Lessee's personal property and equipment 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, 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.
Page 12
13
(a) Carried by Lessee. Lessee shall obtain and keep in force a
Commercial General Liability Policy of Insurance protecting
Lessee, Lessor and Xxxxxxx Investment Company against claims
for bodily injury, personal injury and property damage based
upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto.
Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $2,000,000
per occurrence with an "Additional Insured-Managers or Lessors
of Premises Endorsement" and contain the "Amendment of the
Pollution Exclusion Endorsement" for damage caused by the,
smoke or fumes from a hostile fire. The Policy shall not
contain any insured exclusions as between injured persons or
organizations, but shall include coverage for liability
assumed under this lease as an "insured contract" for the
performance of Lessee's indemnity obligations under this
Lease. The limits of said insurance shall not, however, limit
the liability of Lessee nor relieve Lessee of any obligation
hereunder. All insurance carried by Lessee shall be primary to
and not contributory with any similar insurance carried by
Lessor, whose insurance shall be considered excess insurance
only. Lessor and Xxxxxxx Investment Company shall be named as
additional insureds on such insurance contracts.
(b) Carried by Lessor. All insurance maintained by Lessor shall be
for the sole benefit of Lessor and under Lessor's sole
control.
(i) Property Insurance. Lessor agrees to maintain property
insurance insuring the Building against damage or
destruction due to risks including fire, vandalism and
malicious mischief in an amount not less than the
replacement cost thereof in the form and with
deductibles and endorsements as selected by Lessor. At
its election, Lessor may instead obtain "All Risk"
coverage, and may also obtain earthquake, pollution,
and/or flood insurance in amounts selected by Lessor.
(ii) Optional Insurance. Lessor, at Lessor's option, may also
carry insurance against loss of rent, in an amount equal
to the amount of Base Rent and Additional Rent that
Lessor could be required to xxxxx to all Building
tenants in the event of condemnation, damage or
destruction for a period of twelve (12) months. Lessor
may also carry such other insurance as Landlord may deem
prudent or advisable, including, without limitation,
liability insurance in such amounts an on such terms as
Lessor shall determine. Lessor shall not be obligated to
insure any furniture, machinery, goods, inventory or
supplies which Tenant may keep or maintain in the
Premises, or any leasehold improvements, additions or
alterations within the Premises.
Page 13
14
(c) Adjacent Premises. If the Premises are part of a larger
building or of a group of buildings owned by Lessor which are
adjacent to the Premises, the Lessee shall pay for any
increase in the premiums for the property insurance of such
building or building if said increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises.
8.2 LESSEE'S PROPERTY/BUSINESS INTERRUPTION INSURANCE.
(a) Property Damage. Lessee shall obtain and maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures,
and Lessee Owned Alterations and Utility Installations. Such
insurance shall be full replacement cost coverage with a
deductible of not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for
the replacement of personal property, Trade Fixtures and
Lessee Owned Alterations and Utility Installations. Lessee
shall provide Lessor with written evidence that such insurance
is in force.
(b) Business Interruption. Lessee shall obtain and maintain loss
of income and extra expense insurance in amounts as will
reimburse Lessee for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent
lessees in the business of Lessee or attributable to
prevention of access to the Premises as a result of such
perils.
(c) No Representation of Adequate Coverage. Lessor makes no
representation that the limits or forms of coverage of
insurance specified herein are adequate to cover Lessee's
property, business operations or obligations under this Lease.
8.3 INSURANCE POLICIES. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the
Premises are located and maintaining during the policy term a "General
Policy Holders Rating" of at least B+, V, as set fort in the most current
issue of "Best's Insurance Guide", or such other rating as may be required
by a Lender. Lessee shall not do or permit to be done anything which
invalidates the required insurance policies. Lessee shall, prior to the
Start Date deliver, to Lessor certified copies of policies of such
insurance or certificates evidencing the existence and amounts of the
required insurance. No such policy shall be cancelable or subject to
modification except after thirty (30) days prior written notice to lessor.
Lessee shall, at least thirty (30) days prior to the expiration of such
policies, furnish, Lessor with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Lessor may order such insurance and charge
the cost thereof to Lessee, which amount shall be payable by Lessee to
Lessor upon demand. Such policies shall be for a term of at least one
year, or the length of the remaining term of this Lease, whichever is
less. If either Party shall fail to procure and maintain the insurance
required to be carried by it, the other Party may, but shall not be
required to, procure and maintain the same.
8.4 WAIVER OF SUBROGATION. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to
Page 14
15
recover damages against the other, for loss of or damage to its property
arising out of or incident to the perils required to be insured against
herein. The effect of such releases and waivers is not limited by the
amount of insurance carried or required, or by any deductibles applicable
hereto. The Parties agree to have their respective property damage
insurance carriers waive any right to subrogation that such companies may
have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.
8.5 INDEMNITY. Except for Lessor's gross negligence or willful
misconduct, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor,
partners and Lenders from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys' and consultants'
fees, expenses and/or liabilities arising out of, involving, or in
connection with the use and/or occupancy of the Premises by Lessee. If any
action or proceeding is brought against Lessor by reason of any of the
foregoing matters, Lessee shall upon notice defend the same at Lessee's
expense by counsel reasonably satisfaction to Lessor and Lessor shall
cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be defended or indemnified.
8.6 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers,
or any other person in or about the Premises, whether such damage or
injury is caused by or results from fire, steam, electricity, gas, water
or rain, or from the breakage, leakage, obstruction or other defects of
pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting
fixtures, or from any other cause, whether the said injury or damage
results from conditions arising upon the Premises or upon other portions
of the Building of which the Premises are a part, or from other sources or
places. Lessor shall not be liable for any damages arising from any act or
neglect of any other tenant of Lessor. Notwithstanding lessor's negligence
or breach of this Lease, Lessor shall under no circumstances be liable for
injury to Lessee's business or for any loss of income or profit therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Premises 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 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.
Page 15
16
(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 if 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 Costs 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 than an Insured Loss has
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 lessee's, 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 paragraph 9.4 and
9.5, if as 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 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 (30) 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 920) day period
notwithstanding any term or provision in the grant of option
to the contrary.
Page 16
17
9.3 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 Expense
Increase) for the period during which such damage, repair or
restoration continues shall be abated, provided (i) the damage
was not the result of the negligence of Lessee, and (ii) 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.
(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 his 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.
9.4 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, in addition, return to Lessee so much of Lessee's security
deposit as has not theretofore been applied by Lessor.
9.5 WAIVER. Lessor and Lessee waive the provisions of any statute, which
relates 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 4.5, 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 lessee's or by Lessor for the exclusive
enjoyment of any other lessee. Lessee shall,
Page 17
18
however, pay to Lessor at the time that Operating Expenses are payable
under paragraph 4.2 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, regional, state 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, 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 as a result of a change in ownership, as defined by
applicable local statues 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 changes of
ownership, or (v) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.
10.4 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 SERVICES PROVIDED BY LESSOR. Lessor shall provide heating,
ventilation, air conditioning, and janitorial service as reasonably
required, reasonable amounts of electricity for normal lighting and office
machines during the days/hours set forth in subparagraph 11.3, water for
reasonable and normal drinking and lavatory use, and
Page 18
19
replacement light bulbs and/or fluorescent tubes and ballasts for standard
overhead fixtures.
11.2 SERVICES EXCLUSIVE TO LESSEE. Lessee shall pay for all water, gas,
heat, light, power, telephone and other utilities and services specially
or exclusively supplied and/or metered exclusively to the Premises or to
Lessee, together with any taxes thereon. If 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 HOURS OF SERVICE. Said services and utilities shall be provided
Monday through Friday, 7:00 a.m. to 7:00 p.m. "Standard Usage" is four (4)
xxxxx per square foot (based on "rentable" square footage) per hour
excluding general building H.V.A.C. during hours of service. All usage of
services and utilities on days or hours other than Monday through Friday,
7:00 a.m. to 7:00 p.m. shall be defined as "After Hours Usage". Lessee
agrees to pay Lessor, as additional rent, the sum of $15.00 per hour
billed in increments of one (1) hour for all after hour standard usage of
services and utilities. Charges for such after hour usages shall be
reflected in the monthly statement to Lessee and shall be paid each month
in conjunction with base rent pursuant to paragraph 4.1.
11.4 EXCESS USAGE BY LESSEE. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or
use machinery or equipment in or about the Premises that uses excess
water, lighting or power, or suffer or permit any act that causes extra
burden upon the utilities or services, including but not limited to
security services over Standard 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 is sole discretion, install at Lessee's expense
supplemental equipment and/or separate metering applicable to Lessee's
excess usage or loading. It is agreed and understood that all costs
(including, without limitation, costs incurred in determining excess
usage) incident to excess usage shall be paid by Lessee.
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 servitude to riot,
strike, labor dispute, breakdown, accident, repair or other cause beyond
Lessor's reasonable control or in cooperation with governmental request or
directions.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law assign,
sublet, transfer, mortgage or encumber all or any part of
Lessee's interest in this Lease or in the Premises without
Lessor's prior written consent. A change in the control of
Lessee whether by way of merger, sale, acquisition, financing,
transfer, leveraged buy-out or otherwise, shall require
Lessor's prior
Page 19
20
written consent. Any such assignment, sublet, transfer,
mortgage, encumbrance or change in control of Lessee is
hereafter collectively referred to as "Assignment or
Subletting";
(b) An Assignment or Subletting without written consent shall, at
Lessor's option, be a Default curable after notice per
Paragraph 13.1;
(c) Or a noncurable Breach without the necessity of any notice and
grace period. If Lessor elects to treat such unapproved
Assignment or Subletting as a noncurable Breach, Lessor may
either (i) terminate this Lease, or (ii) upon thirty (30) days
written notice increase the monthly Base Rent to one hundred
ten percent (110%) of the current market rent for new leases.
Further, in the event of such Breach and rental adjustment,
all fixed and non-fixed rental adjustments scheduled during
the remainder of the Lease term shall be increased to One
Hundred Ten percent (110%) of the estimated future market
rent(s).
(d) Lessor and Lessee hereby acknowledge that Lessor's disapproval
of any proposed Assignment or Subletting pursuant to Paragraph
12 shall be deemed reasonably withheld if based upon any
reasonable factor, specifically, without limitation, any or
all of the following factors:
(i) The proposed Assignment or Subletting would result in
more than two subleases of portions of the premises
being in effect at any one time during the Term;
(ii) The net effective rent payable by the Assignee or
Sublessee (adjusted on a rentable square foot basis) is
less than the net effective rent theft being quoted by
Lessor for new leases in the Building for comparable
size space for a comparable period of time;
(iii) The proposed Assignee or Sublessee is an existing tenant
of the Project (or has negotiated with Lessor in the
last six (6) months) for space in the Project;
(iv) The proposed Assignee or Sublessee is a governmental
entity,
(v) The portion of the premises to be assigned or sublet is
irregular in shape with inadequate means of ingress and
egress:
(vi) The use of the Premises by the Assignee or Sublessee;
(aa) Is not permitted by the use provisions hereof or
(bb) Violates any exclusive use granted by Lessee to
another tenant in the Building;
Page 20
21
(vii) The Assignment or Subletting would likely result in a
significant increase in the use of parking areas or
Common Areas by the Assignee's or Sublessee's employees
or visitors and/or significantly increase the demand
upon utilities and services to be provided by Lessor to
the Premises,
(viii) The Assignee or Sublessee does not have the financial
capacity to fulfill the obligations imposed by the
Assignment or Subletting; or
(ix) The Assignee or Sublessee is not in Lessee's reasonable
opinion of reputable or good character or consistent
with Lessor's desired tenant mix.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written
assumption by such Assignee at Sublessee of the obligations of
Lessee under this lease; (ii) release Lessee of any
obligations hereunder; or (iii) alter the primary liability of
Lessee for the payment of Rent or for the performance of any
other obligations to be performed by Lessee.
(b) Lessor may accept Rent at performance at Lessee's obligations
from any person other than Lessee pending approval or
disapproval of an Assignment. Neither a delay in the approval
or disapproval of such Assignment nor the acceptance of Rent
or performance shall constitute a waiver or estoppel of
Lessors right to exercise its remedies for Lessees Default or
Breach.
(c) Lessors consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or
subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may
proceed directly against Lessor any Guarantors or anyone else
responsible for the performance of Lessee's obligations under
this Lease including any Assignee or Sublessee without first
exhausting Lessor's remedies against any other person a entity
responsible therefore to Lessor or any security held by
Lessor.
(e) Each request for consent to an Assignment or Subletting shall
be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational
responsibility and appropriateness of the proposed Assignee or
Sublessee, including but not limited to the intended use
and/or required modification at the Premises, if any, together
with a fee of $1,000 or ten percent (10%) of the current
monthly Base Rent applicable to the portion of the Premises
which is the subject of the proposed Assignment or Sublease,
whichever it greater, as consideration for Lessor's
considering and processing said request. Lessee agrees to
Page 21
22
provide Lessor with such other or additional information
and/or documentation as may be reasonably requested.
(f) Any Assignee of, or Sublessee under, this Lease shall, by
reason of accepting such Assignment or entering into such
Sublease, be deemed to have assumed and agreed to conform and
comply with each and every term, covenant, condition and
obligation herein to be observed or performed by Leasee during
the term of said Assignment or Sublease, other than such
obligations as are contrary to or inconsistent with provisions
of an Assignment or Sublease to which Lessor has specifically
consented to in writing.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of
all or any part of the Premises and shall be deemed included in all
subleases under this Lease whether or not expressly incorporated therein:
(a) Subject to paragraph 12.4, Lessee hereby assigns and transfers
to Lessor all of Lessee's interest in all Rent payable on any
Sublease and Lessor may collect such Rent and apply same
toward Lessor's obligations under this Lease; provided,
however, that until a Breach shall occur in the performance of
Lessee's obligations, Lessee may collect said Rent. Lessor
shall not, by reason of the foregoing or any assignment of
such sublease, nor by reason of the collection of Rent, be
deemed liable to the Sublessee for any failure to Lessee to
perform and comply with any of Lessee's obligations to such
Sublessee. Lessee hereby irrevocably authorizes and directs
any such Sublessee, upon receipt of a written notice from
Lessor stating that a Breach exists in the performance of
Lessee's obligations under this Lease, to pay to Lessor all
Rent due and to become due under the Sublease. Sublessee shall
rely upon any such notice from Lessor and shall pay all Rents
to Lessor without any obligation or right to inquire as to
whether such Breach exists, notwithstanding any claim from
Lessee to the contrary.
(b) In the event of a Breach by Lessee, Lessor may, at its option,
require Sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the Sublessor under such
Sublease from the time of the exercise of said option to the
expiration of such Sublease; provided, however, Lessor shall
not be liable for any prepaid rents or security deposit paid
by such Sublessee to such Sublessor or for any prior Defaults
or Breaches by such Sublessor.
(c) Any matter requiring the consent of the Sublessor under a
Sublease shall also require the consent of Lessor.
(d) No Sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
Page 22
23
(e) Lessee and/or Sublessee shall be responsible for paying all
costs associated with Subletting and not be entitled to credit
such associated costs against rent (or other consideration)
payable on any Sublease. It is expressly understood and agreed
that all rent (or other consideration) payable on any Sublease
shall be paid to Lessor without offset or credit.
12.4 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND
SUBLETTING. It is the intent of the parties hereto that the Lease shall
confer upon Lessee only the right to use and occupy the premises and to
exercise such other rights as are conferred upon Lessee by this Lease. The
parties agree that this Lease is not intended to have a bonus or enhanced
value to Lessee, nor to serve as a vehicle whereby Lessee may profit by a
future assignment or sublet of this Lease of a right to use or occupy the
Premises as a result of any favorable terms contained herein or any
favorable changes in the market for commercial lease space. It is the
intent of the parties that any such bonus or enhanced value that may
attach to this Lease shall be and remain the exclusive property of the
Lessor. In order to carry out this intent, in the event Lessee seeks to
assign or transfer its interest in this Lease of Premises. Lessor shall
have the following options, which may be exercised at its sole election,
without limiting Lessor in the exercise of any other right or remedy at
law or equity or under this Lease, which Lessor may have by reason of such
proposed assignment or sublet.
(a) Lessor may terminate this lease and release Lessee from any
further rental obligations thereunder by sending Lessee
written notice of such termination within forty-five (45) days
after notice of intent to assign or sublet is deemed given by
Lessee, provided, however, that Lessee may withdraw its notice
of intent by written notice to Lessor at any time within ten
(10) days after receipt by Lessee of Lessor's notice of
termination, in which event this Lease shall continue in full
force and effect. If Lessor elects to terminate this Lease and
if lessee does not withdraw its notice of intent, Lessee shall
surrender the Premises pursuant to the terms of this Lease
within sixty (60) days after notice of intent to transfer is
deemed given by Lessee and on such date as designed by Lessor.
(b) Lessor may within forty-five (45) days after notice of intent
to assign or sublet is deemed given by lessee, acquire the
interest in this Lease and the Premises that Lessee proposed
to assign or sublet on the same terms and conditions as the
proposed assignment or sublet.
(c) Lessor may consent to proposed assignment or sublet, provided
that as a condition to such consent, Lessor shall have the
right to require that any and all rent paid by the assignee,
tenant or subtenant, including, without limitation, any rent
in excess of the rentals to be paid under this Lease shall be
paid directly to Lessor at the time and place specified in
this Lease. For the purpose of this paragraph, the term "rent"
shall include any consideration of any kind received, or to be
received from the assignee tenant subtenant. If such sums are
related to Lessee's interest in the Lease or in the Premises,
including, without limitation, expense reimbursements
Page 23
24
or advances, the value of services performed, key money, bonus
money and/or payments for Lessee's personal property in excess
of the book value of such property. The term "personal
property" as used in this paragraph shall include, without
limitation, assets, fixtures, inventories, accounts, good
will, equipment, furniture, general intangibles, and any
capital stock or other equity ownership interest of Lessee.
13. DEFAULTS; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. A "Default" is defined as a failure by the Lessee
to comply with or perform any of the terms, covenants, conditions or rules
under this Lease. A "Breach" a defined as the occurrence of one or more of
the following Defaults, and the failure of Lessee to cure such Default
within any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the
Premises without providing a commercially reasonable level of
security and/or Security Deposit or where the coverage of the
property insurance described in Paragraph 8.1 is jeopardized
as a result thereof, or without providing reasonable
assurances to minimize potential vandalism.
(b) The failure of Lessee to make any payment of Rent, Operating
Expense, Capital Expense, Insurance, Real Property Tax, or any
Security Deposit required to be made by Lessee hereunder,
whether to Lessor or to a third party, when due, to provide
reasonable evidence of insurance or surety bond, or to fulfill
any obligation under this Lease which endangers or threatens
life or property, where such failure continues for a period of
three (3) days following written notice to Lessee.
(c) The failure of any Lessee to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the
service contracts, (iii) the rescission of an unauthorized
assignment or subletting, (iv) a Tenancy Statement, (v) a
requested subordination, (vi) evidence concerning any guaranty
and/or Guarantor, (vii) any document requested under Paragraph
40 (easements), or (viii) any other documentation or
information which Lessor may reasonably require of Lessee
under the terms of this Lease, where any such failure
continues for a period of three (3) days following written
notice to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease or of the attached rules adopted
hereunder including, without limitation, Vehicle Parking
(Paragraph 2.2), Security Deposit (Paragraph 5), Use
(Paragraph 6), Maintenance and Alterations (Paragraphs 7.2,
7.3 and 7.4), Utilities (Paragraph 11), Assignment and
Subletting (Paragraph 12), Lessor's Access (Paragraph 32),
Hazardous Substances (Paragraph 49), where such Default
continues for a period of three (3) days after written notice.
Page 24
25
(e) The occurrences of any of the following events: (i) the making
of any general arrangement or assignment for the benefit of
creditors; (ii) becoming a "debtor" as defined in 11 U.S.C.
Sec. 101 or any successor statute thereto (unless, in the case
of a petition filed against Lessee, the same is dismissed
within sixty (60) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this
Lease, where possession is not restored to Lessee within
thirty (30) days; or (iv) the attachment, execution or other
judicial seizure of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease,
where such seizure is not discharged within thirty (30) days;
provided, however, in the event that any provision of this
subparagraph (e) is contrary to any applicable law, such
provision shall be of no force or effect, and not affect the
validity of the remaining provisions.
(f) The discovery that any financial statement of Lessee or of any
Guarantor given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor; (ii) the termination
of a Guarantor's liability with respect to this Lease other
than in accordance with the terms of such guaranty; (iii) a
Guarantor's becoming insolvent or the subject of a bankruptcy
filing; (iv) a Guarantor's refusal to honor the guaranty; or
(v) a Guarantor's breach of its guaranty obligation on an
anticipatory basis, the Lessee's failure, within sixty (60)
days following written notice of any such event, to provide
written alternative assurance or security, which, when coupled
with the then existing resources of Lessee, equals or exceeds
the combined financial resources of Lessee and the Guarantor
that existed at the time of execution of this Lease.
(h) In the event Lessee has one or more additional leases for
another premises in the Office Building Project then is
acknowledged and agreed that a default under such additional
lease(s) shall also constitute a default under this lease.
13.2 REMEDIES. If Lessee fails to perform any of its affirmative duties
or obligations, within ten (10) days after written notice (or in case of
an emergency, without notice), Lessor may, at its option, perform such
duty or obligation on Lessee's behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or
governmental licenses, permits or approvals. The costs and expenses of any
such performance by Lessor shall be due and payable by Lessee upon receipt
of invoice therefore. If any check given to Lessor by Lessee shall not be
honored by the bank upon which it is drawn, Lessor, at its option, may
require all future payments to be made by Lessee to be by cashier's check.
In the event of a Breach, Lessor may, with or without further notice or
demand, and without limited Lessor in the exercise of any right or remedy,
which Lessor may have by reason of such Breach:
Page 25
26
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and
Lessee shall immediately surrender possession to Lessor. In
such event Lessor shall be entitled to recover from Lessee:
(i) the unpaid Rent which had been earned after termination
until the time of award exceeds the amount of such rental loss
that the Lessee proves could have been reasonably avoided;
(iii) the worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee
proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Lessor for all the detriment
proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course
of things would be likely to result therefrom, including but
not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable
attorneys' fees, and that portion of any leasing commission
paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the
immediately preceding sentence shall be computed by
discounting such amount at the discount rate of the Federal
Reserve Bank of the District within which the Premises are
located at the time of award plus one percent (1%). Efforts by
Lessor to mitigate damages caused by lessee's Breach of this
Lease shall not waive Lessor's right to recover damages under
Paragraph 12. If termination of this Lease is obtained through
the provisional remedy of unlawful detainer, Lessor shall have
the right to recover in such proceeding any unpaid Rent and
damages as are recoverable therein, or Lessor may reserve the
right to recover all or any part thereof in a separate suit.
If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice t pay rent or quit, or to
perform or quit given to Lessee under the unlawful detainer
statute shall also constitute the notice required by Paragraph
13.1. In such case, the applicable grace period required by
Paragraph 13.1 and the unlawful detainer statute shall run
concurrently, and the failure of Lessee to cure the Default
within the greater of the two such grace periods shall
constitute an unlawful detainer and a Breach of this Lease
entitling Lessor to the remedies provided for in this Lease
and/or by statute.
(b) Continue this Lease and Lessee's right to possession and
recover the Rent as it becomes due, in which event Lessee may
sublet or assign, subject only to reasonable limitations. Acts
of maintenance, efforts to relet, and/or the appointment of a
receiver to protect the Lessor's interests, shall not
constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the
laws or judicial decisions of the state wherein the Premises
are located. The expiration or termination of this Lease
and/or the termination of Lessee's right to possession shall
not relieve Lessee from liability under any
Page 26
27
indemnity provisions of this Lease as to matters occurring or
accruing during the term hereof or by reason of Lessee's
occupancy of the premises.
13.3 INDUCEMENT RECAPTURE. Any agreement for free or abated rent or other
charges or for the giving or paying by Lessor to or for Lessee of any cash
or other bonus, inducement or consideration for Lessee's entering into
this Lease, all of which concessions are hereinafter referred to as
"Inducement Provisions," shall be deemed conditioned upon Lessee's full
and faithful performance of all the terms, covenants and conditions of
this Lease. Upon Breach of this Lease by Lessee, any such Inducement
Provision shall automatically be deemed deleted from this Lease and of no
further force or effect, and any rent, other charges, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
inducement Provision shall be immediately due and payable by Lessee to
Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The
acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated in writing by
Lessor at the time of such acceptance.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee
of Rent will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to, processing and accounting charges,
and late charges, which may be imposed upon Lessor by any Lender.
Accordingly, if any Rent shall not be received by Lessor within five (5)
days after such amount shall be due, then, without any requirements for
notice to Lessee, Lessee shall pay to Lessor a one-time late charge equal
to six percent (6%) of each such overdue amount. The parties hereby agree
that such late charge represents a fair and reasonable estimate of the
costs Lessor will incur by reason of such late payment. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of Lessee's
Default of Breach with respect to such overdue amount, nor prevent the
exercise of any of the other rights and remedies granted hereunder. In the
event that a late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of Base Rent, then notwithstanding
any provision of this Lease to the contrary, Base Rent shall, at Lessor's
option, become due and payable quarterly in advance.
13.5 RETURNED CHECK CHARGES. Lessee hereby acknowledges and agrees that a
service charge of $50.00 will be assessed and charged to Lessee for such
check, which is returned because of insufficient funds.
13.6 NOTICES TO PAY RENT CHARGE. Lessee hereby acknowledges and agrees
that a charge of $74.00 will be assessed and charged to Lessee for each
Three Day Notice to Pay Rent or Quit (or other termination notice based on
Default) served on Lessee.
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 of the condemning authority takes title or
Page 27
28
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 adversely 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. If Lessee does not
terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises
remaining, except that the rent and Lessee's Share of Operating Expense
increase shall be reduced in the proportion that the floor area of the
Premises is 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 sold 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 nay 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 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. 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") excuse, 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, 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 which the rent and other charges are
paid in advance, if any, and (ii) acknowledging that there are
not, to the respond 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 and 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
Page 28
29
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 not
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 herein set forth.
16. 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, 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 date 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.
17. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity
of any other provision hereof.
18. INTEREST ON PAST-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.
19. TIME OF ESSENCE. Time is of the essence with respect to the obligations to
be performed under this Lease.
20. 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 Increase, Capital Expense Increase, Insurance Premium
Increase, Real Property Tax Increase, late charges, Three-Day Notice
charges (Paragraph 13.6), returned check charges, attorney's fees and any
other expenses payable by Lessee hereunder shall be deemed to be rent.
Page 29
30
20.1 CREDITS TO LESSEE'S ACCOUNT. Lessor shall promptly credit Lessee's
account for all payments received from Lessee. Such payments shall be
first credited to those sums due under this Lease Agreement, including but
not limited to, Base Rent, Operating Expense Increase, Capital Expenses,
Insurance Premium Increase, Real Property Tax Increase, late charges,
3-Day Notice charges (Paragraph 13.6), returned check fees and attorney's
fees, which were incurred earliest in time (oldest chargeable items).
Nothing in this paragraph (including Lessor's acceptance of a partial
payment on account balance) shall be construed nor constitute a waiver by
Lessor of any provision hereof or of any subsequent breach by Lessee of
the same or any other provision.
21. 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 acknowledged that neither
Xxxxxxx Investment Company 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 and the Americans with
Disabilities 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.
22. 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 address as Lessor may from time to time hereafter
designate by notice to Lessee.
23. 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.
Page 30
31
24. RECORDING. Either Lessor or Lessee shall, upon request to the other,
execute, acknowledge and deliver to the other a `short form' memorandum of
this Lease for recording purposes.
25. 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 as defined in Section 1945 of the
California Civil Code with all of the provisions of this Lease pertaining
to the obligations of Lessee, except that the rent payable shall be two
hundred percent (200%) 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 tenancy.
26. BROKERAGE COMMISSIONS. Lessee represents and warrants that Lessee has
dealt with no broker or agent other than none. Lessee agrees to indemnify
and hold the Lessor harmless from and against any claims by any other
broker, agent or other person/entity claiming a commission or other form
of compensation by virtue of having dealt with Lessee with regard to this
leasing transmission. The provisions of this paragraph shall survive the
termination of this Lease.
27. CUMULATIVE DAMAGES. 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
Lessee shall be deemed both a covenant and condition.
29. BINDING EFFECT; CHOICE OF LAW. Subject to any provision hereof restricting
assignment or subletting by Lessee and subject to the provisions of
paragraph 16, this Lease shall bind the parties, their personal
representative, successors and assigns. This Lease shall be governed by
the laws of the State 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 Office Building
Project 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 if 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
Page 31
32
lease, and shall given 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 and
Lessee's attorney-in-fact. Lessee does herby make, constitute
and irrevocably appoint Lessor as Lessee's attorney-in-fact
and in 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 X.X. Xxxxxxx, Inc., dba Xxxxxxx Investment
Company brings (or defends) 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 their 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.
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 NOTICE OF
DEFAULT AND CONSULTATIONS IN CONNECTION THEREWITH AND ANY OTHER LEGAL
SERVICES NECESSITATED BY LESSEE DEFAULT, WHETHER OR NOT A LEGAL ACTION IS
SUBSEQUENTLY COMMENCED IN CONNECTION WITH SUCH DEFAULT.
31.4 JURY TRIAL WAIVER. Lessor and Lessee hereby waive their respective
right to trial by jury of any cause of action, claim, counterclaim or
cross-complaint in any action, proceeding and/or hearing brought by either
Lessor against Lessee or Lessee against Lessor or any matter whatsoever
arising out of, or in any way connected with, this lease, the relationship
of Lessor and Lessee, Lessee's use or occupancy of the premises, or any
claim or injury or damage, or the enforcement of any remedy under any law,
statue, or regulation, emergency or otherwise, now or hereafter in effect.
Page 32
33
32. LESSOR'S ACCESS.
32.1 LESSOR AND LESSOR'S AGENTS SHALL HAVE THE RIGHT TO ENTER THE
PREMISES AT REASONABLE TIMES (MONDAY THROUGH FRIDAY, DURING NORMAL
BUSINESS HOURS, FOLLOWING TWENTY-FOUR (24) HOURS TELEPHONIC NOTICE BY
LESSOR OR LESSOR'S AGENTS) FOR THE PURPOSE OF INSPECTING THE SAME,
PERFORMING ANY SERVICE REQUIRED OF LESSOR, SHOWING THE SAME TO PROSPECTIVE
PURCHASERS, LENDERS, OR LESSEE'S, TAKING SUCH SAFETY MEASURES, ERECTING
SUCH SCAFFOLDING OR OTHER NECESSARY STRUCTURES, MAKING SUCH ALTERATIONS,
REPAIRS, IMPROVEMENTS OR ADDITIONS TO THE PREMISES OR 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 six (6) months of the
term hereof place on or about the Premises any 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 THE CASE OF AN 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, an 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
circumstances 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.
Page 33
34
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. OPTIONS.
38.1 DEFINITIONS. "Options" shall mean: (a) the right to extend the term
of or review this Lease or to extend or renew any lease that Lessee has on
other property of Lessor; (b) the right of first refusal or first offer to
lease either the Premises or other property of Lessor; (c) the right to
purchase or the right of first refusal to purchase the Premises or other
property of Lessor.
38.2 OPTIONS PERSONAL TO ORIGINAL LESSEE: Each option granted to Lessee
in this Lease is personal to the original Lessee, and cannot be assigned
or exercised by anyone other than said original Lessee and only while the
original Lessee is in full possession of the Premises and, if requested by
Lessor, with Lessee certifying that Lessee has no intention of thereafter
assigning or subletting.
38.3 MULTIPLE OPTIONS. In the event the Lessor has any multiple options
to extend or review this Lease, a lesser Option cannot be exercised unless
the prior Options have been validly exercised.
38.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise the Option: (i) during
the period commencing with the giving of any notice of Default
and continuing until said Default is cured; (ii) during the
period of time any Rent is unpaid (without regard to whether
notice thereof is given Lessee); (iii) during the time Lessee
is in Breach of this Lease; or (iv) in the event that Lessee
has been given three (3) or more notices of separate Default,
whether or not the Defaults are cured, during the twelve (12)
month period immediately preceding the exercise of the Option:
(v) becoming a "debtor" as defined in U.S.C. Sec. 101 during
the term of this Lease.
(b) The period of time in 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
38.4(a).
(c) An Option shall terminate and be of no further force or
effect, notwithstanding Lessee's due and timely exercise of
the Option, if, after such exercise and prior to the
commencement of the extended term, (i) Lessee fails to pay
Rent for a period of thirty (30) days after such Rent becomes
due (without any necessity of Lessor to give notice thereof),
(ii) Lessor gives to Lessee three (3) or more notices of
separate Default during any twelve (12) month period, whether
or not the Defaults are cured, or (iii) if Lessee commits a
Breach of this Lease.
Page 34
35
39. SECURITY MEASURES - LESSOR'S RESERVATIONS.
39.1 Lessee hereby acknowledges that Lessor shall have no obligations
whatsoever to provide guard service or other security measures for the
Project in the Common Areas.
39.2 Lessee shall not:
(a) Use a representation (photographic or otherwise) of the
Building or the Office Building Project or their name(s) in
connection with Lessee's business;
(b) Suffer or permit anyone, except in emergency, to go upon the
roof of the Building.
40. EASEMENTS.
40.1 Lessor reserves to itself the right, from time to time, to grant
such easements, rights and dedications that Lessor deems necessary to
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.
40.2 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 effect this Lease or impose any liability upon
Lessor.
41. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money
is asserted shall have the right to make payment "under protest" and such
payment shall not be regarded as a voluntary payment, and there shall
survive the right on the xxx 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 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.
42. 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.
43. CONFLICT. Any conflict between the printed provisions, Exhibits or
Addendum of this Lease and the typewritten or handwritten provisions, if
any, shall be controlled by the typewritten or handwritten provisions.
Page 35
36
44. NO OFFER. Preparation of this Lease by Lessor's agent and submission of
same to Lessee shall not be deemed on offer to Lessee to lease. This Lease
shall become binding upon Lessor and Lessee only when fully executed by
both parties.
45. LENDER MODIFICATIONS. Lessee agrees to make such reasonable modifications
to this Lease as may be reasonably required by an institutional lender in
connection with the obtaining of normal financing or refinancing of the
Office Building Project.
46. MULTIPLE PARTIES. If more than one person or entity is named as either
Lessor or Lessee herein, except 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.
47. WORK LETTER. This Lease is supplemented by that certain Work Letter of
even date executed by Lessor and Lessee, attached hereto as Exhibit C and
incorporated herein by this reference.
48. ATTACHMENTS. Attached hereto are the following documents ("Exhibits"),
which are incorporated and become part of this Lease:
(a) Floor Plan;
(b) Rules and Regulations.
49. HAZARDOUS SUBSTANCES.
49.1 REPORTABLE USER REQUIRE CONSENT.
(a) The term "Hazardous Substance" as used in this Lease shall
mean any product, substance, or waste whose presence, use,
manufacture, disposal, transportation, or release, either by
itself or in combination with other materials expected to be
on the Premises, is either (i) potentially injurious to the
public health, safety or welfare, the environment or the
Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for potential liability of Lessor
to any governmental agency or third party under any applicable
statute or common law theory. Hazardous Substances shall
include, but not be limited to, hydrocarbons, petroleums,
gasoline, and/or crude oil or any products, by-products or
fractions thereof. Lessee shall not engage in any activity in
or on the Premises which constitutes a Reportable Use of
Hazardous Substances without the express prior written consent
of Lessor and timely compliance (at Lessor's expense) with all
applicable laws, covenants, or restrictions of record,
building codes, regulations and ordinances ("Applicable
Requirements"). "Reportable Use" shall mean (i) installation
or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or
disposal of a Hazardous Substance that requires a permit from,
or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental
authority, and/or (iii)
Page 36
37
the presence at the Premises of a Hazardous Substance with
respect to which any Applicable Requirements required that a
notice be given to persons entering or occupying the Premises
or neighboring properties. Notwithstanding the foregoing,
Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Use as
specified in paragraph 1.4 so long as such use is in
compliance with all Applicable Requirements, is not a
Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination
or damages or expose Lessor to any liability, including, but
not limited to, the installation (and removal on or before
Lease expiration or termination) of protective modifications
(such as concrete encasements) and/or increasing the Security
Deposit .
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance has come to be
located in, on, under or about the Premises, other than as
previously consented to by Lessor, Lessee shall immediately
give written notice of such fact to Lessor, and provide Lessor
with a copy of any report, notice, claim or other
documentation which it has concerning the presence of such
Hazardous Substances.
(c) LESSEE REMEDIATION. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under,
or about the Premises (including through the plumbing or
sanitary sewer system) and shall promptly, at Lessee's
expense, take all investigatory and/or remedial action
reasonably recommended, whether or not formally ordered or
required, for the cleanup of any combination of, and for the
maintenance, security and/or monitoring of the Premises or
neighboring properties, that was caused or materially
contributed to by Lessee, or pertaining to or involving any
Hazardous Substance brought onto the Premises during the term
of this Lease, by or for Lessee, or any third party.
(d) LESSEE INDEMNIFICATION. Lessee shall indemnify, defend and
hold Lessor, its agents, employees, lenders and ground lesser,
if any, harmless from and against any and all loss of rents
and/or damages, liabilities, judgments, claims, expenses,
penalties, and attorneys' and consultants' fees arising out of
or in involving any Hazardous Substance brought onto the
Premises by or for Lessee, or any third party (provided,
however, that Lessee shall have no liability under this Lease
with respect to underground migration of any Hazardous
Substance under the Premises from adjacent properties).
Lessee's obligations shall include, but not be limited to, the
effects of any contamination or injury to person, property or
the environment created or suffered by Lessee, and the cost of
investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of
this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from
its
Page 37
38
obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessor in writing
at the time of such agreement.
(e) LESSOR INDEMNIFICATION. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its
employees and lenders, harmless from and against any all
environmental damages, including the cost remediation, which
existed as a result of Hazardous Substances on the Premises
prior to the Commencement Date or which are caused by the
gross negligence or willful misconduct of Lessor, its agents
or employees. Lessor's obligations, if and when required by
the Applicable Requirements, shall include, but not be limited
to, the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration
or termination of this Lease.
(f) INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the
responsibility and pay for any investigations or remediation
measures required by governmental entities having jurisdiction
with respect to the existence of Hazardous Substances on the
Premises prior to the Commencement Date unless such
remediation measure is required as a result of Lessee's use
(including "Alterations", as defined in paragraph 7.3(a)
below) of the Premises, in which event Lessee shall be
responsible for such payment. Lessee shall cooperate fully in
any such activities at the request of Lessor, including
allowing Lessor and Lessor's agents to have reasonable access
to the Premises at reasonable times in order to carryout
Lessor's investigative and remedial responsibility.
(g) LESSOR TERMINATION OPTION. If a Hazardous Substance Condition
occurs during the term of this Lease, unless Lessee is legally
responsible therefor (in which case Lessee shall make the
investigation and remediation thereof required by the
Applicable Requirements and the Lease shall continue in full
force and effect, but subject to Lessor's rights under
Paragraph 51(d) and Paragraph 13), Lessor may, at Lessor's
option, either (i) investigate and remediate such Hazardous
Substance Condition, if required, as soon as reasonably
possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated
cost to remediate such condition exceeds twelve (12) times the
then monthly Base Rent or $100,000, whichever is greater, give
written notice to Lessee, within thirty (30) days after
receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition, of Lessor's desire to terminate
this Lease as of the date sixty (60) days following the date
of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within ten (10) days
thereafter, give written notice to Lessor of Lessee's
commitment to pay the amount by which the cost of the
remediation of such Hazardous Substance Condition exceeds an
amount equal to twelve (12) times the then monthly Base Rent
or $100,000, whichever is greater. Lessee shall provide Lessor
with said funds or satisfactory assurance thereof within
thirty (30) days following
Page 38
39
such commitment. In such event, this Lease shall continue in
full force and effect, and Lessor shall proceed to make such
remediation as soon as reasonably possible after the required
funds are available. If Lessee does not give such notice and
provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date
specified in Lessor's notice of termination.
49.2 LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise provided in this Lease. Lessee shall, at Lessee's sole expense,
fully, diligently and in a timely manner, materially comply with all
Applicable Requirements, the requirements of any applicable fire insurance
underwriter or rating bureau, and the recommendations of Lessor's
engineers and/or consultants which relate in any manner to the Premises,
without regard to whether said requirements are not in effect or become
effective after the Commencement Date. Lessee shall, within ten (10) days
after receipt of Lessor's written request, provide Lessor with copies of
all permits and other documents, and other information evidencing Lessee's
compliance with any Applicable Requirements specified by Lessor, and shall
immediately upon receipt, modify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving the failure of
Lessee or the Premises to comply with any Applicable Requirements.
49.3 INSPECTION; COMPLIANCE. Lessor and Lessor's consultants shall have
the right to enter into Premises at any time, in the case of an emergency,
and otherwise at reasonable times, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with this
Lease. The post of any such inspections shall be paid by Lessor, unless a
violation of Applicable Requirements, or a contamination is found to exist
or be imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse
Lessor for the cost of such inspections, so long as such inspection is
reasonably related to the violation or contamination.
50. TENANT IMPROVEMENTS. Lessor, at its sole cost and expense, shall provide
the following improvements:
1. Paint the interior walls per the building standard
2. Install new carpet per the building standard
3. Add one (1) wall per Exhibit A
4. Remove one (1) wall and one (1) door per Exhibit A
5. Detail the suite
51. OFFER. This offer to lease shall remain open until Tuesday, August 22,
2009 at 2:00 p.m.
52. Lessee shall submit to Lessor the sum of $13,878.00 as first months rent
and security deposit no later than Tuesday, August 22, 2000 at 2:00 p.m.
53. Lessor must have copy of Insurance Certificate before keys will be given
out for this unit.
Page 39
40
In the event of an emergency after normal business hours, Lessor should contact
one of the three individuals listed below including their after hours telephone
number.
1. Name____________ Email_______________ Telephone Number (___)__________
2. Name____________ Email_______________ Telephone Number (___)__________
3. Name____________ Email_______________ Telephone Number (___)__________
LESSEE AND LESSOR 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.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY LESSOR OR XXXXXXX
INVESTMENT COMPANY AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE LESSEE IS
URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF
THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATION SYSTEMS, AND
THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.
Page 40
41
LESSOR: LESSEE:
Clay Street Capital, Inc. National Scientific Corporation
a California Corporation a Texas Corporation
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ L.L. Xxxx
-------------------- -------------
Its: President Its: Chairman/CEO
Please Print Name and Title
Executed at: Xxxxxxx Investment Executed at: Phoenix, AZ
Company
On: September 7, 2000 On: 8/22/00
Address: 0000 Xxxxxxxxxx Xxxxx #000 Address: 0000 X. Xxxxxxxxx Xx., Xxx. 000
Xxx Xxxx, XX 00000-0000 Xxxxxxx, XX 00000
Page 41
42
EXHIBIT "B"
RULES AND REGULATIONS FOR
STANDARD OFFICE LEASE
GENERAL RULES
1. Lessee shall not suffer or permit the obstruction of any Common Areas,
including driveways, walkways and stairways.
2. Lessor reserves the right to refuse access to any persons Lessor in good
faith judges to be a threat to the safety, reputation, or property of the Office
Building Project and its occupants.
3. Lessee shall not make or permit any noise or odors that annoy or interfere
with other lessee's or persons having business within the Office Building
Project.
4. Lessee shall not keep animals or birds within the Office Building Project,
and shall not bring bicycles, motorcycles or other vehicles into areas not
designated as authorized for same.
5. Lessee shall not make, suffer or permit litter except in appropriate
receptacles for that purpose.
6. Lessee shall not alter any lock or install new or additional locks or
bolts.
7. Lessee shall be responsible for the inappropriate use of any toilet rooms,
plumbing or other utilities. No foreign substances of any kind are to be
inserted therein.
8. Lessee shall not deface the walls, partitions or other surfaces of the
Premises or Office Building Project.
9. Lessee shall not suffer or permit any thing in or around the Premises or
Building that causes excessive vibration or floor loading in any part of the
Office Building Project.
10. Furniture, significant freight and equipment shall be moved into or out of
the building only with the Lessor's knowledge and consent, and subject to such
reasonable limitations, techniques and timing, as may be designated by Lessor.
Lessee shall be responsible for any damage to the Office Building Project
arising from any such activity.
11. Lessee shall not employ any service or contractor for services or work to
be performed in the Building, except as approved by Lessor.
12. Lessor reserves the right to close and lock the Building on Saturdays,
Sundays and legal holidays, and on other days between the hours of 3:00 p.m. and
8:00 a.m. of the following day. If Lessee uses the Premises during such period,
Lessee shall be responsible for securely locking any doors it may have opened
for entry.
13. Lessee shall return all keys at the termination of its tenancy and shall
be responsible for the cost of replacing any keys that are lost.
Page 42
43
14. No window coverings, shades or awnings shall be installed or used by
Lessee.
15. No Lessee, employee or invitee shall go upon the roof of the Building.
16. Lessee shall not suffer or permit smoking or carrying of lighted cigars or
cigarettes in areas reasonably designated by Lessor or by applicable
governmental agencies as non-smoking areas.
17. Lessee shall not use any method of heating or air conditioning other than
as provided by Lessor.
18. Lessee shall not install, maintain or operate any vending machines upon
the Premises without Lessor's written consent.
19. The premises shall not be used for lodging or manufacturing, cooking or
food preparation.
20. Lessee shall comply with all safety, fire protection and evacuation
regulations established by Lessor or any applicable governmental agency.
21. Lessor reserves the right to waive any one of these rules or regulations,
and/or as to any particular Lessee, and any such waiver shall not constitute a
waiver of any other rule or regulation or any subsequent application thereof to
such Lessee.
22. Lessee assumes all risks from theft or vandalism and agrees to keep its
Premises locked as may be required.
23. Lessor reserves the right to make such other reasonable rules and
regulations as it may from time to time deem necessary for the appropriate
operation and safety of the Office Building Project and its occupants. Lessee
agrees to abide by these and such rules and regulations.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles herein called "Permitted Size Vehicles."
Vehicles other than Permitted Size Vehicles are herein referred to as "Oversized
Vehicles."
2. Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Lessor for such activities.
3. Parking stickers or identification devices shall be the property of Lessor
and be returned to Lessor by the holder thereof upon termination of the holder's
parking privileges. Lessee will pay such replacement charge as is reasonably
established by Lessor for the loss of such devices.
4. Lessor reserves the right to refuse the sale of monthly identification
devices to any person or entity that willfully refuses to comply with the
applicable rules, regulations, laws and/or agreements.
Page 43
44
5. Lessor reserves the right to relocate all or a part of parking spaces from
floor to floor, within one floor, and/or to reasonably adjacent offsite
location(s), and to reasonably allocate them between compact and standard size
spaces, as long as the same complies with applicable laws, ordinances and
regulations.
6. Users of the parking area will obey all posted signs and park only in the
areas designated for vehicle parking.
7. Unless otherwise instructed, every person using the parking area is
required to park and lock his own vehicle. Lessor will not be responsible for
any damage to vehicles, injury to persons or loss of property, all of which
risks are assumed by the party using the parking area.
8. Validation, if established, will be permissible only by such method or
methods as Lessor and/or its licensee may establish at rates generally
applicable to visitor parking.
9. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.
10. Lessee shall be responsible for seeing that all of its employees, agents
and invitees comply with the applicable parking rules, regulations, laws and
agreements.
11. Lessor reserves the right to modify these rules and/or adopt such other
responsible and non-discriminatory rules and regulations as it may deem
necessary for the property operation of the parking area. Should it become
necessary to designate parking stalls based on Lessee's use of the parking area,
Lessor reserves the right (at Lessor's sole discretion) to designate certain
parking stalls for a particular Lessee's usage with all costs incident to such
designation payable by Lessee.
12. Such parking use as is herein provided is intended merely as a license
only and no bailment is intended or shall be created hereby.
Page 44
