Exhibit 6.6
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes
only, October 22, 1997, is made by and between COOPERAGE-ROSSE PROPERTIES
II, a General Partnership ("LESSOR") and INNOVACOM, INC., a California
corporation ("LESSEE"), (collectively the "PARTIES," or individually a
"PARTY").
1.2(a) PREMISES: That certain portion of the Building, including all
improvements therein or to be provided by Lessor under the terms of this
Lease, commonly known by the street address of 0000 Xxxxxxx Xxxxx, located
in the City of Santa Xxxxx, County of Santa Xxxxx, State of California,
with zip code 95054, as outlined on Exhibit A attached hereto ("PREMISES").
The "BUILDING" is that certain building containing the Premises and
generally described as (describe briefly the nature of the Building):
Approx. 18,000 sq. ft. of space situated on the northern most portion of a
single story building which is part of a 2 bldg. complet situated at the
northwesterly corner of Xxxxx Blvd. & Xxxxxxx Drive. In addition to
Lessee's rights to use and occupy the Premises as hereinafter specified,
Lessee shall have non-exclusive rights to the Common Areas (as defined in
Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the Building or
to any other buildings in the Industrial Center. The Premises, the
Building, the Common Areas, the land upon which they are located, along
with all other buildings and improvements thereon, are herein collectively
referred to as the "INDUSTRIAL CENTER." (Also see Paragraph 2.)
1.2(b) PARKING: 70 unreserved vehicle parking spaces ("UNRESERVED
PARKING SPACES"); and no reserved vehicle parking spaces ("RESERVED PARKING
SPACES"). (Also see Paragraph 2.6.)
1.3 TERM: 5 years and 0 months ("ORIGINAL TERM") commencing
January 1, 1998 ("COMMENCEMENT DATE") and ending December 31, 2002
("EXPIRATION DATE"). (Also see Paragraph 3.)
1.4 EARLY POSSESSION: N/A ("EARLY POSSESSION DATE").
(Also see Paragraphs 3.2 and 3.3.)
1.5 BASE RENT: $28,800.00 per month ("BASE RENT"), payable on the
first day of each month commencing January 1, 1998. (Also see Paragraph
4.)
If this box is checked, this Lease provides for the Base Rent
to be adjusted per Addendum _________, attached hereto.
1.6(a) BASE RENT PAID UPON EXECUTION: $28,800 as Base Rent for the
period January 1, 1998 - January 31, 1998.
1.6(b) LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: 47% of Bldg,
27% of Project ("LESSEE'S SHARE") as determined by prorata
square footage of the Premises as compared to the total square footage of
the Building or other criteria as described in Addendum _____.
1.7 SECURITY DEPOSIT: $32,400.00 ("SECURITY DEPOSIT"). (Also see
Paragraph 5.)
1.8 PERMITTED USE: General office, engineering, software
development, storage, shipping & receiving, testing and other legally
related uses ("PERMITTED USE"). (Also see Paragraph 6.)
1.9 INSURING PARTY. Lessor is the "INSURING PARTY." (Also see
Paragraph 8.)
1.10(a) REAL ESTATE BROKERS. The following real estate broker(s)
(collectively, the "BROKERS") and brokerage relationships exist in this
transaction and are consented to by the Parties (check applicable boxes):
______________________________ represents Lessor exclusively
("LESSOR'S BROKER");
Xxxxx Xxxxxx & Associates represents Lessee exclusively
("LESSEE'S BROKER");
____________________________ represents both Lessor and Lessee
("DUAL AGENCY"); (Also see Paragraph 15.)
1.10(b) PAYMENT TO BROKERS. Upon the execution of this Lease by
both Parties,
Lessor shall pay to said Broker(s) jointly, or in such separate shares as
they may mutually designate in writing, a fee as set forth in a separate
written agreement between Lessor and said Broker(s) (or in the event there
is no separate written agreement between Lessor and said Broker(s), the sum
of $__________) for brokerage services rendered by said Broker(s) in
connection with this transaction.
1.11 GUARANTOR. The obligations of the Lessee under this Lease are to
be guaranteed by NONE ("GUARANTOR"). (Also see Paragraph 37.)
1.12 ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 49 through 55, and Exhibits A through B, all of
which constitute a part of this Lease.
2. PREMISES, PARKING AND COMMON AREAS.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises, for the term, at the rental, and upon all
of the terms, covenants and conditions set forth in this Lease. Unless
otherwise provided herein, any statement of square footage set forth in
this Lease, or that may have been used in calculating rental and/or Common
Area Operating Expenses, is an approximation which Lessor and Lessee agree
is reasonable and Lessee's Share (as defined in Paragraph 1.6(b)) based
thereon is not subject to revision whether or not the actual square footage
is more or less.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee clean and
free of debris on the Commencement Date and warrants to Lessee that the
existing plumbing, electrical systems, fire sprinkler system, lighting, air
conditioning and heating systems and loading doors, if any, in the
Premises, other than those constructed by Lessee, shall be in good
operating condition on the Commencement Date. If a non-compliance with
said warranty exists as of the Commencement Date, Lessor shall, except as
otherwise provided in this Lease, promptly after receipt of written notice
from Lessee setting forth with specificity the nature and extent of such
non-compliance, rectify same at Lessor's expense. If Lessee does not give
Lessor written notice of a non-compliance with this warranty within thirty
(30) days after the Commencement Date, correction of that non-compliance
shall be the obligation of Lessee at Lessee's sole cost and expense.
2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE.
Lessor warrants that any improvements (other than those constructed by
Lessee or at Lessee's direction) on or in the Premises which have been
constructed or installed by Lessor or with Lessor's consent or at Lessor's
direction shall comply with all applicable covenants or restrictions of
record and applicable building codes, regulations and ordinances in effect
on the Commencement Date. Lessor further warrants to Lessee that Lessor
has no knowledge of any claim having been made by any governmental agency
that a violation or violations of applicable building codes, regulations,
or ordinances exist with regard to the Premises as of the Commencement
Date. Said warranties shall not apply to any Alterations or Utility
Installations (defined in Paragraph 7.3(a)) made or to be made by Lessee.
If the Premises do not comply with said warranties, Lessor shall, except as
otherwise provided in this Lease, promptly after receipt of written notice
from Lessee given within six (6) months following the Commencement Date and
setting forth with specificity the nature and extent of such non-
compliance, take such action, at Lessor's expense, as may be reasonable or
appropriate to rectify the non-compliance. Lessor makes no warranty that
the Permitted Use in Paragraph 1.8 is permitted for the Premises under
Applicable Laws (as defined in Paragraph 2.4).
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it
has been advised by the Broker(s) to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical and
fire sprinkler systems, security, environmental aspects, seismic and
earthquake requirements, and compliance with the Americans with
Disabilities Act and applicable zoning, municipal, county, state and
federal laws, ordinances and regulations and any covenants or restrictions
of record (collectively, "APPLICABLE LAWS") and the present and future
suitability of the Premises for Lessee's intended use; (b) that Lessee has
made such investigation as it deems necessary with reference to such
matters, is satisfied with reference thereto, and assumes all
responsibility therefore as the same relate to Lessee's occupancy of the
Premises and/or the terms of this Lease; and (c) that neither Lessor, nor
any of Lessor's agents, has made any oral or written representations or
warranties with respect to said matters other than as set forth in this
Lease.
2.5 LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in
this Paragraph 2 shall be of no force or effect if immediately prior to the
date set forth in Paragraph 1.1 Lessee was the owner or occupant of the
Premises. In such event, Lessee shall, at Lessee's sole cost and expense,
correct any noncompliance of the Premises with said warranties.
2.6 VEHICLE PARKING. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved Parking Spaces specified in
Paragraph 1.2(b) on those portions of the Common Areas designated from time
to time by Lessor for parking. Lessee shall not use more parking spaces
than said number. Said parking spaces shall be used for parking by
vehicles no larger than full-size passenger automobiles or pick-up trucks,
herein called "PERMITTED SIZE VEHICLES." Vehicles other than Permitted
Size Vehicles shall be parked and loaded or unloaded as directed by Lessor
in the Rules and Regulations (as defined in Paragraph 40) issued by Lessor.
(Also see Paragraph 2.9.)
(a) Lessee shall not permit or allow any vehicles that belong to
or are controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in
areas other than those designated by Lessor for such activities.
(b) If Lessee permits or allows any of the prohibited activities
described in this Paragraph 2.6, 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 Lessor.
(c) Lessor shall at the Commencement Date of this Lease, provide
the parking facilities required by Applicable Law.
2.7 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 Industrial Center and interior utility raceways within
the Premises that are provided and designated by the Lessor from time to
time for the general non-exclusive use of Lessor, Lessee and other Leases
of the Industrial Center and their respective employees, suppliers,
shippers, customers, contractors and invitees, including parking areas,
loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways and landscaped areas.
2.8 COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby grants to Lessee,
for the benefit of Lessee and its employees, suppliers, shippers,
contractors, customers and invitees, during the term of this Lease, the
non-exclusive right to use, in common with others entitled to such use, the
Common Areas as they exist from time to time, subject to any rights,
powers, and privileges reserved by Lessor under the terms hereof or under
the terms of any rules and regulations or restrictions governing the use of
the Industrial Center. Under no circumstances shall the right herein
granted to use the Common Areas be deemed to include the right to store any
property, temporarily or permanently, in the Common Areas. Any such
storage shall be permitted only by the prior written consent of Lessor or
Lessor's designated agent, which consent may be revoked at any time. In
the event that any unauthorized storage shall occur then Lessor shall have
the right, without notice, in addition to such other rights and remedies
that it may have, to remove the property and charge the cost to Lessee,
which cost shall be immediately payable upon demand by Lessor.
2.9 COMMON AREAS - RULES AND REGULATIONS. 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 establish, modify, amend and enforce reasonable Rules and Regulations
with respect thereto in accordance with Paragraph 40. Lessee agrees to
abide by and conform to all such Rules and Regulations, and to cause its
employees, suppliers, shippers, customers, contractors and invitees to so
abide and conform. Lessor shall not be responsible to Lessee for the non-
compliance with said rules and regulations by other lessees of the
Industrial Center.
2.10 COMMON AREAS - CHANGES. Lessor shall have the right, in Lessor's
sole discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas,
ingress, egress, direction of traffic, landscaped areas, walkways and
utility raceways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the
Industrial Center to be a part of the Common Areas;
(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 Industrial Center, or any
portion thereof; and
(f) To do and perform such other acts and make such other
changes in, to or with respect to the Common Areas and Industrial Center as
Lessor may, in the exercise of sound business judgment, deem to be
appropriate. REFER TO PARAGRAPH 56 BELOW.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term
of this Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If an Early Possession Date is specified in
Paragraph 1.4 and if Lessee totally or partially occupies the Premises
after the Early Possession Date but prior to the Commencement Date, the
obligation to pay Base Rent shall be abated for the period of such early
occupancy. All other terms of this Lease, however (including but not
limited to the obligations to pay Lessee's Share of Common Area Operating
Expenses and to carry the insurance required by Paragraph 8) shall be in
effect during such period. Any such early possession shall not affect nor
advance the Expiration Date of the Original Term.
3.3 DELAY IN POSSESSION. If for any reason Lessor cannot deliver
possession of the Premises to Lessee by the Early Possession Date, if one
is specified in Paragraph 1.4, or if no Early Possession Date is specified,
by the Commencement Date, 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, except as otherwise provided herein, be obligated
to pay rent or perform any other obligation of Lessee under the terms of
this Lease until Lessor delivers possession of the Premises to Lessee. If
possession of the Premises is not delivered to Lessee within sixty (60)
days after the Commencement Date, Lessee may, at its option, by notice in
writing to Lessor within ten (10) days after the end of said sixty (60) day
period, cancel this Lease, in which event the parties shall be discharged
from all obligations hereunder; provided, further, however, that if such
written notice of Lessee is not received by lessor within said ten (10) day
period, Lessee's right to cancel this Lease hereunder shall terminate and
be of no further force or effect. Except as may be otherwise provided, and
regardless of when the Original Term actually commences, if possession is
not tendered to Lessee when required by this Lease and Lessee does not
terminate this Lease, as aforesaid, the period free of the obligation to
pay Base Rent, if any, that Lessee would otherwise have enjoyed shall run
from the date of delivery of possession and continue for a period equal to
the period during which the Lessee would have otherwise enjoyed under the
terms hereof, but minus any days of delay caused by the acts, changes or
omissions of Lessee.
4. RENT.
4.1 BASE RENT. Lessee shall pay Base Rent and other rent or charges,
as the same may be adjusted from time to time, to Lessor in lawful money of
the United States, without offset or deduction, on or before the day on
which it is due under the terms of this Lease. Base Rent and all other
rent and charges for any period during the term hereof which is for less
than one full month shall be prorated based upon the actual number of days
of the month involved. Payment of Base Rent and other charges shall be
made to Lessor at its address stated herein or to such other persons or at
such other addresses as Lessor may from time to time designate in writing
to Lessee.
4.2 COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor
during the term hereof, in addition to the Base Rent, Lessee's Share (as
specified in Paragraph 1.6(b) of all Common Area Operating Expenses, as
hereinafter defined, during each calendar year of the term of this Lease,
in accordance with the following provisions: REFER TO PARAGRAPH 57 BELOW.
(a) "COMMON AREA OPERATING EXPENSES" are defined, for purposes
of this Lease, as all costs incurred by Lessor relating to the ownership
and operation of the Industrial Center, including, but not limited to, the
following:
(i) The operation, repair and maintenance, in neat, clean,
good order and condition, of the following:
(aa) The Common Areas, including parking areas, loading
and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, striping, bumpers, irrigation systems, Common
Area lighting facilities, fences and gates, elevators and roof.
(bb) Exterior signs and any tenant directories.
(cc) Fire detection and sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to
service the Common Areas.
(iii) Trash disposal, property management and security
services and the costs of any environmental inspections.
(iv) Reserves set aside for maintenance and repair of Common
Areas.
(v) Real Property Taxes (as defined in Paragraph 10.2) to
be paid by Lessor for the Building and the Common Areas under Paragraph 10
hereof.
(vi) The costs of the premiums for the insurance policies
maintained by Lessor under Paragraph 8 hereof.
(vii) Any deductible portion of an insured loss concerning
the Building or the Common Areas.
(viii) Any other services to be provided by Lessor that are
stated elsewhere in this Lease to be a Common Area Operating Expense.
(b) Any Common Area Operating Expenses and Real Property Taxes
that are specifically attributable to the Building or to any other building
in the Industrial Center or to the operation, repair and maintenance
thereof, shall be allocated entirely to the Building or to such other
building. However, any Common Area Operating Expenses and Real Property
Taxes that are not specifically attributable to the Building or to any
other building or to the operation, repair and maintenance thereof, shall
be equitably allocated by Lessor to all buildings in the Industrial Center.
(c) The inclusion of the improvements, facilities and services
set forth in Subparagraph 4.2(a) shall not be deemed to impose an
obligation upon Lessor to either have said improvements or facilities or to
provide those services unless the Industrial Center already has the same,
Lessor already provides the services, or Lessor has agreed elsewhere in
this Lease to provide the same or some of them.
(d) Lessee's Share of Common Area Operating Expenses shall be
payable by Lessee within ten (10) days after a reasonably detailed
statement of actual expenses is presented to Lessee by Lessor. At Lessor's
option, however, an amount may be estimated by Lessor from time to time of
Lessee's Share of annual Common Area Operating Expenses and the same shall
be payable monthly or quarterly, as Lessor shall designate, during each 12-
month period of the Lease term, on the same day as the Base Rent is due
hereunder. Lessor shall deliver to Lessee within sixty (60) days after the
expiration of each calendar year a reasonably detailed statement showing
Lessee's Share of the actual Common Area Operating Expenses incurred during
the preceding year. If Lessee's payments under this Paragraph 4.2(d)
during said preceding year exceed Lessee's Share as indicated on said
statement, Lessor shall be credited the amount of such over-payment against
Lessee's Share of Common Area Operating Expenses next becoming due. If
Lessee's payments under this Paragraph 4.2(d) during said preceding year
were less than Lessee's Share as indicated on said statement, Lessee shall
pay to Lessor the amount of the deficiency within twenty (20) days after
delivery by Lessor to Lessee of said statement.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon Lessee's
execution hereof the Security Deposit set forth in Paragraph 1.7 as
security for Lessee's faithful performance of Lessee's obligations under
this Lease. If Lessee fails to pay Base Rent or other rent or charges due
hereunder, or otherwise Defaults under this Lease (as defined in Paragraph
13.1), Lessor may use, apply or retain all or any portion of said Security
Deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, cost, expense, loss or damage
(including attorneys fees) 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 therefore
deposit monies with Lessor sufficient to restore said Security Deposit to
the full amount required by this Lease. Any time the Base Rent increases
during the term of this Lease, Lessee shall, upon written request from
Lessor, deposit additional monies with Lessor as an addition to the
Security Deposit so that the total amount of the Security Deposit shall at
all times bear the same proportion to the then current Base Rent as the
initial Security Deposit bears to the initial Base Rent set forth in
Paragraph 1.5. Lessor shall not be required to keep all or any part of the
Security Deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest herein), that portion of the
Security Deposit not used or applied by Lessor. Unless otherwise expressly
agreed in writing by Lessor, no part of the Security Deposit shall be
considered to be held in trust, to bear interest or other increment for its
use, or to be prepayment for any monies to be paid by Lessee under this
Lease.
6. USE.
6.1 PERMITTED USE.
(a) Lessee shall use and occupy the Premises only for the
Permitted Use set forth in Paragraph 1.8, or any other legal use which is
reasonably comparable thereto, and for no other purpose. Lessee shall not
use or permit the use of the Premises in a manner that is unlawful, creates
waste or a nuisance, or that disturbs owners and/or occupants of, or causes
damage to the Premises or neighboring premises or properties.
(b) Lessor hereby agrees to not unreasonably withhold or delay
its consent to any written request by Lessee, Lessee's assignees or
subtenants, and by prospective assignees and subtenants of Lessee, its
assignees and subtenants, for a modification of said Permitted Use, so long
as the same will not impair the structural integrity of the improvements on
the Premises or in the Building or the mechanical or electrical systems
therein, does not conflict with uses by other lessees, is not significantly
more burdensome to the Premises or the Building and the improvements
thereon, and is otherwise permissible pursuant to this Paragraph 6. If
Lessor elects to withhold such consent, Lessor shall within five (5)
business days after such request give a written notification of same, which
notice shall include an explanation of Lessor's reasonable objections to
the change in use.
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS
SUBSTANCE" as used in this Lease shall mean any product, substance,
chemical, material or waste whose presence, nature, quantity and/or
intensity of existence, use, manufacture, disposal, transportation, spill,
release or effect, 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 Substance
shall include, but not be limited to, hydrocarbons, petroleum, gasoline,
crude oil or any products or by-products thereof. Lessee shall not engage
in any activity in or about the Premises which constitutes a Reportable Use
(as hereinafter defined) of Hazardous Substances without the express prior
written consent of Lessor and compliance in a timely manner (at Lessee's
sole cost and expense) with all Applicable Requirements (as defined in
Paragraph 6.3). "REPORTABLE USE" shall mean (i) the installation or use of
any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that
requires a permit from, or with respect to which a report, notice,
registration or business plan is required to be filed with, any
governmental authority, and (iii) the presence in, on or about the Premises
of a Hazardous Substance with respect to which any Applicable Laws require
that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Lessee may, without
Lessor's prior consent, but upon notice to Lessor and in compliance with
all Applicable Requirements, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of the
Permitted Use, so long as such use is not a Reportable Use and does not
expose the Premises or neighboring properties to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor. In
addition, Lessor may (but without any obligation to do so) condition its
consent to any Reportable Use of Hazardous Substance by Lessee upon
Lessee's giving Lessor such additional assurances as Lessor, in its
reasonable discretion, deems necessary to protect itself, the public, the
Premises and the environment against damage, contamination or injury and/or
liability therefor, including but not limited to the installation (and, at
Lessor's option, removal on or before Lease expiration or earlier
termination) or reasonably necessary protective modifications to the
Premises (such as concrete encasements) and/or the deposit of an additional
Security Deposit under Paragraph 5 hereof.
(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 or the Building, other than as previously
consented to by Lessor, Lessee shall immediately give Lessor written notice
thereof, together with a copy of any statement, report, notice,
registration, application, permit, business plan, license, claim, action,
or proceeding given to, or received from, any governmental authority or
private party concerning the presence, spill, release, discharge of, or
exposure to, such Hazardous Substance including but not limited to all such
documents as may be involved in any Reportable Use involving the Premises.
Lessee shall not cause or permit any Hazardous Substance to be spilled or
released in, on, under or about the Premises (including, without
limitation, through the plumbing or sanitary sewer system).
(c) INDEMNIFICATION. Lessee shall indemnify, protect, defend
and hold Lessor, its agents, employees, lenders and ground lessor, if any,
and the Premises, harmless from and against any and all damages,
liabilities, judgments, costs, claims, liens, expenses, penalties, loss of
permits and reasonable attorneys' and reasonable consultants' fees arising
out of or involving any Hazardous Substance brought onto the Premises by or
for Lessee or by anyone under Lessee's control. Lessee's obligations under
this Paragraph 6.2(c) 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 (including
consultants' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein
involved, and shall survive the expiration or earlier termination of this
Lease. No termination, cancellation or release agreement entered into by
Lessor and Lessee shall release Lessee from its obligations under this
Lease with respect to Hazardous Substances, unless specifically so agreed
by Lessor in writing at the time of such agreement.
6.3 LESSEE'S COMPLIANCE WITH REQUIREMENTS. Lessee shall, at Lessee's
sole cost and expense, fully, diligently and in a timely manner, comply
with all "APPLICABLE REQUIREMENTS," which term is used in this Lease to
mean all laws, rules, regulations, ordinances, directives, covenants,
easements and restrictions of record, permits, the requirements of any
applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating in any
manner to the Premises (including but not limited to matters pertaining to
(i) industrial hygiene, (ii) environmental conditions on, in, under or
about the Premises, including soil and groundwater conditions, and
(iii) the use, generation, manufacture, production, installation,
maintenance, removal, transportation, storage, spill, or release of any
Hazardous Substance), now in effect or which may hereafter come into
effect. REFER TO PARAGRAPH 58 BELOW. Lessee shall, within five (5) days
after receipt of Lessor's written request, provide Lessor with copies of
all documents and information, including but not limited to permits,
registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with any Applicable Requirements specified
by Lessor, and shall immediately upon receipt, notify Lessor in writing
(with copies of any documents involved) of any threatened or actual claim,
notice, citation, warning, complaint or report pertaining to or involving
failure by Lessee or the Premises to comply with any Applicable
Requirements.
6.4 INSPECTION; COMPLIANCE WITH LAW. Lessor, Lessor's agents,
employees, contractors and designated representatives, and the holders of
any mortgages, deeds of trust or ground leases on the Premises ("LENDERS")
shall have the right to enter the Premises at any time in the case of an
emergency, and other wise at reasonable times upon reasonable prior notice,
for the purpose of inspecting the condition of the Premises and for
verifying compliance by Lessee with this Lease and all Applicable
Requirements (as defined in Paragraph 6.3), and Lessor shall be entitled to
employ experts and/or consultants in connection therewith to advise Lessor
with respect to Lessee's activities, including but not limited to Lessee's
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance on or from the Premises. The costs and expenses of any
such inspections shall be paid by the party requesting same, unless a
Default or Breach of this Lease by Lessee or a violation of Applicable
Requirements or a contamination, caused or materially contributed to by
Lessee, is found to exist or to be imminent, or unless the inspection is
requested or ordered by a governmental authority as the result of any such
existing or imminent violation or contamination. In such case, Lessee
shall upon request reimburse Lessor or Lessor's Lender, as the case may be,
for the costs and expenses of such inspections.
7. MAINTENANCE, REPAIRS, UTILITY INSTALLATIONS, TRADE FIXTURES AND
ALTERATIONS. REFER TO PARAGRAPH 59 BELOW.
7.1 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessor's
Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee
shall, at Lessee's sole cost and expense and at all times, keep the
interior, non-structural portions of the Premises and every part thereof in
good order, condition and repair (whether or not such portion of the
Premises requiring repair, or the means of repairing the same, are
reasonably or readily accessible to Lessee, and whether or not the need for
such repairs occurs as a result of Lessee's use, any prior use, the
elements or the age of such portion of the Premises), including, without
limiting the generality of the foregoing, all equipment or facilities
specifically serving the Premises, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting facilities, boilers, fired
or unfired pressure vessels, fire hose connections if within the Premises,
fixtures, interior walls, interior surfaces of exterior walls, ceilings,
floors windows, doors, plate glass, and skylights, but excluding any items
which are the responsibility of Lessor pursuant to Paragraph 7.2 below.
Lessee, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices. Lessee's obligations
shall include restorations, replacements or renewals when necessary to keep
the Premises and all improvements thereon or a part thereof in good order,
condition and state of repair. REFER TO PARAGRAPH 60 BELOW.
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain a contract, with copies to Lessor, in customary form and substance
for and with a contractor specializing and experienced in the inspection,
maintenance and service of the heating, air conditioning and ventilation
for the Premises. However, Lessor reserves the right, upon notice to
Lessee, to procure and maintain the contract for the heating, air
conditioning and ventilating systems, and if Lessor so elects, Lessee shall
reimburse Lessor within twenty (20) days after receipt of, upon demand, for
the cost thereof.
(c) If Lessee fails to perform Lessee's obligations under this
Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days'
prior written notice to Lessee (except in the case of an emergency, in
which case no notice shall be required), perform such obligations on
Lessee's behalf, and put the Premises in good order, condition and repair,
in accordance with Paragraph 13.2 below.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs
2.2 (Condition), 2.3 (Compliance with Covenants, Restrictions and Building
Code), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's
Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor,
subject to reimbursement pursuant to Paragraph 4.2, shall keep in good
order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler and/or
standpipe and hose (if located in the Common Areas) or other automatic fire
extinguishing system including fire alarm and/or smoke detection systems
and equipment, fire hydrants, parking lots, walkways, parkways, driveways,
landscaping, fences, signs and utility systems serving the Common Areas and
all parts thereof, as well as providing the services for which there is a
Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not
be obligated to paint the exterior or interior surfaces of exterior walls
nor shall Lessor be obligated to maintain, repair or replace windows, doors
or plate glass of the Premises. Lessee expressly waives the benefit 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 Building, Industrial Center or
Common Areas in good order, condition and repair.
7.3 UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY
INSTALLATIONS" is used in this Lease to refer to all air lines, power
panels, electrical distribution, security, fire protection systems,
communications systems, lighting fixtures, heating, ventilating and air
conditioning equipment, plumbing, and fencing in, on or about the Premises.
The term "TRADE FIXTURES" shall mean Lessee's machinery and equipment which
can be removed without doing material damage to the Premises. The term
"ALTERATIONS" shall mean any modification of the improvements on the
Premises which are provided by Lessor under the terms of this Lease, other
than Utility Installations or Trade Fixtures. "LESSEE-OWNED ALTERATIONS
AND/OR UTILITY INSTALLATIONS" are defined as Alterations and/or Utility
Installations made by Lessee that are not yet owned by Lessor pursuant to
Paragraph 7.4(a). Lessee shall not make nor cause to be made any
Alterations or Utility Installations in, on, under or about the Premises
without Lessor's prior written consent. Lessee may, however, make non-
structural Utility Installations to the interior of the Premises (excluding
the roof) without Lessor's consent but upon notice to Lessor, so long as
they are not visible from the outside of the Premises, do not involve
puncturing, relocating or removing the roof or any existing walls, or
changing or interfering with the fire sprinkler or fire detection systems
and the cumulative cost thereof during the term of this Lease as extended
does not exceed $10,000.00.
(b) CONSENT. Any Alterations or Utility Installations that
Lessee shall desire to make and which require the consent of the Lessor
shall be presented to Lessor in written form with detailed plans. All
consents given by Lessor, whether by virtue of Paragraph 7.3(a) or by
subsequent specific consent, shall be deemed conditioned upon:
(i) Lessee's acquiring all applicable permits required by governmental
authorities; (ii) the furnishing of copies of such permits together with a
copy of the plans and specifications for the Alteration or Utility
Installation to Lessor prior to commencement of the work thereon; and
(iii) the compliance by Lessee with all conditions of said permits in a
prompt and expeditious manner. Any Alterations or Utility Installations by
Lessee during the term of this Lease shall be done in a good and
workmanlike manner, with good and sufficient materials, and be in
compliance with all Applicable Requirements. Lessee shall promptly upon
completion thereof furnish Lessor with as-built plans and specifications
therefor. Lessor may (but without obligation to do so) condition its
consent to any requested Alteration or Utility Installation that costs
$2,500.00 or more upon Lessee's providing Lessor with a lien and completion
bond in an amount equal to one and one-half times the estimated cost of
such Alteration or Utility Installation.
(c) LIEN PROTECTION. Lessee shall pay when due all claims for
labor or materials furnished or alleged to have been furnished to or for
Lessee at or for use on the Premises, which claims are or may be secured by
any mechanic's or materialmen's lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work in, on, or about the Premises, and
Lessor shall have the right to post notices of non-responsibility in or on
the Premises 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 and protect itself, Lessor and the Premises against
the same and shall pay and satisfy any such adverse judgment that may be
rendered thereon before the enforcement thereof against the Lessor or the
Premises. If Lessor shall require, Lessee shall furnish to Lessor a surety
bond satisfactory to Lessor in an amount equal to one and one-half times
the amount of such contested lien claim or demand, indemnifying Lessor
against liability for the same, as required by law for the holding of the
Premises free from the effect of such lien or claim. In addition, Lessor
may require Lessee to pay Lessor's attorneys' fees and costs in
participating in such action if Lessor shall decide it is to its best
interest to do so.
7.4 OWNERSHIP, REMOVAL, SURRENDER, AND RESTORATION.
(a) OWNERSHIP. Subject to Lessor's right to require their
removal and to cause Lessee to become the owner thereof as hereinafter
provided in this Paragraph 7.4, all Alterations and Utility Installations
made to the Premises by Lessee shall be the property of and owned by
Lessee, but considered a part of the Premises. Lessor may, at any time and
at its option, elect in writing to Lessee to be the owner of all or any
specified part of the Lessee-Owned Alterations and Utility Installation.
Unless otherwise instructed per Subparagraph 7.4(b) hereof, all
Lessee-Owned Alterations and Utility Installations shall, at the expiration
or earlier termination of this Lease, become the property of Lessor and
remain upon the Premises and be surrendered with the Premises by Lessee.
(b) REMOVAL. Unless otherwise agreed in writing, Lessor may
require that any or all Lessee-Owned Alterations or Utility Installations
be removed by the expiration or earlier termination of this Lease,
notwithstanding that their installation may have been consented to by
Lessor. Lessor may require the removal at any time of all or any part of
any Alterations or Utility Installations made without the required consent
of Lessor. REFER TO PARAGRAPH 61 BELOW.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises
by the end of the last day of the Lease term or any earlier termination
date, clean and free of debris and in good operating order, condition and
state of repair, ordinary wear and tear excepted. Ordinary wear and tear
shall not include any damage or deterioration that would have been
prevented by good maintenance practice or by Lessee performing all of its
obligations under this Lease. Except as otherwise agreed or specified
herein, the Premises, as surrendered, shall include the Alterations and
Utility Installations. The obligation of Lessee shall include the repair
of any damage occasioned by the installation, maintenance or removal of
Lessee's Trade Fixtures, furnishings, equipment, and Lessee-Owned
Alterations and Utility Installations, as well as the removal of any
storage tank installed by or for Lessee, and the removal, replacement, or
remediation of any soil, material or ground water contaminated by Lessee,
all as may then be required by Applicable Requirements and/or good
practice. Lessee's Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee subject to its obligation to repair and restore
the Premises per this Lease.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT OF PREMIUMS. The cost of premiums for the insurance
policies maintained by Lessor under this Paragraph 8 shall be a Common Area
Operating Expense pursuant to Paragraph 4.2 hereof. Premiums for policy
periods commencing prior to, or extending beyond, the term of this Lease
shall be prorated to coincide with the corresponding Commencement Date or
Expiration Date.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force
during the term of this Lease a Commercial General Liability policy of
insurance protecting Lessee, Lessor and any Lender(s) whose names have been
provided to Lessee in writing (as additional insureds) against claims for
bodily injury, personal injury and property damage based upon, involving 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
$1,000,000 per occurrence with an "Additional Insured-Managers or Lessors
of Premises" endorsement and contain the "Amendment of the Pollution
Exclusion" endorsement for damage caused by heat, smoke or fumes from a
hostile fire. The policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an "INSURED CONTRACT" for the
performance of Lessee's indemnity obligations under this Lease. The limits
of said insurance required by this Lease or as carried by Lessee shall not,
however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All insurance to be 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.
(b) CARRIED BY LESSOR. Lessor shall also maintain liability
insurance described in Paragraph 8.2(a) above, in addition to and not in
lieu of, the insurance required to be maintained by Lessee. Lessee shall
not be named as an additional insured therein.
8.3 PROPERTY INSURANCE-BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep in
force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and to any Lender(s), insuring against
loss or damage to the Premises. Such insurance shall be for full
replacement cost, as the same shall exist from time to time, or the amount
required by any Lender(s), but in no event more than the commercially
reasonable and available insurable value thereof if, by reason of the
unique nature or age of the improvements involved, such latter amount is
less than full replacement cost. Lessee-Owned Alterations and Utility
Installations, Trade Fixtures and Lessee's personal property shall be
insured by Lessee pursuant to Paragraph 8.4. If the coverage is available
and commercially appropriate, Lessor's policy or policies shall insure
against all risks of direct physical loss or damage (except the perils of
flood and/or earthquake unless required by a Lender), including coverage
for any additional costs resulting from debris removal and reasonable
amounts of coverage for the enforcement of any ordinance or law regulating
the reconstruction or replacement of any undamaged sections of the Building
required to be demolished or removed by reason of the enforcement of any
building, zoning, safety or land use laws as the result of a covered loss,
but not including plate glass insurance. Said policy or policies shall
also contain an agreed valuation provision in lieu of any co-insurance
clause, waiver of subrogation, and inflation guard protection causing an
increase in the annual property insurance coverage amount by a factor of
not less than the adjusted U.S. Department of Labor Consumer Price Index
for All Urban Consumers for the city nearest to where the Premises are
located.
(b) RENTAL VALUE. Lessor shall also obtain and keep in force
during the term of this Lease a policy or policies in the name of Lessor,
with loss payable to Lessor and any Lender(s), insuring the loss of the
full rental and other charges payable by all lessees of the Building to
Lessor for one year (including all Real Property Taxes, insurance costs,
all Common Area Operating Expenses and any scheduled rental increases).
Said insurance may provide that in the event the Lease is terminated by
reason of an insured loss, the period of indemnity for such coverage shall
be extended beyond the date of the completion of repairs or replacement of
the Premises, to provide for one full year's loss of rental revenues from
the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any co-insurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental income,
Real Property Taxes, insurance premium costs and other expenses, if any,
otherwise payable, for the next 12-month period. Common Area Operating
Expenses shall include any deductible amount in the event of such loss.
(c) ADJACENT PREMISES. Lessee shall pay for any increase in the
premiums for the property insurance of the Building and for the Common
Areas or other buildings in the Industrial Center if said increase is
caused by Lessee's acts, omissions, use or occupancy of the Premises.
(d) LESSEE'S IMPROVEMENTS. Since Lessor is the Insuring Party,
Lessor shall not be required to insure Lessee-Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.
8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessor's option, by endorsement to a policy already carried, maintain
insurance coverage on all of Lessee's personal property, Trade Fixtures and
Lessee-Owned Alterations and Utility Installations in, on, or about the
Premises similar in coverage to that carried by Lessor as the Insuring
Party under Paragraph 8.3(a). Such insurance shall be full replacement
cost coverage with a deductible not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the
replacement of personal property and the restoration of Trade Fixtures and
Lessee-Owned Alterations and Utility Installations. Upon request from
Lessor, Lessee shall provide Lessor with written evidence that such
insurance is in force.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the
Premises are located, and maintaining during the policy term a "General
Policyholders Rating" of at least B+, V, or such other rating as may be
required by a Lender, as set forth in the most current issue of "Best's
Insurance Guide." Lessee shall not do or permit to be done anything which
shall invalidate the insurance policies referred to in this Paragraph 8.
Lessee shall cause to be delivered to Lessor, within seven (7) days after
the earlier of the Early Possession Date or the Commencement Date,
certified copies of, or certificates evidencing the existence and amounts
of, the insurance required under Paragraph 8.2(a) and 8.4. 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 be Lessee to Lessor upon demand.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to recover damages (whether in contract or in
tort) against the other, for loss or damage to their property arising out
of or incident to the perils required to be insured against under
Paragraph 8. The effect of such releases and waivers of the right to
recover damages shall not be limited by the amount of insurance carried or
required, or by any deductibles applicable thereto. Lessor and Lessee
agree to have their respective insurance companies issuing property damage
insurance waive any right to subrogation that such companies may have
against Lessor or Lessee, as the case may be, so long as the insurance is
not invalidated thereby.
8.7 INDEMNITY. Except for Lessor's negligence, willful misconduct
and/or breach of express warranties, 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, costs, liens, judgments, penalties,
loss of permits, attorneys' and consultants' fees, expenses and/or
liabilities arising out of, involving, or in connection with, the occupancy
of the Premises by Lessee, the conduct of Lessee's business, any act,
omission or neglect of Lessee, its agents, contractors, employees or
invitees, and out of any Default or Breach by Lessee in the performance in
a timely manner of any obligation on Lessee's part to be performed under
this Lease. The foregoing shall include, but not be limited to, the
defense or pursuit of any claim or any action or proceeding involved
therein, and whether or not (in the case of claims made against Lessor)
litigated and/or reduced to judgment. In case any action or proceeding be
brought against Lessor by reason of any of the foregoing matters, Lessee
upon notice from Lessor shall defend the same at Lessee's expense by
counsel reasonably satisfactory to Lessor and Lessor shall cooperate with
Lessee in such defense. Lessor need not have first paid any such claim in
order to be so indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Except for Lessor's
negligence, and/or willful misconduct, Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other
property of 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, air conditioning or lighting
fixtures, or from any other cause, whether 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, from other sources or places,
and regardless of whether the cause of such damage or injury or the means
of repairing the same is accessible or not. Lessor shall not be liable for
any damages arising from any act or neglect of any other lessee of Lessor
nor from the failure by Lessor to enforce the provisions of any other lease
in the Industrial Center. 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 PARTIAL DAMAGE" shall mean damage or destruction
to the Premises, other than Lessee-Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is less than
fifty percent (50%) of the then Replacement Cost (as defined in
Paragraph 9.1(d) of the Premises (excluding Lessee-Owned Alterations and
Utility Installations and Trade Fixtures) immediately prior to such damage
or destruction.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or
destruction to the Premises, other than Lessee-Owned Alterations and
Utility Installations, the repair cost of which damage or destruction is
fifty percent (50%) or more the then Replacement Cost of the Premises
(excluding Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction. In addition,
damage or destruction to the Building, other than Lessee-Owned Alterations
and Utility Installations and Trade Fixtures of any lessees of the
Building, the cost of which damage or destruction is fifty percent (50%) or
more of the then Replacement Cost (excluding Lessee-Owned Alterations and
Utility Installations and Trade Fixtures of any lessees of the Building) of
the Building shall, at the option of Lessor, be deemed to be Premises Total
Destruction.
(c) "INSURED LOSS" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a) irrespective of any deductible
amounts or coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild
the improvements owned by Lessor at the time of the occurrence to their
condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of applicable building
codes, ordinances or laws, and without deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by,
a Hazardous Substance as defined in Paragraph 6.2(a), in, on or under the
Premises.
9.2 PREMISES PARTIAL DAMAGE - INSURED LOSS. If Premises Partial
Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's
expense, repair such damage (but not Lessee's Trade Fixtures or
Lessee-Owned Alterations and Utility Installations) as soon as reasonably
possible and this Lease shall continue in full force and effect. In the
event, however, that there is a shortage of insurance proceeds and such
shortage is due to the fact that, by reason of the unique nature of the
improvements in the Premises, full replacement cost insurance coverage was
not commercially reasonable and available, Lessor shall have no obligation
to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises unless Lessee provides Lessor with the funds
to cover same, or adequate assurance thereof, within ten (10) days
following receipt of written notice of such shortage and request therefor.
If Lessor receives said funds or adequate assurance thereof within said ten
(10) day period, Lessor shall complete them as soon as reasonably possible
and this Lease shall remain in full force and effect. If Lessor does not
receive such funds or assurance within said period. Lessor may
nevertheless elect by written notice to Lessee within ten (10) days
thereafter to make such restoration and repair as is commercially
reasonable with Lessor paying any shortage in proceeds, in which case this
Leases shall remain in full force and effect. If Lessor does not receive
such funds or assurance within such ten (10) day period, and if Lessor does
not so elect to restore and repair, then this Lease shall terminate sixty
(60) days following the occurrence of the damage or destruction. Unless
otherwise agreed, Lessee shall in no event have any right to reimbursement
from Lessor for any funds contributed by Lessee to repair any such damage
or destruction. Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that
there may be some insurance coverage, but the net proceeds of any such
insurance shall be made available for the repairs if made by either Party.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. If Premises Partial Damage that
is not an Insured Loss occurs, unless caused by a negligent or willful act
of Lessee (in which the event Lessee shall make the repairs at Lessee's
expense and this Lease shall continue in full force and effect), Lessor may
at Lessor's option, either (i) repair such damage as soon as reasonably
possible at Lessor's expense, in which event this Lease shall continue in
full force and effect, or (ii) give written notice to Lessee within thirty
(30) days after receipt by Lessor of knowledge of the occurrence of such
damage 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
such notice of Lessor's intention to terminate this Lease, Lessee shall
have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair
of such damage totally at Lessee's expense and without reimbursement from
Lessor. Lessee shall provide Lessor with the required funds or
satisfactory assurance thereof within thirty (30) days following such
commitment from Lessee. In such event this Lease shall continue in full
force and effect, and Lessor shall proceed to make such repairs as soon as
reasonably possible after the required funds are available. If Lessee does
not give such notice and provide the funds or assurance thereof within in
the times specified above, this Lease shall terminate as of the date
specified in Lessor's notice of termination.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof,
if Premises Total Destruction occurs (including any destruction required by
any authorized public authority), this Lease shall terminate sixty (60)
days following the date of such Premises Total Destruction, whether or not
the damage or destruction is an Insured Loss or was caused by a negligent
or willful act of Lessee. In the event, however, that the damage or
destruction was caused by Lessee, Lessor shall have the right to recover
Lessor's damages from Lessee except as released and waived in
Paragraph 9.7.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6)
months of the term of this Lease there is damage for which the cost to
repair exceeds one month's Base Rent, whether or not an Insured Loss,
Lessor may, at Lessor's option, terminate this Lease effective sixty (60)
days following the date of occurrence of such damage by giving written
notice to Lessee of Lessor's election to do so within thirty (30) days
after the date of occurrence of such damage. Provided, however, if Lessee
at that time has an exercisable option to extend this Lease or to purchase
the Premises, then Lessee may preserve this Lease by (a) exercising such
option, and (b) providing Lessor with any shortage in insurance proceeds
(or adequate assurance thereof) needed to make the repairs on or before the
earlier of (i) the date which is ten (10) days after Lessee's receipt of
Lessor's written notice purporting to terminate this Lease, or (ii) the day
prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides Lessor with funds (or adequate
assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's expense repair such damage as soon as reasonably
possible and this Lease shall continue in full force and effect. If Lessee
fails to exercise such option and provide such funds or assurance during
such period, then this Lease shall terminate as of the date set forth in
the first sentence of this Paragraph 9.5.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event of (i) Premises Partial Damage or
(ii) Hazardous Substance Condition for which Lessee is not legally
responsible, the Base Rent, Common Area Operating Expenses and other
charges, if any, payable by Lessee hereunder for the period during which
such damage or condition, its repair, remediation or restoration continues,
shall be abated in proportion to the degree to which Lessee's use of the
Premises is impaired, but not in excess of proceeds from insurance required
to be carried under Paragraph 8.3(b). Except for abatement of Base Rent,
Common Area Operating Expenses and other charges, if any, as aforesaid, all
other obligations of Lessee hereunder shall be performed by Lessee, and
Lessee shall have no claim against Lessor for any damage suffered by reason
of any such damage, destruction, repair, remediation or restoration.
(b) If Lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9 and shall not commence,
in a substantial and meaningful way, the repair or restoration of the
Premises within ninety (90) days after such obligation shall accrue, Lessee
may, at any time prior to the commencement of such repair or restoration,
give written notice to Lessor and to any Lenders of which Lessee has actual
notice of Lessee's election to terminate this Lease on a date not less than
sixty (60) days following the giving of such notice. If Lessee gives such
notice to Lessor and such Lenders and such repair or restoration is not
commenced within thirty (30) days after receipt of such notice, this Lease
shall terminate as of the date specified in said notice. If Lessor or a
Lender commences the repair or restoration of the Premises within thirty
(30) days after the receipt of such notice, this Lease shall continue in
full force and effect. "COMMENCE" as used in this Paragraph 9.6 shall mean
either the unconditional authorization of the preparation of the required
plans, or the beginning of the actual work on the Premises, whichever
occurs first.
9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance
Condition occurs, unless Lessee is legally responsible therefor (in which
case Lessee shall make the investigation and remediation thereof required
by Applicable Requirements and this Lease shall continue in full force and
effect, but subject to Lessor's rights under Paragraph 6.2(c) 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
investigate and 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 such notice of Lessor's
intention to terminate this Lease, Lessee shall have the right within ten
(10) days after the receipt of such notice to give written notice to Lessor
of Lessee's commitment to pay for the excess costs of (a) investigation and
remediation of such Hazardous Substance Condition to the extent required by
Applicable Requirements, over (b) an amount equal to twelve (12) times the
then monthly Base Rent or $100,000, whichever is greater. Lessee shall
provide Lessor with the funds required of Lessee or satisfactory assurance
thereof within thirty (30) days following said commitment by Lessee. In
such event this Lease shall continue in full force and effect, and Lessor
shall proceed to make such investigation and 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 period specified above, this Lease shall terminate as of
the date specified in Lessor's notice of termination.
9.8. TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Paragraph 9, Lessor shall return to Lessee any advance
payment made by Lessee to Lessor and so much of Lessee's Security Deposit
as has not been or is not then required to be, used by Lessor under the
terms of this Lease.
9.9 WAIVER OF STATUTES. Lessor and Lessee agree that the terms of
this Lease shall govern the effect of any damage to or destruction of the
Premises and the Building with respect to the termination of this Lease and
hereby waive the provisions of any present or future statute to the extent
it is inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes, as
defined in Paragraph 10.2, applicable to the Industrial Center, and except
as otherwise provided in Paragraph 10.3, any such amounts shall be included
in the calculation of Common Area Operating Expenses in accordance with the
provisions of Paragraph 4.2.
10.2 REAL PROPERTY TAX DEFINITION. As used herein, the term "REAL
PROPERTY TAXES" 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 upon the Industrial
Center by any authority having the direct or indirect power to tax,
including any city, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage, or other improvement
district thereof, levied against any legal or equitable interest of Lessor
in the Industrial Center or any portion thereof, Lessor's right to rent or
other income therefrom, and/or Lessor's business of leasing the Premises.
The term "REAL PROPERTY TAXES" shall also include any tax, fee, levy,
assessment or charge, or any increase therein, imposed by reason of events
occurring, or changes in Applicable Law taking effect, during the term of
this Lease, including but not limited to a change in the ownership of the
Industrial Center or in the improvements thereon, the execution of this
Lease, or any modification, amendment or transfer thereof, and whether or
not contemplated by the Parties. In calculating Real Property Taxes for
any calendar year, the Real Property Taxes for any real estate tax year
shall be included in the calculation of Real Property Taxes for such
calendar year based upon the number of days which such calendar year and
tax year have in common. REFER TO PARAGRAPH 62 BELOW.
10.3 ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses shall
not include Real Property Taxes specified in the tax assessor's records and
work sheets as being caused by additional improvements placed upon the
Industrial Center by other lessees or by Lessor for the exclusive enjoyment
of such other lessees. Notwithstanding Paragraph 10.1 hereof, Lessee
shall, however, pay to Lessor at the time Common Area Operating Expenses
are payable under Paragraph 4.2, the entirety of any increase in Real
Property Taxes if assessed solely by reason of Alterations, Trade Fixtures
or Utility Installations placed upon the Premises by Lessee or at Lessee's
request.
10.4 JOINT ASSESSMENT. If the Building is not separately assessed,
Real Property Taxes allocated to the Building shall be an equitable
proportion of the Real Property Taxes for all of the land and improvements
included within the tax parcel assessed, such proportion to be determined
by Lessor from the respective valuations assigned in the assessor's work
sheets or such other information as may be reasonably available. Lessor's
reasonable determination thereof, in good faith, shall be conclusive.
10.5 LESSEE'S PROPERTY TAXES. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee-Owned Alterations and
Utility Installations, Trade Fixtures, furnishings, equipment and all
personal property of Lessee contained in the Premises or stored within the
Industrial Center. When possible, Lessee shall cause its Lessee-Owned
Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all other personal property to be assessed and billed
separately from the real property of Lessor. If any of Lessee's said
property shall be assessed with Lessor's real property, Lessee shall pay
Lessor the taxes attributable to Lessee's property within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Lessee's property.
11. UTILITIES. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity,
telephone, security, gas and cleaning of the Premises, together with any
taxes thereon. If any such utilities or services are not separately
metered to the Premises or separately billed to the Premises, Lessee shall
pay to Lessor a reasonable proportion to be determined by Lessor of all
such charges jointly metered or billed with other premises in the Building,
in the manner and within the time periods set forth in Paragraph 4.2(d).
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively,
"assign") or sublet all or any part of Lessee's interest in this Lease or
in the Premises without Lessor's prior written consent given under and
subject to the terms of Paragraph 36.
(b) A change in the control of Lessee shall constitute an
assignment requiring Lessor's consent. The transfer, on a cumulative
basis, of forty-five percent (45%) or more of the voting control of Lessee
shall constitute a change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction,
or series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise), whether or not a
formal assignment or hypothecation of this Lease or Lessee's assets occurs,
which results or will result in a reduction of the Net Worth of Lessee, as
hereinafter defined, by an amount equal to or greater than twenty-five
percent (25%) of such Net Worth of Lessee as it was represented to Lessor
at the time of full execution and delivery of this Lease or at the time of
the most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such
reduction, at whichever time said Net Worth of Lessee was or is greater,
shall be considered an assignment of this Lease by Lessee to which Lessor
may reasonably withhold its consent. "NET WORTH OF LESSEE" for purposes of
this Lease shall be the net worth of Lessee (excluding any Guarantors)
established under generally accepted accounting principles consistently
applied.
(d) An assignment or subletting of Lessee's interest in this
Lease without Lessor's specific prior written consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1, or a non-
curable Breach without the necessity of any notice and grace period. If
Lessor elects to treat such unconsented to assignment or subletting as a
non-curable Breach, Lessor shall have the right to either: (i) terminate
this Lease, or (ii) upon thirty (30) days' written notice ("LESSOR'S
NOTICE"), increase the monthly Base Rent for the Premises to the greater of
the then fair market rental value of the Premises, as reasonably determined
by Lessor, or one hundred ten percent (110%) of the Base Rent then in
effect. Pending determination of the new fair market rental value, if
disputed by Lessee, Lessee shall pay the amount set forth in Lessor's
Notice, with any overpayment credited against the next installment(s) of
Base Rent coming due, and any underpayment for the period retroactively to
the effective date of the adjustment being due and payable immediately upon
the determination thereof. Further, in the event of such Breach and rental
adjustment, (i) the purchase price of any option to purchase the Premises
held by Lessee shall be subject to similar adjustment to the then fair
market value as reasonably determined by Lessor (without the Lease being
considered an encumbrance or any deduction for depreciation or
obsolescence, and considering the Premises at its highest and best use and
in good condition) or one hundred ten percent (110%) of the price
previously in effect, (ii) any index-oriented rental or price adjustment
formulas contained in this Lease shall be adjusted to require that the base
index be determined with reference to the index applicable to the time of
such adjustment, and (iii) any fixed rental adjustments scheduled during
the remainder of the Lease term shall be increased in the same ratio as the
new rental bears to the Base Rent in effect immediately prior to the
adjustment specified in Lessor's Notice.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by
Lessor shall be limited to compensatory damages and/or injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease,
(ii) release Lessee of any obligations hereunder, nor (iii) alter the
primary liability of Lessee for the payment of Base Rent and other sums due
Lessor hereunder or for the performance of any other obligations to be
performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending approval or
disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of any rent for
performance shall constitute a waiver or estoppel of Lessor's right to
exercise its remedies for the Default or Breach by Lessee of any of the
terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall
not constitute a consent to any subsequent assignment or subletting by
Lessee or to any subsequent or successive assignment or subletting by the
assignee or sublessee. However, Lessor may consent to subsequent
sublettings and assignments of the sublease or any amendments or
modifications thereto without notifying Lessee or anyone else liable under
this Lease or the sublease and without obtaining their consent, and such
action shall not relieve such persons from liability under this Lease or
the sublease.
(d) In the event of any Default or Breach of Lessee's obligation
under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or anyone else responsible for the performance of the Lessee's
obligations under this Lease, including any sublessee, without first
exhausting Lessor's remedies against any other person or entity responsible
therefor to Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting
shall be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including but not
limited to the intended use and/or required modification of the Premises,
if any, together with a non-refundable deposit of $1,000 or ten percent
(10%) of the monthly Base Rent applicable to the portion of the Premises
which is the subject to the proposed assignment or sublease, whichever is
greater, as reasonable consideration for Lessor's considering processing
the request for consent. Lessee agrees to provide Lessor with such other
or additional information and/or documentation as may be reasonably
requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be
deemed, for the benefit of Lessor, to have assumed and agreed to conform
and comply with each and every term, covenant, condition and obligation
herein to be observed or performed by Lessee during the term of said
assignment or sublease, other than such obligations as are contrary to or
inconsistent with provisions of an assignment or sublease to which Lessor
has specifically consented in writing.
(g) The occurrence of a transaction describe in Paragraph
12.2(c) shall give Lessor the right (but not the obligation) to require
that the Security Deposit be increased by an amount equal to six (6) times
the then monthly Base Rent, and Lessor may make the actual receipt by
Lessor of the Security Deposit increase a condition to Lessor's consent to
such transaction.
(h) Lessor, as a condition to giving its consent to any
assignment or subletting, may require that the amount and adjustment
schedule of the rent payable under this Lease be adjusted to what is then
the market value and/or adjustment schedule for property similar to the
Premises as then constituted, as determined by Lessor.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of
all or any part of the Premises and shall be deemed included in all
subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any sublease of
all or a portion of the Premises heretofore or hereafter made by Lessee,
and Lessor may collect such rent and income and apply same toward Lessee's
obligations under this Lease; provided, however, that until a Breach (as
defined in Paragraph 13.1) shall occur in the performance of Lessee's
obligations under this Lease, Lessee may, except as otherwise provided in
this Lease, receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of the foregoing provision or any
other assignment of such sublease to Lessor, nor by reason of the
collection of the rents from a sublessee, be deemed liable to the sublessee
for any failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee under such Sublease. 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 the rents and
other charges due and to become due under the sublease. Sublessee shall
rely upon any such statement and request from Lessor and shall pay such
rents and other charges to Lessor without any obligation or right to
inquire as to whether such Breach exists and notwithstanding any notice
from or claim from Lessee to the contrary. Lessee shall have no right or
claim against such sublessee, or, until the Breach has been cured, against
Lessor, for any such rents and other charges so paid by said sublessee to
Lessor.
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any
obligation to do so, may require any 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 other prior defaults or breaches of such sublessor
under such sublease.
(c) Any matter or thing requiring the consent of the sublessor
under a sublease shall also require the consent of Lessor herein.
(d) No sublessee under a sublease approved by Lessor shall
further assign or sublet all or any part of the Premises without Lessor's
prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or
Breach by Lessee to the sublessee, who shall have the right to cure the
Default of Lessee within the grace period, if any, specified in such
notice. The sublessee shall have a right of reimbursement and offset from
and against Lessee for any such Defaults cured by the sublessee. REFER TO
PARAGRAPH 63 BELOW.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such
occurrence for legal services and costs in the preparation and service of a
notice of Default, and that Lessor may include the cost of such services
and costs in said notice as rent due and payable to cure said default. A
"DEFAULT" by Lessee is defined as a failure by Lessee to observe, comply
with or perform any of the terms, covenants, conditions or rules applicable
to Lessee under this Lease. A "BREACH" by Lessee is defined as the
occurrence of any one or more of the following Defaults, and, where a grace
period for cure after notice is specified herein, the failure by Lessee to
cure such Default prior to the expiration of the applicable grace period,
and shall entitle Lessor to pursue the remedies set forth in Paragraphs
13.2 and/or 13.3:
(a) The vacating of the Premises without the intention to
reoccupy same, or the abandonment of the Premises.
(b) Except as expressly otherwise provided in this Lease, the
failure by Lessee to make any payment of Base Rent, Lessee's Share of
Common Area Operating Expenses, or any other monetary payment required to
be made by Lessee hereunder as and when due, the failure by Lessee to
provide Lessor with reasonable evidence of insurance or surety bond
required under this Lease, or the failure of Lessee 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 thereof by or on behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the
failure by Lessee to provide Lessor with reasonable written evidence (in
duly executed original form, if applicable) of (i) compliance with
Applicable Requirements per Paragraph 6.3, (ii) the inspection, maintenance
and service contracts required under Paragraph 7.1(b), (iii) the rescission
of an unauthorized assignment or subletting per Paragraph 12.1, (iv) a
Tenancy Statement per Paragraphs 16 or 37, (v) the subordination or non-
subordination of this Lease per Paragraph 30, (vi) the guaranty of the
performance of Lessee's obligations under this Lease if required under
Paragraphs 1.11 and 37, (vii) the execution of any document requested under
Paragraph 42 (easements), or (viii) any other documentation or information
which Lessor may reasonably require of Lessee under the terms of this
Lease, where any such failure continues for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the term, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof
that are to be observed, complied with or performed by Lessee, other than
those described in Subparagraphs 13.1(a), (b) or (c), above, where such
Default continues for a period of thirty (30) days after written notice
thereof by or on behalf of Lessor to Lessee; provided, however, that if the
nature of Lessee's Default is such that more than thirty (30) days are
reasonably required for its cure, then it shall not be deemed to be a
Breach of this Lease by Lessee if Lessee commences such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
(e) The occurrence of any of the following events: (i) the
making by Lessee of any general arrangement or assignment for the benefit
of creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S. Code
Section 101 or any successor statute thereto (unless, in the case of a
petition filed against Lessee, the same is dismissed within sixty (60)
days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within
thirty (30) days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Lessee's assets located at the Premises or
of Lessee's interest in this Lease, where such seizure is not discharged
within thirty (30) days; provided, however, in the event that any provision
of this Subparagraph 13.1(e) is contrary to any applicable law, such
provision shall be of no force or effect, and shall not affect the validity
of the remaining provisions.
(f) The discovery by Lessor that any financial statement of
Lessee or of any Guarantor, given to Lessor by Lessee or any Guarantor, 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 breach basis, and Lessee's failure, within sixty (60) days
following written notice by or on behalf of Lessor to Lessee of any such
event, to provide Lessor with written alternative assurances of security,
which, when coupled with the then existing resources of Lessee, equals or
exceeds the combined financial resources of Lessee and the Guarantors that
existed at the time of execution of this Lease.
13.2 REMEDIES. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written
notice to Lessee (or in case of an emergency, without notice), Lessor may
at its option (but without obligation to do so), 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 to Lessor upon invoice therefor.
If any check given to Lessor by Lessee shall not be honored by the bank
upon which it is drawn, Lessor at its own option, may require all future
payments to be made under this Lease by Lessee to be made only by cashier's
check. In the event of a Breach of this Lease by Lessee (as defined in
Paragraph 13.1), with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy which Lessor may
have by reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately surrender possession of the Premises
to Lessor. In such event Lessor shall be entitled to recover from Lessee:
(i) the worth at the time of the award of the unpaid rent which had been
earned at the time of termination; (ii) the worth at the time of award of
the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such 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 San Francisco or the Federal
Reserve Bank District in which the Premises are located at the time of
award plus one percent (1%). Efforts by Lessor to mitigate damages caused
by Lessee's Default or Breach of this Lease shall not waive Lessor's right
to recover damages under this Paragraph 13.2. If termination of this Lease
is obtained through the provisional remedy of unlawful detainer, Lessor
shall have the right to recover in such proceeding the 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 for such rent and/or
damages. If a notice and grace period required under Subparagraph 13.1(b),
(c) or (d) was not previously given, a notice to pay rent or quit, or to
perform or quit, as the case may be, given to Lessee under any statute
authorizing the forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes required by
Subparagraph 13.1(b), (c) or (d). In such case, the applicable grace
period under the unlawful detainer statute shall run concurrently after the
one such statutory notice, and the failure of Lessee to cure the Default
within the greater of the two (2) such grace periods shall constitute both
an unlawful detainer and a Breach of this Lease entitling Lessor to the
remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in
effect (in California under California Civil Code Section 1951.4) after
Lessee's Breach and recover the rent as it becomes due, provided Lessee has
the right to sublet or assign, subject only to reasonable limitations.
Lessor and Lessee agree that the limitations on assignment and subletting
this Lease are reasonable. Acts of maintenance or preservation, efforts to
relet the Premises, or the appointment of a receiver to protect the
Lessor's interest under this Lease, shall not constitute a termination of
the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located.
(d) The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters
occurring or accruing during the term hereof or by reason of Lessee's
occupancy of the Premises.
13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by Lessor
for free or abated rent or other charges applicable to the Premises, or for
the giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of
which concessions are hereinafter referred to as "INDUCEMENT PROVISIONS"
shall be deemed conditioned upon Lessee's full and faithful performance of
all of the terms, covenants and conditions of this Lease to be performed or
observed by Lessee during the term hereof as the same may be extended.
Upon the occurrence of a Breach (as defined in paragraph 13.1) of this
Lease by Lessee, any such Inducement Provision shall automatically be
deemed deleted from this Lease and of no further force or effect, and any
rent, other charge, bonus, inducement or consideration theretofore abated,
given or paid by Lessor under such an Inducement Provision shall be
immediately due and payable by Lessee to Lessor, and recoverable by Lessor,
as additional rent due under this Lease, 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 13.3
shall not be deemed a waiver by Lessor of the provisions of this Paragraph
13.3 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 to Lessor of rent and other sums due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of which will
be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges, and late charges which may
be imposed upon Lessor by the terms of any ground lease, mortgage or deed
of trust covering the Premises. Accordingly, if any installment of rent or
other sum due from Lessee shall not be received by Lessor or Lessor's
designee within ten (10) days after such amount shall be due, then, without
any requirement for notice to Lessee, Lessee shall pay to Lessor a late
charge equal to six percent (6%) of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable
estimate of the costs Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's Default or Breach with respect to such
overdue amount, nor prevent Lessor from exercising 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 Paragraph 4.1 or any other provision of
this Lease to the contrary, Base Rent shall, at Lessor's option, become due
and payable quarterly in advance.
13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph 13.5, a
reasonable time shall in no event be less than thirty (30) days after
receipt by Lessor, and by any Lender(s) whose name and address shall have
been furnished to Lessee in writing for such purpose, of written notice
specifying wherein such obligation of Lessor has not been performed;
provided, however, that if the nature of Lessor's obligation is such that
more than thirty (30) days after such notice are reasonably required for
its performance, then Lessor shall not be in breach of this Lease if
performance is commenced within such thirty (30) day period and thereafter
diligently pursued to completion.
14. CONDEMNATION. If the Premises or any portion thereof are taken under
the power of eminent domain or sold under the threat of the exercise of
said power (all of which are herein called "condemnation", this Lease shall
terminate as to the part so taken as of the date the condemning authority
takes title or possession, whichever first occurs. If more than ten
percent (10%) of the floor area of the Premises, or more than twenty-five
percent (25%) of the portion of the Common Areas designated for Lessee's
parking, is taken by condemnation, Lessee may, at Lessee's option, to be
exercised in writing within ten (10) days after Lessor shall have given
Lessee written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority
takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and
effect as to the portion of the Premises remaining, except that the Base
Rent shall be reduced in the same proportion as the rentable floor area of
the Premises taken bears to the total rentable floor area of the Premises.
No reduction of Base Rent shall occur if the condemnation does not apply to
any portion of the Premises. Any award for the taking of all or any part
of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution of value of
the leasehold or for the taking of the fee, or as severance damages;
provided, however, that Lessee shall be entitled to any compensation,
separately awarded to Lessee for Lessee's relocation expenses and/or loss
of Lessee's Trade Fixtures. In the event that this Lease is not terminated
by reason of such condemnation, Lessor shall to the extent of its net
severance damages received, over and above Lessee's Share of the legal and
other expenses incurred by Lessor in the condemnation matter, repair any
damage to the Premises caused by such condemnation authority. Lessee shall
be responsible for the payment of any amount in excess of such net
severance damages required to complete such repair.
15. BROKERS' FEES.
15.1 PROCURING CAUSE. The Broker(s) named in Paragraph 1.10 is/are
the procuring cause of this Lease.
15.2 ADDITIONAL TERMS. Unless Lessor and Broker(s) have otherwise
agreed in writing, Lessor agrees that: (a) if Lessee exercises any Option
(as defined in Paragraph 39.1) granted under this Lease or any Option
subsequently granted, or (b) if Lessee acquires any rights to the Premises
or other premises in which Lessor has an interest, or (c) if Lessee remains
in possession of the Premises with the consent of Lessor after the
expiration of the term of this Lease after having failed to exercise an
Option, or (d) if said Brokers are the procuring cause of any other lease
or sale entered into between the Parties pertaining to the Premises and/or
any adjacent property in which Lessor has an interest, or (e) if Base Rent
is increased, whether by agreement or operation of an escalation clause
herein, then as to any of said transactions, Lessor shall pay said
Broker(s) a fee in accordance with the schedule of said Broker(s) in effect
at the time of the execution of this Lease.
15.3 ASSUMPTION OF OBLIGATIONS. Any buyer or transferee of Lessor's
interest in this Lease, whether such transfer is by agreement or by
operation of law, shall be deemed to have assumed Lessor's obligation under
this Paragraph 15. Each Broker shall be an intended third party
beneficiary of the provisions of Paragraph 1.10 and of this Paragraph 15 to
the extent of its interest in any commission arising from this Lease and
may enforce that right directly against Lessor and its successors.
15.4 REPRESENTATIONS AND WARRANTIES. Lessee and Lessor each represent
and warrant to the other that it has had no dealings with any person, firm,
broker or finder other than as named in Paragraph 1.10(a) in connection
with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and that no broker or other person, firm
or entity other than said named Broker(s) is entitled to any commission or
finder's fee in connection with said transaction. Lessee and Lessor do
each hereby agree to indemnify, protect, defend and hold the other harmless
from and against liability for compensation or charges which may be claimed
by any such unnamed broker, finder or other similar party by reason of any
dealings or actions of the indemnifying Party, including any costs,
expenses, and/or attorneys' fees reasonably incurred with respect thereto.
16. TENANCY AND FINANCIAL STATEMENTS.
16.1 TENANCY STATEMENT. Each Party (as "RESPONDING PARTY") shall
within ten (10) days after written notice from the other Party (the
"REQUESTING PARTY") execute, acknowledge and deliver to the Requesting
Party a statement in writing in a form similar to the then most current
"TENANCY STATEMENT" form published by the American Industrial Real Estate
Association, plus such additional information, confirmation and/or
statements as may be reasonably requested by the Requesting Party.
16.2 FINANCIAL STATEMENT. If Lessor desires to finance, refinance, or
sell the Premises or the Building, or any part thereof, Lessee and all
Guarantors shall deliver to any potential lender or purchaser designated by
Lessor such financial statements of Lessee and such Guarantors as may be
reasonably required by such lender or purchaser, including but not limited
to Lessee's financial statements for the past three (3) years. All such
financial statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the purposes herein set
forth.
17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises.
In the vent of a transfer of Lessor's title or interest in the Premises or
in this Lease, Lessor shall deliver to the transferee or assignee (in cash
or by credit) any unused Security Deposit held by Lessor at the time of
such transfer or assignment. Except as provided in Paragraph 15.3, upon
such transfer or assignment and delivery of the Security Deposit, as
aforesaid, the prior Lessor shall be relieved of all liability with respect
to the obligations and/or covenants under this Lease thereafter to be
performed by the Lessor. Subject to the foregoing, the obligations and/or
covenants in this Lease to be performed by the Lessor shall be binding only
upon the Lessor as hereinabove defined and this Lease shall remain in full
force and effect in the event of any transfer of Lessor's interest in the
Premises of this Lease.
18. SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within ten (10)
days following the date on which it was due, shall bear interest from the
date due at the prime rate charged by the largest state chartered bank in
the state in which the Premises are located plus four percent (4%) per
annum, but not exceeding the maximum rate allowed by law, in addition to
the potential late charge provided for in Paragraph 13.4.
20. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties
under this Lease.
21. RENT DEFINED. All monetary obligations of Lessee to Lessor under
the terms of this Lease are deemed to be rent.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains
all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding
shall be effective. Lessor and Lessee each represents and warrants to the
Brokers that it has made, and is relying solely upon, its own investigation
as to the nature, quality, character and financial responsibility of the
other Party to this Lease and as to the nature, quality and character of
the Premises. Brokers have no responsibility with respect thereto or with
respect to any default or breach hereof by either Party. Each Broker shall
be an intended third party beneficiary of the provisions of this Paragraph
22.
23. NOTICES.
23.1 NOTICE REQUIREMENTS. All notices required or permitted by this
Lease shall be in writing and may be delivered in person (by hand or by
messenger or courier service) or may be sent by regular, certified or
registered mail or U.S. Postal Service Express Mail, with postage prepaid,
or by facsimile transmission during normal business hours, and shall be
deemed sufficiently given if served in a manner specified in this Paragraph
23. The addresses noted adjacent to a Party's signature on this Lease
shall be that Party's address for delivery or mailing of notice purposes.
Either Party may by written 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 the purpose of
mailing or delivering notices to Lessee. A copy of all notices required or
permitted to be given to Lessor hereunder shall be concurrently transmitted
to such party or parties at such addresses as Lessor may from time to time
hereafter designate by written notice to Lessee.
23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is show, the postmark
thereon. If sent by regular mail, the notice shall be deemed given forty-
eight (48) hours after the same is addressed as required herein and mailed
with postage prepaid. Notices delivered by United States Express Mail or
overnight courier that guarantees next day delivery shall be deemed given
twenty-four (24) hours after delivery of the same to the United States
Postal Service or courier. If any notice is transmitted by facsimile
transmission or similar means, the same shall be deemed served or delivered
upon telephone or facsimile confirmation of receipt of the transmission
thereof, provided a copy is also delivered via delivery or mail. If notice
is received on a Saturday or a Sunday or a legal holiday, it shall be
deemed received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or
Breach by Lessee of the same or any other term, covenant or condition
hereof. Lessor's consent to, or approval of, any such act shall not be
deemed to render unnecessary the obtaining of Lessor's consent to, or
approval of, any subsequent or similar act by Lessee, or be construed as
the basis of an estoppel to enforce the provision or provisions of this
Lease requiring such consent. Regardless of Lessor's knowledge of a
Default or Breach at the time of accepting rent, the acceptance of rent by
lessor shall not be a waiver of any Default or Breach by Lessee of any
provision hereof. Any payment given Lessor by Lessee may be accepted by
Lessor on account of moneys or damages due Lessor, notwithstanding any
qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before
the time of deposit of such payment.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of
this Lease for recording purposes. The Party requesting recordation shall
be responsible for payment of any fees or taxes applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination
of this Lease. In the event that Lessee holds over in violation of this
Paragraph 26 then the Base Rent payable from and after the time of the
expiration or earlier termination of this Lease shall be increased to one
hundred fifty percent (150%) of the Base Rent applicable during the month
immediately preceding such expiration or earlier termination. Nothing
contained herein shall be construed as a consent by Lessor to any holding
over by lessee.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
28. COVENANTS AND CONDITIONS. All provisions of this Lease to be observed
or performed by Lessee are both covenants and conditions.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any
litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "SECURITY DEVICE"),
now or hereafter placed by Lessor upon the real property of which the
Premises are a part, to any and all advances made on the security thereof,
and to all renewals, modifications, consolidations, replacements and
extensions thereof. Lessee agrees that the Lenders holding any such
Security Device shall have no duty, liability or obligation to perform any
of the obligations of Lessor under this Lease, but that in the event or
Lessor's default with respect to any such obligation, Lessee will give any
Lender whose name and address have been furnished Lessee in writing for
such purpose notice of Lessor's default pursuant to Paragraph 13.5. If any
Lender shall elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device and shall give written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to
such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof. REFER TO PARAGRAPH 64 BELOW.
30.2 ATTORNMENT. REFER TO PARAGRAPH 64 BELOW. Subject to the non-
disturbance provisions of Paragraph 30.3, Lessee agrees to attorn to a
Lender or any other party who acquires ownership of the Premises by reason
of a foreclosure of a Security Device, and that in the vent of such
foreclosure, such new owner shall not: (i) be liable for any act or
omission or any prior lessor or with respect to events occurring prior to
acquisition of ownership, (ii) be subject to any offsets or defenses which
Lessee might have against any prior lessor, or (iii) be bound by prepayment
of more than one month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into
by Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall be subject to receiver assurance (a "non-disturbance
agreement") from the Lender that Lessee's possession and this Lease,
including any options to extend the term hereof, will not be disturbed so
long as Lessee is not in Breach hereof and attorns to the record owner of
the Premises.
30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents;
provided, however, that upon written request from Lessor or a Lender in
connection with a sale, financing or refinancing of Premises, Lessee and
Lessor shall execute such further writings as may be reasonably required to
separately document any such subordination or non-subordination, attornment
and/or non-disturbance agreement as is provided for herein.
31. ATTORNEYS' FEES. If any Party or Broker brings an action or
proceeding to enforce the terms hereof or declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding, action, or
appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees
may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term
"PREVAILING PARTY" shall include, without limitation, a Party or Broker who
substantially obtains or defeats the relief sought, as the case may be,
whether by compromise, settlement, judgment, or the abandonment by the
other Party or Broker of its claim or defense. 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.
Lessor shall be entitled to attorneys' fees, costs and expenses incurred in
preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently
commenced in connection with such Default or resulting Breach. Broker(s)
shall be intended third party beneficiaries of this Paragraph 31.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's
agents shall have the right to enter the Premises at any time, in the case
of an emergency, and otherwise at reasonable times for the purpose of
showing the same to prospective purchasers, lenders, or lessees, and making
such alterations, repairs, improvements or additions to the Premises or to
the Building, as Lessor may reasonably deem necessary. Lessor may at any
time place on or about the Premises or Building any ordinary "For Sale"
signs and Lessor may at any time during the last one hundred eighty (180)
days of the term hereof place on or about the Premises any ordinary "For
Lease" signs. All such activities of Lessor shall be without abatement of
rent or liability to Lessee.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises 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.
34. SIGNS. Lessee shall not place any sign upon the exterior of the
Premises or the Building, except that Lessee may, with Lessor's prior
written consent, install (but not on the roof) such signs as are reasonably
required to advertise Lessee's own business so long as such signs are in a
location designated by Lessor and comply with Applicable Requirements and
the signage criteria established for the Industrial Center by Lessor. The
installation of any sign on the Premises by or for Lessee shall be subject
to the provisions of Paragraph 7 (Maintenance, Repairs, Utility
Installations, Trade Fixtures and Alterations). Unless otherwise expressly
agreed herein, Lessor reserves all rights to the use of the roof of the
Building, and the right to install advertising signs on the Building,
including the roof, which do not unreasonably interfere with the conduct of
Lessee's business; Lessor shall be entitled to all revenues from such
advertising signs.
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing
by Lessor, the voluntary or other surrender of this Lease by Lessee, the
mutual termination or cancellation hereof, or a termination hereof by
Lessor for Breach by Lessee, shall automatically terminate any sublease or
lesser estate in the Premises; provided, however, Lessor shall, in the
event of any such surrender, termination or cancellation, have the option
to continue any one or all of any existing subtenancies. Lessor's failure
within ten (10) days following any such event to make a written election to
the contrary by written notice to the holder of any such lesser interest,
shall constitute Lessor's election to have such event constitute the
termination of such interest.
36. CONSENTS.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a Party is required
to an act by or for the other Party, such consent shall not be unreasonably
withheld or delayed. Lessor's actual reasonable costs and expenses
(including but not limited to architects', attorneys', engineers' and other
consultants' fees) incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent pertaining to this Lease or the
Premises, including but not limited to consents to an assignment a
subletting or the presence or use of a Hazardous Substance, shall be paid
by Lessee to Lessor upon receipt of an invoice and supporting documentation
therefor. In addition to the deposit described in Paragraph 12.2(e),
Lessor may, as a condition to considering any such request by Lessee,
require that Lessee deposit with Lessor an amount of money (in addition to
the Security Deposit held under Paragraph 5) reasonably calculated by
Lessor to represent the cost Lessor will incur in considering and
responding to Lessee's request. Any unused portion of said deposit shall
be refunded to Lessee without interest. Lessor's consent to any act,
assignment of this Lease or subletting of the Premises by Lessee shall not
constitute an acknowledgment that no Default or Breach by Lessee of this
Lease exists, nor shall such consent be deemed a waiver of any then
existing Default or Breach, except as may be otherwise specifically stated
in writing by Lessor at the time of such consent.
(b) All conditions to Lessor's consent authorized by this Lease
are acknowledged by Lessee as being reasonable. The failure to specify
herein any particular condition to Lessor's consent shall not preclude the
impositions by Lessor at the time of consent of such further or other
conditions as are then reasonable with reference to the particular matter
for which consent is being given.
37. GUARANTOR.
37.1 FORM OF GUARANTY. If there are to be any Guarantors of this
Lease per Paragraph 1.11, the form of the guaranty to be executed by each
such Guarantor shall be in the form most recently published by the American
Industrial Real Estate Association, and each such Guarantor shall have the
same obligations as Lessee under this Lease, including but not limited to
the obligation to provide the Tenancy Statement and information required in
Paragraph 16.
37.2 ADDITIONAL OBLIGATIONS OF GUARANTOR. It shall constitute a
Default of the Lessee under this Lease if any such Guarantor fails or
refuses, upon reasonable request by Lessor to give: (a) evidence of the
due execution of the guaranty called for by this Lease, including the
authority of the Guarantor (and of the party signing on Guarantor's behalf)
to obligate such Guarantor on said guaranty, and resolution of its board of
directors authorizing the making of such guaranty, together with a
certificate of incumbency showing the signatures of the persons authorized
to sign on its behalf, (b) current financial statements of Guarantor as may
from time to time be requested by Lessor, (c) a Tenancy Statement, or
(d) written confirmation that the guaranty is still in effect.
38. QUITE POSSESSION. Upon payment by Lessee of the rent for the Premises
and the performance of all of the covenants, conditions and provisions on
Lessee's part to be observed and performed under this Lease, Lessee shall
have quiet possession of the Premises for the entire term hereof subject to
all of the provisions of this Lease.
39. OPTIONS.
39.1 DEFINITION. As used in this Lease, the word "OPTION" has the
following meaning: (a) the right to extend the term of this Lease or to
renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (b) the right of first refusal to lease the Premises or
the right of first offer to lease the Premises or the right of first
refusal to lease other property of Lessor or the right of first offer to
lease other property of Lessor; (c) the right to purchase the Premises, or
the right of first refusal to purchase the Premises, or the right of first
offer to purchase the Premises, or the right to purchase other property of
Lessor, or the right of first refusal to purchase other property of Lessor,
or the right of first offer to purchase other property of Lessor.
39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to
Lessee in this Lease is personal to the original Lessee named in Paragraph
1.1 hereof, and cannot be voluntarily or involuntarily assigned or
exercised by any person or entity other than said original Lessee while the
original Lessee is in full and actual possession of the Premises and
without the intention of thereafter assigning or subletting. The Options,
if any, herein granted to Lessee are not assignable, either as a part of an
assignment of this Lease or separately or apart therefrom, and no Option
may be separated from this Lease in any manner, by reservation or
otherwise.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple
Options to extend or renew this Lease, a later option cannot be exercised
unless the prior Options to extend or renew this Lease have been validly
exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary:
(i) during the period commencing with the giving of any notice of Default
under Paragraph 13.1 and continuing until the noticed Default is cured, or
(ii) during the period of time any monetary obligation due Lessor from
Lessee is unpaid (without regard to whether notice thereof is given
Lessee), or (iii) during the time Lessee is in Breach of this Lease, or
(iv) in the event that Lessor has given to Lessee three (3) or more notices
of separate Defaults under Paragraph 13.1 during the twelve (12) month
period immediately preceding the exercise of the Option, whether or not the
Defaults are cured.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to
exercise an Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's
due and timely exercise of the Option, if, after such exercise and during
the term of this Lease, (i) Lessee fails to pay to Lessor a monetary
obligation of Lessee for a period of thirty (30) days after such obligation
becomes due (without any necessity of Lessor to give notice thereof to
Lessee), or (ii) Lessor gives to Lessee three (3) or more notices of
separate Defaults under Paragraph 13.1 during any twelve (12) month period,
whether or not the Defaults are cured, or (iii) if Lessee commits a Breach
of this Lease.
40. RULES AND REGULATIONS. Lessee agrees that it will abide by, and keep
and observe all reasonable rules and regulations ("Rules and Regulations")
which Lessor may make from time to time for the management, safety, care,
and cleanliness of the grounds, the parking and unloading of vehicles and
the preservation of good order, as well as for the convenience of other
occupants or tenants of the Building and the Industrial Center and their
invitees.
41. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable
to Lessor hereunder does not include the cost of guard service or other
security measures, and that Lessor shall have no obligation whatsoever to
provide same. Lessee assumes all responsibility for the protection of the
Premises, Lessee, its agents and invitees and their property from the acts
of third parties.
42. RESERVATIONS. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way,
utility raceways, and dedications that Lessor deems necessary, and to cause
the recordation of parcel maps and restrictions, so long as such easements,
rights of way, utility raceways, dedications, maps and restrictions do not
reasonably interfere with the use of the Premises by Lessee. Lessee agrees
to sign any documents reasonably requested by Lessor to effectuate any such
easement rights, dedication, map or restrictions.
43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money
is asserted shall have the right to make payment "under protest" and such
payment shall not be regarded as a voluntary payment and there shall
survive the right on the part of said Party to institute suit for recovery
of such sum. If it shall be adjudged that there was no legal obligation on
the part of said Party to pay such sum or any part thereof, said Party
shall be entitled to recover such sum or so much thereof as it was not
legally required to pay under the provisions of this Lease.
44. AUTHORITY. If either Party hereto is a corporation, trust, or general
or limited partnership, each individual executing this Lease on behalf of
such entity represents and warrants that he or she is duly authorized to
execute and deliver this Lease on its behalf. If Lessee is a corporation,
trust or partnership, Lessee shall, within thirty (30) days after request
by Lessor, deliver to Lessor evidence satisfactory to Lessor of such
authority.
45. CONFLICT. Any conflict between the printed provisions of this Lease
and the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
46. OFFER. Preparation of this Lease by either Lessor or Lessee or
Lessor's agent or Lessee's agent and submission of same to Lessee or Lessor
shall not be deemed an offer to lease. This Lease is not intended to be
binding until executed and delivered by all Parties hereto.
47. AMENDMENTS. This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification. The Parties shall
amend this Lease from time to time to reflect any adjustments that are made
to the Base Rent or other rent payable under this Lease. As long as they
do not materially change Lessee's obligations hereunder, Lessee agrees to
make such reasonable non-monetary modifications to this Lease as may be
reasonably required by an institutional insurance company or pension plan
Lender in connection with the obtaining of normal financing or refinancing
of the property of which the Premises are a part.
48. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if
more than one person or entity is named herein as either Lessor or Lessee,
the obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or
Lessee.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW
THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE
THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND
LESSEE WITH RESPECT TO THE PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR
ATTORNEY'S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
TO EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE
OF ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL
REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKERS OR THEIR
CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH
IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE
SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, AN
ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE
CONSULTED.
The parties hereto have executed this Lease at the place on the dates
specified above to their respective signatures.
Executed at Executed at
on on
by LESSOR: by LESSEE:
COOPERAGE-ROSE PROPERTIES II INNOVACOM, INC.
By: By:
Name Printed: Xxxxxxxx X. Xxxx Name Printed: Xxxx Xxx
Title: Partner Title: President
By: By:
Name Printed: Name Printed:
Title: Title:
Address: 0000 Xxxxx Xxxx., Xxxxx 000 Xxxxxxx:
Xxxxx Xxxxx, XX 00000
Telephone: (___) ________
Telephone: (000) 000-0000 Facsimile: (___) _______
Facsimile: (000) 000-0000
BROKER: BROKER:
Executed at: Executed at:
on: on:
By: By:
Name Printed: Name Printed:
Title: Title:
Address: Address:
Telephone: (___) ________ Telephone: (___) ________
Facsimile: (___) _______ Facsimile: (___) _______
NOTE: These forms are often modified to meet changing requirements of
law and needs of the industry. Always write or call to make sure you are
utilizing the most current form: AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx X-0, Xxx Xxxxxxx, Xxxxxxxxxx
00000 (213) 687-8777
Exhibit 6.6
continued
ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE -
MODIFIED NET
Parties: COOPERAGE-ROSE PROPERTIES II (Lessor), INNOVACOM, INC. (Lessee).
Dated: October 22, 1997
49. BASE RENT ADJUSTMENTS: Commencing January 1, 1999, the new monthly
base rent shall be Twenty-nine Thousand Seven Hundred and no/100
($29,700.00) Dollars.
Commencing January 1, 2000, the new monthly base rent shall be Thirty
Thousand Six Hundred and no/100 ($30,600.00) Dollars.
Commencing January 1, 2001, the new monthly base rent shall be Thirty-
one Thousand Five Hundred and no/100 ($31,500.00) Dollars.
Commencing January 1, 2002, the new monthly base rent shall be Thirty-
two Thousand Four Hundred Ninety and no/100 ($32,400.00) Dollars.
50. IMPROVEMENTS. At any time during the first twelve (12) months of the
lease term Lessee may make modifications to the interior of the
Premises. All such modifications shall be done by a licensed
contractor, be in keeping with the existing interior improvements, be
pursued to a prompt completion and done in a workmanlike manner.
Lessee's contractor shall obtain a building permit from governmental
authorities and all improvements shall comply with all applicable
building codes. Prior to commencement of all such modifications
Lessee shall obtain Lessor's written approval of Lessee's plans. Such
approval will not be unreasonably withheld. Lessor agrees to pay for
said modifications in an amount not to exceed $25,000. Lessor may, at
its option, pay said amount directly to Lessee's contractor, or after
Lessee has presented proof of payment of said amount by Lessee to
contractor, Lessor may forgive a portion of one of Lessee's monthly
rental payments for Lessee to recover said amount.
51. LATE CHARGES. In reference to paragraph 13.4 above, the ten (10) day
time period for performance shall end at 4:00 PM Pacific Time on the
tenth (10th) calendar day. If the ten (10) day time period for
performance ends on a Saturday, Sunday, or federal, state, city or
legal holiday, then such date for performance shall be accelerated to
4:00 PM Pacific Time on the preceding day which is not a Saturday,
Sunday or federal, state, city or legal holiday.
52. PETS. Lessee shall not keep or permit to be kept any pets within the
Premises or Common Areas at any time.
53. CONDITION OF PREMISES. Lessee and Lessor agree that any repairs
needed to the plumbing, HVAC and roof, outside of normal common area
charges, shall be paid by Lessor for the first sixty (60) days of the
Lease term.
54. SIGNAGE. Lessee shall be allowed to place a monument sign on the
property which shall conform with applicable CC & R's and the
requirements of the City of Sunnyvale.
55. OPTION TO EXTEND. Subject to the provisions contained in Paragraph 39
above, Lessee shall have the right, at its option, to extend the term
of this Lease for a period of three (3) years commencing January 1,
2003 (the "Extension Term"). If Lessee elects to extend this Lease
pursuant to this Paragraph, Lessee shall give unequivocal written
notice ("Exercise Notice") of its exercise to Lessor not less than one
hundred eighty (180) days prior to the expiration Date of the Original
Term. Lessee's failure to give the Exercise Notice in a timely manner
shall be deemed a waiver of Lessee's right to extend. The terms,
covenants and conditions applicable to the Extension Term shall be the
same terms, covenants and conditions of this Lease except that (1)
Lessee shall not be entitled to any further option to extend for any
period after the Extension Term, and (2) the Base Rent for the
Premises shall be increased as provided in this Paragraph 55.
DETERMINATION OF BASE RENT DURING THE EXTENSION TERM:
(i) AGREEMENT ON RENT. Lessor and Lessee shall have sixty (60)
days after Lessor receives the Exercise Notice in which to agree on
the Base Rent during the Extension Term, which shall be the fair
market rental value of the Premises during the Extension Term. In
determining the fair market rental value of the Premises during the
Extension term, consideration shall be given to the uses of the
Premises permitted under this Lease, the quality, size, design and
location of the Premises, and the rental value of comparable space
located in the Oakmead Village area with similar quality improvements
in existence on the date of the extension. In no event shall the Base
Rent for the Extension Term be less than the Base Rent last able under
this Lease during the Original Term. If Lessor and Lessee agree on
the Base Rent for the Extension Term during the sixty (60) day period,
they shall immediately execute an amendment to this Lease stating the
Base Rent.
(ii) SELECTION OF APPRAISERS. If Lessor and Lessee are unable
to agree on the Base Rent for the Extension Term within the sixty (60)
day period, then within ten (10) days after the expiration of the
sixty (60) day period, Lessor and Lessee each, at its cost and by
giving notice to the other party, shall appoint a competent and
disinterested real estate appraiser with at least five (5) years'
full-time commercial appraisal experience in the geographical area of
the Building to appraise and set the Base Rent during the Extension
Term. If either Lessor or Lessee does not appoint an appraiser within
ten (10) days after the other party has given notice of the name of
its appraiser, the single appraiser appointed shall be the sole
appraiser and shall set the Base Rent during the Extension Term. If
two (2) appraisers are appointed by Lessor and Lessee as stated in
this paragraph, they shall meet promptly and attempt to set the Base
Rent during the Extension Term. If two (2) appraisers are unable to
agree within thirty (30) days after the second appraiser has been
appointed, they shall attempt to select a third appraiser meeting the
qualifications stated in this paragraph within ten (10) days after the
last day the two (2) appraisers are given to set the Base Rent. If
they are unable to agree on the third appraiser, either Lessor or
Lessee, by giving ten (10) days' notice to the other party, can apply
to the then president of the real estate board of the county in which
the Building is located, or to the Presiding Judge of the Superior
Court of the county in which the Building is located, for the
selection of a third appraiser who meets the qualifications stated in
this paragraph. Lessor and Lessee each shall bear one-half (1/2) of
the cost of appointing the third appraiser and of paying the third
appraiser's fee. The third appraiser, however selected, shall be a
person who has not previously acted in any capacity for either Lessor
or Lessee.
(iii) VALUE DETERMINED BY THREE (3) APPRAISERS. Within thirty
(30) days after the selection of a third appraiser, a majority of the
appraisers shall set the Base Rent for the Extension Term. If a
majority of the Appraisers is unable to set the Base Rent within the
stipulated period of time, Lessor's appraiser shall arrange for a
simultaneous exchange of written appraisals from each of the
appraisers and the three (3) appraisals shall be added together and
their total divided by three (3); the resulting quotient shall be the
Base Rent for the Premises during the Extension Term. If, however,
the low appraisal and/or high appraisal are/is more than ten percent
(10%) lower and/or higher than the middle appraisal, the lower
appraisal and/or higher appraisal shall be disregarded. If only one
(1) appraisal is disregarded, the remaining two (2) appraisals shall
be added together and their total divided by two (2); the resulting
quotient shall be the Base Rent for the Premises during the Extension
Term. If both the low appraisal and the high appraisal are
disregarded as stated this paragraph, the middle appraisal shall be
the Base Rent for the Premises during the Extension Term.
(iv) NOTICE TO LESSOR AND LESSEE. After the Base Rent for the
Extension Term has been set, the appraisers shall immediately notify
Lessor and Lessee, and Lessor and Lessee shall immediately execute an
amendment to this Lease stating the Base Rent.
56. Lessor's exercise for the foregoing rights shall not materially
interfere with Lessee's use or enjoyment of the Premises or its rights
under this Lease, including, without limitation, Lessee's parking
rights.
57. Notwithstanding anything to the contrary contained in this Lease, in
no event shall Lessee have any obligation to perform, to pay directly,
or to reimburse Lessor for, all or any portion of the following
repairs, maintenance, improvements, replacements, premiums, claims
losses, fees, commissions, charges, disbursements, attorneys' fees,
experts' fees, costs and expenses (collectively, "Costs"), (i) Costs
occasioned by the act, omission or violation of Law by Lessor, any
other occupant of the Complex, or their respective agents, employees
or contractors', (ii) Costs occasioned by fire, acts of God or other
casualties, not caused by Lessee and subject to 4.2(a)(vii), or by the
exercise of the power of eminent domain; (iii) Costs which properly
would be capitalized under generally accepted accounting principles
and which relate to repairs, alterations, improvements, replacements,
equipment and tools except to the extent that Lessee's share of such
Costs is amortized over the useful life of the capital improvement in
question in accordance with generally accepted accounting principles;
(iv) Costs which Lessee pays directly to a third person or for which
Lessor has a right of reimbursement from others; (v) Costs associated
with utilities and services of a type not provided to Lessee; (vi)
Costs incurred in connection with negotiations or disputes with other
occupant(s) of the Complex, and Costs arising from the violation by
Lessor or any occupant of the Complex (other than Lessee) of the terms
and conditions of any lease or other agreement; (vii) depreciation,
amortization or other expense reserves; or (viii) Costs related to
Hazardous Substances, except to the extent the Cost is caused by the
storage, use or disposal of the Hazardous Substance in question by
Lessee in violation of Applicable Laws.
58. Notwithstanding anything to the contrary contained in this Lease,
Lessee shall not be required to construct or pay the cost of any
Applicable Requirements (i) regarding the presence of Hazardous
Substances, unless the same were stored, used or disposed of by
Lessee, its agents or employees on or in the Premises; or (ii)
requiring the correction of any condition existing on the Premises as
of the Commencement Date.
59. Lessee's Responsibility. Notwithstanding anything to the contrary
contained in this Lease, except to the extent that the Hazardous
Substance in question was released, emitted, used, stored,
manufactured, transported or discharged by Lessee, or its agents,
employees or contractors, in violation of Applicable Laws, Lessee
shall not be responsible for, and hereby is released from, losses,
costs (including reasonable attorneys' fees), damages, claims, suits,
actions and causes of action with respect to any Hazardous Substance
present on or about the Premises, the Building or the Complex, or the
soil, groundwater or surface water thereof, without regard to whether
the Hazardous Substances were present on the Premises, Building or
Complex as of the Commencement Date.
60. Notwithstanding anything to the contrary contained in this Lease, if
the repair or replacement required, including compliance with
Applicable Requirements, by Lessee hereunder is of a capital item, as
defined in accordance with generally accepted accounting principles,
Lessor shall pay the cost to repair or replace the capital item and
amortize the cost over its useful life (again determined in accordance
with generally accepted accounting principles), and Lessee shall
reimburse Lessor for the cost thereof on a monthly basis for each
month of useful life falling within the remainder of this term, as
extended. Provided, however, that Lessee shall bear the full cost of
capital items required due to Applicable Requirements imposed due to
Lessee's misuse of the Premises and or due to Applicable Requirements
imposed on Lessee because of its particular use of the Premises and
not imposed on all tenant's of the project.
61. Notwithstanding anything to the contrary contained in this Lease, with
respect to Alterations or Utility Installations requiring Lessor's
prior written consent, if so requested by Lessee, Lessor shall notify
Lessee in writing at the time that Lessee requests Lessor's consent
whether Lessor shall require removal of the Alteration or Utility
Installation upon the expiration or earlier termination of this Lease.
62. Notwithstanding anything to the contrary contained in this Lease,
Lessee shall not be required to pay any portion of any tax or
assessment expense (i) levied on Lessor's rental income, unless such
tax or assessment, expense is imposed in lieu of real property taxes;
(ii) in excess of the amount which would be payable if such tax or
assessment expense were paid in installments over the longest possible
term; (iii) imposed on land and improvements other than the Project;
or (iv) attributable to Lessor's net income, inheritance, gift,
franchise, estate or state taxes. Lessee may in good faith contest
any tax or assessment, provided that Lessee indemnifies Lessor from
any loss or liability in connection therewith.
63. Notwithstanding anything to the contrary contained in this Lease,
Lessee, without Lessor's prior written consent, may sublet the
Premises or assign this Lease to: (i) a wholly owned subsidiary, (ii)
a successor corporation related to Lessee by merger, so long as the
net worth of the merged entity is not less than the net worth of the
Lessee on the date of this Lease. For purposes of this Lease, a sale
of Lessee;s capital stock through any public exchange shall not be
deemed an assignment, subletting or other transfer of this Lease or
the Premises requiring Lessor's consent.
64. Lessor shall exert reasonable efforts to deliver a non-disturbance
agreement from the current lender, in a form reasonably satisfactory
to Lessee, to Lessee after execution of this Lease by both parties.
The failure to Lessor to deliver such agreement shall not be a breach
of this Lease.
