EXHIBIT 10.9
[LOGO] AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE--NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. BASIC PROVISIONS: ( "Basic Provisions ")
1.1 PARTIES: This Lease ( "Lease "), dated for reference purposes only
July 20, 2001, is made by and between MOORPARK VENTURE L.P., a California
limited partnership ( "Lessor ") and SMTEK, INC., a California corporation (
"Lessee "), (collectively the "Parties, " or individually a "Party ").
1.2 PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and
commonly known as 000 Xxxxxxx Xxxxx, Xxxxxxxx, located in the County of
Ventura, State of California, and generally described as (describe briefly
the nature of the property) consisting of a free standing
Commercial/Industrial building containing an agreed 115,538 Rentable Square
Feet. ( "Premises "). (See also Paragraph 2)
1.3 TERM: (See Addendum Section 3) years and ___ months ( "Original Term
") commencing (See Addendum Section 3) ( "Commencement Date ") and ending See
Addendum Section 3 ( "Expiration Date "). (See also Paragraph 3)
1.4 EARLY POSSESSION: Not Applicable ( "Early Possession Date "). (See
also Paragraphs 3.2 and 3.3)
1.5 BASE RENT: $ See Addendum Section 1 per month ( "Base Rent "),
payable on the First day of each month commencing See Addendum Section 1 (See
also Paragraph 4)
/x/ If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted.
1.6 BASE RENT PAID UPON EXECUTION: $ See Addendum Section 1 as Base Rent
for the period See Addendum Section 1.
1.7 SECURITY DEPOSIT: $ See Addendum Section 1.5 ( "Security Deposit ").
(See also Paragraph 5)
1.8 AGREED USE: design, manufacture, and storage of electronic
assemblies and contract manufacturing services. (See also Paragraph 6)
1.9 INSURING PARTY: LESSOR is the "Insuring Party " unless otherwise
stated herein. (See also Paragraph 8)
1.10 [THIS SECTION INTENTIONALLY OMITTED]
1.11 GUARANTOR: [THIS SECTION INTENTIONALLY OMITTED]
1.12 ADDENDA AND EXHIBITS: Attached hereto is an Addendum or Addenda
consisting of Paragraphs 1 through 25 and Exhibits "1 " through "8 ", all
of which constitute a part of this Lease.
2. PREMISES. SEE ADDENDUM SECTION 3
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 size set forth in this Lease, or that may
have been used in calculating rental, is an approximation which the Parties
agree is reasonable and the rental based thereon is not subject to revision
whether or not the actual size is more or less.
2.2 CONDITION. SEE ADDENDUM SECTIONS 4 AND 5
[THIS SECTION INTENTIONALLY OMITTED]
2.3 COMPLIANCE. SEE ADDENDUM SECTIONS 4 AND 5
[THIS SECTION INTENTIONALLY OMITTED]
(a) [THIS SECTION INTENTIONALLY OMITTED]
(b) [THIS SECTION INTENTIONALLY OMITTED]
(c) [THIS SECTION INTENTIONALLY OMITTED]
2.4 ACKNOWLEDGMENTS. Lessee acknowledges that: (a) it has been advised
by Lessor to satisfy itself with respect to the condition of the Premises
(including but not limited to the electrical, HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable
Requirements), and their suitability for Lessee's intended use, (b) Lessee
has made such investigation as it deems necessary with reference to such
matters and assumes all responsibility therefor as the same relate to its
occupancy of the Premises, and (c) neither Lessor, nor Lessor's agents, has
made any oral or written representations or warranties with respect to said
matters other
2.5 [THIS SECTION INTENTIONALLY OMITTED]
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent
shall be abated for the period of such early possession. All other terms of
this Lease (including but not limited to the obligations to pay Real Property
Taxes and insurance premiums and to maintain the Premises) shall, however, be
in effect during such period. Any such early possession shall not affect the
Expiration Date.
3.3 DELAY IN POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease. Lessee shall not,
however, be obligated to pay Rent or perform its other obligations until it
receives possession of the Premises. If possession is not delivered within
sixty (60) days after the Commencement Date, Lessee may, at its option, by
notice in writing within ten (10) days after the end of such sixty (60) day
period, cancel this Lease, in which event the Parties shall be discharged
from all obligations hereunder. If such written notice is not received by
Lessor within said ten (10) day period, Lessee's right to cancel shall
terminate. Except as otherwise provided, if possession is not tendered to
Lessee by the Start Date, and Lessee does not terminate this Lease, as
aforesaid, any period of rent abatement that Lessee would otherwise have
enjoyed shall run from the date of delivery of possession and continue for a
period equal to what Lessee would otherwise have enjoyed under the terms
hereof, but minus any days of delay caused by the acts or omissions of
Lessee. If possession of the Premises is not delivered within four (4) months
after the Commencement Date, this Lease shall terminate unless other
agreements are reached between Lessor and Lessee, in writing.
3.4 LESSEE COMPLIANCE. Lessor shall not be required to tender possession
of the Premises to Lessee until Lessee complies with its obligation to
provide evidence of insurance (Paragraph 8.5). Pending delivery of such
evidence, Lessee shall be required to perform all of its obligations under
this Lease from and after the Start Date, including the payment of Rent,
notwithstanding Lessor's election to withhold possession pending receipt of
such evidence of insurance. Further, if Lessee is required to perform any
other conditions prior to or concurrent with the Start Date, the Start Date
shall occur but Lessor may elect to withhold possession until such conditions
are satisfied.
4. RENT. SEE ADDENDUM SECTIONS 1 AND 2
4.1 RENT DEFINED. All monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent (
"Rent ").
4.2 PAYMENT. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is
due. Rent for any period during the term hereof which is for less than one
(1) full calendar month shall be prorated based upon the actual number of
days of said month. Payment of Rent shall be made to Lessor at its address
stated herein or to such other persons or place as Lessor may from time to
time designate in writing. Acceptance of a payment which is less than the
amount then due shall not be a waiver of Lessor's rights in the balance of
such Rent, regardless of Lessor's endorsement of any check so stating.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise
Defaults under this Lease, Lessor may use, apply or retain all or any portion
of said Security Deposit for the payment of any amount due Lessor or to
reimburse or compensate Lessor for any liability, expense, loss or damage
which Lessor may suffer or incur by reason thereof. If Lessor uses or applies
all or any portion of said Security Deposit, Lessee shall within ten (10)
days after written request therefor deposit monies with Lessor sufficient to
restore said Security Deposit to the full amount required by this Lease. If
the Base Rent increases during the term of this Lease, Lessee shall, upon
written request from Lessor, deposit additional moneys with Lessor so that
the total amount of the Security Deposit shall at all times bear the same
proportion to the increased Base Rent as the initial Security Deposit bore to
the initial Base Rent. Should the Agreed Use be amended to accommodate a
material change in the business of Lessee or to accommodate a sublessee or
assignee, Lessor shall have the right to increase the Security Deposit to the
extent necessary, in Lessor's reasonable judgment, to account for any
increased wear and tear that the Premises may suffer as a result thereof. If
a change in control of Lessee occurs during this Lease and following such
change the financial condition of Lessee is, in Lessor's reasonable judgment,
significantly reduced, Lessee shall deposit such additional monies with
Lessor as shall be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on said change in financial condition.
Lessor shall not be required to keep the Security Deposit separate from its
general accounts. Within fourteen (14) days after the expiration or
termination of this Lease, if Lessor elects to apply the Security Deposit
only to unpaid Rent, and otherwise within thirty (30) days after the Premises
have been vacated pursuant to Paragraph 7.4(c) below, Lessor shall return
that portion of the Security Deposit not used or applied by Lessor. No part
of the Security Deposit shall be considered to be held in trust, to bear
interest or to be prepayment for any monies to be paid by Lessee under this
Lease.
6. USE. See Addendum Section 6
6.1 USE. Lessee shall use and occupy the Premises only for the
Agreed Use, or any other legal use which is reasonably comparable thereto,
and for no other purpose. Lessee shall not use or permit the use of the
Premises in a manner that is unlawful, creates damage, waste or a nuisance,
or that disturbs owners and/or occupants of, or causes damage to neighboring
properties. Lessor shall not unreasonably withhold or delay its consent to
any written request for a modification of the Agreed Use, so long as the same
will not impair the structural integrity of the improvements on the Premises
or the mechanical or electrical systems therein, is not significantly more
burdensome to the Premises. If Lessor elects to withhold consent, Lessor
shall within five (5) business days after such request give written
notification of same, which notice shall include an explanation of Lessor's
objections to the change in use.
6.2 HAZARDOUS SUBSTANCES. See Addendum Section 7
(a) REPORTABLE USES REQUIRE CONSENT. The term "Hazardous
Substance " as used in this Lease shall mean any product, substance, or waste
whose presence, use, manufacture, disposal, transportation, or release,
either by itself or in combination with other materials expected to be on the
Premises, is either; (i) potentially injurious to the public health, safety
or welfare, the environment or the Premises, (ii) regulated or monitored by
any governmental authority, or (iii) a basis for potential liability of
Lessor to any governmental agency or third party under any applicable statute
or common law theory. Hazardous Substances shall include, but not be limited
to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-
products or fractions thereof. Lessee shall not engage in any activity in or
on the Premises which constitutes a Reportable Use of Hazardous Substances
without the express prior written consent of Lessor and timely compliance (at
Lessee's expense) with all Applicable Requirements. "Reportable Use " shall
mean (i) the installation or use of any above or below ground storage tank,
(ii) the generation, possession, storage, use, transportation, or disposal of
a Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with,
any governmental authority, and/or (iii) the presence at the Premises of a
Hazardous Substance with respect to which any Applicable Requirements
requires that a notice be given to persons entering or occupying the Premises
or neighboring properties. Notwithstanding the foregoing, Lessee may use any
ordinary and customary materials reasonably required to be used in the normal
course of the Agreed Use, so long as such use is in compliance with all
Applicable Requirements, is not a Reportable Use, and does not expose the
Premises or neighboring property to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor. In addition, Lessor may
condition its consent to any Reportable Use upon receiving such additional
assurances as Lessor reasonably deems necessary to protect itself, the
public, the Premises and/or the environment against damage, contamination,
injury and/or liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasements) and/or increasing the Security
Deposit.
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has
reasonable cause to believe, that a Hazardous Substance has come to be
located in, on, under or about the Premises, other than as previously
consented by Lessor, Lessee shall immediately give written notice of such
fact to Lessor, and provide Lessor with a copy of any report, notice, claim
or other documentation which it has concerning the presence of such Hazardous
Substance.
(c) LESSEE REMEDIATION. Lessee shall not cause or permit
any Hazardous Substance to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee's expense, take all investigatory and/or remedial action
reasonably recommended, whether or not formally ordered or required, for the
cleanup of any contamination of, and for the maintenance, security and/or
monitoring of the Premises or neighboring properties, that was caused or
materially contributed to by Lessee, or pertaining to or involving any
Hazardous Substance brought onto the Premises during the term of this Lease,
by or for Lessee, or any third party.
(d) LESSEE INDEMNIFICATION. Lessee shall indemnify, defend
and hold Lessor, its agents, employees, lenders and ground lessor, if any,
harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, claims, expenses, penalties, and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance in, on,
under or near the Premises.
Lessee's obligations shall include, but not be
limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Lessee, and the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the
expiration or termination of this Lease. No termination, cancellation or
release agreement entered into by Lessor and Lessee shall release Lessee from
its obligations under this Lease with respect to Hazardous Substances, unless
specifically so agreed by Lessor in writing at the time of such agreement.
(e) [THIS SECTION INTENTIONALLY OMITTED]
(f) [THIS SECTION INTENTIONALLY OMITTED]
(g) [THIS SECTION INTENTIONALLY OMITTED]
6.3 LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise provided in this Lease, Lessee shall, at Lessee's sole expense,
fully, diligently and in a timely manner, materially comply with all
Applicable Requirements, the requirements of any applicable fire insurance
underwriter or rating bureau, and the recommendations of Lessor's engineers
and/or consultants which relate in any manner to the Premises, without regard
to whether said requirements are now in effect or become effective after the
Start Date. Lessee shall, within ten (10) days after receipt of Lessor's
written request, provide Lessor with copies of all permits and other
documents, and other information evidencing Lessee's compliance with any
Applicable Requirements specified by Lessor, and shall immediately upon
receipt, notify Lessor in writing (with copies of any documents involved) of
any threatened or actual claim, notice, citation, warning, complaint or
report pertaining to or involving the failure of Lessee or the Premises to
comply with any Applicable Requirements.
6.4 INSPECTIONS; COMPLIANCE. Lessor and Lessor's "Lender " (as
defined in Paragraph 30 below) and consultants shall have the right to enter
into Premises at any time, in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Lessee with this Lease. The cost of any such
inspections shall be paid by Lessor, unless a violation of Applicable
Requirements, or a contamination is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority, in such case,
Lessee shall upon request reimburse Lessor for the cost of such inspections,
so long as such inspection is reasonably related to the violation or
contamination.
7. MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) IN GENERAL. Subject to the provisions of, Section 4 of
the Addendum, 6.3 (Lessee's Compliance with Applicable Requirements), 7.2
(Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation),
Lessee shall, at Lessee's sole expense, keep the Premises, Utility
Installations, and Alterations in good order, condition and repair (whether
or not the portion of the Premises requiring repairs, or the means of
repairing the same, are reasonably or readily accessible to Lessee, and
whether or not the need for such repairs occurs as a result of Lessee's use,
any prior use, the elements or the age of such portion of the Premises),
including, but not limited to, all equipment or facilities, such as plumbing,
heating, ventilating, air-conditioning, electrical, lighting facilities,
boilers, pressure vessels, fire protection system, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, floors, windows, doors, plate
glass, skylights, landscaping, driveways, parking lots, fences, retaining
walls, signs, sidewalks and parkways located in, on, or adjacent to the
Premises. Lessee, in keeping the Premises in good order, condition and
repair, shall exercise and perform good maintenance practices, specifically
including the procurement and maintenance of the service contracts required
by Paragraph 7.1(b) below. Lessee's obligations shall include restorations,
replacements or renewals when necessary to keep the Premises and all
improvements thereon or a part thereof in good order, condition and state of
repair. Lessee shall, during the term of this Lease, keep the exterior
appearance of the Building in a first-class condition consistent with the
exterior appearance of other similar facilities of comparable age and size in
the vicinity, including, when necessary, the exterior repainting of the
Building.
(b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole
expense, procure and maintain contracts, with copies to Lessor, in customary
form and substance for, and with contractors specializing and experienced in
the maintenance of the following equipment and improvements, if any, if and
when installed on the Premises; (i) HVAC equipment, (ii) boiler, and pressure
vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke
detection, (iv) landscaping and irrigation systems, (v) roof covering and
drains, (vi) driveways and parking lots, (vii) clarifiers (viii) basic
utility feed to the perimeter of the Building, and (ix) any other equipment,
if reasonably required by Lessor.
(c) REPLACEMENT. Subject to Lessee's indemnification of
Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of
liability resulting from Lessee's failure to exercise and perform good
maintenance practices, if the Basic Elements described in Paragraph 7.1(b)
cannot be repaired other than at a cost which is excess of 50% of the cost of
replacing such Basic Elements, then such Basic Elements shall be replaced by
Lessor, and the cost thereof shall be prorated between the Parties and Lessee
shall only be obligated to pay, each month during the remainder of the term
of this Lease, on the date on which Base Rent is due, an amount equal to the
product of multiplying the cost of such replacement by a fraction, the
numerator of which is one, and the denominator of which is the number of
months of the useful life of such replacement as such useful life is
specified pursuant to Federal income tax regulations or guidelines for
depreciation thereof (including interest on the unamortized balance as is
then commercially reasonable in the judgment of Lessor's accountants), with
Lessee reserving the right to prepay its obligation at any time.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Section 4 of
the Addendum 9 (Damage or Destruction) and 14 (Condemnation), it is intended
by the Parties hereto that Lessor have no obligation, in any manner
whatsoever, to repair and maintain the Premises, or the equipment therein,
all of which obligations are intended to be that of the Lessee. It is the
intention of the Parties that the terms of this Lease govern the respective
obligations of the Parties as to maintenance and repair of the Premises, and
they expressly waive the benefit of any statute now or hereafter in effect to
the extent it is inconsistent with the terms of this Lease.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
SEE ADDENDUM SECTION 5
(a) DEFINITIONS; CONSENT REQUIRED. The term "Utility
Installations " refers to all floor and window coverings, air lines, power
panels, electrical distribution, security and fire protection systems,
communication systems, lighting fixtures, HVAC equipment, plumbing, and
fencing in or on the Premises. The term "Trade Fixtures " shall mean
Lessee's machinery and equipment that can be removed without doing material
damage to the Premises. The term "Alterations " shall mean any modification
of the improvements, other than Utility Installations or Trade Fixtures,
whether by addition or deletion. "Lessee Owned Alterations and/or Utility
Installations " are defined as Alterations and/or Utility Installations made
by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a),
Lessee shall not make any Alterations or Utility Installations to the
Premises without Lessor's prior written consent. Lessee may, however, make
non-structural Utility Installations to the interior of the Premises
(excluding the roof) without such consent but upon notice to Lessor, as long
as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative
cost thereof during this Lease as extended does not exceed $50,000 in the
aggregate or $10,000 in any one year.
(b) CONSENT. Any Alterations or Utility Installations that
Lessee shall desire to make and which require that consent of the Lessor
shall be presented to Lessor in written form with detailed plans. Consent
shall be deemed conditioned upon Lessee's: (i) acquiring all applicable
governmental permits, (ii) furnishing Lessor with copies of both the permits
and the plans and specifications prior to commencement of the work, and (iii)
compliance with all conditions of said permits and other Applicable
Requirements in a prompt and expeditious manner. Any Alterations or Utility
Installations shall be performed in a workmanlike manner with good and
sufficient materials. Lessee shall promptly upon completion furnish Lessor
with as-built plans and specifications. For work which costs an amount equal
to the greater or one month's Base Rent, or $10,000, Lessor may condition its
consent upon Lessee providing a lien and completion bond in an amount equal
to one and one-half times the estimated cost of such Alteration or Utility
Installation and/or upon Lessee's posting an additional Security Deposit with
Lessor.
(c) INDEMNIFICATION. Lessee shall pay, when due, all claims
for labor or materials furnished or alleged to have been furnished to or for
Lessee at or for use on the Premises, which claims are or may be secured by
any mechanic's or materialmen's lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (10) days' notice prior
to the commencement of any work in, on or about the Premises, and Lessor
shall have the right to post notices of non-responsibility. If Lessee shall
contest the validly of any such lien, claim or demand, then Lessee shall, at
its sole expense defend and protect itself, Lessor and the Premises against
the same and shall pay and satisfy any such adverse judgment that may be
rendered thereon before the enforcement thereof. If Lessor shall require,
Lessee shall furnish a surety bond in an amount equal to one and one-half
times the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same, if Lessor elects to participate in any such
action, Lessee shall pay Lessor's attorneys' fees and costs.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
SEE ADDENDUM SECTION 8
(a) OWNERSHIP. Subject to Lessor's right to require removal
or elect ownership as hereinafter provided, all Alterations and Utility
Installations made by Lessee shall be the property of Lessee, but considered
a part of the Premises. Lessor may, at any time, elect in writing to be the
owner of all or any specified part of the Lessee Owned Alterations and
Utility Installations. Unless otherwise instructed per Paragraph 7.4(b)
hereof, all Lessee Owned Alterations and Utility Installations shall, at the
expiration or termination of this Lease, become the property of Lessor and be
surrendered by Lessee with the Premises.
(b) REMOVAL. By delivery to Lessee of written notice from
Lessor not earlier than ninety (90) and not later than thirty (30) days prior
to the end of the term of this Lease, Lessor may require that any or all
Lessee Owned Alterations or Utility Installations be removed by the
expiration or termination of this Lease. Lessor may require the removal at
any time of all or any part of any Lessee Owned Alterations or Utility
Installations made without the required consent.
(c) SURRENDER/RESTORATION. Lessee shall surrender the
Premises by the Expiration Date or any earlier termination date, with all of
the improvements, parts and surfaces thereof broom clean and free of debris,
and in good operating order, condition and state of repair, ordinary wear and
tear excepted.
Lessee shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Lessee Owned
Alteration and/or Utility Installations, furnishings, and equipment as well
as the removal of any storage tank installed by or for Lessee, and the
removal, replacement, or remediation of any soil, material or groundwater
contaminated by Lessee. Trade Fixtures shall remain the property of Lessee
and shall be removed by Lessee. The failure by Lessee to timely vacate the
Premises pursuant to this Paragraph 7.4(c) without the express written
consent of Lessor shall constitute a holdover under the provisions of
Paragraph 2G below.
8. INSURANCE; INDEMNITY. SEE ADDENDUM SECTION 10
8.1 PAYMENT FOR INSURANCE. Lessee shall pay for all insurance
required under Paragraph 8 except to the extent of the cost attributable to
liability insurance carried by Lessor under Paragraph 8.2(b) in excess of
$2,000,000 per occurrence. Premiums for policy periods commencing prior to or
extending beyond the Lease term shall be prorated to correspond to the Lease
term. Payment shall be made by Lessee to Lessor within ten (10) days
following receipt of an invoice.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force
a Commercial General Liability Policy of Insurance protecting Lessee and
Lessor against claims for bodily injury, personal injury and property damage
based upon or arising out of the ownership, use, occupancy or maintenance of
the Premises and all areas appurtenant thereto. Such insurance shall be on an
occurrence basis providing single limit coverage in an amount not less than
$2,000,000 per occurrence with an "ADDITIONAL INSURED-MANAGERS OR LESSORS OF
PREMISES ENDORSEMENT " and contain the "AMENDMENT OF THE POLLUTION EXCLUSION
ENDORSEMENT " for damage caused by heat, smoke or fumes from a hostile fire.
The Policy shall not contain any intra-insured exclusions as between insured
persons or organizations, but shall include coverage for liability assumed
under this Lease as an "insured contract " for the performance of Lessee's
indemnity obligations under this Lease. The limits of said insurance shall
not, however, limit the liability of Lessee nor relieve Lessee of any
obligation hereunder. All insurance carried by Lessee shall be primary to and
not contributory with any similar insurance carried by Lessor, whose
insurance shall be considered excess insurance only.
(b) CARRIED BY LESSOR. Lessor shall maintain liability
insurance as described in Paragraph 8.2(a), 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. The Insuring Party shall
obtain and keep in force a policy or policies in the name of Lessor, with
loss payable to Lessor, any groundlessor, and to any Lender(s) insuring loss
or damage to the Premises. The amount of such insurance shall be equal to
the full replacement cost of the Premises, as the same shall exist from time
to time, or the amount required by any Lenders, but in no event more than the
commercially reasonable and available insurable value thereof. If Lessor is
the Insuring Party, however, Lessee Owned Alterations and Utility
Installations, Trade Fixtures, and Lessee's personal property shall be
insured by Lessee under Paragraph 8.4 rather than by Lessor. Such policy or
policies shall insure against all risks of direct physical loss or damage
(except the perils of flood and/or earthquake unless required by a Lender),
including coverage for debris removal and the enforcement of any Applicable
Requirements requiring the upgrading, demolition, reconstruction or
replacement of any portion of the Premises as the result of a covered loss.
Said policy or policies shall also contain an agreed valuation provision in
lieu of any coinsurance clause, waiver of subrogation, and inflation guard
protection causing an increase in the annual property insurance coverage
amount by a factor of not less than the adjusted U.S. Department of Labor
Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located. If such insurance coverage has a deductible clause,
the deductible amount shall not exceed $1,000 per occurrence, and Lessee
shall be liable for such deductible amount in the event of an Insured Loss.
(b) RENTAL VALUE. The Insuring Party shall obtain and keep
in force a policy or policies in the name of Lessor with loss payable to
Lessor and any Lender, insuring the loss of the full Rent for one (1) year.
Said insurance shall provide that in the event the Lease is terminated by
reason of an insured loss, the period of indemnity for such coverage shall be
extended beyond the date of the completion of repairs or replacement of the
Premises, to provide for one full year's loss of Rent from the date of any
such loss. Said insurance shall contain an agreed valuation provision in lieu
of any coinsurance clause, and the amount of coverage shall be adjusted
annually to reflect the projected Rent otherwise payable by Lessee, for the
next twelve (12) month period. Lessee shall be liable for any deductible
amount in the event of such loss.
(c) ADJACENT PREMISES. If the Premises are part of a larger
building, or of a group of buildings owned by Lessor which are adjacent to
the Premises, the Lessee shall pay for any increase in the premiums for the
property insurance of such building or buildings if said increase is caused
by Lessee's acts, omissions, use or occupancy of the Premises.
8.4 LESSEE'S PROPERTY/BUSINESS INTERRUPTION INSURANCE.
(a) PROPERTY DAMAGE. Lessee shall obtain and maintain
insurance coverage on all of Lessee's personal property, Trade Fixtures, and
Lessee Owned Alterations and Utility Installations. Such insurance shall be
full replacement cost coverage with a deductible of not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for
the replacement of personal property, Trade Fixtures and Lessee Owned
Alterations and Utility Installations. Lessee shall provide Lessor with
written evidence that such insurance is in force.
(b) BUSINESS INTERRUPTION. Lessee shall obtain and maintain
loss of income and extra expense insurance in amounts as will reimburse
Lessee for direct or indirect loss of earnings attributable to all perils
commonly insured against by prudent lessees in the business of Lessee or
attributable to prevention of access to the Premises as a result of such
perils.
(c) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Lessee's property, business operations or
obligations under this Lease.
8.5 INSURANCE POLICIES. Insurance required herein shall be by
companies duly licensed or admitted to transact business in the state where
the Premises are located, and maintaining during the policy term a "General
Policyholders Rating " of at least B+, V, as set forth in the most current
issue of "Best's Insurance Guide ", or such other rating as may be required
by a Lender. Lessee shall not do or permit to be done anything which
invalidates the required insurance policies. Lessee shall, prior to the Start
Date, deliver to Lessor certified copies of policies of such insurance or
certificates evidencing the existence and amounts of the required insurance.
No such policy shall be cancelable or subject to modification except after
thirty (30) days prior written notice to Lessor. Lessee shall, at least
thirty (30) days prior to the expiration of such policies, furnish Lessor
with evidence of renewals or "insurance binders " evidencing renewal
thereof, or Lessor may order such insurance and charge the cost thereof to
Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such
policies shall be for a term of at least one year, or the length of the
remaining term of this Lease, whichever is less. If either Party shall fail
to procure and maintain the insurance required to be carried by it, the other
Party may, but shall not be required to, procure and maintain the same.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights
or remedies, Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to recover damages against the other, for loss of or
damage to its property arising out of or incident to the perils required to
be insured against herein to the extent of insurance proceeds actually
collected.
The Parties agree to have their respective property damage
insurance carriers waive any right to subrogation that such companies may
have against Lessor or Lessee, as the case may be, so long as the insurance
is not invalidated thereby.
8.7 INDEMNITY. Except for Lessor's gross negligence or willful
misconduct, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners
and Lenders, from and against any and all claims, loss of rents and/or
damages, liens, judgments, penalties, attorneys' and consultants' fees,
expenses and/or liabilities arising out of, involving, or in connection with,
the use and/or occupancy of the Premises by Lessee. If any action or
proceeding is brought against Lessor by reason of any of the foregoing
matters, Lessee shall upon notice defend the same at Lessee's expense by
counsel reasonably satisfactory to Lessor and Lessor shall cooperate with
Lessee in such defense. Lessor need not have first paid any such claim in
order to be defended or indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be
liable for injury or damage to the person or goods, wares, merchandise or
other property of Lessee, Lessee's employees, contractors, invitees,
customers, or any other person in or about the Premises, whether such damage
or injury is caused by or results from fire, steam, electricity, gas, water
or rain, or from the breakage, leakage, obstruction or other defects of
pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting
fixtures, or from any other cause, whether the said injury damage results
from conditions arising upon the Premises or upon other portions of the
Building of which the Premises are a part, or from other sources or places.
Lessor shall not be liable for any damages arising from any act or neglect of
any other tenant of Lessor. Notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to
Lessee's business or for any loss of income or profit therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE " shall mean damage or
destruction to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations, which can reasonably be repaired in
six (6) months or loss from the date of the damage or destruction. Lessor
shall notify Lessee in writing within thirty (30) days from the date of the
damage or destruction as to whether or not the damage is Partial or Total.
(b) "PREMISES TOTAL DESTRUCTION " shall mean damage or
destruction to the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired in six
(6) months or less from the date of the damage or destruction. Lessor shall
notify Lessee in writing within thirty (30) days from the date of the damage
or destruction as to whether or not the damage is Partial or Total.
(c) "INSURED LOSS " shall mean damage or destruction to
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which was caused by an event required to be
covered by the insurance described in Paragraph 8.3(a), irrespective of any
deductible amounts or coverage limits involved.
(d) "REPLACEMENT COST " shall mean the cost to repair or
rebuild the improvements owned by Lessor at the time of the occurrence to
their condition existing immediately prior thereto, including demolition,
debris removal and upgrading required by the operation of Applicable
Requirements, and without deduction for depreciation.
(e) [THIS SECTION INTENTIONALLY OMITTED]
9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage
that is an Insured Loss occurs, then Lessor shall, at Lessor's expense,
repair such damage (but not Lessee's Trade Fixtures or Lessee Owned
Alterations and Utility Installations) as soon as reasonably possible and
this Lease shall continue in full force and effect; provided, however, that
Lessee shall, at Lessor's election, make the repair of any damage or
destruction the total cost to repair of which is $10,000 or less, and, in
such event, Lessor shall make any applicable insurance proceeds available to
Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing,
if the required insurance was not in force or the insurance proceeds are not
sufficient to effect such repair, the Insuring Party shall promptly
contribute the shortage in proceeds (except as to the deductible which is
Lessee's responsibility) as and when required to complete said repairs. In
the event, however, such shortage was due to the fact that, by reason of the
unique nature of the improvements, full replacement cost insurance coverage
was not commercially reasonable and available, Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore
the unique aspects of the Premises unless Lessee provides Lessor with the
funds to cover same, or adequate assurance thereof, within ten (10) days
following receipt of written notice of such shortage and request therefor. If
Lessor receives said funds or adequate assurance thereof within said ten (10)
day period, the party responsible for making the repairs shall complete them
as soon as reasonably possible and this Lease shall remain in full force and
effect. If such funds or assurance are not received, Lessor may nevertheless
elect by written notice to Lessee within ten (10) days thereafter to: (i)
make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in
full force and effect, or have this Lease terminate thirty (30) days
thereafter. Lessee shall not be entitled to reimbursement of any funds
contributed by Lessee to repair any such damage or destruction.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial
Damage that is not an Insured Loss occurs, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at
Lessee's expense), Lessor may either: (i) repair such damage as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) terminate this Lease by giving
written notice to Lessee within thirty (30) days after receipt by Lessor of
knowledge of the occurrence of such damage. Such termination shall be
effective sixty (60) days following the date of such notice. In the event
Lessor elects to terminate this Lease, Lessee shall have the right within ten
(10) days after receipt of the termination notice to give written notice to
Lessor of Lessee's commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within thirty (30) days after making such
commitment. In such event this Lease shall continue in full force and effect,
and Lessor shall proceed to make such repairs as soon as reasonably possible
after the required funds are available. If Lessee does not make the required
commitment, this Lease shall terminate as of the date specified in the
termination notice.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision
hereof, if a Premises Total Destruction occurs, this Lease shall terminate
sixty (60) days following such Destruction. If the damage or destruction was
caused by the gross negligence or willful misconduct of Lessee, Lessor shall
have the right to recover Lessor's damages from Lessee, except as provided in
Paragraph 8.6.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six
(6) months of this Lease there is damage for which the cost to repair exceeds
one (1) month's Base Rent, whether or not an Insured Loss, Lessor may
terminate this Lease effective sixty (60) days following the date of
occurrence of such damage by giving a written termination notice to Lessee
within thirty (30) days after the date of occurrence of such damage.
Notwithstanding the foregoing, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, (a) exercising such option and (b) providing Lessor
with any shortage in insurance proceeds (or adequate assurance thereof)
needed to make the repairs on or before the earlier of (i) the date which is
ten days after Lessee's receipt of Lessor's written notice purporting to
terminate this Lease, or (ii) the day prior to the date upon which such
option expires. If Lessee duly exercises such option during such period and
provides Lessor with funds (or adequate assurance thereof) to cover any
shortage in insurance proceeds, Lessor shall, at Lessor's commercially
reasonable expense, repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. If Lessee fails to
exercise such option and provide such funds or assurance during such period,
then this Lease shall terminate on the date specified in the termination
notice and Lessee's option shall be extinguished.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) ABATEMENT. In the event of Premises Partial Damage or
Premises Total Destruction the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired,
but not to exceed the proceeds received from the Rental Value insurance. All
other obligations of Lessee hereunder shall be performed by Lessee and Lessor
shall have no liability for any such damage, destruction, remediation, repair
or restoration except as provided herein.
(b) REMEDIES. If Lessor shall be obligated to repair or
restore the Premises and does not commence, in a substantial and meaningful
way, such repair or restoration within ninety (90) days after such obligation
shall accrue, Lessee may, at any time prior to the commencement of such
repair or restoration, give written notice, to Lessor and to any Lenders of
which Lessee has actual notice, of Lessee's election to terminate this Lease
on a date not less than sixty (60) days following the giving of such notice.
If Lessee gives such notice and such repair or restoration is not commenced
within thirty (30) days thereafter, this Lease shall terminate as of the date
specified in said notice. If the repair or restoration is commenced within
said thirty (30) days, this Lease shall continue in full force and effect.
"COMMENCE " shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.
9.7 TERMINATION - ADVANCE PAYMENTS. Upon termination of this
Lease pursuant to Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to
Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's
Security Deposit as has not been, or is not then required to be, used by
Lessor.
9.8 WAIVE STATUTES. Lessor and Lessee agree that the terms of
this Lease shall govern the effect of any damage to or destruction of the
Premises with respect to the termination of this Lease and hereby waive the
provisions of any present or future statute to the extent inconsistent
herewith.
10. REAL PROPERTY TAXES.
10.1 DEFINITION OF "REAL PROPERTY TAXES. " As used herein, the
term "REAL PROPERTY TAXES " shall include any form of assessment; real
estate, general, special, ordinary or extraordinary, or rental levy or tax
(other than inheritance, personal income or estate taxes); improvement bond;
and/or license fee imposed upon or levied against any legal or equitable
interest of Lessor in the Premises, Lessor's right to other income therefrom,
and/or Lessor's business of leasing, by any authority having the direct or
indirect power to tax and where the funds are generated with reference to the
Building address and where the proceeds so generated are to be applied by the
city, county or other local taxing authority of a jurisdiction within which
the Premises are located. The term "REAL PROPERTY TAXES " shall also include
any tax, fee, levy, assessment or charge, or any increase therein, imposed by
reason of events occurring during the term of this Lease, including but not
limited to, a change in the ownership of the Premises.
10.2 (a) PAYMENT OF TAXES. Lessee shall pay the Real Property
Taxes applicable to the Premises during the term of this Lease. Subject to
Paragraph 10.2(b), all such payments shall be made at least ten (10) days
prior to any delinquency date. Lessee shall promptly furnish Lessor with
satisfactory evidence that such taxes have been paid. If any such taxes shall
cover any period of time prior to or after the expiration or termination of
this Lease, Lessee's share of such taxes shall be prorated to cover only that
portion of the tax xxxx applicable to the period that this Lease is in
effect, and Lessor shall reimburse Lessee for any overpayment. If Lessee
shall fail to pay any required Real Property Taxes, Lessor shall have the
right to pay the same, and Lessee shall reimburse Lessor therefor upon
demand.
(b) ADVANCE PAYMENT. In the event Lessee incurs a late
charge on any Rent payment, Lessor may, at Lessor's option, estimate the
current Real Property Taxes, and require that such taxes be paid in advance
to Lessor by Lessee, either: (i) in a lump sum amount equal to the
installment due, at least twenty (20) days prior to the applicable
delinquency date, or (ii) monthly in advance with the payment of the Base
Rent. If Lessor elects to require payment monthly in advance, the monthly
payment shall be an amount equal to the amount of the estimated installment
of taxes divided by the number of months remaining before the month in which
said installment becomes delinquent. When the actual amount of the applicable
tax xxxx is known, the amount of such equal monthly advance payments shall be
adjusted as required to provide the funds needed to pay the applicable tax
xxxx is known, the amount of such equal monthly advance payments shall be
adjusted as required to provide the funds needed to pay the applicable taxes.
If the amount collected by Lessor is insufficient to pay such Real Property
Taxes when due, Lessee shall pay Lessor, upon demand, such additional sums as
are necessary to pay such obligations. All moneys paid to Lessor under this
Paragraph may be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a Breach by Lessee in the performance of its
obligations under this Lease, then any balance of funds paid to Lessor under
the provisions of this Paragraph may at the option of Lessor, be treated as
an additional Security Deposit.
10.3 JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax parcel
assessed, such proportion to be conclusively determined by Lessor from the
respective valuations assigned in the assessor's work shoels or such other
information as may be reasonably available.
10.4 PERSONAL PROPERTY TAXES. Lessee shall pay, prior to delinquency,
all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal
property of Lessee. When possible, Lessee shall cause such property to be
assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee's property
within ten (10) days after receipt of a written statement.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered.
12. ASSIGNMENT AND SUBLETTING. See Addendum Section 11
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or encumber (collectively, "assign or assignment ") or
sublet all or any part of Lessee's interest in this Lease or in the Premises
without Lessor's prior written consent.
(b) A change in the control of Lessee shall constitute an
assignment requiring consent. The transfer, on a cumulative basis, of twenty-
five percent (25%) or more of the voting control of Lessee shall constitute a
change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
transfer, leveraged buy-out or otherwise), whether or not a formal assignment
or hypothecation of this Lease or Lessee's assets occurs, which results or
will result in a reduction of the Net Worth of Lessee by an amount greater
than twenty-five percent (25%) of such Net Worth as it was represented at the
time of the execution of this Lease or at the time of the most recent
assignment to which Lessor has consented, or as it exists immediately prior
to said transaction or transactions constituting such reduction, whichever
was or is greater, shall be considered an assignment of this Lease to which
Lessor may withhold its consent. "NET WORTH OF LESSEE " shall mean the net
worth of Lessee (excluding any guarantors) established under generally
accepted accounting principles.
(d) An assignment or subletting without consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(c), or a
noncurable Breach without the necessity of any notice and grace period. If
Lessor elects to treat such unapproved assignment or subletting as a
noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon
thirty (30) days written notice, increase the monthly Base Rent to one
hundred ten percent (110%) of the Base Rent then in effect. Further, in the
event of such Breach and rental adjustment; (i) the purchase price of any
option to purchase the Premises held by Lessee shall be subject to similar
adjustment to one hundred ten percent (110%) of the price previously in
effect, and (ii) all fixed and non-fixed rental adjustments scheduled during
the remainder of the Lease term shall be increased to One Hundred Ten Percent
(110%) of the scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any
other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of Rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for Lessee's Default or
Breach.
(c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may
proceed directly against Lessee, any Guarantors or anyone else responsible
for the performance of Lessee's obligations under this Lease, including any
assignee or sublessee, without first exhausting Lessor's remedies against any
other person or entity responsible therefore to Lessor, or any security held
by Lessor.
(e) Each request for consent to an assignment or subletting shall
be in writing, accompanied by information relevant to Lessor's determination
as to the financial and operational responsibility and appropriateness of the
proposed assignee or sublessee, including but not limited to the intended use
and/or required modification of the Premises, if any, together with a fee of
$1,000 or ten percent (10%) of the current monthly Base Rent applicable to
the portion of the Premises which is the subject of the proposed assignment
or sublease, whichever is greater, as consideration for Lessor's considering
and processing said request. Lessee agrees to provide Lessor with such other
or additional information and/or documentation as may be reasonably
requested.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed
to have assumed and agreed to conform and comply with each and every form,
covenant, condition and obligation herein to be observed or performed by
Lessee during the term of said assignment or sublease, other than such
obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented to in
writing.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following forms and conditions shall apply to any subletting by Lessee of all
or any part of the Premises and shall be deemed included in all subleases
under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all Rent payable on any sublease, and Lessor may collect such
Rent and apply same toward Lessee's obligations under this Lease; provided,
however, that until a Breach shall occur in the performance of Lessee's
obligations, Lessee may collect said Rent. Lessor shall not, by reason of the
foregoing or any assignment of such sublease, nor by reason of the collection
of Rent, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee. Lessee
hereby irrevocably authorizes and directs any such sublessee, upon receipt of
a written notice from Lessor stating that a Breach exists in the performance
of Lessee's obligations under this Lease, to pay to Lessor all Rent due to
become due under the sublease. Sublessee shall rely upon any such notice from
Lessor and shall pay all Rents to Lessor without any obligation or right to
inquire as to whether such Breach exists, notwithstanding any claim from
Lessee to the contrary.
(b) In the event of a Breach by Lessee, Lessor may, at its option,
require sublessee to attorn to Lessor, in which event Lessor shall undertake
the obligations of the sublessor under such sublease from the time of the
exercise of said option to the expiration of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to such sublessor or for any prior Defaults or
Breaches of such sublessor.
(c) Any matter requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor.
(d) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(e) [THIS SECTION INTENTIONALLY OMITTED]
13. DEFAULT; BREACH; REMEDIES. See Addendum Section 12
13.1 DEFAULT; BREACH. A "Default " is defined as a failure by the
Lessee to comply with or perform any of the terms, covenants, conditions or
rules under this Lease. A "Breach " is defined as the occurrence of one or
more of the following Defaults, and the failure of Lessee to cure such
Default within any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the
Premises without providing a commercially reasonable level of security, or
where the coverage of the property insurance described in Paragraph 8.3 is
jeopardized as a result thereof, or without providing reasonable assurances
to minimize potential vandalism.
(b) The failure of Lessee to make any payment of Rent or any
Security Deposit required to be made by Lessee hereunder, whether to Lessor
or to a third party, when due, to provide reasonable evidence of insurance or
surety bond, or to fulfill any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of
three (3) business days following written notice to Lessee.
(c) The failure by Lessee to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the service
contracts, (iii) the rescission of an unauthorized assignment or subletting,
(iv) a Tenancy Statement, (v) a requested subordination, (vi) evidence
concerning any guaranty and/or Guarantor, (vii) any document requested under
Paragraph 42 (easements), or (viii) any other documentation or information
which Lessor may reasonably require of Lessee under the terms of this Lease,
where any such failure continues for a period of ten (10) days following
written notice to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraphs 13.1(a), (b) or (c), above, where
such Default continues for a period of thirty (30) days after written notice;
provided, however, that if the nature of Lessee's Default is such that more
than thirty (30) days are reasonably required for its cure, then it shall not
be deemed to be a Breach if Lessee commences such cure within said thirty
(30) day period and thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making
of any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "debtor " as defined in 11 U.S.C. Section 101 or any successor
statute thereto (unless, in the case of a petition filed against Lessee, the
same is dismissed within sixty (60) days); (iii) the appointment of a trustee
or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where
possession is not restored to Lessee within thirty (30) days; or (iv) the
attachment, execution or other judicial seizure of substantially all of
Lessee's assets located at the Premises or of Lessee's interest in this
Lease, where such seizure is not discharged within thirty (30) days;
provided, however, in the event that any provision of this subparagraph (e)
is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity at the remaining provisions.
(f) The discovery that any financial statement of Lessee or of any
Guarantor given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor's liability with respect to this Lease other than in accordance
with the terms of such guaranty, (iii) a Guarantor's becoming insolvent or
the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the
guaranty, or (v) a Guarantor's breach of its guaranty obligation on an
anticipatory basis, and Lessee's failure, within sixty (60) days following
written notice of any such event, to provide written alternative assurance or
security, which, when coupled with the then existing resources of Lessee,
equals or exceeds the combined financial resources of Lessee and the
Guarantors that existed at the time of execution of this Lease.
13.2 REMEDIES. If Lessee fails to perform any of its affirmative
duties or obligations, within ten (10) days after written notice (or in case
of an emergency, without notice). Lessor may, at its option, perform such
duty or obligation on Lessee's behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental
licenses, permits or approvals. The costs and expenses of any such
performance by Lessor shall be due and payable by Lessee upon receipt of
invoice therefor. If any check given to Lessor by Lessee shall not be honored
by the bank upon which it is drawn, Lessor, at its option, may require all
future payments to be made by Lessee to be by cashier's check. In the event
of a Breach, Lessor may, with or without further notice or demand, and
without limiting Lessor in the exercise of any right or remedy which Lessor
may have by reason of such Breach:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession to Lessor. In such event Lessor shall be
entitled to recover from Lessee: (i) the unpaid Rent which had been earned at
the time of termination; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until
the time of award exceeds the amount of such rental loss that the Lessee
proves could have been reasonably avoided; (iii) the worth at the time of
award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of such rental loss that the
Lessee proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Lessor for all the detriment proximately caused by
the Lessee's failure to perform its obligations under this Lease or which in
the ordinary course of things would be likely to result therefrom, including
but not limited to the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation and alteration of the
Premises, reasonable attorneys' fees, and that portion of any leasing
commission paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (iii) of the immediately preceding sentence shall be
computed by discounting such amount at the discount rate of the Federal
Reserve Bank of the District within which the Premises are located at the
time of award plus one percent (1%). Efforts by Lessor to mitigate damages
caused by Lessee's Breach of this Lease shall not waive Lessor's right to
recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the
right to recover in such proceeding any unpaid Rent and damages as are
recoverable therein, or Lessor may reserve the right to recover all or any
part thereof in a separate suit. If a notice and grace period required under
Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to
perform or quit given to Lessee under the unlawful detainer statute shall
also constitute the notice required by Paragraph 13.1. In such case, the
applicable grace period required by Paragraph 13.1 and the unlawful detainer
statute shall run concurrently, and the failure of Lessee to cure the Default
within the greater of the two such grace periods shall constitute both an
unlawful detainer and a Breach of this Lease entitling Lessor to the remedies
provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and recover
the Rent as it becomes due, in which event Lessee may sublet or assign,
subject only to reasonable limitations. Acts of maintenance, efforts to
relet, and/or the appointment of a receiver to protect the Lessor's
interests, shall not constitute a termination of the Lessee's right to
possession.
(c) Pursue any other remedy now or hereafter available under the
laws or judicial decisions of the state wherein the Premises are located. The
expiration or termination of this Lease and/or the termination of Lessee's
right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's occupancy of the Premises.
13.3 INDUCEMENT RECAPTURE. Any agreement for free or abated rent or
other charges, or for the giving or paying by Lessor to or for Lessee of any
cash or other bonus, inducement or consideration for Lessee's entering into
this Lease, all of which concessions are hereinafter referred to as
"INDUCEMENT PROVISIONS, " shall be deemed conditioned upon Lessee's full and
faithful performance of all of the terms, covenants and conditions of this
Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision
shall automatically be deemed deleted from this Lease and of no further force
or effect, and any rent, other charge, bonus, inducement or consideration
theretofore abated, given or paid by Lessor under such an Inducement
Provision shall be immediately due and payable by Lessee to Lessor,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance
by Lessor of rent or the cure of the Breach which initiated the operation of
this paragraph shall not be deemed a waiver by Lessor of the provisions of
this paragraph unless specifically so stated in writing by Lessor at the time
of such acceptance. SEE ADDENDUM SECTION 13.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee of Rent will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting
charges, and late charges which may be imposed upon Lessor by any Lender.
Accordingly, if any Rent shall not be received by Lessor within five (5) days
after such amount shall be due, then, without any requirement for notice to
Lessee, Lessee shall pay to Lessor a one-time late charge equal to ten
percent (10%) of each such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Lessor
will incur by reason of such late payment. Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Lessee's Default or Breach
with respect to such overdue amount, nor prevent the exercise of any of the
other rights and remedies granted hereunder. In the event that a late charge
is payable hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding any provision of this Lease
to the contrary, Base Rent shall, at Lessor's option, become due and payable
quarterly in advance.
13.5 INTEREST. Any monetary payment due Lessor hereunder, other than
late charges, not received by Lessor, when due as to scheduled payments (such
as Base Rent) or within thirty (30) days following the date on which it was
due for non-scheduled payment, shall bear interest from the date when due, as
to scheduled payments, or the thirty-first (31st) day after it was due as to
non-scheduled payments. The interest ( "Interest ") charged shall be equal to
the prime rate reported in the Wall Street Journal as published closest prior
to the date when due plus four percent (4%), but shall not exceed the maximum
rate allowed by law. Interest is payable in addition to the potential late
charge provided for in Paragraph 13.4.
13.6 BREACH BY LESSOR.
(a) NOTICE OF BREACH. Lessor shall not be deemed in breach
of this Lease unless Lessor fails within a reasonable time to perform an
obligation required to be performed by Lessor. For purposes of this
Paragraph, a reasonable time shall in no event be less than thirty (30) days
after receipt by Lessor, and any Lender whose name and address shall have
been furnished Lessee in writing for such purpose, of written notice
specifying wherein such obligation of Lessor has not been performed;
provided, however, that if the nature of Lessor's obligation is such that
more than thirty (30) days are reasonably required for its performance, then
Lessor shall not be in breach if performance is commenced within such thirty
(30) day period and thereafter diligently pursued to completion.
(b) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event
that neither Lessor nor Lender cures said breach within thirty (30) days
after receipt of said notice, or if having commenced said cure they do not
diligently pursue it to completion, then Lessee may elect to cure said breach
at Lessee's expense and offset from Rent an amount equal to the greater of
one month's Base Rent or the Security Deposit, and to pay an excess of such
expense under protest, reserving Lessee's right to reimbursement from Lessor.
Lessee shall document the cost of said cure and supply said documentation to
Lessor.
14. CONDEMNATION. If the Premises or any portion thereof are taken under
the power of eminent domain or sold under the threat of the exercise of said
power (collectively "CONDEMNATION "), this Lease shall terminate as to the
part taken as of the date the condemning authority takes title or possession,
whichever first occurs. If more than ten percent (10%) of any building
portion of the premises, or more than twenty-five percent (25%) of the land
area portion of the premises not occupied by any building, is taken by
Condemnation, Lessee may, at Lessee's option, to be exercised in writing
within ten (10) days after Lessor shall have given Lessee written notice of
such taking (or in the absence of such notice, within ten (10) days after the
condemning authority shall have taken possession) terminate this Lease as of
the date the condemning authority takes such possession. If Lessee does not
terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises remaining,
except that the Base Rent shall be reduced in proportion to the reduction in
utility of the Premises caused by such Condemnation. Condemnation awards
and/or payments shall be the property of Lessor, whether such award shall be
made as compensation for diminution in value of the leasehold, the value of
the part taken, or for severance damages; provided, however, that Lessee
shall be entitled to any compensation for Lessee's relocation expenses, loss
of business goodwill and/or Trade Fixtures, without regard to whether or not
this Lease is terminated pursuant to the provisions of this Paragraph. All
Alterations and Utility Installations made to the Premises by Lessee, for
purposes of Condemnation only, shall be considered the property of the Lessee
and Lessee shall be entitled to any and all compensation which is payable
therefor. In the event that this Lease is not terminated by reason of the
Condemnation, Lessor shall repair any damage to the Premises caused by such
Condemnation.
15. BROKERS' FEE.
15.1 [THIS SECTION INTENTIONALLY OMITTED]
15.2 [THIS SECTION INTENTIONALLY OMITTED]
15.3 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Lessee
and Lessor each represent and warrant to the other that it has had no
dealings with any person, firm, broker or finder (other than the Brokers, if
any) in connection with this Lease, and that no one other than said named
Brokers is entitled to any commission or finder's fee in connection herewith.
Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold
the other harmless from and against liability for compensation or charges
which may be claimed by any such unnamed broker, finder or other similar
party by reason of any dealings or actions of the indemnifying Party,
including any costs, expenses, attorneys' fees reasonably incurred with
respect thereto.
16. ESTOPPEL CERTIFICATES. SEE ADDENDUM SECTION 14.
(a) Each Party (as "RESPONDING PARTY ") shall within ten
(10) days after written notice from the other Party (the "REQUESTING PARTY
") execute, acknowledge and deliver to the Requesting Party a statement in
writing in form similar to the then most current "ESTOPPEL CERTIFICATE "
form published by the American Industrial Real Estate Association, plus such
additional information, confirmation and/or statements as may be reasonably
requested by the Requesting Party.
(b) If the Responding Party shall fail to execute or
deliver the Estoppel Certificate within such ten day period, the Requesting
Party may execute an Estoppel Certificate stating that: (i) the Lease is in
full force and effect without modification except as may be represented by
the Requesting Party, (ii) there are no uncured defaults in the Requesting
Party's performance, and (iii) if Lessor is the Requesting Party, not more
than one month's rent has been paid in advance. Prospective purchasers and
encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and
the Responding Party shall be estopped from denying the truth of the facts
contained in said Certificate.
(c) If Lessor desires to finance, refinance, or sell the
Premises, or any part thereof, Lessee and all Guarantors shall deliver to any
potential lender or purchaser designated by Lessor such financial statements
as may be reasonably required by such lender or purchaser, including but not
limited to Lessee's financial statements for the past three (3) years. All
such financial statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the purposes herein set
forth.
17. DEFINITION OF LESSOR. The term "LESSOR " as used herein shall mean
the owner or owners at the time in question of the fee title to the Premises,
or, if this is a sublease, of the Lessee's interest in the prior lease. In
the event of a transfer of Lessor's title or interest in the Premises or this
Lease, Lessor shall deliver to the transferee or assignee (in cash or by
credit) any unused Security Deposit held by Lessor. Except as provided in
Paragraph 15, 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. Notwithstanding the above, and
subject to the provisions of Paragraph 20 below, the original Lessor under
this Lease, and all subsequent holders of the Lessor's interest in this Lease
shall remain liable and responsible with regard to the potential duties and
liabilities of Lessor pertaining to Hazardous Substances as outlined in
Paragraph 6 above.
18. SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. DAYS. Unless otherwise specifically indicated to the contrary, the
word "days " as used in this Lease shall mean and refer to calendar days.
20. LIMITATION ON LIABILITY. Subject to the provisions of Paragraph 17
above, the obligations of Lessor under this Lease shall not constitute
personal obligations of Lessor, the individual partners of Lessor or its or
their individual partners, directors, officers or shareholders, and Lessee
shall look to the Premises, and to no other assets of Lessor, for the
satisfaction of any liability of Lessor with respect to this Lease, and shall
not seek recourse against the individual partners of Lessor, or its or their
individual partners, directors, officers or shareholders, or any of their
personal assets for such satisfaction.
21. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties
under this Lease.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains
all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding
shall be effective. Lessor and Lessee each represents and warrants to the
Brokers that it has made, and is relying solely upon, its own investigation
as to the nature, quality, character and financial responsibility of the
other Party to this Lease and as to the nature, quality and character of the
Premises. Brokers have no responsibility with respect thereto or with respect
to any default or breach hereof by either party. The liability (including
court costs and Attorneys' fees), of any Broker with respect to negotiation,
execution, delivery or performance by either Lessor or Lessee under this
Lease or any amendment or modification hereto shall be limited to an amount
up to the fee received by such Broker pursuant to this Lease; provided,
however, that the foregoing limitation on each Broker's liability shall not
be applicable to any gross negligence or willful misconduct of such Broker.
23. NOTICES.
23.1 NOTICE REQUIREMENTS. All notices required or permitted by this
Lease shall be in writing and may be delivered in person (by hand or by
courier) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile
transmission, and shall be deemed sufficiently given if served in a manner
specified in this Paragraph 23. The addresses noted adjacent to a Party's
signature on this Lease shall be that Party's address for delivery or mailing
of notices. Either Party may by written notice to the other specify a
different address for notice, except that upon Lessee's taking possession of
the Premises, the Premises shall constitute Lessee's address for notice. A
copy of all notices to Lessor shall be concurrently transmitted to such party
or parties at such addresses as Lessor may from time to time hereafter
designate in writing.
23.2 DATE OF NOTICE. Any notice sent by registered or certified
mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark
thereon. If sent by regular mail the notice shall be deemed given forty-eight
(48) hours after the same is addressed as required herein and mailed with
postage prepaid. Notices delivered by United States Express Mail or overnight
courier that guarantee next day delivery shall be deemed given twenty-four
(24) hours after delivery of the same to the Postal Service or courier.
Notices transmitted by facsimile transmission or similar means shall be
deemed delivered upon telephone confirmation of receipt, provided a copy is
also delivered via delivery or mail. If notice is received on a Saturday,
Sunday, or legal holiday, it shall be deemed received on the next business
day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or of any other term, covenant or condition hereof.
Lessor's consent to, or approval of, any net shall not be deemed to render
unnecessary the obtaining of Lessor's consent to, or approval of, any
subsequent or similar act by Lessee, or be construed as the basis of an
estoppel to enforce the provision or provisions of this Lease requiring such
consent. The acceptance of Rent by Lessor shall not be a waiver of any
Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor
on account of 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. SEE ADDENDUM SECTION 15
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of
the Premises or any part thereof beyond the expiration or termination of this
Lease. In the event that Lessee holds over, then the Base Rent shall be
increased to one hundred fifty percent (150%) of the Base Rent applicable
during the month immediately preceding the expiration or termination. Nothing
contained herein shall be construed as consent by Lessor to any holding over
by Lessee.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT. All provisions
of this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the
convenience of the parties only and shall not be considered a part of this
Lease. Whenever required by the context, the singular shall include the
plural and vice versa. This Lease shall not be construed as if prepared by
one of the parties, but rather according to its fair meaning as a whole, as
if both parties had prepared it.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any
litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE. SEE ADDENDUM SECTION 16.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall
be subject and subordinate to any ground lease, mortgage, deed of trust, o
other hypothecation or security device (collectively, "SECURITY DEVICE "),
now or hereafter placed upon the Premises, to any and all advances made on
the security thereof, and to all renewals, modifications, and extensions
thereof. Lessee agrees that the holders of any such Security Devices (in this
Lease together referred to as "Lessor's Lender ") shall have no liability or
obligation to perform any of the obligations of Lessor under this Lease. Any
Lender may elect to have this Lease and/or any Option granted hereby superior
to the lien of its Security Device by giving written notice thereof to
Lessee, whereupon this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of
Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party who
acquires ownership of the Premises by reason of a foreclosure of a Security
Device, and that in the event of such foreclosure, such new owner shall not:
(i) be liable for any act or omission of any prior lessor or with respect to
events occurring prior to acquisition of ownership; (ii) be subject to any
offsets or defenses which Lessee might have against any prior lessor, or
(iii) be bound by prepayment of more than one (1) month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall be subject to receiving a commercially reasonable non-disturbance
agreement (a "Non-Disturbance Agreement ") from the Lender which Non-
Disturbance Agreement provides that Lessee's possession of the Premises, and
this Lease, including any options to extend the term hereof, will not be
disturbed so long as Lessee is not in Breach hereof and attorns to the record
owner of the Premises. Further, within sixty (60) days after the execution of
this Lease, Lessor shall use its commercially reasonable efforts to obtain a
Non-Disturbance Agreement from the holder of any pre-existing Security Device
which is secured by the Premises. In the event that Lessor is unable to
provide the Non-Disturbance Agreement within said sixty (60) days, then
Lessee may, at Lessee's option, directly contact Lessor's lender and attempt
to negotiate for the execution and delivery of a Non-Disturbance Agreement.
30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents; provided,
however, that, upon written request from Lessor or a Lender in connection
with a sale, financing or refinancing of the Premises, Lessee and Lessor
shall execute such further writings as may be reasonably required to
separately document any subordination, attornment and/or Non-Disturbance
Agreement provided for herein.
31. ATTORNEYS' FEES. If any Party or Broker brings an action or proceeding
involving the Premises to enforce the terms hereof or to declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such
proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys' fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to
decision or judgment. The term, "PREVAILING PARTY " shall include, without
limitation, a Party 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. Th
attorneys' fees award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred. In addition, Lessor shall be entitled to attorneys'
fees, costs and expenses incurred in the preparation and service of notices
of Default and consultations in connection therewith, whether or not a legal
action is subsequently commenced in connection with such Default or resulting
Breach.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the
same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises as Lessor may
deem necessary. All such activities shall be without abatement of rent or
liability to Lessee. Lessor may at any time place on the Premises any
ordinary "For Sale " signs and Lessor may during the last six (6) months of
the term hereof place on the Premises any ordinary "For Lease " signs.
Lessee may at any time place on or about the Premises any ordinary "For
Sublease " sign.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, any
auction upon the Premises without Lessor's prior written consent. Lessor
shall not be obligated to exercise any standard of reasonableness in
determining whether to permit an auction.
34. SIGNS. Except for ordinary "For Sublease " signs, Lessee shall not place
any sign upon the Premises without Lessor's prior written consent. All signs
must comply with all Applicable Requirements. SEE ADDENDUM SECTION 17
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for
Breach by Lessee, shall automatically terminate any sublease or lesser estate
in the Premises; provided, however, that Lessor may elect to continue any one
or all existing subtenancies. Lessor's failure within ten (10) days following
any such event to elect to the contrary by written notice to the holder of
any such lessor interest, shall constitute Lessor's election to have such
event constitute the termination of such event.
36. CONSENTS. Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such
consent shall not be unreasonably withheld or delayed. Lessor's actual
reasonable costs and expenses (including but not limited to architects',
attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Lessee for any Lessor consent,
including but not limited to consents to an assignment, a subletting or the
presence or use of a Hazardous Substance, shall be paid by Lessee upon
receipt of an invoice and supporting documentation therefor. Lessor's consent
to any act, assignment or subletting shall not constitute an acknowledgment
that no Default or Breach by Lessee of this Lease exists, nor shall such
consent be deemed a waiver of any then existing Default or Breach, except as
may be otherwise specifically stated in writing by Lessor at the time of such
consent. The failure to specify herein any particular condition to Lessor's
consent shall not preclude the imposition by Lessor at the time of consent of
such further or other conditions as are then reasonable with reference to th
particular matter for which consent is being given. In the event that either
Party disagrees with any determination made by the other hereunder and
reasonably requests the reasons for such determination, the determining party
shall furnish its reasons in writing and in reasonable detail within ten (10)
business days following such request.
37. GUARANTOR
[THIS SECTION INTENTIONALLY OMITTED]
38. OUTLET POSSESSION. Subject to payment by Lessee of the Rent and
performance of all of the covenants, conditions and provisions on Lessee's
part to be observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during the term hereof.
39. OPTIONS. SEE ADDENDUM SECTION 3.4
39.1 DEFINITION. "Option " shall mean: (a) the right to extend the term
of or renew this Lease or to extend or renew any lease that Lessee has on
other property of Lessor; (b) the right of first refusal or first offer to
lease either the Premises or other property of Lessor; (c) the right to
purchase or the right of first refusal to purchase the Premises or other
property of Lessor.
39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to Lessee
in this Lease is personal to the original Lessee, and cannot be assigned or
exercised by anyone other than said original Lessee and only while the
original Lessee is in full possession of the Premises and, if requested by
Lessor, with Lessee certifying that Lessee has no intention of thereafter
assigning or subletting.
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 have been validly exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of Default and continuing
until said Default is cured, (ii) during the period of time any Rent is
unpaid (without regard to whether notice thereof is given Lessee), (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that
Lessee has been given three (3) or more notices of separate Default, whether
or not the Defaults are cured, during the twelve (12) month period
immediately preceding the exercise of the Option.
(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) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, after
such exercise and prior to the commencement of the extended term, (i) Lessee
fails to pay Rent for a period of thirty (30) days after such Rent becomes
due (without any necessity of Lessor to give notice thereof), (ii) Lessor
gives to Lessee three (3) or more notices of separate Default during an
twelve (12) month period, whether or not the Defaults are cured, or (iii) if
Lessee commits a Breach of this Lease.
40. MULTIPLE BUILDINGS. If the Premises are a part of a group of buildings
controlled by Lessor, Lessee agrees that it will observe all reasonable rules
and regulations which Lessor may make from time to time for the management,
safety, and care of said properties, including the care and cleanliness of
the grounds and including the parking, loading and unloading of vehicles, and
that Lessee will pay its fair share of common expenses incurred in connection
therewith.
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 to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of
parcel maps and restrictions, so long as such easements, rights, dedications,
maps and restrictions do not unreasonably interfere with the use of the
Premises by Lessee. Lessee agrees to sign any documents reasonably requested
by Lessor to effectuate any such easement rights, dedication, map or
restrictions.
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 adjugded 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.
44. AUTHORITY. If either party hereto is a corporation, trust, limited
liability company, partnership, or similar entity, each individual executing
this Lease on behalf of such entity represents and warrants that he or she is
duly authorized to execute and deliver this Lease on its behalf. Each party
shall, within thirty (30) days after request, deliver to the other party
satisfactory evidence of such authority. SEE ADDENDUM SECTION 18
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 Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease
to the other Party. This Lease is not intended to be binding until executed
and delivered by all Parties hereto.
47. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in Interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder. Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.
48. MULTIPLE PARTIES. If more than one person or entity is named herein as
either Lessor or Lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.
49. MEDIATION AND ARBITRATION OF DISPUTES. An Addendum requiring the
Mediation and/or the Arbitration of all disputes between the Parties and/or
Brokers arising out of this Lease / / is /x/ is not attached to this Lease.
SEE ADDENDUM SECTIONS 19 TO 24 FOR ADDITIONAL TERMS
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.
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ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO :
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF
THE PREMISES, SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND
THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.
WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES IS LOCATED.
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The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: Executed at:
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on: on:
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By LESSOR: By LESSEE:
Moorpark, Venture L.P., Smtek, Inc.,
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a California limited partnership a California corporation
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By: Managing GP, Inc. Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx By:
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Name Printed: Xxxxxxx X. Xxxxxx Name Printed:
------------------------ --------------------
Title: President Title: President
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By: By:
---------------------------------- ------------------------------
Name Printed: Name Printed:
------------------------ --------------------
Title: Title: Secretary
------------------------------- ---------------------------
Address: 000 Xxxx Xxxxxxx Xxx Address: 0000 Xxxxxx Xxxxx
----------------------------- -------------------------
Xx Xxxxx, XX 00000 Xxxxxxxx Xxxx, XX 00000
-------------------------------------- ----------------------------------
Telephone: (000) 000-0000 Telephone: (000) 000-0000
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Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
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Federal ID No. Federal ID No.
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NOTE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the
most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 000 Xx.
Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000. (213) 687-
8777, Fax No. (000) 000-0000
ADDENDUM TO LEASE
This Addendum to Lease ( "Addendum ") is made by and between MOORPARK
VENTURE L.P., a California limited partnership ( "LESSOR ") and SMTEK, INC.,
a California corporation ( "LESSEE ") and is intended to supplement that
certain Standard Industrial/Commercial Single-Tenant Lease-Net between LESSOR
and LESSEE dated July 20, 2001 ( "Lease ") to which this Addendum is annexed
and all references to "Lease " shall be deemed to include this Addendum
unless otherwise stated or the context indicates otherwise. Any word or
phrases defined in the Lease shall have the same meaning when used in this
Addendum. If there is any inconsistency between this Addendum and the Lease,
the terms of this Addendum shall supersede and control. LESSOR and LESSEE
agree as follows:
1. RENT. "Rent " for the Premises shall be the sum of (a) the Base
Rent described in subsection 1.1 of this Addendum, subject to adjustment as
provided in subsection 1.2 of this Addendum, (b) the Allowance Amortization
Charge described in subsection 1.3 of this Addendum, (c) the Operating
Expenses as defined in subsection 3 of this Addendum, and (d) any other
amounts becoming payable by LESSEE under the Lease.
1.1 BASE RENT. The monthly "Base Rent " for the first Lease Year
(as defined below) of the Original Term shall be the amount of Seventy One
Thousand Five Hundred Eighteen Dollars ($71,518.00), which is equals $ .655
per Rentable Square Foot within the Premises.
1.2 INCREASE IN BASE RENT. The Base Rent shall be increased at the
beginning of the second Lease Year and at the beginning of each Lease Year
thereafter during the Original Term, in an amount of One Thousand Seven
Hundred Eighty Eight Dollars ($1, 788.00) monthly over the amount of the
scheduled increased Base Rent for the immediately preceding Lease Year.
1.3 TENANT IMPROVEMENT ALLOWANCE AMORTIZATION. In addition to
payment of the Base Rent, LESSEE shall pay monthly the Allowance Amortization
Charge calculated in accordance with this section, which is presently
estimated to equal a maximum of Four Thousand One Hundred Thirty Three
Dollars ($4,133.00) monthly. As more particularly provided in section 5 of
this Addendum, LESSOR will provide a Tenant Improvement Allowance in the
amount of up to One Million Dollars ($1,000,000.00) to pay for a portion of
the Tenant Improvement Costs (as defined below) for Tenant Improvements
requested by LESSEE. The term "Allowance Amortization Charge " means an
amount to be included in the Rent calculated as follows: (a) determine the
aggregate amount of the Allowance expended by LESSOR for Tenant Improvements;
(b) deduct Seven Hundred Thousand Dollars ($700,000.00) from the amount
expended; (c) amortize the remaining amount of the Allowance actually
expended ( "Excess Allowance ") based on an economic return equivalent to
eleven percent (11%) per annum to derive a monthly payment sufficient to pay
in full the Excess Allowance and such economic return over a period of time
equal to one hundred and twenty (120) months beginning on the Commencement
Date; and (d) the resulting monthly payment shall equal the Allowance
Amortization Charge. If the amount of the Allowance Amortization Charge is
determined after the Commencement Date on account of a delay in finalizing
the Tenant Improvement Costs, then LESSEE shall pay LESSOR the amount
accruable from the Commencement Date to the end of the then current month,
within fifteen (15) days after LESSOR's billing for such accrued amounts, and
shall thereafter pay the monthly Allowance Amortization Charge as a part of
the monthly of Base Rent. Upon LESSOR's request, LESSEE and LESSOR shall
execute an amendment to the Lease setting for the exact Allowance
Amortization Charge if less than the amount stated above, provided that
failure of LESSOR and LESSEE to execute such amendment shall not effect the
validity of the Lease. LESSEE shall not have the right to prepay the
unamortized Allowance Amortization Charge at any time. The Allowance
Amortization Charge is only payable during the Original Term, not during any
Extension Term, and it is not subject to increase upon the adjustment of the
Base Rent under section 1.2 of this Addendum.
1.4 DUE DATE/PAYMENT. The monthly Base Rent, Allowance Amortization
Charge and the Operating Expenses shall be due and payable on the first day
of each month without notice beginning on the Commencement Date (as defined
below), except that a Security Deposit equaling the first month's Base Rent
and the first month's Allowance Amortization Charge shall be payable as
provided in section 1.5 of this Addendum. If the Commencement Date is other
than the first day of a calendar month, the Base Rent and Allowance
Amortization Charge shall be prorated based on the number of days between the
Commencement Date and the first day of the first full calendar month
thereafter and such amount shall be due and payable by LESSEE on or before
the Commencement Date. The remaining Rent shall be payable in accordance
with the other provisions of the Lease. Rent for any partial month will be
prorata based on a thirty (30) day month.
1.5 SECURITY DEPOSIT/FIRST MONTH'S RENT. Concurrently with the
execution of the Lease, LESSEE shall pay the Security Deposit set forth in
Paragraph 1.7 of the Lease, which has been calculated based on two (2) months
Base Rent and Allowance Amortization Charge based on the maximum amount of
such Allowance Amortization Charge. So long as LESSEE does not commit a
Default, LESSOR agrees to apply one-half of such Security Deposit to the Base
Rent and Tenant Improvement Allowance Amortization becoming due for the first
full month of the Lease following the Commencement Date.
2. LESSEE'S PAYMENT OF OPERATING EXPENSES. Subject to section 2.1
of this Addendum, beginning on the Commencement Date, in addition to payment
of the Base Rent, LESSEE shall be responsible for payment of all "Operating
Expenses. " The term "Operating Expenses " means the following expenses and
costs of the ownership and operation of the Premises: (a) amounts payable
for maintenance contracts required to be procured pursuant to Paragraph
7.1(b) of the Lease (but not the cost of repairs or replacements separately
payable by LESSEE), (b) insurance required to be maintained by LESSOR or
LESSEE under the Lease (exclusive of any insurance maintained by LESSEE under
Paragraph 8.4 of the Lease), (c) Real Property Taxes, (d) assessments and
dues payable to any association or other governing body established pursuant
to any covenants, conditions, or restrictions affecting the Premises or any
Applicable Requirement, (e) a fire sprinkler monitoring contract, if payable,
separate from the fire sprinkler maintenance contract described in Paragraph
7.1(b) of the Lease, (f) the Administrative Fee described in subsection 2.2
of this Addendum, (g) the reasonable amount of other ordinary and necessary
expenses and costs of routine maintenance and operation of the Premises,
which are customarily incurred in the operation of similarly situated real
estate projects, and (h) reasonable reserves, as determined by LESSOR, for
replacement of the roof, exterior painting, paving and restriping of th
parking lot, and HVAC ( "Reserves "); provided, however, the term "Operating
Expenses " does not include (i) the costs of repairs, maintenance or
replacements required to be performed by LESSEE to the extent such costs
exceed the amount of any Reserves accumulated from the Operating Expenses
collections for the particular maintenance, repair or replacement item, or
(ii) any other items of expense or cost which the terms of the Lease
expressly require be paid or incurred by LESSEE, including all utility and
trash charges payable by LESSEE under Paragraph 11 of the Lease.
2.1 METHOD OF PAYMENT. LESSEE shall pay to LESSOR monthly, as
additional rent, an amount equal to 1/12 of the projected annual Operating
Expenses. Such amount shall be due and payable concurrently with the payment
of the applicable Base Rent. Prior to the Commencement Date, in the case of
the first Lease Year, and at the beginning of each Lease Year thereafter,
LESSOR will provide LESSEE an annual estimated Operating Budget ( "Estimated
Operating Budget ") for each calendar year or partial year. Subject to
LESSEE's payment to LESSOR of the Operating Expenses as provided in this
Addendum, LESSOR shall make prompt payment of the Operating Expenses included
in the Estimated Operating Budget. Any excess or deficit from the estimates
shown in the Estimated Operating Budget will be credited or billed to LESSEE
within ninety (90) days following the end of the applicable calendar year,
and LESSOR shall concurrently furnish LESSEE with a detailed statement
showing the actual Operating Expenses incurred for such year. Any deficit
will be payable as additional Rent within ten (10) days of receipt of a final
Operating Budget setting forth the actual expenditures for the applicable
year and the deficit. Any excess shall be credited against the next payments
of Operating Expenses due from LESSEE. LESSEE acknowledges that any
Estimated Operating Budget represents only LESSOR's good faith estimate of
predictable expenses and that actual expenses may vary. Promptly following
LESSEE's request, LESSOR shall furnish LESSEE with such additional
information as LESSEE may reasonably request with respect to such Operating
Expenses. LESSEE acknowledges that the Estimated Operating Expenses Budget
for the first Lease Year is annexed to this Addendum as EXHIBIT "1 " and
such budget (a) is an estimate that is being provided only to illustrate the
projected amounts and categories of expense and that actual results may be
different than the estimates; and (b) it is aware that amounts and categories
of expense may vary in future years as the Premises ages.
2.2 LESSOR'S ADMINISTRATIVE SERVICES. LESSOR shall provide certain
administrative services to monitor LESSEE's performance of LESSEE's
obligations under Paragraphs 7, 8.2, 8.3 and 10 of the Lease in consideration
for LESSEE's monthly payment of an administrative fee to LESSOR of one
percent (1%) of the Base Rent in effect from time to time ( "Administrative
Fee "). Such Administrative Fee shall be payable as a part of the Operating
Expenses payable by LESSEE. LESSOR's administrative services shall generally
consist of monitoring LESSEE's compliance with LESSEE's repair and
maintenance obligations under the Lease and arranging, on behalf of LESSEE,
appropriate insurance coverages for the Premises.
2.3 ACKNOWLEDGMENTS. Notwithstanding any other provision in this
section, LESSEE acknowledges and agrees that nothing in this section is
intended to limit any of LESSEE's obligations under the Lease, including,
without limitation, its obligations to maintain the Premises in accordance
with the requirements of Paragraph 7 of the Lease, but is intended to provide
a convenient administrative procedure for LESSEE's payment of known an
predictable expenses and make available, to the extent provided for in this
section and requested by LESSEE, LESSOR's services in coordinating and
facilitating LESSEE's performance of its maintenance, repair and insurance
obligations.
3. EFFECTIVE DATE/TERM/COMMENCEMENT DATE. Notwithstanding any
other provision of the Lease, this Lease shall be effective upon execution by
LESSOR and LESSEE ( "Effective Date ") and shall constitute a legally binding
contract for LESSOR to deliver possession of the Premises in accordance with
the requirements of this Lease and for LESSEE to pay the Rent beginning on
the Commencement Date. Notwithstanding that the Effective Date of this Lease
is the date of execution of this Lease, LESSEE's obligation to begin payment
of the Rent payable under this Lease shall not commence until the occurrence
of the Commencement Date.
3.1 PRIOR OCCUPANCY. Notwithstanding any other provision, LESSOR is
delivering possession of the Premises to LESSEE in advance of the
Commencement Date of this Lease pursuant to a separate agreement between
LESSOR and LESSEE and the terms of such separate agreement shall govern
LESSEE's occupancy in advance of the Commencement Date of this Lease.
Following the Commencement Date of this Lease, the terms and conditions of
this Lease shall constitute the sole and exclusive terms and conditions of
LESSEE's continued occupancy of the Premises and this Lease shall be applied
and interpreted without regard to any such prior agreement.
3.2 COMMENCEMENT DATE. The Commencement Date of this Lease shall be
March 1, 2002, unless LESSEE and LESSOR agree to an earlier or later
Commencement Date.
3.3 LEASE TERM/ "LEASE YEAR " DEFINED. Unless otherwise provided,
the initial Term of the Lease ( "Original Term ") shall be a period of ten
(10) years beginning on the Commencement Date and ending ten (10) consecutive
years later ( "Expiration Date "); provided, however, if the Commencement
Date occurs other than on the first day of a calendar month, the Original
Term shall be deemed extended for a period of time equal to the number of
days between the Commencement Date and the beginning of the first full
calendar month following the Commencement Date. The term "Lease Year "
means each consecutive period of twelve (12) months during the Lease Term,
provided that if the "Commencement Date " is other than the first day of a
calendar month, then the first Lease Year shall be a period of twelve (12)
months plus the period between the Commencement Date and the first day of the
first full calendar month thereafter.
3.3.1 AMENDMENT. Following the Commencement Date and upon LESSOR's
request, LESSEE and LESSOR shall execute an amendment to the Lease setting
for the exact Commencement Date and the exact Expiration Date of the Original
Term, provided that failure of LESSOR and LESSEE to execute such amendment
shall not effect the validity of the Lease.
3.4 OPTION TO EXTEND TERM. The following option is subject to, and
the terms of this section are additive to, and do not modify the terms and
provisions of Paragraph 39 of the Lease.
3.4.1 GRANT. LESSOR grants to LESSEE the option to extend the Lease
for one five (5) year period beginning upon the expiration of the Original
Term ( "Extension Term ")
3.4.2 EXERCISE. If LESSEE desires to extend the Lease Term, such option
shall be exercised only by written notice ( "Election Notice ") delivered to
LESSOR no earlier than 360 days and no later than 270 days before the
expiration of the Original Term. Regardless of cause, if LESSEE fails to
timely give an Election Notice, all option rights will automatically lapse
and terminate and be of no further force or effect without any requirement of
notice or demand by LESSOR.
3.4.3 Adjustment to Base Rent. Except as otherwise provided in this
section, the Base Rent for the first Lease Year of the Extension Term shall
be adjusted at the beginning of the Extension Term to the "fair rental value
" of the Premises as determined in the following manner:
(a) Within thirty (30) days from LESSEE's notice, LESSOR and LESSEE
shall meet in an effort to negotiate, in good faith, the fair rental value of
the Premises as of the beginning of the Extension Term. If LESSOR and
LESSEE have not agreed upon the fair rental value of the Premises at least
one hundred twenty (120) days prior to the beginning of the Extension Term ,
the fair rental value shall be determined by appraisal, by one or more
appraisers ( "Appraiser(s) "). The Appraisers shall have at least five (5)
years experience in the appraisal of commercial/industrial real property in
the area in which the Premises are located and shall be members of
professional organizations such as M.A.I. or equivalent.
(b) If LESSOR and LESSEE are not able to agree upon the fair rental
value of the Premises within the prescribed time period, then LESSOR and
LESSEE shall attempt to agree in good faith upon a single Appraiser not later
than one hundred (100) days prior to the beginning of the applicable
Extension Term. If LESSOR and LESSEE are unable to agree upon a single
Appraiser within such time period, then LESSOR and LESSEE shall each appoint
one Appraiser not later than ninety (90) days prior to the beginning of the
applicable Extension Term. Within ten (10) days thereafter, the two (2)
appointed Appraisers shall appoint a third Appraiser. If either LESSOR or
LESSEE fails to appoint its Appraiser within the prescribed time period, the
single Appraiser appointed shall determine the fair rental value of the
Premises. If both parties fail to appoint Appraisers within the prescribed
time periods, then the first Appraiser thereafter selected by a party shall
determine the fair rental value of the Premises. Each party shall bear the
cost of its own Appraiser and the parties shall share equally the cost of the
single or third Appraiser, if applicable.
(c) For the purposes of such appraisal, the term "fair rental value
" shall mean the price that a ready and willing tenant would pay, as of the
beginning of the Extension Term, as monthly rent to a ready and willing
landlord of property comparable to the Premises if such property were exposed
for lease on the open market for a reasonable period of time and taking into
account all of the purposes for which such property may be used and taking
into account all material attributes and benefits of the Premises. Fair
rental value shall take into consideration all monetary concessions being
granted in connection with such comparable property, including without
limitation, rent abatement concessions and tenant improvements or allowance
provided therefore. If a single Appraiser is chosen, then such Appraiser
shall determine the fair rental value of the Premises. Otherwise, the fair
rental value of the Premises shall be the average of the two (2) of the three
(3) appraisals which are closest in amount, and the third appraisal shall be
disregarded. LESSOR and LESSEE shall instruct the Appraiser(s) to complete
the determination of the fair rental value not later than forty-five (45)
days prior to the beginning of the applicable option period. If the fair
rental value is not determined prior to the beginning of the Extension Term,
then LESSEE shall continue to pay to LESSOR the Base Rent applicable to the
Premises immediately prior to such extension, until the fair rental value is
determined. When the fair rental value of the Premises is determined, LESSOR
shall deliver notice thereof to LESSEE, and if the fair rental value is
higher, LESSEE shall pay to LESSOR, within ten (10) days after receipt of
such notice, the difference between the Base Rent actually paid by LESSEE to
LESSOR and the new Base Rent determined under this section.
(d) Notwithstanding any other provision of this Lease, in no event
shall the Base Rent for the first Lease Year of the Extension Term be less
than an amount equal to 103% of the Base Rent in effect for the Lease Year
immediately preceding the beginning of the Extension Term ( "Prior Base Rent
"). If the fair rental value of the Premises determined under this section
is less than the Prior Base Rent, then the Base Rent for the first Lease Year
of an Extension Term shall equal the Prior Base Rent.
(e) The Base Rent shall be increased at the beginning of the second
Lease Year of the Extension Term and at the beginning of each Lease Year
thereafter in an amount equal to three percent (3%) of the Base Rent in
effect for the immediately preceding Lease Year.
3.4.4 IMPLEMENTATION. Promptly upon the parties' approval of, or the
Appraisers establishment of, the fair rental value, the LESSOR and LESSEE
shall execute an amendment to this Lease setting out the starting and ending
dates and the starting Base Rent for the Extension Term.
3.4.5 AFFILIATE TRANSACTION. Notwithstanding the provisions of
Paragraph 39.2 of the Lease providing that any option rights granted are
personal to LESSEE and not assignable, LESSOR agrees that the option rights
to extend the Term of the Lease under this section 3.4 may be assigned to an
assignee of the Lease in an Affiliate Transaction (as defined below).
3.4.6 REMAINING LEASE TERMS. If LESSEE elects to extend the Original
Term, all other terms and conditions of the Lease shall remain in effect
during such Extension Term except: (a) no tenant improvements or allowances
shall be provided by LESSOR, and LESSEE shall be deemed to have extended the
term of the Lease and accepted the Premises "AS IS " in their then existing
condition and without representation or warranty from LESSOR; (b) upon
expiration of the last Extension Term, LESSEE shall have no further right to
extend the term of the Lease; and (c) the Security Deposit shall be
increased to an amount equal to one months Base Rent determined as of the
beginning of each Extension Term.
4. CONDITION OF PREMISES. Except as provided in this section and in
sections 5 of this Addendum, LESSEE has accepted possession of the Premises
in an "AS IS " condition, without representation or warranty from LESSOR
concerning the physical condition of the Premises. LESSEE acknowledges tha
it has had the reasonable opportunity to conduct such inspections,
evaluations and other investigations of the Premises as LESSEE may desire,
including inspections by LESSEE's architects, engineers, contractors and
other professional advisers as LESSEE deems necessary, LESSEE is relying
exclusively on such inspections, evaluations and investigations in making a
decision to enter into this Lease and not on any representation or warranty
whatsoever by LESSOR and/or any agent of LESSOR. LESSEE further acknowledges
and agrees that the Premises are in good condition, acceptable to LESSEE.
LESSEE WAIVES ALL WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE CONDITION AND
USE 0F THE PREMISES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
4.1 UTILITIES. Without limiting the generality of any other
provisions of this Lease requiring LESSEE to investigate and determine the
suitability of the Premises for its intended use, LESSEE specifically
acknowledges that LESSOR is not making any representation or warranty
whatsoever concerning the availability, adequacy or cost of any utility or
quasi-utility services (including the adequacy or capacity of any utility
owned or controlled equipment services the Premises) and LESSEE shall be
solely responsible for evaluating and determining the suitability of such
utility or quasi-utility services and costs of installing and maintaining
such utilities.
4.2 TENANT IMPROVEMENTS BY LESSOR. Except for the Tenant
Improvements described in section 5 below, LESSOR shall not be required to
make any improvements, alterations, modifications and/or repairs whatsoever
to the Premises in advance of LESSEE 's taking possession.
4.3 COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as provided in
section 5 of this Addendum, LESSEE shall be responsible for making any
repairs, improvements and/or alterations to the Premises required for
compliance with any Applicable Requirements; provided, however, LESSEE, not
LESSOR, shall be responsible for any modifications or improvements required
on account of special Americans With Disabilities Act ( "ADA ") requirements
resulting from any unusual use or employment practices of LESSEE which are
not ordinary and customary to the use or practices of tenants generally in
similarly situated real estate projects. "Applicable Requirements " means
and includes, without limitation, (a) all covenants, conditions and
restrictions and similar items recorded against the Premise, and (b) any
federal, state or local law, ordinance, rule, building code or regulation (
"Applicable Laws "), including, without, limitation, the American
Disabilities Act, local laws relating to the zoning or use of the Premises
and waste discharge requirements as a result of California Regional Water
Quality Control Board rules, regulations or orders.
4.4 LIMITED LESSOR WARRANTIES. The limited warranties of LESSOR in
this section only apply to the Tenant Improvements, and any other elements of
the Premises damaged by LESSOR or Contractor (as described below) in
connection with the construction of the Tenant Improvements.
4.4.1 COMPLIANCE WITH APPLICABLE REQUIREMENTS. LESSOR warrants that
the Tenant Improvements shall be in substantial compliance with Applicable
Requirements as of the Commencement Date.
4.4.2 OPERATING CONDITION. LESSOR warrants that the Building Systems,
which comprise part of the Tenant Improvements, will be in a commercially
reasonable operating condition as of the date LESSEE first occupies the
Premises pursuant to this Lease or any other agreement with LESSOR.
4.4.3 REMEDY FOR NONCOMPLIANCE WITH WARRANTY. LESSEE's sole right and
remedy on account of any noncompliance with LESSOR's warranties under
sections 4.4.1 and 4.4.2 of this Addendum shall be to require LESSOR, at its
cost and expense, to place the affected element in a condition so it is in
compliance with such warranties. LESSOR shall not otherwise have any
liability whatsoever to LESSEE for damages of any type or nature (including
consequential or incidental damages) on account of such noncompliance.
4.4.4 TIME LIMITATION FOR ENFORCEMENT. LESSEE shall have a period of
(a) in the case of any warranty in sections 4.4.2 and 4.4.3 above, one
hundred and twenty (120) days, and (b) in the case of section 4.4.1 above,
twelve (12) months, following LESSOR's delivery of a notice of Substantial
Completion of the Tenant Improvements to LESSEE ( "Substantial Completion
Notice ") to give LESSOR notice of noncompliance specifying in detail the
nature of the noncompliance ( "Warranty Claim Notice ") even though the
Tenant Improvements will be completed prior to the Commencement Date of this
Lease. If LESSEE does not timely give such a Warranty Claim Notice for any
reason, including LESSEE's failure to discover such noncompliance, all such
warranties shall be deemed expired and LESSEE shall thereafter be responsible
for correction of any noncompliance at LESSEE's sole cost and expense.
4.5 LESSOR'S ENFORCEMENT OF CONTRACTOR'S WARRANTIES. LESSOR has
obtained from Contractor the following warranties ( "Contractor's Warranties
"):
"CONTRACTOR unconditionally warrants all materials and equipment
furnished under this Contract will be new, unless otherwise specified, and
that all Work will be of good quality, free from material faults and defects
and in conformance with the Contract Documents. CONTRACTOR, at its expense,
shall repair or replace any Work requiring replacement or repair within one
(1) year from completion of the Project, except with respect to the roof
membrane only, which CONTRACTOR will repair or replace within two (2) years
as required to prevent water penetration. In the event CONTRACTOR fails to
timely perform its warranty obligation, OWNER shall have the right to cause
such repairs or replacements and CONTRACTOR shall be liable for the
reasonable costs of such repairs or replacements. "
Notwithstanding the limitation on the LESSOR's warranties under section 4.4
of this Addendum or the time for enforcement of LESSOR's warranties has
expired, to the extent that any warranties provided by the Contractor in
connection with the construction of the Premises cover any of the items
described in section 4.4 of this Addendum or LESSOR has any claim against the
Contractor on account of any defect or deficiency in the construction of the
Premises, upon the written request of LESSEE, LESSOR shall either (a) take
such commercially reasonable action as necessary to enforce any such
warranties or claims for the benefit of LESSEE to the extent LESSEE incurs or
will incur any out-of-pocket expense or cost in the performance of its
obligations under this Lease for the repair or maintenance of the Premises on
account of any items covered by the Contractor's warranty or as a result of
any such defects or deficiencies, provided that LESSOR shall first be
entitled to recover its Legal Expenses (as defined below) prior to an
reimbursement to LESSEE of any such out-of-pocket expenses, or (b) assign to
LESSEE the right to enforce any such warranties or claims, provided any such
assignment shall be effective only to the extent LESSEE incurs or will incur
any out-of-pocket expense or cost in the performance of its obligations under
this Lease for the repair or maintenance of the Premises on account of any
items covered by the Contractor's warranty or as a result of any such defects
or deficiencies, and LESSOR shall be entitled to receive any excess recovery
after deduction of LESSEE's Legal Expenses (as defined below).
4.5.1 "LEGAL EXPENSES " DEFINED. For purposes of this section, the
term "Legal Expenses " means reasonable attorneys' fees and costs (including
any expert witness fees), including attorneys' fees and costs in connection
with the enforcement of any award or judgment or any appellate proceedings,
which Legal Expenses are incurred by LESSOR in the event LESSOR elects to
enforce warranties or claims in any legal proceedings against the Contractor,
or incurred by LESSEE, in the event LESSOR assigns the right to LESSEE to
enforce such warranties or claims directly against the Contractor.
4.5.2 LIMITATIONS. Nothing in this section shall be construed or
applied to expand the scope of LESSOR's warranties under section 4.4 of this
Addendum or otherwise extend the time for LESSEE's enforcement of LESSOR's
warranties under section 4.4.4 of this Addendum.
5. TENANT IMPROVEMENTS. The phrase "Tenant Improvements " means
all improvements for LESSEE's Premises, which shall consist of those
improvements LESSEE desires to have for its operations and the Mandatory
Improvements (as described below), including (a) partitions, walls (including
any interior demising walls between the Premises and any other rentable area
of the Building), and doors, (b) all surface finishes, including wall
coverings, paint, floor coverings, suspended ceilings and other similar
items, (c) duct work, heat pumps, vents, diffusers, terminal boxes and
accessories for completion of heating, ventilation and air conditioning
systems within the Premises, (d) electrical distribution systems (including
panels, subpanels, wires and outlets), lighting fixtures, outlets, switches
and other electrical work to be installed in the Premises, (e) plumbing
lines, fixtures and accessories, (f) all fire and life safety control systems
such as fire walls and fire alarms (including piping, wiring and accessories)
to be located in the Premises, and fire sprinklers and lines attributable to
the Tenant Improvements and/or LESSEE's fixture, furnishing or equipment, (g)
entrance door signage and directory listings, as authorized by LESSOR, (h)
improvements required for compliance with Title 24, (i) improvements, repairs
and replacements consisting of the Mandatory Improvements, and (j) other
improvements shown on the "Cost Breakdown Tenant Improvement " form attached
to this Addendum as EXHIBIT "2 "; provided, LESSEE's trade fixtures,
equipment and personal property (including telephone systems, chairs, tables,
furniture and other equipment used in LESSEE's business) shall not be
considered part of the Tenant Improvements. "Mandatory Improvements " means
repairs, replacements or improvements of certain elements of the Building,
such as the roof and the Building Systems as necessary to place them in a
commercially reasonably operating condition and which are more particularly
described in the Schedule of Mandatory Improvements annexed to this Addendum
as EXHIBIT "3 ". The Mandatory Improvements are a required element of
LESSEE's Tenant Improvements and LESSEE shall not have the discretion to
delete or modify such Tenant Improvements, except with LESSOR's approval in
its sole discretion. "Building Systems " means the electrical, ventilating,
heating and air conditioning systems, fire protection (if any), plumbing and
sewage systems within and outside of the Premises which specifically services
the Premises as necessary to maintain such services to the Premises.
5.1 DESIGN OF TENANT IMPROVEMENTS/PERMITS. LESSOR shall cause the
Tenant Improvements to be constructed substantially in accordance with the
general design elements shown in that certain "Space Plan " and "TI
Specifications " provided by LESSEE, which LESSEE hereby approves ( "Approved
TI Plans "); a copy of the Approved TI Plans is attached as EXHIBIT "4 " to
this Addendum. LESSEE shall furnish to LESSOR, a complete set of plans and
specifications detailing all Tenant Improvements no later than August 5, 2001
( "Tenant Improvement Plans ") conforming to the Approved TI Plans. In
addition, LESSEE shall be responsible for procuring the necessary building
permits for construction of the Tenant Improvements no later than August 20,
2001. Unless otherwise approved by LESSOR, the Tenant Improvement Plans will
be prepared by the Xxxx Xxxxx, AIA or Xxxxxxx X. Xxxxx and Associates. The
Tenant Improvement Plans shall be subject to LESSOR's prior approval, which
will not be unreasonably withheld; provided, however, LESSOR shall have the
absolute right of disapproval, in its sole discretion, of any Tenant
Improvements which (a) alter or otherwise affect any structural component of
the Building, (b) are visible from the exterior of the Premises, or (c) the
Tenant Improvement Plans specify materials which are not readily available or
customarily and ordinarily used in similarly situated construction work where
the procurement of such materials would cause a delay in Substantial
Completion (as defined below). LESSOR shall have thirty (30) days after
receipt of the Tenant Improvement Plans in which to approve or disapprove the
Tenant Improvement Plans. If LESSOR does not disapprove the Tenant
Improvement Plans within such thirty (30) day period, LESSOR shall be deemed
to have approved the Tenant Improvement Plans. If LESSOR reasonably
disapproves the Tenant Improvement Plans, LESSEE, at its expense, shall
promptly cause the Tenant Improvement Plans to be revised and resubmitted to
LESSOR for its review and approval within fifteen (15) days from notice of
LESSOR's disapproval. Following LESSOR's approval, LESSOR will have the
Architect submit the Tenant Improvement Plans for government plan checking
and a building permit, if required, provided, LESSOR shall have the right to
approve any changes required by such governmental authorities. The final
Tenant Improvement Plans shall be subject to any changes required by
governmental authorities.
5.1.1 NO LESSOR LIABILITY. The rights granted LESSOR to approve the
Tenant Improvements and the Tenant Improvement Plans are solely for the
benefit of LESSOR. LESSOR shall have no obligation or liability whatsoever
to LESSEE or any other person on account of LESSOR's approvals in the event
the Tenant Improvements do not conform to Applicable Requirements or
otherwise contain defect or deficiencies. LESSEE agrees that it is solely
responsible for the compliance of designing the Tenant Improvement with all
Applicable Requirements and the provisions of this Lease.
5.2 APPROVED CONTRACTOR. Hamann Construction, a licensed general
contractor, will be the general contractor for construction of the Building
Shell Improvements and Tenant Improvements. LESSOR and LESSEE hereby approve
Hamann Construction acting as the general contractor ( "Contractor "). The
Contractor's agreed-upon markup (profit and overhead) for the Tenant
Improvements will be 12% of the actual costs incurred in the development an
construction of the Tenant Improvements exclusive only of the costs of the
preparation of the Tenant Improvement Plans and government permits.
5.2.1 LESSEE'S REVIEW OF SUBCONTRACTORS' BIDS. LESSEE shall have
the right to review the subcontract proposals ( "Bids ") for the Major Trades
(as defined below) required for construction of the Tenant Improvements. No
later than thirty (30) days prior to the commencement of construction, LESSOR
shall cause Contractor to deliver to LESSEE Bids for each Major Trade from no
less than three (3) licensed and qualified subcontractors together with a
written notice specifying the Bids which Contractor recommends for
acceptance. LESSEE shall have the right to reasonably disapprove one of the
Bids for each of the Major Trades selected by Contractor by giving LESSOR
written notice of any objection that LESSEE may have to such Bids within five
(5) days from LESSEE's receipt of the Bids from Contractor; provided,
however, LESSEE shall not have the right to disapprove more than one (1) bid
within a Major Trade, and Contractor shall have the right to select any of
the remaining Bids in such Major Trade category. LESSEE's notice of
disapproval shall explain in detail the basis for the disapproval of any Bid
recommended by Contractor. Contractor shall have the right to utilize any
subcontractors submitting Bids for which LESSEE does not timely give notice
of its disapproval. The term "Major Trades " means portions of the
construction work consisting of the supply or installation of electrical,
heating and air conditioning, fire sprinkler system, framing, drywall,
plumbing, painting, floor coverings, suspended ceilings, glass, doors and
ceramic tile.
5.3 PAYMENT OF TENANT IMPROVEMENT COSTS. The phrase "Tenant
Improvement Costs " means all direct and indirect costs of designing,
furnishing, constructing and installing the Tenant Improvements, including
(a) costs for design and/or architectural services of the Architect in
preparing the Tenant Improvement Plans, (b) government permit costs
applicable to the Tenant Improvements, (c) amounts payable to the Contractor
for overhead/profit, job site supervision, cleanup, trash and janitorial
services as shown in the Cost Breakdown Tenant Improvement (EXHIBIT "2 "),
(d) the actual "hard costs " of construction of the Tenant Improvements, (e)
financing costs attributable to financing to pay the Tenant Improvement
Costs, including, construction period interest from the initial loan funding
until the Commencement Date, loan points, fees and other costs, such as
appraisals, environmental surveys, legal fees and other costs customarily
incurred in connection with such financing; and (f) leasing brokerage
commissions based on the portion of rentals attributable to the amortization
of the LESSOR's payment of the Allowance described in subparagraph 5.3.2 of
this Addendum over the Lease Term.
5.3.1 ESTIMATE FOR TENANT IMPROVEMENT COSTS. Prior to the commencement
of construction, LESSOR shall cause the Contractor to make a final selection
of the Bids for each Major Trade and LESSOR shall provide final estimates of
all other Tenant Improvement Costs ( "Estimated Tenant Improvement Costs ").
LESSOR shall provide LESSEE written notice of such Estimated Tenant
Improvement Costs, which notice will include copies of the Bids for the Major
Trades.
5.3.2 LESSOR'S ALLOWANCE. LESSOR agrees to pay a maximum of One
Million Dollars ($1,000,000.00) for the Tenant Improvement Costs ( "Allowance
"). The Allowance shall be applied solely to pay the cost of the Tenant
Improvements, and under no circumstances shall LESSEE be entitled to any
payment on account of any unused portion of the Allowance following
completion of the Tenant Improvements and payment of the Tenant Improvement
Costs. The amount of any Excess Allowance (as determined in section 1.3 of
this Addendum) actually expended for payment of Tenant Improvement Costs
shall be the amount used to determine the amount of the Tenant Improvement
Allowance Amortization
Charge described in section 1.3 of this Addendum. LESSOR shall pay its share
of the Tenant Improvement Costs as construction progresses.
5.3.3 LESSEE'S PAYMENT/INITIAL CONTRIBUTION. Except for LESSOR's
Allowance, LESSEE shall be responsible for the payment of all Tenant
Improvement Costs. The amount of LESSEE's initial contribution will be
determined based on the Estimated Tenant Improvement Costs, and LESSEE shall
pay to LESSOR, as provided in this subsection, an amount equal to the
difference between LESSOR's Allowance and the Estimated Tenant Improvement
Costs ( "Initial Contribution "). LESSEE shall pay such Initial Contribution
to an institutional fund control established by LESSOR for payment of the
Tenant Improvement Costs within ten (10) days from LESSOR's notice requesting
such payment. Such funds shall be disbursed on a pro rated basis with
LESSOR's Allowance based on the percentage of completion of the Tenant
Improvements, as reasonably determined by LESSOR.
5.3.4 FINAL RECONCILIATION. Following completion of the construction
of the Tenant Improvements, LESSOR shall to deliver to LESSEE a final
accounting of the Tenant Improvement Costs. If additional amounts are due
from LESSEE on account of differences between the Estimated Tenant
Improvement Costs and the actual costs incurred, LESSEE shall reimburse
LESSOR in the amount of such difference following completion of the
construction of the Tenant Improvements and within fifteen (15) days from
receipt of a written notice and accounting from LESSOR's accounting. If such
final accounting shows that the actual Tenant Improvement Costs are less than
the Estimated Tenant Improvement Costs, then LESSEE shall be entitled to a
credit in the amount of any excess paid by LESSEE, which credit shall be
applied to the next payment of Base Rent then becoming due.
5.3.5 COSTS ATTRIBUTABLE TO CHANGES. LESSEE will be responsible for
payment of any excess Tenant Improvement Costs resulting from any changes to
the Work requested by LESSEE or necessitated by government requirements,
following LESSOR's approval of the Tenant Improvement Plans. Any such
changes shall be subject to LESSOR's approval and LESSEE shall deposit funds
with LESSOR to pay such costs within thirty (30) days following notice from
LESSOR of the Contractor's estimated cost for any change. If the actual cost
of the change is less than the estimate, LESSOR shall refund the difference
to LESSEE upon LESSEE's occupancy, and if the actual cost is more than the
estimate, LESSEE shall pay the difference within thirty (30) days of a notice
from LESSOR documenting such actual costs.
5.3.6 INSPECTION OF RECORDS/LESSOR'S DUTY TO NOTIFY LESSEE OF COST
OVERRUN. LESSEE, or its designated representative, shall have the right
during the course of performance of the construction of the Building Shel
and the Tenant Improvements and in connection with the final reconciliation
of the Tenant Improvement Costs as provided in subsection 5.3.4 of this
Addendum to a reasonable review of books and records maintained by LESSOR and
Contractor relating to such costs. Such right of inspection is exercisable
on reasonable written notice to LESSOR and during the regular business hours
of LESSOR or Contractor, whichever is applicable. LESSOR shall cause
Contractor to notify LESSEE of any material increase in the Tenant
Improvement Costs over and above of Estimated Tenant Improvement Costs within
ten (10) days from the date Contractor has actual knowledge of the increase,
which in the cases of the Major Trades shall be the date Contractor receives
written notice of any extra claim by a subcontractor or supplier, and in the
case of an Excusable Event (as defined in section 5.4.5.1 of this Addendum,
the date Contractor first learns of the Excusable Event, and if LESSOR fails
to so timely notify LESSEE, LESSOR, not LESSEE shall be responsible for the
extra cost of any work performed earlier than ten (10) days prior to the date
of Contractor's notice under this section.
5.4 CHANGE ORDERS. LESSEE shall have the right to, from time to
time, submit to LESSOR any written requests for reasonable changes or
additions to the Tenant Improvements desired by the LESSEE in such detail as
LESSOR may reasonably require in accordance with the requirements and
procedures in this section ( "Change Order "); subject to the limitations in
subsection 5.4.6 of this Addendum. The term "Change Costs " shall mean the
net increase (after taking into account any savings from any Change Order or
prior Change Orders), if any, in the actual out-of-pocket cost, including,
without limitation, the actual construction costs attributable to a Change
Order, including Contractor's "markup ", and any costs incurred by the
LESSOR to design and engineer the Change Order) to be incurred by LESSOR to
complete the work associated with the Change Order, including, without
limitation, the costs of any demolition, removal or reconfiguration of
completed work, mobilization and de-mobilization charges of subcontractors,
overhead and profit allowance to subcontractors, restocking, pickup and
redelivery charges of suppliers, costs of government permits and/or
additional inspections caused by such change, Contractor's additional
supervision and general conditions costs and additional interest or other
financing charges attributable to the period of any Change Delay caused by
such Change Order. The term "Change Delay " means the period that
Substantial Completion of the Tenant Improvements is delayed on account of
any Change Order, which shall be calculated without regard to the
Contractor's acceleration of the work and/or other extraordinary measures to
mitigate such delay, and such delay period shall include the time reasonably
required for processing of the Change Order, for any demolition, removal or
reconfiguration of completed work, mobilization and de-mobilization of
subcontractors and Contractor's forces, ordering, restocking, pickup and
redelivery of materials from suppliers, the time required for completion of
the work actually changed by the Change Order, the time required to obtain
any additional government approvals or inspections of such changes and the
period of time that LESSEE delays making any payment due under this section
5.4 of this Addendum.
5.4.1 TENANT IMPROVEMENTS. If LESSEE desires to change the Tenant
Improvements, whether before the completion of the Final TI Plans or during
the course of construction, then LESSEE shall submit a Change Order to
LESSOR. LESSOR shall reasonably approve any such Change Order, except that
LESSOR shall have the absolute right, in its sole discretion to disapprove a
Change Order as provided in subsection 5.4.6 of this Addendum.
5.4.2 LESSOR'S RESPONSE. Within fifteen (15) days after LESSOR's
receipt of a Change Order from LESSEE, LESSOR shall determine and provide
written notice ( "Change Order Response ") to LESSEE setting forth (a)
Contractor's good faith estimate of the Change Costs (as defined above), if
any, associated with such proposed Change Order; and (b) a good faith
anticipated length of any Change Delay (as defined above), if any, in
completing the Tenant Improvements as a result of such proposed Change Order;
provided, however, if LESSOR does not approve the changes requested in the
Change Order, then in lieu of the information required under preceding
clauses (a) and (b), LESSOR's Change Order Response shall state in detail the
reasonable grounds for such disapproval pursuant to section 5.4.6 below.
5.4.3 NOTICE TO PROCEED. Within five (5) days after delivery of the
Change Order Response, LESSEE shall give to LESSOR written notice to proceed
with the Change Order ( "Notice to Proceed ") if LESSEE desires to proceed
with such Change Order. If LESSEE fails to give such Notice to Proceed to
LESSOR within such period of time, LESSEE shall be deemed to have elected not
to proceed with the Change Order. LESSEE's Notice to Proceed with the Change
Order shall constitute the agreement by LESSEE to pay to LESSOR the Change
Cost and to accept the associated Change Delay as a LESSEE Delay for all
purposes of this Lease. Following the Notice to Proceed, LESSOR shall
promptly revise the Final Plans and/or the TI Plans, as applicable, to
incorporate the Change Order and proceed to complete the Improvements in
accordance with the Change Order.
5.4.4 INTERIM WORK. LESSOR shall continue with the construction of the
work in accordance with the Final TI Plans (taking into account any prior
approved Change Orders for which a Notice to Proceed has been received)
notwithstanding LESSEE's delivery of a Change Order and pending LESSEE's
delivery of the Notice to Proceed. Any additional costs associated with the
removal, demolition or reconfiguration of such interim work shall be included
in the Change Costs and any additional time associated with the removal,
demolition or reconfiguration of such interim work shall be included in the
Change Delay.
5.4.5 PAYMENT OF CHANGE COSTS. LESSEE will be responsible for payment
of the actual Change Costs resulting from any Change Order, provided LESSOR'S
good faith estimate of Change Costs included in the Change Order Response
shall be binding on LESSOR except to the extent of (a) any Change Costs
attributable to Change Delays the duration of which was not reasonably
determinable as of the time of LESSOR's Change Order Response, and/or (b) any
Excusable Event Cost attributable to a Change Order. LESSEE shall pay the
amount of such Change Costs in the same manner and in accordance with the
same procedure as LESSEE's Initial Contribution for Tenant Improvements is
payable under section 5.3.3 of this Addendum. The actual Change Costs shall
be accounted for in the Final Accounting described in section 5.3.4 of this
Addendum, and any variance between the estimate and the actual Change Costs
(to the extent that LESSOR is not bound by the estimate stated in the Change
Order Response as provided in this section) shall be adjusted in the same
manner as LESSEE's Initial Contribution for Tenant Improvements.
5.4.5.1 "EXCUSABLE EVENT COST " DEFINED. The term "Excusable Event
Cost " means any increase in Tenant Improvement Costs which result from or
are caused by an Excusable Event " and the term "Excusable Event " means (a)
fire, earthquake or other unavoidable casualties, Acts of God, war, national
emergency or inclement weather conditions not reasonably anticipatable, (b)
extraordinary or unusual governmental action other than usual permit and
inspection procedures, (c) the discovery and/or remediation of any unknown or
concealed conditions affecting the Premises, (d) general area-wide labor or
material shortages or labor disputes (such as strikes or lockouts), (e) any
LESSEE Delay, (f) any other causes not the fault of LESSOR or the Contractor,
and/or (g) costs or expenses attributable to delays in construction resulting
from any of the causes described in preceding clauses (a) through (g);
provided, however, insurance proceeds from the typical builder's risk
insurance actually collected by LESSOR or Contractor on account of such an
Excusable Event shall be applied to reduce any amount payable by LESSEE on
account of such an Excusable Event Cost.
5.4.6 LESSOR'S APPROVAL. LESSOR's approval of all Change Orders shall
be required. LESSOR agrees not to unreasonably withhold its approval of a
Change Order; provided, however, LESSOR shall have the absolute right of
disapproval, in its sole discretion, of any Change Order affecting
improvements which (a) alter or otherwise affect any structural component of
the Building, (b) reduce the Rentable Square Feet of the Premises, (c) are
visible from the exterior of the Building, or (d) consist of Mandatory
Improvements. If LESSOR disapproves any Change Order, such disapproval shall
be set forth in the Change Order Response and if LESSOR fails to state such
disapproval within the given time frame, LESSOR shall be deemed to have
approved the Change Order. If LESSOR properly disapproves a Change Order,
then the proposed change shall not be made, provided that LESSEE shall have
the right to resubmit new Change Order in accordance with the procedures
provided in this section 5.4 to take in order to eliminate the grounds for
LESSOR's disapproval.
5.4.7 AUTHORIZED REPRESENTATIVES. The only person authorized to issue
Change Orders on behalf of LESSEE are Xxxx Xxxxxx, President or Xxxx Xxxxxxx,
CFO. ( " Authorized Representatives "), unless such Authorized
Representatives designates any other person(s) as additional Authorized
Representative by giving LESSOR or Contractor written notice of such
authority.
5.4.8 "SUBSTANTIAL COMPLETION " DEFINED. The term "Substantial
Completion " means the date upon which LESSOR reasonably satisfies all of the
following requirements: (a) the construction of the applicable the Tenant
Improvements are substantially completed, subject only to minor corrective
work which does not materially affect or limit LESSEE's use of the Premises;
provided, LESSOR shall complete any such minor work within thirty (30) days
following Substantial Completion; (b) LESSOR has procured a certificate of
occupancy (whether temporary or permanent) or other applicable permit
permitting LESSEE's immediate use and occupancy of the Premises; and (c)
LESSOR has given LESSEE written notice stating that such Substantial
Completion has occurred and that the Premises are available for LESSEE's
immediate possession and occupancy ( "Notice of Possession "). It is
expected that Substantial Completion will occur prior to the Commencement
Date as more particularly provided in section 3.1 of this Addendum.
6. SPECIAL PROVISIONS REGARDING HAZARDOUS MATERIALS.
Notwithstanding the provisions of Paragraph 6 of the Lease, LESSOR is not
making any representation, warranty or agreement concerning the absence of
Hazardous Substance contamination of the Premises and LESSOR shall not have
any responsibility or liability with respect to any Hazardous Substance
contamination. LESSEE is assuming all risk of loss arising from the presence
of any Hazardous Substance contamination, whether existing now or in the
future.
7. USE OF PREMISES. LESSEE shall be solely responsible for
determining that the Premises are suitable and feasible for LESSEE's intended
use and for determining all Applicable Requirements. LESSOR, by giving its
consent to any use, shall not be deemed to warrant that such use is
permissible under the Applicable Requirements nor shall such consent
constitute a waiver of any other condition or requirement of this Lease and
under no circumstance whatsoever shall LESSOR have any liability to LESSEE
(nor shall the validity of this Lease be effected) if it is determined that
any intended use is not permitted or is in some manner subject to
restrictions or limitations.
7.1 EXCEPTION/HAZARDOUS MATERIALS. Without limiting LESSEE's
obligations under Paragraph 6 of the Lease regarding compliance with
Hazardous Substance Laws, LESSEE has completed and delivered to LESSOR a
Hazardous Materials Questionnaire in the form as set forth in EXHIBIT "5 "
annexed to the Lease, which LESSOR may use for filing with applicable
government authorities in the event that LESSOR is required to make any such
filing. Within fifteen (15) days of a written request by LESSOR, LESSEE
agrees to complete and deliver to LESSOR an updated Hazardous Materials
Questionnaire. Notwithstanding any other provisions of the Lease, LESSEE
shall not use or otherwise engage in any activity upon the Premises that
would constitute a Reportable Use as defined in Paragraph 6.2(a) of the Lease
or otherwise significantly increase the risk of and/or potential severity of
contamination of Hazardous Substances, without LESSOR's prior written
consent, in its sole discretion, including, without limitation, engaging in
any business primarily involving the transport, storage, processing,
packaging or manufacture of Hazardous Substances or the installation of any
underground storage tank(s).
7.2 NO INSURANCE RATED ACTIVITIES. LESSEE shall not commit any acts
on the Premises, nor use the Premises in any manner that will (a) cause the
cancellation of any fire, liability, or other insurance policy insuring now
or in the future insuring the Premises or any portion of the Premises, or (b)
cause any required deductible to exceed the amount permitted by LESSOR's
lender,.
7.3 DISPOSAL OF WASTE. LESSEE shall lawfully dispose of all sanitary
sewage and not use the sewage disposal system of the Premises (a) for the
disposal of anything except sanitary sewage, (b) in excess of the amount
reasonably contemplated by the uses permitted under the Lease, or (c) in
excess of the amount permitted by any Applicable Laws.
8. ADDITIONAL PROVISIONS REGARDING REMOVAL OF PERSONAL PROPERTY.
For all purposes of the Lease (including Paragraph 7.4 of the Lease), the
Tenant Improvements shall constitute "Alterations and Utility Installations
" and, unless LESSOR otherwise elects, shall become the property of LESSOR
and shall not be removed by LESSEE upon expiration or earlier termination of
the Lease. The term "Personal Property " means trade fixtures, personal
property, inventory, business equipment and furnishings supplied, owned or
leased by LESSEE, including, without limitation, components of LESSEE's
telephone system, computer and computer network systems and security systems;
provided, however, cabling and conduits for such systems shall not be removed
by LESSEE and shall be surrendered with the Premises upon expiration or
termination of the Lease. Notwithstanding any other provision, LESSEE may
not remove any property, including any Personal Property, if such removal
would cause material damage to the Premises, unless such damages can be and
are repaired by LESSEE. Furthermore, LESSEE shall repair any damage to the
Premises caused by LESSEE's removal of any such Personal Property, and shall,
prior to the expiration or earlier termination of this Lease, restore and
return the Premises to the condition they were in when first occupied by
LESSEE, reasonable ordinary wear and tear excepted. The provisions of
Paragraph 7.3 of the Lease shall apply to any restoration work under this
section the same as if the restoration was an Alteration or Utility
Installation.
8.1 FAILURE TO REMOVE PERSONAL PROPERTY. If LESSEE shall fail to
remove any Personal Property which it is entitled to remove under this Lease
prior to termination or expiration of this Lease, then LESSOR may retain
ownership of such property or may dispose of the property under the
provisions of Section 1980 et seq. of the California Civil Code, as such
provisions may be modified from time to time, or under any other applicable
provisions of California law, without further notice or liability to LESSEE.
Notwithstanding any other provision, upon the expiration or earlier
termination of the Lease, other than a termination on account of LESSEE's
Breach, LESSOR will give LESSEE three (3) days notice prior to the disposal
of any Personal Property left on the Premises by LESSEE so that LESSEE can
enter Premises within such three (3) day period and retrieve such Personal
Property. All Personal Property left after such three (3) day period shall
be deemed abandoned by LESSEE.
8.2 LEASE/SECURITY INTEREST FILING. In the event LESSEE shall lease
or finance the acquisition of Personal Property utilized by LESSEE in the
operation of LESSEE's business, LESSEE warrants that any Uniform Commercial
Code financing statement executed by LESSEE will upon its face or by exhibit
clearly indicate that such financing statement is applicable only to Personal
Property of LESSEE specifically described in the financing statement that is
subject to removal on the expiration or earlier termination of this Lease.
In no event shall the address of the Building (or other information
identifying the Premises) be furnished on the financing statement without
qualifying language as to applicability of the lien only to Personal Property
of LESSEE described in the financing statement. Should any holder of a
security agreement executed by LESSEE record or place of record a financing
statement which appears to constitute a lien against any interest of LESSOR
in the Premises, LESSEE shall within ten (10) days after the filing of such
financing statement cause (i) copies of the security agreement or other
documents to which the financing statement pertains to be furnished to LESSOR
to facilitate LESSOR's being in a position to show such lien is not
applicable to any interest of LESSOR, and (ii) the holder of the security
interest to amend documents of record so as to clarify that such lien is not
applicable to any interest of LESSOR in the Premises.
9. LESSOR'S INDEMNITY OBLIGATION. Notwithstanding the exemption
from LESSOR's liability provided in Paragraph 8.8 of the Lease, LESSOR agrees
to indemnify, defend and hold harmless LESSEE from any loss, damage, cost or
expense (including reasonable attorneys' fees and legal expenses) suffered or
incurred by LESSEE as a result of any personal injury or property damage
caused by LESSOR's employees, agents or contractor while such employees,
agent or contractors are present on the Premises.
10. ADDITIONAL INSURANCE PROVISIONS. The provisions of this section
supplement the provisions of Paragraph 8 of the Lease, provided in the event
of any inconsistency, the provisions in this section shall supersede and
control.
10.1 ADJUSTMENT OF LESSEE'S LIABILITY INSURANCE. The liability
insurance to be maintained by LESSEE in accordance with Paragraph 8.2 of the
Lease shall be subject to increase no more frequently than each three (3)
Lease Years as reasonably determined by LESSOR's insurance advisor taking
into account prevailing industry practices for similar businesses; provided,
however, in no event shall the amount of the required insurance exceed Five
Million Dollars ($5,000,000.00) during the Original Term of the Lease.
10.2 LIMITATION ON WAIVER OF SUBROGATION. As between LESSOR and
LESSEE, the waiver and release set forth in Paragraph 8.6 of the Lease shall
only apply to the extent of the actual amount of the insurance proceeds
received.
10.3 SPECIAL DEDUCTIBLE/EARTHQUAKE INSURANCE. In addition to the
"All Risk " insurance coverage for the Premises described Paragraph 8.3 of
the Lease, LESSEE shall maintain earthquake insurance coverage if required by
LESSOR's lender, and such insurance shall be subject to reasonable
deductibles in accordance with industry practices in the locale as reasonably
determined by LESSOR's professional insurance advisor. LESSEE shall be
responsible for payment of any premiums for such insurance and LESSOR shall
be responsible for payment of any such deductible amounts in the event of
damage or destruction of the Premises from earthquake; provided, LESSEE,
shall be responsible for any deductibles on any of the other property
insurance.
11. ADDITIONAL PROVISIONS REGARDING ASSIGNMENT/SUBLEASE. This
section includes provisions that modify and/or supplement the provisions of
Paragraph 12 of the Lease concerning the assignment and subletting of the
Premises. Except as expressly set forth in subsections 11.1 to 11.3 of this
Addendum, the provisions of Paragraph 12 of the Lease shall be enforced in
accordance with their terms.
11.1 AFFILIATE TRANSACTION. Subject to compliance with Paragraph 12.2
of the Lease and the requirements of sections 11.1.1 to 11.1.4 of this
Addendum, LESSOR's consent to an Affiliate Transaction shall not be required,
and the provisions of Paragraph 12.1(d) of the Lease shall not apply to an
Affiliate Transaction so long as LESSEE is not otherwise in Default under
this Lease at the time of the proposed transaction. The term "Affiliate
Transaction " means (a) any assignment or sublease to an entity controlling,
controlled by or under common control with LESSEE; or (b) any assignment
resulting from a bona fide consolidation, merger or purchase of substantially
all of LESSEE's assets; provided, however, any such assignment or sublease
shall not release or otherwise affect LESSEE's liability for its obligations
under the Lease.
11.1.1 NOTICE AND TRANSFER DOCUMENTATION TRANSACTION. Any Affiliate
Transaction shall comply with all conditions and requirements in this section
11.1.1. No later than ten (10) days following the consummation of an
Affiliate Transaction, any assignee or sublessee shall (a) execute and
deliver to LESSOR a copy of this Lease to confirm such assignees or
sublessee's assumption of any and all obligations of LESSEE under this Lease,
and (b) deliver to LESSOR, Transfer Documentation as described in clauses
(a), (b) and (c) of section 11.2.2 of this Addendum.
11.1.2 ADDITIONAL REQUIREMENTS. In the case of an Affiliate Transaction
described in clause (b) of section 11.1 of this Addendum, in addition to
compliance with the requirements in section 11.1.1 of this Addendum, such
assignee or sublessee, shall: deliver to LESSOR the additional Transfer
Documentation as described in clause (d) of section 11.2.2 of this Addendum
evidencing satisfaction of the Financial Standard (as defined below) to
qualify as an Affiliate Transaction. The term "Financial Standard " means:
(i) immediately prior to and after the sale and transfer of assets or stock
to such the assignee or sublessee, such assignee or sublessee has a net
worth, determined in accordance with generally accepted accounting
principles, which exceeds $5,000,000.00; and (ii) for the fiscal year
immediately preceding the sale and transfer of such assets or stock such
assignee or sublessee has realized a net profit, determined by generally
accepted accounting principles consistently applied, of not less then
$1,000,000.00 If the proposed assignee or sublessee does not satisfy such
Financial Standard than such transaction shall not constitute an Affiliate
Transaction and shall require LESSOR's consent in accordance with section
11.2 of this Addendum.
11.1.3 NO CHANGE IN HAZARDOUS SUBSTANCE USE. In order to qualify as an
Affiliate Transaction, the assignee's or sublessee's use of the Premises
shall not materially increase the risk of contamination of any Hazardous
Substance from the risk presented by LESSEE's use of the Premises as
determined by a qualified environmental consultant designated by LESSOR.
11.1.4 NON-COMPLIANCE/DEFAULT. If a purported Affiliate Transaction
does not comply with all requirements and conditions for a qualified
Affiliate Transaction, such transaction shall require LESSOR's consent in
accordance with the procedures in section 11.2 of this Addendum and the
occurrence of such transaction without such consent shall constitute a
Default under this Lease.
11.2 NON-AFFILIATE TRANSACTIONS. The provisions in this section are
in addition to the provisions of Paragraph 12 of the Lease, provided such
provisions do no apply to an Affiliate Transaction except as stated in
section 11.1 of this Addendum.
11.2.1 PRESUMPTION OF REASONABLENESS. To the extent that the Lease
provides for LESSOR's reasonable consent to an assignment or sublease of the
Lease, LESSEE acknowledges and agrees that LESSOR shall be conclusively
deemed to have reasonably withheld such consent if (a) a proposed assignee
does not comply with the Financial Standards described in section 11.1 of
this Addendum as of the date of the proposed assignment or sublease, or (b)
the assignee's or sublessee's use of the Premises would materially increase
the risk of contamination of any Hazardous Substance from the risk presented
by LESSEE's use of the Premises as determined by a qualified environmental
consultant designated by LESSOR. LESSEE shall be responsible for the fees of
such consultant. Nothing in this section shall be construed or applied to
restrict LESSOR from withholding its consent for other reasonable grounds,
and this provision is included solely to provide LESSOR the benefit of the
conclusive presumption with respect to one or both of the above described
conditions.
11.2.2 "TRANSFER DOCUMENTATION " DEFINED. The term "Transfer
Documentation " means and includes the following documentation, which shall
be certified in writing as true, correct and complete by the LESSEE and any
assignee or sublessee: (a) the name, address, telephone number and
responsible representative of the assignee or sublease; (b) written reports,
government filings and other relevant documentation, if any, describing the
extent of the use of Hazardous Substances in assignee's or sublessee's
general business operations, and, if different, the use of the Premises
proposed by assignee or sublessee; (c) all written contracts and agreements,
including lease assignments, signed between LESSEE (or any of its affiliates)
and the assignee or sublessee relating to or in any way concerning the
assignment or subletting or any contemporaneous transaction, which, in the
case of a purported Affiliate Transaction, such contracts and agreements must
evidence that the assignment or sublease conform to all requirements of an
Affiliate Transaction; and (d) audited financial statements, prepared by a
certified public accountant or equivalent, for the last three (3) years of
assignee's operation, including balance sheet, income statements and any
other statements prepared in the ordinary course of assignee's or sublessee's
operations.
11.2.3 TIME FOR CONSENT. LESSOR shall give LESSEE written notice of its
consent or refusal to consent to a proposed assignment no later than forty
five (45) days following receipt from LESSEE of the last of the Transfer
Documentation and LESSEE's payment under Paragraph 12.2(e) of the Lease (
"LESSOR's Notice "). If LESSOR does not timely give LESSOR's Notice, LESSOR
shall be deemed to have given its consent to the assignment as disclosed in
the Transfer Documentation.
11.2.4 RIGHT OF FIRST REFUSAL. In the event LESSEE desires to assign
this Lease or enter into a Major Sublease of the Premises other than in an
Affiliate Transaction, LESSOR shall have a period equal to the period for
LESSOR to consent or not consent under section 11.2.3 of this Addendum (
"Election Period ") to notify LESSEE of LESSOR's election to terminate this
Lease as to the entire Premises, in which event Tenant shall be released from
all further obligations under the Lease and LESSOR shall be free to enter
into a new lease with the proposed assignee or sublessee; provided, however,
in the case of a Major Sublease, such termination shall only apply with
respect to the portion of the Premises subject to such sublease and this
Lease shall remain in full effect with respect to the remaining portion o
the Premises. The provisions of this section apply regardless of whether or
not LESSOR agrees to consent to such transfer. The term "Major Sublease "
means a sublease (a) for 25% or more of the Rentable Square Footage of the
Premises then used by LESSEE taking into account any prior sublease(s) for a
term of (a) three (3) years or more, or (b) if the remaining Term of the
Lease is less than five (5) years, then substantially all of the remaining
Term of the Lease. If LESSOR does not give LESSEE notice of its election to
exercise its right to terminate all or a portion of the Lease as provided in
this provision on or before expiration of the Election Period, then LESSOR's
rights under this section shall expire with respect to the proposed
transaction and the provisions of section 11.2.5 below shall apply.
11.2.5 RENT ADJUSTMENT. If LESSEE subleases the Premises (regardless
of whether such sublease is consented to by LESSOR) and, if applicable,
LESSOR does not elect to terminate the Lease in accordance with section
11.2.4 of this Addendum, the Rent due under this Lease shall be automatically
increased as follows: (a) in the case of a Major Sublease, in an amount equal
to fifty percent (50%) of the Net Profit (as defined below) received by
LESSEE from such sublessee; or (b) in the case of a sublease other than a
Major Sublease, in an amount equal to twenty five percent (25%) of the Net
Profit (as defined below) received by LESSEE from such sublessee. "Net
Profit " shall mean the excess in Base Rent or other consideration received
by LESSEE ( "Excess Rent ") for the portion of the Premises sublet, over the
Base Rent and other Rent payable by LESSEE to LESSOR for such portion of the
Premises, after deducting: (i) reasonable brokerage commissions actually paid
by LESSEE for such, and (ii) the actual out-of-pocket costs incurred by
LESSEE to pay for new tenant improvements required by the subtenant, each
deducted from the Excess Rent at a rate determined by (aa) dividing the total
amount expended by LESSEE for such commissions and new tenant improvements,
(bb) by the number of months of the term of the Sublease, and (cc) the
resulting quotient shall equal the amount deducted monthly from the Excess
Rent to determine the amount of the monthly Net Profit. Such amounts shall
be due and payable within fifteen (15) days from LESSEE's receipt. In the
event of subletting of only a portion of the Premises, in calculating whether
the rent received by LESSEE exceeds the Rent payable under this Lease, the
Rent payable under the Lease shall be prorated according to the Rentable
Square Feet subject to the sublease. In the case of a permitted assignment,
LESSOR's only right is to elect to terminate the Lease in accordance with
section 11.2.4 above, and if LESSOR does not elect to terminate the Lease,
no adjustment in Rent shall be made under this section on account of such
assignment. In no event shall the Rent due under the Lease be reduced as a
result of the operation of this section.
11.3 NO RELEASE OF LIABILITY. Notwithstanding any subletting or
assignment, LESSEE shall remain fully and primarily liable for the payment of
all Rent and other sums due, or to become due hereunder, and for the full
performance of all other terms, conditions, and covenants to be kept and
performed by LESSEE, except as provided in section 11.2.4 above. The
acceptance of rent or any other sum due hereunder, or the acceptance of
performance of any other term, covenant, or condition hereof, from any other
person or entity shall not be deemed to be a waiver of any of the provisions
of this Lease or a consent to any subletting or assignment of the Premises.
To the extent that LESSEE may contend that its is a surety or guarantor of
the obligations of the assignee or sublessee in contravention of the
provisions of this section, LESSEE freely, voluntarily and unconditionally
waivers and release any and all defenses of a surety or guarantor, including,
without limitation, rights, defenses or benefits which might otherwise be
available to any surety guarantor under California Civil Code sections 2787
through 2855, inclusive, 2899 and 3433, and California Code of Civil
Procedure sections 580a, 580b, 580d and 726, and any successor or replacement
sections.
11.4 SUBLEASE. In addition to the provisions of Paragraph 12.3 of the
Lease, any sublease of the Premises shall be subject and subordinate to the
provisions of this Lease and LESSOR shall not be bound by any of the terms,
covenants, conditions, provisions or agreements of the sublease, including,
without limitation, any provisions that may be inconsistent with the terms of
this Lease, including, without limitation, any provisions providing for (a) a
term of the sublease extending beyond the Term of this Lease, (b) any right
to renew or extend the term of the sublease for a period extending beyond the
Term of this Lease, or (c) the transfer of any rights or benefits under in
this Lease that expressly provide that they are personal to LESSEE or not
transferable. The sublease shall terminate upon any termination of this
Lease, subject to the right of LESSOR, in its sole discretion, to require the
subtenant to attorn to LESSOR as provided in Paragraph 12 of the Lease and
section 11.4.1 of this Addendum. LESSOR shall no have any duty or obligation
to inspect or review the terms and conditions of any sublease and/or advise
or notify subtenant of any such terms or conditions that are inconsistent
with the provisions of this Lease. LESSOR, by giving its consent to a
sublease as provided in this Lease, shall not be construed or applied to make
LESSOR a party to the sublease and, except as otherwise expressly provided in
this Lease, no contractual relationship shall exist between LESSOR and
subtenant notwithstanding that LESSOR shall have the right to elect to
enforce the terms of the sublease against subtenant and requiring payment of
the rent due under the sublease directly to LESSOR as provided in Paragraph
12.3 of the Lease.
11.4.1 ADDITIONAL PROVISIONS REGARDING SUBTENANT ATTORNMENT. The
provisions of this section are intended to supplement the provisions of
Paragraph 12.3(b) granting LESSOR the right, in its discretion, to require
any subtenant to attorn to LESSOR. In event LESSOR elects to require such
attornment, LESSOR shall undertake the obligations of the sublessor under the
sublease, provided LESSOR shall not (a) be liable for any prepayment of rent
or any security deposit paid by subtenant, except to the extent that LESSOR
is then in possession of any portion of any prepaid rent or security deposit,
(b) be liable for any previous acts or omissions of LESSEE under the
sublease, (c) be subject to any defenses or offsets which such subtenant may
have against LESSEE on account of any act, omission, transaction or
occurrence, (d) be required to complete construction of any tenant
improvements and/or provide pay for any portion of such tenant improvements,
or (e) be bound by any changes or modifications made to the sublease made
without the written consent of the LESSOR.
12. No Restriction on LESSOR'S Remedies. In the event that LESSEE
commits a Breach of the Lease by failing or refusing to take possession of
the Premises and commencing payment of the Rent, nothing in the Lease is
intended to nor shall it be applied to restrict any rights or remedies that
LESSOR may have on account of such Breach, including, without limitation,
LESSOR's entitlement to recover consequential and incidental damages from
LESSEE on account of such breach. LESSEE acknowledges that it is aware that,
based upon LESSEE's inducement in entering into this Lease, LESSOR is making
a substantial investment of its own funds and creditworthiness to develop the
Building, and, in the event of such Default by LESSEE, LESSOR will suffer
substantial damages and losses, including lost profits and loss of use of its
invested funds and credits and potential loss of its creditworthiness and
business reputation.
13. [THIS SECTION INTENTIONALLY OMITTED]
14. ADDITIONAL PROVISIONS REGARDING TENANCY STATEMENT. In addition
to the information required under Paragraph 16 of the Lease, LESSOR may also
require that LESSEE certify to the absence of any violations of any Hazardous
Substance Laws and require that LESSEE provide and certify to an updated
Hazardous Materials Questionnaire. In addition, in lieu of the form of the
Estoppel Certificate described in Paragraph 16 of the Lease, LESSOR shall
have the right, at its election, to require LESSEE to deliver an Estoppel
Certificate in the form of the Estoppel Certificate annexed to this Addendum
as EXHIBIT "6 " and LESSEE agrees to execute and deliver to LESSOR from time
to time as requested by LESSOR.
15. PROHIBITION AGAINST RECORDATION. LESSEE shall not record nor
attempt to record this Lease or any memorandum referencing its option rights.
Upon expiration or termination, LESSEE agrees, if requested by LESSOR, to
execute, acknowledge and deliver a quitclaim deed to LESSOR within five (5)
days from such request together with such additional documents required by
any title company to further evidence the lack of any further right of LESSEE
to any leasehold interest in the Premises.
16. ADDITIONAL PROVISIONS REGARDING SUBORDINATION/NON-DISTURBANCE.
Without limiting the generality of LESSEE's obligations under Paragraph 30 of
the Lease, LESSEE approves the form of the Subordination, Nondisturbance and
Attornment Agreement annexed to the Lease as EXHIBIT "7 " for use in
connection with any of LESSOR's financing of the Building, which may, if
elected by LESSOR, be used in lieu of the form described in Paragraph 30 of
the Lease. LESSEE agrees to execute, acknowledge and deliver to LESSOR from
time to time as requested by LESSOR, such documents in favor of LESSOR's
lender(s) within ten (10) days of LESSOR's request and the failure to timely
provide such documentation shall constitute a non-curable Default under this
Lease.
17. SIGNAGE. If permitted by Applicable Requirements, LESSEE shall
be entitled to one sign displaying its name on the exterior facade of the
building immediately in front of the entrance to the premises and a monument
sign near the parking lot entrance, All installation and maintenance
signage costs will be born by the LESSEE. LESSEE shall be responsible for,
at its expense, causing all signage to be permitted by the City of Moorpark
and conform to any other Applicable Requirements.
18. CORPORATE RESOLUTION. Within ten (10) days of Lease execution,
LESSEE shall provide LESSOR with a certified copy of a Corporate Resolution
authorizing the person(s) designated below to execute this Lease on the
behalf of LESSEE and thereupon become a binding contractual obligation of
LESSEE.
19. INTERPRETATION. Each party acknowledges that the terms of this
Lease have been negotiated and that any rule of construction or
interpretation of a written document against the draftsperson shall not apply
to the interpretation or application of this Lease. If any provision of this
Lease is determined, by a court of competent jurisdiction to be illegal or
unenforceable, such provision shall be deemed to be severed and deleted, and
neither such provision, its severance nor deletion shall affect the validity
of the remaining provisions of this Lease so long as the primary
consideration and rights intended to be afforded each party are preserved.
20. PROTECTION OF AFFILIATES. Whenever in this Lease a party is
obligated to indemnify, defend and/or hold harmless another party, such
obligation to provide indemnification shall be deemed to include
indemnification of the officers, directors, shareholders, partners, members
and agents of the party entitled to indemnification, who are expressly
declared to be third party beneficiaries of this Lease for purposes of the
enforcement of such indemnification rights.
21. ENTIRE AGREEMENT. This Lease, including the Addendum together
with all exhibits annexed to this Addendum and other agreements expressly
referred to herein, constitutes the entire agreement between the parties with
respect to this Lease. All prior or contemporaneous agreements,
understandings, representations, warranties and statements, oral or written,
are superseded, and neither party shall have any right to rely on such
agreements, understandings, representations, warranties and statements in
entering into this Lease.
22. INDEMNIFICATION. Whenever in this Lease, a party is obligated to
indemnify, defend and hold harmless another party, such obligation to provide
indemnification specifically includes, but is not limited to, the obligation
to pay reasonable attorneys' fees and other legal expenses to the attorney
reasonably retained by the party obligated to provide such indemnification on
a continuing basis and upon submission of as such attorneys' fees and legal
expenses are incurred. The attorney retained by the party obligated to
provide indemnification shall be qualified and experienced in the field of
law which is the subject of the action and shall be subject to the reasonable
approval of the party entitled to indemnification.
23. OPTION TO PURCHASE. Subject to the provisions of Paragraph 39 of
the Lease, LESSOR grants to LESSEE an option ( "Option Right ") to purchase
the Premises during the Option Period (as defined below) for the Purchase
Price (as defined below) in strict accordance with all terms, conditions and
requirements set forth in this section 23 and on the terms and conditions set
forth in the Real Estate Purchase and Sale Contract and Joint Escrow
Instructions annexed to the Lease as EXHIBIT "8 " ( "Sale Contract "). Any
words or phrases constituting defined terms in the Sale Contract shall have
the same meaning and effect when used in this Addendum. Except for the
Option Right expressly granted in this section 23, LESSEE shall not have any
other right or entitlement to purchase the Premises or any interest in the
Premises.
23.1 "OPTION PERIOD " DEFINED. The phrase "Option Period " means
the period of time during which the Option Right is exercisable, which is the
period beginning at the start of the sixth Lease Year and expiring sixty (60)
consecutive days thereafter and such Option Period shall not be subject to
extension for any reason. The Option Right is not exercisable prior to the
start of the Option Period nor after the end of the Option Period. If the
Option Right is not timely exercised in accordance with the procedure
provided in this section prior to the expiration of the Option Period, the
Option Right shall automatically expire without further notice or demand and
LESSEE shall have no further right to purchase the Premises.
23.2 MANNER OF EXERCISING OPTION. The Option Right granted LESSEE may
be exercised by LESSEE delivering to LESSOR, before the expiration of the
Option Period, written notice of the election to exercise the option (
"Notice of Election "), which Notice of Election shall state that the option
is exercised without condition or qualification. A Notice of Election must
be accompanied by three (3) copies of a Sale Contract (EXHIBIT "8 ")
executed by LESSEE and in which LESSEE shall insert the "Effective Date " in
the blank in the first paragraph of the Sale Contract, which shall be the
date of delivery of the Notice of Election, which shall be a date prior to
the expiration of the Option Period.
23.3 DETERMINATION OF PURCHASE PRICE. The phrase "Purchase Price "
means the total consideration payable by LESSEE to LESSOR for the purchase of
the Premises as calculated in accordance with Section 4 of the Sale Contract.
LESSEE shall be entitled to have credited to the Purchase Price any unused
portion of the Security Deposit (but not any amounts earned by LESSOR as
rent) paid by LESSEE to LESSOR in accordance with Paragraph 1.7 of the Lease.
In addition to payment of the Purchase Price, LESSEE shall be responsible for
payment of any prepayment premium and/or other costs incurred as a result of
the early payment by LESSOR of LESSOR's Permanent Loan, as more particularly
described in Section 4.8 of the Sale Contract.
23.4 COMPLETION OF SALE. Upon LESSOR's receipt of the Notice of
Election and the three (3) copies of the Sale Contract executed by LESSEE in
compliance with subsection 23.2 above, LESSOR shall execute, within five (5)
days, the Sale Contract and deliver one (1) executed copy to LESSEE and one
(1) executed copy to the Escrow Agent identified in the Sale Contract. The
Sale Contract shall be immediately effective and binding on both LESSOR and
LESSEE.
23.5 TIME OF ESSENCE; FAILURE TO EXERCISE OPTION. Time is of the
essence for the parties' performance of their obligations under this
Addendum. If the Option Right is not exercised in the manner provided in
this section 23 before the earlier to occur of (a) expiration of the Option
Period, or (b) the termination of the Option Right in accordance with section
23.6 of this Addendum, then such Option Right shall automatically expire or
terminate and be of no further force or effect, and LESSEE shall have no
further right whatsoever to purchase the Premises and any such expired Option
Right may not be revived by any subsequent payment or further action by
LESSEE.
23.6 TERMINATION OF OPTION RIGHTS. In addition to the expiration of
the Option Right upon expiration of the Option Period, the Option Right, and
LESSEE's entitlement to purchase the Premises, shall be subject to immediate
termination, without further notice or demand, upon the occurrence of any of
the following events:
(a) in the event that LESSEE commits any Breach or Material Default
under the Lease, including, without limitation, at any time from the date of
the Lease through the date of Close of Escrow under the Sale Contract. The
phrase "Material Default " means and includes (i) any failure by LESSEE to
take possession of the Premises upon the Commencement Date or any repudiation
by LESSEE of its obligations under the Lease, (ii) the occurrence of three
(3) or more Defaults in failing to timely pay Rent or other charges payable
by LESSEE under the Lease within any twenty four (24) month period, (iii) any
Default under Paragraphs 13.1(a),(c),(e) or (f) of the Lease, and (iv) any
Default under sections 5.3 or 5.4 of this Addendum in failing to timely pay
amounts due LESSOR;
(b) in the event LESSEE timely gives a Notice of Election and
exercises the Option Right, but thereafter LESSEE (i) commits a default under
the terms of the Sale Contract by failing to purchase the Premises, or (ii)
LESSEE decides not to purchase the Premises and terminates the Sale Contract
in accordance with an express right of termination granted LESSEE;
(c) in the event of any assignment, or attempted assignment, of all
or any part of the Option Right; or
(d) LESSEE's Option Right is terminated as a result of the operation
of section 23.7 of this Addendum
23.7 SUBORDINATE TO LENDER'S INTEREST. The rights of LESSEE under
this section are subordinate and inferior to any lender holding a mortgage,
deed of trust or other security interest in the Premises. In the event
ownership of the Premises is acquired by any such lender of LESSOR, whether
by foreclosure, deed-in-lieu of foreclosure or other similar transactions as
a result of LESSOR's default on any of its obligations to such lender, or
LESSOR's ownership is otherwise divested by any action of such lender, then
all of LESSEE's rights under this section 23 shall immediately terminate
without further notice or demand.
23.8 PROHIBITION AGAINST RECORDATION. LESSEE shall not record nor
attempt to record this Lease or any memorandum referencing its Option Right.
Upon expiration or termination of the Option Right, LESSEE agrees, if
requested by LESSOR, to execute, acknowledge and deliver a quitclaim deed to
LESSOR within five (5) days from such request together with such additional
documents required by any title company to further evidence the lack of any
further right of LESSEE to purchase the Premises.
23.9 CONTINUING VALIDITY OF LEASE/TERMINATION OF LEASE. Except as
otherwise expressly provided in this section 23, the terms of the Lease shall
continue to govern the terms and conditions for LESSEE's continued occupancy
before and during the Option Period, and if LESSEE exercises the Option
Right, until the Close of Escrow under the Sale Contract. If LESSEE does not
exercise the Option Right, or if LESSEE exercises the Option Right but fails
to purchase the Premises in accordance with the Sale Contract, the Lease
shall remain in full force and effect, except LESSEE's Option Right shall no
longer be deemed a part of the Lease. Upon the Close of Escrow under the
Sale Contract, the Lease shall automatically terminate and be of no further
force or effect and neither party shall have any further rights or
obligations under the Lease except (a) to the extent the Lease provides for
rights and obligations to survive the termination or expiration of the Lease,
or (b) if otherwise provided in the Sale Contract.
23.10 NOT ASSIGNABLE. The Option Right granted in this section 23 is
personal to SMTEK, INC. and is not assignable under any circumstances nor
subject to exercise by any other person. The Option Right shall be subject
to automatic termination in the event of any assignment, or attempted
assignment of all or any part of the Option Right.
24. RIGHT OF FIRST OFFER. During the Original Term and during any
Extension Term, LESSEE shall have a Right of First Offer to purchase the
Premises strictly in accordance with the terms and conditions of Sections
24.1 to 24.9 of this Addendum.
24.1 OFFER NOTICE. If LESSOR desires to sell the Premises to a third
party ( "Third Party Sale "), LESSOR agrees to provide LESSEE with a written
notice ( "Offer Notice ") of LESSOR's intent to sell the Premises before
entering into any binding agreement to sell the Premises to a third party.
The Offer Notice shall set forth all of the material terms ( "Offer Terms ")
of the proposed sale offering.
24.2 ACCEPTANCE OF OFFER TERMS. LESSEE shall have ten (10) days after
the delivery of the Offer Notice described above to elect to purchase the
Premises by (a) giving written notice to LESSOR of such election, and (b)
executing and delivering to LESSOR within such ten (10) day period written
acceptance of the Offer Terms ( "Acceptance Notice "). If LESSEE does not
elect to purchase the Premises on the Offer Terms by giving an Acceptance
Notice within such ten (10) day period, then LESSOR may thereafter sell the
Premises to a third party in accordance with the requirements of Section
24.3 of this Addendum.
24.3 THIRD PARTY SALE. If LESSEE does not elect to purchase the
Premises in accordance with Section 24.2 above, LESSOR shall thereafter be
free, for a period of six (6) months from the delivery of the Offer Notice,
to sell the Premises to a third party on terms and conditions which do not
constitute a Material Deviation from the Offer Terms submitted to LESSEE and
otherwise on such terms and conditions as may be agreed upon between LESSOR
and such third party ( "Third Party Sale "). The term "Material Deviation
" means and refers only to: (a) a sale price that is less than ninety seven
and one-half percent (97.5%) of the sale price included in the Offer Terms,
or (b) the purchase price is payable other than by cash or cash equivalent
upon Close of Escrow. If LESSOR decides to proceed with a Third Party Sale
of the Premises on terms and conditions which constitute a Material Deviation
from the Offer Terms, or if LESSOR has not entered into a binding contract
for a Third Party Sale within six (6) months from the delivery of the Offer
Notice and, thereafter, completed the conveyance for such Third Party Sale
within nine (9) months from the delivery of the Offer Notice, then LESSOR
shall resubmit to LESSEE a new Offer Notice ( "New Offer Notice ") in
accordance with the procedure provided in Section 24.1 above, which New
Offer Notice shall be on such terms and conditions as determined by LESSOR,
and all terms and conditions of this section shall apply to such New Offer
Notice, and the time permitted for LESSEE's delivery of an acceptance notice
shall be ten (10) days from the delivery of the New Offer Notice.
24.4 TERMINATION OF RIGHTS. Notwithstanding any other provision,
LESSEE's rights under this Section 24 shall automatically terminate and be of
no further force or effect in the event LESSOR gives an Offer Notice or New
Offer Notice, whichever is applicable, and LESSEE declines to exercise its
Right of First Offer and LESSOR closes on a Third Party Sale, and LESSEE
shall have no subsequent rights to purchase the Premises, except as provided
in Section 24.3 of this Addendum regarding a Material Deviation.
24.5 LIMITATIONS ON RIGHTS. The Right of First Offer to purchase the
Premises shall be exercisable only in strict accordance with the terms and
conditions described in this section; provided, however, that all conditions
and requirements for the exercise of an Option under Paragraph 39 of the
Lease shall apply to LESSEE's entitlement to exercise such Right of First
Offer. All of LESSEE's rights under this section shall automatically
terminate in the event of the occurrence of a Breach or other event or
circumstance consisting a Material Default (as defined in section 23 of this
Addendum) either at the time LESSEE would otherwise be required to give an
acceptance notice as described in Section 24.2 of this Addendum or during the
course of any escrow for the purchase of the Premises.
24.6 LIMITED APPLICATION. The provisions of this section shall only
apply to a transfer of the Premises as a part of an arms-length transaction
intended by LESSOR as a Third Party Sale. Nothing in this section shall be
construed or applied to require LESSOR to first offer the Premises for
purchase by LESSEE as a condition to LESSEE (or any successor) otherwise
transferring the Premises or any interest in the Premises in connection with
any merger, consolidation, dissolution, reorganization or the similar
transaction, or by gift or for consideration other than the payment of money
or delivery of a promissory obligation of the purchaser.
24.7 COOPERATION WITH TAX DEFERRED EXCHANGE. Without limiting the
generality of any other provision, LESSOR may include in the Offer Terms a
requirement that the purchaser reasonably cooperate with LESSOR to
accommodate LESSOR's treatment of the transaction as a tax-deferred exchange
under Internal Revenue Code 1031; provided, however, such obligation of
cooperation shall not require LESSEE to incur any additional expense, debt,
liability or obligation nor delay the date for consummation of the conveyance
of the Premises from the period set forth in the Offer Terms on account of
such obligation.
24.8 SUBORDINATE TO LENDER'S INTEREST. The rights of LESSEE under
this section are subordinate and inferior to any lender holding a mortgage,
deed of trust or other security interest in the Premises. In the event
ownership of the Premises is acquired by any such lender of LESSOR, whether
by foreclosure, deed-in-lieu of foreclosure or other similar transactions as
a result of LESSOR's default on any of its obligations to such lender, or
LESSOR's ownership is otherwise divested by any action of such lender, then
all of LESSEE's rights under this Section 24 shall immediately terminate
without further notice or demand.
24.9 NOT ASSIGNABLE. The Right of First Offer granted in this section
24 is personal to SMTEK, INC. and is not assignable under any circumstances
nor subject to exercise by any other person. The Right of First Offer shall
be subject to automatic termination in the event of any assignment, or
attempted assignment of all or any part of the Option Right.
25. NO BINDING OFFER. LESSOR'S SUBMISSION OF THIS DOCUMENT FOR
EXAMINATION, NEGOTIATION AND/OR SIGNATURE BY LESSEE DOES NOT CONSTITUTE AN
OFFER TO LEASE, NOR A RESERVATION OF, NOR AN OPTION FOR THE LEASE OF THE
PREMISES. THE DOCUMENT SHALL NOT BE BINDING AND IN EFFECT AGAINST EITHER
PARTY UNTIL AT LEAST ONE COUNTERPART OF THIS LEASE IS FULLY EXECUTED AND
DELIVERED BY LESSOR AND LESSEE.
"LESSOR "
MOORPARK VENTURE L.P.,
a California limited partnership
By: MANAGING GP, INC.
a California corporation,
Its General Partner
By:
Xxxxxxx X. Xxxxxx, President
"LESSEE "
SMTEK, INC.
a California corporation
By:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
By:
/s/ Xxxxxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxxxxx, Secretary
Triple Net Calculations for Xxxxx - Xxxxxxxx 00/00/0000
XXXXX - Xxxxxxxx
Leased SF 115,538
Total Bldg. SF 116,538
Percentage of Project 100.00%
ANNUALLY MONTHLY MONTHLY
DESCRIPTION ANNUAL /SF OF BLDG /SF OF BLDG NNN
--------------------------------------------------------------------------------------
Property Taxes $ 79,056.00 $ 0.6842 $0.0570 $6,588.00
Management Fee $ 8,580.00 $ 0.0743 $0.0082 $ 715.00
Property Insurance $ 5,545.82 $ 0.0480 $0.0040 $ 462.15
Utilities:
Electricity $ 0.00 $ 0.0000 $0.0000 $ 0.00
Telephone $ 0.00 $ 0.0000 $0.0000 $ 0.00
Alarm $ 0.00 $ 0.0000 $0.0000 $ 0.00
Landscape Water $ 0.00 $ 0.0000 $0.0000 $ 0.00
Security $ 0.00 $ 0.0000 $0.0000 $ 0.00
HVAC Maint. $ 0.00 $ 0.0000 $0.0000 $ 0.00
Elevator Maint. & Reserve N/A $ 0.0000 $0.0000 $ 0.00
Landscape $ 0.00 $ 0.0000 $0.0000 $ 0.00
Roof Replacement Reserve $ 6,000.00 $ 0.0519 $0.0043 $ 500.00
Painting Reserve $ 1,800.00 $ 0.0227 $0.0019 $ 150.00
Paving Reserve $ 4,392.00 $ 0.0380 $0.0032 $ 368.00
--------------------------------------------------------------------------------------
TOTAL $105,373.82 $ 0.9191 $0.0766 $8,781.15
======================================================================================
Per month for SMTEK $ 8,781.15 $ 0.0766
--------------------------------------------------------------------------------------
EXHIBIT "1 "
ESTIMATED OPERATING
EXPENSES BUDGET
[STAMP]
HAMANN CONSTRUCTION
000 X. XXXXXXX XXX. TELEPHONE: 000-0000
XX XXXXX, XX 00000 FAX: 000-0000
COST BREAKDOWN 112,320 TOTAL BUILDING SIZE
TENANT IMPROVEMENT 14,000 SQ. FT. OF MEZZANIN
DATED: January 15, 2000 28,000 SQ. FT. OF OFFICE
Revised May 29, 2001
JOB: SMTEK @ Moorpark
FILE: SMTEK1
ITEM # ITEM NAME UNIT PRICE AMOUNT
--------------------------------------------------------------------------------
110 DRAWINGS 28,000 0.03 840
112 STRUCTURAL ENGINEER 500
200 PERMITS (ALLOWANCE) 28,000 0.20 8,600
330 DEMO: demising walls 765 18.00 11,475
DEMO: office walls 32 15.00 480
DEMO: carpet 28,000 0.50 14,000
DEMO: concrete ramps 180 5.00 900
DEMO: rails & footings 500
330 DEMO PLUMBING 8 175.00 1,400
430 TEMPORARY UTILITIES BY OWNER
512 SLAB PATCH 4,337 3.00 13,011
820 OFFICE FRAMING 45 18.00 810
824 STAIRWAY 1 3000.00 3,000
830 DEMISING WALL @ 14' 600 19.00 11,400
850 CARPENTRY HARDWARE 150
899 MISC. FINISH CARPENTRY 28,000 0.2 5,000
920 ROOFING Foam 106,420 1.40 148,988
Skylights 19 425.00 7,650
1010 PLUMBING 8 1200.00 9,600
1011 PLUMBING: service 8 275.00 2,200
1020 HVAC Service 18,000
HVAC: demo & safe-out 3,000
HVAC: Rework 5,000
1030 FIRE SPRINKLERS: safe-out 20 155.00 3,100
1034 FIRE EXTINGUISHER 8 85.00 680
1110 ELECTRICAL & PHONE RING 28,000 0.40 11,200
ELECTRICAL, safe-out 106,420 0.05 5,321
ELECTRICAL, parking lights 163,240 0.04 6,530
1310 PAINT: walls; office 32,420 0.28 9,078
PAINT: walls, cafe, weld, QC 18,580 0.28 5,202
PAINT: Office ceilings 28,000 0.28 7,840
PAINT: Mfg. ceilings 84,320 1.35 113,832
PAINT: Mfg. walls @ 25 ft. 57,350 0.26 16,058
PAINT: Mfg. walls @ 10 ft. 5,470 0.28 1,532
PAINT: Mfg. screen wall @ 14 ft. 6,400 0.28 2,352
1320 DRYWALL 22,320 1.35 30,132
1410 Carpet; allowance 28,400 2.50 71,000
VCT; allowance 64,320 1.00 84,320
1460 Wallpaper Strip 2,000 0.60 1,000
1470 ACOUSTIC CEILING: replace 3,000 1.25 3,750
1510 GLASS & GLAZING: replace 40 16.00 640
GLASS gaskets 1,000
1620 OTHER DOORS, FRAMES & H 1 325,000 325
1630 Roll-Up Door Service 3 100.00 300
1710 TOILET ACCESSORIES 8 250.00 2,000
1740 INSULATION; rework 5,000 0.30 1,500
1910 AC Paving; Seal and Sand 163,240 0.05 8,162
AC Paving; repairs 20,000 2.50 50,000
AC Paving; striping 1,000
2000 CLEANUP; CONSTRUCTION 26,000 0.25 7,000
2100 TEMPORARY EXPENSE 26,000 0.12 3,360
2200 SUPERVISION 28,000 0.50 14,000
Subsistence 88 80.00 5,280
Contingency 50,000
Environmental Phase II Survey 15,000
------ ------------------------------------------ ------- -------- -------
SUBTOTAL 796,558
PROFIT & OVERHEAD 15 119,490
====== ========================================== ======= ======== =======
TOTAL 916,088
NOTE: Fire sprinkler design is @ .20/3000. I have concerns that it may be too
low for the building use.
EXHIBIT "2 "
COST BREAKDOWN
TENANT IMPROVEMENT
[STAMP]
HAMANN CONSTRUCTION
000 X. XXXXXXX XXX. TELEPHONE: 000-0000
XX XXXXX, XX 00000 FAX: 000-0000
COST BREAKDOWN 112,320 TOTAL BUILDING SIZE
TENANT IMPROVEMENT 14,000 SQ. FT. OF MEZZANINE
DATED: January 15, 2000 28,000 SQ. FT. OF OFFICE
Revised May 29, 2001
JOB: SMTEK @ MANDATORY ITEMS
FILE: SMTEK1 MAND #1
ITEM # ITEM NAME UNIT PRICE AMOUNT
----------------------------------------------- ---------- ------- --------
512 SLAB PATCH 4,337 3.00 13,011
920 ROOFING Foam 106,420 1.40 148,988
Skylights 0
1010 PLUMBING 0
1011 PLUMBING: service 0
1020 HVAC Service 18,000
1510 GLASS & GLAZING: replace 40 15.00 640
GLASS: gaskets 1,000
1630 Roll-Up Door Service 3 100.00 300
1710 TOILET ACCESSORIES 8 250.00 2,000
1910 AC Paving: Seal and Sand 163,240 0.05 8,162
AC Paving: repairs 20,000 2.50 30,000
AC Paving: striping 1,000
2000 CLEANUP: CONSTRUCTION 28,000 0.05 1,400
2200 SUPERVISION 28,000 0.10 2,800
Subsistence 20 85.00 1,700
Environmental Phase II Survey 15,000
Elevator Certification 1,200
------ ------------------------------------------- ------- ------ -------
SUBTOTAL 265,201
PROFIT & OVERHEAD 15 39,780
====== =========================================== ======= ====== =======
TOTAL 304,981
NOTE: Fire sprinkler design is @ .20/3000. I have concerns that it may be too
low for the building use.
SMTEK IS NOT OBLIGATED TO SPEND ANY MONIES ABOVE $304,981
FOR MANDATORY ITEMS WITHOUT THEIR PRIOR WRITTEN CONSENT. [STAMP]
EXHIBIT "3 "
SCHEDULE OF
MANDATORY ITEMS
[STAMP]
EXHIBITS
Exhibit "1 " Legal Description
Exhibit "2 " Building Shell Drawings
Exhibit "3 " Specifications
Exhibit "4 " Triple Net Calculations
Exhibit "5 " Cost Breakdown - Tenant improvement
Exhibit "6 " Hazardous Materials Questionnaire
Exhibit "7 " Estoppel Certificates
Exhibit "8 " Subordination, Non-Disturbance, and Attornment Agreement
Exhibit "9 " Rules and Regulations
[STAMP]
CONSENT TO SUB-LEASE AND SUB-SUB-LEASE,
NONDISTURBANCE AND ATTORNMENT AGREEMENT AND
CONSENT TO TENANT IMPROVEMENTS
THIS CONSENT TO SUB-LEASE AND SUB-SUB-LEASE, NONDISTURBANCE AND
ATTORNMENT AGREEMENT AND CONSENT TO TENANT IMPROVEMENTS ( "Agreement ") is
made effective as of September 1, 2001 ( "Effective Date ") by and among
MOORPARK VENTURE L.P., a California corporation ( "MVLP "), SMTEK, INC., a
California corporation ( "SMTEK "), XXXXXX-XXXXXXXX CORPORATION, an Ohio
corporation ( "XXXXXX-XXXXXXXX "), and SWS ASSOCIATES, a California general
partnership ( "SWS ") and is made with reference to the following facts,
which are a material part of this Agreement:
A. On January 6, 1984, Metal Bellows Corporation ( "Metal Bellows
"), as tenant, entered into a Lease with SWS, as landlord ( "Lease "), for
the Premises commonly known and referred to as 000 Xxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx ( "Premises "). On May 29, 1986, Metal Bellows merged into
XXXXXX-XXXXXXXX and XXXXXX-XXXXXXXX thereby acquired and assumed all of Metal
Bellows' rights and obligations under the Lease. Thereafter, XXXXXX-XXXXXXXX
and SWS entered into an Amendment to Lease on May 29, 1986 ( "First Amendment
") and a Second Amendment to Lease on August 15, 1992 ( "Second Amendment ").
"Primary Lease " means and refers to the Lease, as amended by the First
Amendment and Second Amendment. Any words or phrases constituting defined
terms in the Primary Lease shall have the same meaning when used in this
Agreement, unless the otherwise stated.
X. XXXXXX-XXXXXXXX and MVLP have entered into that certain Agreement
and Escrow Instructions dated May 31, 2001 providing for the purchase of the
Premises by MVLP, as amended by a First Amendment dated June 15, 2001, a
Second Amendment dated June 29, 2001 and a Third Amendment dated July 13,
2001 (as amended, the "Purchase Agreement ") and XXXXXX-XXXXXXXX has or
will be entering into that certain Real Estate Purchase and Sale Agreement
and Escrow Instructions dated September 1, 2001 with SWS ( "Owner Sale
Contract ") whereby SWS is agreeing to convey title to the Premises to MVLP.
Any words or phrases constituting defined terms in the Purchase Agreement or
the Owner Sale Contract shall have the same meaning when used in this
Agreement, unless the otherwise stated.
C. Also, concurrently with the execution of the Purchase Agreement,
XXXXXX-XXXXXXXX and MVLP are entering that certain
Sub-Lease Agreement dated
May 31, 2001, as amended by a First Amendment dated July 20, 2001 (as
amended, the "Sub-Lease ") providing for MVLP to sublease the Premises from
XXXXXX-XXXXXXXX pending the Closing under the Purchase Agreement and the
Owner Sale Contract; a copy of the
Sub-Lease Agreement is annexed as EXHIBIT
"A " to this Agreement.
D. Also, concurrently with the execution of this Agreement, MVLP and
SMTEK are entering that certain Sub-
Sub-Lease Agreement ( "Sub-Sub-Lease ")
providing for the SMTEK to sublease the Premises from MVLP; a copy of the
Sub-
Sub-Lease Agreement is annexed as EXHIBIT "B " to this Agreement.
E. The execution and delivery of this Agreement by XXXXXX-XXXXXXXX,
SWS, MVLP and SMTEK are conditions precedent to the final effectiveness of
the Purchase Agreement, the Owner Sale Contract, the Sub-Lease and the Sub-
Sub-Lease in order to (i) confirm the consent of SWS to the Sublease, (ii)
confirm the consent of SWS and XXXXXX-XXXXXXXX to the Sub-Sub-Lease, (iii)
provide for certain special rights and remedies for MVLP in the event SWS
fails or refuses to convey the Premises to MVLP in accordance with the Owner
Sale Contract, (iv) provide for certain special rights and remedies for MVLP
in the event XXXXXX-XXXXXXXX fails or refuses to perform its obligations
under the Purchase Agreement to cause SWS to convey the Premises to MVLP in
accordance with the Purchase Agreement, and (v) provide for certain special
rights and remedies for SMTEK in the event MVLP fails or refuses to purchase
the Premises in accordance with the Purchase Agreement.
IT IS THEREFORE AGREED, in consideration for the covenants,
representations and agreements of the parties set forth in this Agreement and
for other good and valuable consideration, the receipt and sufficiency of
which is acknowledged by all parties, as follows:
1. CONSENT TO SUB-LEASE AND SUB-SUB-LEASE. SWS hereby consents to
the Sublease and both SWS and XXXXXX-XXXXXXXX hereby consent to the Sub-Sub-
Lease, subject to all terms and conditions of this Agreement and such consent
is granted only upon the terms and conditions set forth in this Agreement.
The Sublease and the Sub-Sub-Lease are subject and subordinate to the Primary
Lease, except as otherwise provided in this Agreement. SWS shall not be
bound by any of the terms, covenants, conditions, provisions or agreements of
the Sublease and SWS and XXXXXX-XXXXXXXX shall not be bound by any of the
terms, covenants, conditions, provisions or agreements of the Sub-Sublease,
except as expressly provided in this Agreement. Neither SWS nor XXXXXX-
XXXXXXXX shall have any duty or obligation to inspect or review the terms and
conditions of the Sublease or the Sub-Sub-Lease and/or advise or notify MVLP
or SMTEK of any such terms or conditions that are inconsistent with the
provisions of the Primary Lease.
2. NON-RELEASE OF XXXXXX-XXXXXXXX. Neither the Sublease, the Sub-
Sub-Lease nor this Agreement shall release or discharge XXXXXX-XXXXXXXX from
any liability, whether past, present or future, under or with respect to the
Primary Lease nor alter the primary liability of XXXXXX-XXXXXXXX to perform
and comply with all of its obligations of under the Primary Lease. Neither
SWS's acceptance of rent or any other sum directly from MVLP or SMTEK nor the
acceptance of performance by MVLP or SMTEK of any other term, covenant, or
condition of the Primary Lease shall be deemed to be a waiver of any of the
provisions of the Primary Lease, a consent to any further subletting or
assignment of the Premises or a waiver of any default of XXXXXX-XXXXXXXX
under the Primary Lease.
3. SWS DEFAULT UNDER OWNER SALE CONTRACT. The provisions of this
section 3 shall only apply in the event that SWS defaults under the terms of
the Owner Sale Contract by failing to convey the Premises to MVLP in
accordance with the terms and conditions of the Owner Sale Contract. In such
event, the provisions of sections 3.1 to 3.3 below shall apply.
3.1 NONDISTURBANCE AGREEMENT. So long as MVLP is not in default
(beyond any period given to cure such default) in the performance of the
terms, covenants, conditions and provisions contained in the Sub-Lease and so
long as MVLP observes the provisions of this Agreement, MVLP and SMTEK, as
MVLP's subtenant, shall continue to have the right to occupy and retain
possession of the Premises in accordance with the terms of the Sub-Lease, and
the leasehold estate shall not be affected in any manner by SWS's
nonperformance of the Owner Sale Contract. Such right of continued occupancy
and quiet possession shall continue to apply for the entire duration of Sub-
Sub-Lease notwithstanding the expiration or termination of the Primary Lease
or the Sublease for any reason.
3.2 MUTUAL ATTORNMENT. Upon the expiration or earlier termination of
the Primary Lease, MVLP (and SMTEK, as MVLP's subtenant) shall recognize and
attorn to SWS as the Sublessor under the Sub-Lease and SWS shall undertake to
perform the obligations of the Sublessor under the Sub-Lease only from the
time of the expiration or earlier termination of the Primary Lease; provided,
however, in such event, MVLP (and SMTEK, as MVLP's subtenant) acknowledge and
agree that SWS shall not (a) be liable for any prepayment of rent or any
security deposit paid by MVLP, except to the extent that SWS is then in
possession of any portion of any prepaid rent or security deposit, (b) be
liable for any previous acts or omissions of XXXXXX-XXXXXXXX under the Sub-
Lease, (c) be subject to any defenses or offsets which MVLP may have against
XXXXXX-XXXXXXXX on account of any act, omission, transaction or occurrence
arising prior to the date of the expiration or termination of the Primary
Lease, (d) be required to complete construction of any tenant improvements
and/or provide pay for any portion of such tenant improvements, or (e) be
bound by any changes or modifications made to the Sub-Sublease without the
written consent of the XXXXXX-XXXXXXXX or SWS, whichever is applicable.
3.3 NO LIMITATION OR WAIVER OF LIABILITY. Nothing in this section is
intended to limit any liability of SWS arising on account of a default under
the Owner Sale Contract or otherwise waive any right or remedy any other
party may have at law or in equity on account of such default.
4. XXXXXX-XXXXXXXX LEASE DEFAULT/DEFAULT UNDER OWNER SALE CONTRACT.
The provisions of this section 4 shall only apply in the following events:
(a) XXXXXX-XXXXXXXX defaults under the terms of the Primary Lease, or (b)
XXXXXX-XXXXXXXX defaults under the terms of either the Owner Sale Contract
(except if caused by MVLP) or the Purchase Agreement by failing to take such
action as required to cause SWS to convey (or taking action which prevents
such conveyance) the Premises to MVLP in accordance with the terms and
conditions of the Owner Sale Contract and Purchase Agreement. In such
events, the provisions of sections 4.1 to 4.4 below shall apply.
4.1 NONDISTURBANCE AGREEMENT. Subject to the limitation in section
4.3.2 below and so long as MVLP cures any monetary default and any Curable
Non-Monetary Default (as defined below) of XXXXXX-XXXXXXXX under the Primary
Lease in accordance with the procedure provided in section 4.2 below and
thereafter continues to perform the terms and conditions of the Primary Lease
(except as provided in section 4.3 below), MVLP and SMTEK, as MVLP's
subtenant, shall continue to have the right to occupy and retain possession
of the Premises in accordance with the terms of the Primary Lease (except as
provided in section 4.3 below) for the duration of the Sub-Sub-Lease and such
leasehold estate shall not be affected in any manner by either (a) the
termination of XXXXXX-XXXXXXXX'x rights under the Primary Lease on account of
the default of XXXXXX-XXXXXXXX, (b) the prior expiration of the Primary
Lease, or (c) the default of XXXXXX-XXXXXXXX under the Owner Sale Contract
or the Purchase Agreement and/or the termination of either of such
agreements.
4.2 DEFAULT NOTICE/CURE RIGHT. So long as MVLP is not in default
under this Agreement or the Sub-Lease, SWS agrees to give MVLP a copy of any
notice of default under the Primary Lease that SWS may give to XXXXXX-
XXXXXXXX. SWS further agrees to accept performance by MVLP of any obligation
of XXXXXX-XXXXXXXX to be performed under the Primary Lease which MVLP is
capable of performing, including the cure of any such default. Any notice
of default from SWS shall describe the amounts required to fully cure any
monetary defaults and describe the nature of any Curable Non-Monetary Default
under the Primary Lease as of the date of the notice, which will be required
to be cured by MVLP. MVLP shall have a period of thirty (30) days from the
receipt of such default notice to cure any monetary default under the Primary
Lease and sixty (60) days to cure any Curable Non-Monetary Default; provided,
however, if the nature of such default is such that more than sixty (60) days
is reasonably required to cure such default, then the time for MVLP's cure
shall be extended for a reasonable time so long as MVLP commences such cure
within fifteen (15) days from receipt of the notice of default and thereafter
diligently prosecutes such cure to completion. With respect to any Curable
Non-Monetary Default, such as a violation of the provisions of the Primary
Lease governing Hazardous Materials contamination or compliance with laws,
rules, ordinances and regulations of governmental authorities, MVLP, by
beginning to undertake to cure any such default shall not be deemed to have
assumed all of the obligations of XXXXXX-XXXXXXXX with respect to such
Curable Non-Monetary Default and shall have the right to abandon at any time
such undertaking to cure the default by giving written notice to SWS. In the
event that MVLP does not timely undertake to cure any default, or with
respect to a Curable Non-Monetary Default described in the preceding
provisions, elects to abandon such cure undertaking, then the right of MVLP
(and SMTEK, its subtenant) to continued occupancy of the Premises shall
terminate upon the later to occur of (a) thirty (30) days following the
delivery of MVLP's abandonment notice, (b) the termination for default or
expiration of the Primary Lease, or (c) the expiration of the period provided
in the Owner's Sale Contract for MVLP to purchase the Premises from SWS in
the event of XXXXXX-XXXXXXXX'x default. The inclusion of this provision for
notice to MVLP (and, indirectly, SMTEK, as its subtenant) is solely for the
benefit of MVLP (and, indirectly, SMTEK, as its subtenant) and XXXXXX-
XXXXXXXX shall not have the right to assert as a defense to any action or
proceeding any failure of SWS to timely provide a notice of default under the
Primary Lease to MVLP.
4.2.1 "CURABLE NON-MONETARY DEFAULT " DEFINED. For purposes of this
section 4, the term "Curable Non-Monetary Default " means a non-monetary
default that is reasonably susceptible of being cured by MVLP in that the
required performance is not something unique to XXXXXX-XXXXXXXX and the
following shall not be considered a Curable Non-Monetary Default: (a) a
default arising on account of XXXXXX-XXXXXXXX filing a bankruptcy or similar
proceeding, provided this exception shall not be construed as waiving or
changing the requirement for MVLP to cure all monetary defaults, including
those arising during any bankruptcy or similar proceeding in order to
continue in occupancy, (b) XXXXXX-XXXXXXXX 's violation of any Hazardous
Materials requirements of the Primary Lease, provided this exception shall
not be deemed to waive or change the requirement of MVLP to remediate
Hazardous Materials contamination of the Premises in order to continue in
occupancy; (c) XXXXXX-XXXXXXXX'x violation of any provisions of the Primary
Lease concerning the assignment of the Primary Lease or subleasing of the
Premises; (d) XXXXXX-XXXXXXXX 's violation of any provisions of the Primary
Lease requiring XXXXXX-XXXXXXXX to deliver financial statements, reports or
other information unique to XXXXXX-XXXXXXXX'x operation and not capable of
delivery by MVLP; (e) XXXXXX-XXXXXXXX'x violation of the provisions of the
Primary Lease described in section 4.3.1 below; or (f) Waste to the Premises
caused by XXXXXX-XXXXXXXX. The term "Waste " means injury or damage to the
Premises caused by the malicious act or gross neglect of XXXXXX-XXXXXXXX, but
does not include ordinary repairs and maintenance not performed by XXXXXX-
XXXXXXXX, which shall remain the responsibility of MVLP to cure to continue
in occupancy.
4.3 ASSUMPTION OF PRIMARY LEASE. If MVLP cures any such monetary
default and any Curable Non-Monetary Default, MVLP shall be deemed to have
assumed any and all obligations of XXXXXX-XXXXXXXX under the Primary Lease
arising from and after the date of such cure, except the obligations
described in section 4.3.1 below, and shall be entitled to exercise any and
all rights of the lessee under the Primary Lease, except any rights or
obligations described in section 4.3.1 below. Neither the cure and
assumption of the Primary Lease obligations by MVLP nor SWS acceptance of
performance from MVLP, shall waive, discharge or otherwise prejudice the
right of SWS to terminate all rights of XXXXXX-XXXXXXXX under the Primary
Lease and/or any claims of SWS against XXXXXX-XXXXXXXX on account of such
default. If requested by MVLP or SWS, the other party agrees to execute and
deliver a new lease on the same terms and conditions as the Primary Lease,
except as otherwise provided in this section 4, including section 4.3.1
below.
4.3.1 EXCEPTIONS TO ASSUMPTION. Notwithstanding any other provision in
this Agreement or the Primary Lease, in the event MVLP assumes the
obligations of the Primary Lease in accordance with section 4.2 above, such
assumption shall not be deemed to include: (a) the right of XXXXXX-XXXXXXXX
to purchase the Premises or the obligation of XXXXXX-XXXXXXXX to purchase,
upon SWS's election, the Premises from SWS, both as provided in Section 30 of
the Original Lease as amended by Section 6 of the First Amendment; (b) the
obligation to maintain earthquake insurance as a part of the extended
insurance coverage as otherwise required by Section 5 of the Second
Amendment; (c) any obligation of the lessee under the Primary Lease to
provide indemnification to SWS for any acts, omissions, occurrences or events
occurring prior to the date of MVLP's assumption of the Primary Lease
obligations under this section 4.3; or (d) any obligation to surrender
certain improvements, alternations and additions as provided in Section 2 of
the First Amendment to the extent that any such items are replaced, removed
or demolished as a result of the Tenant Improvements being approved by SWS in
accordance with section 6 below. Nothing in this provision is intended to
waive or change any right that SWS may have under the Primary Lease to
require XXXXXX-XXXXXXXX to purchase the Premises or any claim by SWS against
XXXXXX-XXXXXXXX for the default under such provision.
4.3.2 SWS'S SPECIAL SALE RIGHT. As a special inducement to SWS to
waive the requirement of MVLP assuming the obligation to purchase the
Premises at the election of SWS as described in section 4.3.1(a) above and
notwithstanding any other provision, MVLP acknowledges and agrees that in the
event that the Purchase Agreement or the Owner Sale Contract is terminated on
account of XXXXXX-XXXXXXXX'X default, SWS shall thereafter be free to sell
the Premises and terminate MVLP's right under this section 4 in the event
that SWS thereafter arranges an Owner-User Sale of the Premises, in which
event, MVLP (and, SMTEK, its subtenant) shall surrender possession of the
Premises upon the later to occur of (a) ninety (90) days following delivery
of notice of SWS making such Owner-User Sale, or (b) such later date as may
be specified by SWS in its notice of the Owner-User Sale. "Owner-User Sale
" means a sale or exchange of the Premises in connection with a transaction
where the purchaser or an affiliate of the purchaser intends to use and
occupy the Premises for the conduct of its business operations on a regular
basis as opposed to a person who is purchasing the Premises for investment
and rental to an unaffiliated tenant.
4.4 SUPPLEMENTAL REMEDIES AND RIGHTS. The rights and remedies
provided MVLP under this section 4.4 are in addition to and cumulative with
any rights or remedies granted MVLP under the Purchase Agreement in the event
XXXXXX-XXXXXXXX fails to cause SWS to convey the Premises or prevents SWS
from conveying the Premises.
5. MVLP SUB-LEASE DEFAULT/DEFAULT UNDER PURCHASE AGREEMENT. The
provisions of this section 5 shall only apply in the following events: (a)
MVLP defaults under the terms of the Sub-Lease, or (b) MVLP defaults under
the terms of the Purchase Agreement by failing to purchase the Premises in
contravention of the Purchase Agreement. In such events, the provisions of
sections 5.1 to 5.5 below shall apply.
5.1 NONDISTURBANCE AGREEMENT. So long as SMTEK cures any monetary
default and any Curable Non-Monetary Default (as defined below) of MVLP under
the Sub-Lease in accordance with the procedure provided in section 5.2 below
and thereafter continues to perform the terms and conditions of the Sub-
Lease, SMTEK shall continue to have the right to occupy and retain possession
of the Premises in accordance with the terms of the Sub-Lease (except as
provided in section 5.4 below) and such leasehold estate shall not be
affected in any manner by either (b) the termination of MVLP's rights under
the Sub-Lease on account of the default of MVLP, or (b) the default of MVLP
under the Purchase Agreement. Such right of continued possession and
occupancy shall only apply for a period of time equal to the lesser of (i)
the Term of the Sub-Lease, or (ii) the last day that SMTEK will have the
right to purchase the Premises under Section 25 of the Purchase Agreement.
5.2 DEFAULT NOTICE/CURE RIGHT. So long as SMTEK is not in default
under this Agreement or the Sub-Sub-Lease, XXXXXX-XXXXXXXX agrees to give
SMTEK a copy of any notice of default under the Sub-Lease that XXXXXX-
XXXXXXXX may give to MVLP. XXXXXX-XXXXXXXX further agrees to accept
performance by SMTEK of any obligation of MVLP to be performed under the Sub-
Lease which SMTEK is capable of performing, including the cure of any
monetary default and any Curable Non-Monetary Default. Any notice of
default from SWS shall describe the amounts required to fully cure any
monetary defaults and describe the nature of any Curable Non-Monetary Default
under the Sub-Lease as of the date of the notice, which will be required to
be cured by SMTEK. SMTEK shall have a period of thirty (30) days from the
receipt of such default notice to cure any monetary default under the Sub-
Lease and sixty (60) days to cure any Curable Non-Monetary Default; provided,
however, if the nature of such default is such that more than sixty (60) days
is reasonable required to cure such default, then the time for SMTEK's cure
shall be extended for a reasonable time so long as SMTEK commences such cure
within fifteen (15) days from receipt of the notice of default and thereafter
diligently prosecutes such cure to completion. With respect to any Curable
Non-Monetary Default, such as a violation of the provisions of the Sub-Lease
governing Hazardous Materials contamination or compliance with laws, rules,
ordinances and regulations of governmental authorities, SMTEK, by beginning
to undertake to cure any such default shall not be deemed to have assumed all
of the obligations of MVLP with respect to such Curable Non-Monetary Default
and shall have the right to abandon at any time such undertaking to cure the
default by giving written notice to SWS. In the event that MVLP does not
timely undertake to cure any default, or with respect to the Curable Non-
Monetary Default described in the preceding provisions, elects to abandon
such cure undertaking, then the right of SMTEK to continued occupancy of the
Premises shall terminate upon the later to occur of (a) thirty (30) days
following the delivery of SMTEK's abandonment notice, (b) the termination for
default or expiration of the Sub-Lease, or (c) the last day that SMTEK will
have the right to purchase the Premises under the Purchase Agreement. The
inclusion of this provision for notice of default to SMTEK is solely for the
benefit of SMTEK and MVLP shall not have the right to assert as a defense to
any action or proceeding any failure of SWS to timely provide a notice of
default under the Sub-Lease to SMTEK.
5.2.1 "CURABLE NON-MONETARY DEFAULT " DEFINED. For purposes of this
section 5, the term "Curable Non-Monetary Default " means a non-monetary
default that is reasonably susceptible of being cured by SMTEK in that the
required performance is not something unique to MVLP and the following shall
not be considered a Curable Non-Monetary Default: (a) a default arising on
account of MVLP filing a bankruptcy or similar proceeding, provided this
exception shall not be construed as waiving or changing the requirement for
SMTEK to cure all monetary defaults, including those arising during any
bankruptcy or similar proceeding, in order to continue in occupancy; (b)
MVLP 's violation of any Hazardous Materials requirements of the Sub-Lease
provided this exception shall not be deemed to waive or change the
requirement of SMTEK to remediate any Hazardous Materials contamination of
the Premises as required by the Sub-Lease in order to continue in occupancy;
(c) MVLP's violation of any provisions of the Sub-Lease concerning the
assignment of the Sub-Lease or subleasing of the Premises; (d) MVLP 's
violation of any provisions of the Sub-Lease requiring MVLP to deliver
financial statements, reports or other information unique to MVLP's operation
and not capable of delivery by SMTEK; or (e) Waste to the Premises caused by
MVLP. The term "Waste " means injury or damage to the Premises caused by
the malicious act or gross neglect of MVLP, but does not include ordinary
repairs and maintenance not performed by MVLP, which shall remain the
responsibility of SMTEK to cure to continue in occupancy.
5.3 ASSUMPTION OF SUB-LEASE. If SMTEK cures any such monetary
default and any Curable Non-Monetary Default, SMTEK shall be deemed to have
assumed any and all obligations of MVLP under the Sub-Lease arising from and
after the date of such cure and shall be entitled to exercise any and all
rights of the lessee under the Sub-Lease. Neither the cure and assumption of
the Sub-Lease obligations by SMTEK nor XXXXXX-XXXXXXXX'x acceptance of
performance from SMTEK, shall waive, discharge or otherwise prejudice the
right of XXXXXX-XXXXXXXX to terminate all rights of MVLP under the Sub-Lease
and/or any claims of XXXXXX-XXXXXXXX against MVLP on account of such
default. If requested by SMTEK or XXXXXX-XXXXXXXX, the other party agrees to
execute and delivery a new lease on the same terms and conditions as the
Sub-Lease, except as otherwise provided in this section 5.
5.4 ATTORNMENT ELECTION. Notwithstanding any other provision, in
the event of the termination of MVLP's interest in the Sub-Lease on account
of MVLP's default, XXXXXX-XXXXXXXX, prior to the termination or expiration of
the Primary Lease, and thereafter, SWS, at their respective option and
without any obligation to do so, may require SMTEK to attorn to them, in
which event XXXXXX-XXXXXXXX, prior to the termination or expiration of the
Primary Lease, and thereafter, SWS, shall undertake the obligations of the
sub-sublessor under such Sub-Sub-Lease from the time of the exercise of such
election in accordance with section 5.4.1 below until the expiration of such
Sub-Sub-Lease and SMTEK shall continue to perform its obligations under the
Sub-Sub-Lease for the benefit of XXXXXX-XXXXXXXX or SWS, whichever is
applicable; provided, however, neither XXXXXX-XXXXXXXX nor SWS shall be (a)
liable for any prepayment of rent or any security deposit paid by SMTEK to
MVLP, except to the extent that XXXXXX-XXXXXXXX or SWS, whichever is
applicable, actually receives possession of any portion of any prepaid rents
or security deposit, (b) be liable for any previous act or omissions of MVLP
under the Sub-Sub-Lease, (c) be subject to any claims, defenses or offsets
which SMTEK may have against MVLP on account of any act, omission,
transaction or occurrence arising prior to the such attornment, (d) be
required to complete construction of any Tenant Improvements and/or provide
pay for any portion of such Tenant Improvements, or (e) be bound by any
changes or modifications made to the Sub-Sub-Lease without the written
consent of the XXXXXX-XXXXXXXX or SWS, whichever is applicable.
5.4.1 ELECTION NOTICE. The obligation of SMTEK to attorn and continue
performance under the Sub-Sub-Lease shall only apply if XXXXXX-XXXXXXXX and
SWS make the election to require such attornment in accordance with this
section. If XXXXXX-XXXXXXXX and SWS desire to require such attornment, both
XXXXXX-XXXXXXXX and SWS must give an notice of election to SMTEK ( "Election
Notice ") no later than fifteen (15) days following the date of the delivery
of any notice of default under section 5.2 above. If either XXXXXX-XXXXXXXX
and SWS fail to timely delivery an Election Notice then the right of XXXXXX-
XXXXXXXX and SWS to require such attornment shall terminate without further
notice or demand. If XXXXXX-XXXXXXXX and SWS timely give such Election
Notice, then the attornment provisions of this section 5.4 shall apply and
remain in full force and effect. In such event, XXXXXX-XXXXXXXX, SWS and
SMTEK agree to execute such additional documents as may be reasonably
requested by the other party(s) to evidence such attornment and assumption
and the continued validity of the Sub-Sub-Lease.
5.5 SUPPLEMENT REMEDIES AND RIGHTS. The rights and remedies provided
SMTEK under this section 5 are in addition to and cumulative with any rights
or remedies granted SMTEK under the Purchase Agreement in the event MVLP
fails to perform its obligation to purchase the Premises.
6. TENANT IMPROVEMENTS. In connection with the initial occupancy
under the Sub-Lease and the Sub-Sub-Lease, MVLP and SMTEK desire to make
certain repairs, alternations and improvements ( "Tenant Improvements ") to
the Premises as more particularly described in the scope of work description,
cost breakdown and space plans drawings ( "Tenant Improvement Information ");
a copy of the Tenant Improvement Information is annexed to this Agreement as
EXHIBIT "C ". XXXXXX-XXXXXXXX and SWS do hereby consent to MVLP's and/or
SMTEK's constructing such Tenant Improvements, including any commercially
reasonable changes or modifications to such Tenant Improvements that do not
materially change the fundamental nature of the such Tenant Improvements or
which are reasonably required in connection with the installation of any
trade fixtures, machinery or equipment, subject to compliance with the
conditions and requirements set forth in section 6.1 below.
6.1 CONSTRUCTION PROCEDURES. MVLP shall cause written notice of the
commencement date of the actual construction of the Tenant Improvements to be
given to XXXXXX-XXXXXXXX and SWS no later than ten (10) days prior to the
start of such construction in order to permit XXXXXX-XXXXXXXX and SWS the
opportunity to post a Notice of Nonresponsibility at the Premises and if the
date of the start of actual construction is delayed following the notice to
SWS and XXXXXX-XXXXXXXX, MVLP shall be responsible for providing a new notice
stating the delayed date for the start of construction no later than five (5)
days prior to such delayed start date. MVLP shall comply with all applicable
laws in carrying out the construction, including procurement of such pre-
construction building permits and other governmental approvals as are
required, copies of which shall be furnished to XXXXXX-XXXXXXXX and SWS.
MVLP shall comply with the provisions of Section 6.4c. of the Sub-Lease
concerning the lien free completion of the construction of such Tenant
Improvements.
6.2 REMOVAL. XXXXXX-XXXXXXXX and SWS agree that neither MVLP nor
SMTEK shall be required to remove any of such Tenant Improvements upon the
expiration or termination of the Sub-Lease, provided MVLP and SMTEK shall
retain the right to remove any such Tenant Improvements constituting trade
fixtures, equipment or machinery so long as any damage to the Premises caused
by such removal is fully repaired.
6.3 EXISTING IMPROVEMENTS. To the extent that such Tenant
Improvements replace any of the improvements described in Section 2 of the
First Amendment, which amended Section 2 of the Primary Lease, MVLP shall
have the right to demolish and/or remove any such existing improvements and
SWS waives any requirement to require such existing improvements so removed
or demolished to be surrendered upon the expiration or termination of the
Primary Lease.
6.4 NO LIABILITY FOR CONSENT. The rights granted XXXXXX-XXXXXXXX and
SWS to consent to any Tenant Improvements are solely for the benefit of
XXXXXX-XXXXXXXX and SWS. Neither XXXXXX-XXXXXXXX nor SWS shall have any
obligation or liability whatsoever to MVLP or SMTEK or to any other person on
account of XXXXXX-XXXXXXXX'x and SWS's consents or approvals for any reason,
including, without limitation, in the event the Tenant Improvements do not
conform to applicable laws or otherwise contain design defects or
deficiencies.
7. XXXXXX-XXXXXXXX AND SWS WARRANTIES. XXXXXX-XXXXXXXX and SWS each
warrant for the benefit of MVLP and SMTEK that: (a) a true, correct and
complete copy of the Primary Lease between XXXXXX-XXXXXXXX and SWS (including
any and all amendments, agreements, assignments, and other related documents)
is attached to the Sub-Lease; (b) the Primary Lease is in full force and
effect as of the Effective Date; (c) there are no uncured defaults presently
existing under the Primary Lease by either XXXXXX-XXXXXXXX and SWS and no
event has occurred or conditions exist which with the giving of notice or
passage of time would constitute a default under the Primary Lease by either
XXXXXX-XXXXXXXX and SWS.
8. MODIFICATIONS TO PRIMARY LEASE. In addition to any other
provisions limiting the application of any provisions in the Primary Lease,
SWS, XXXXXX-XXXXXXXX and MVLP agree that the Primary Lease shall be deemed
modified and amended as provided in section 8.1 and 8.2 below for purposes of
defining the required performance by MVLP under the
Sub-Lease Agreement and,
if MVLP assumes the Primary Lease as provided in section 4.3 above, then
MVLP's performance under the Primary Lease. Notwithstanding the preceding
provisions, as between XXXXXX-XXXXXXXX and SWS, the original terms of the
Primary Lease shall be deemed reinstated in the event of the expiration or
termination of MVLP's rights (and SMTEK's rights) under the Sublease or under
section 4.3 of this Agreement.
8.1 INCREASE IN PERMITTED IMPROVEMENT LIMIT. Section 9 of the
Primary Lease provides that the prior consent of SWS is required for any
alterations or improvements to the Premises to the extent that the cost would
exceed $500.00. The Primary Lease shall be deemed modified to change
"$500.00 " to "$10,000.00 per year ", in addition to the right to construct
the Tenant Improvements.
8.2 SUB-LESSEE'S RIGHT OF REPAIR OR RESTORATION. The second
paragraph of Section 7 of the Primary Lease, providing the "Lessee " the
right to complete repair or restoration in the event the "Owner " fails to
complete such repair or restoration because the reasonable estimated time for
the completion of such restoration or repairs exceeds one hundred and twenty
(120) days under normal conditions, shall be deemed amended to eliminate the
clause "provided that such restoration or rebuilding can normally be
completed within 120 days " so that MVLP shall, in all events, have the right
to elect to complete such repair or restoration as provided Section 7 of the
Primary Lease without regard to such hundred and twenty (120) day period.
9. CONTROLLING LAW. The terms and provisions of this Agreement
shall be construed in accordance with and governed by the laws of the State
of California.
10. BINDING EFFECT. Subject to any limitations provided in the
Primary Lease or this Agreement, this Agreement shall be binding upon and
inure to the benefit of the parties hereto, their heirs, successors and
assigns. As used herein, the singular number includes the plural and the
masculine gender includes the feminine and neuter.
11. CAPTIONS. The paragraph captions utilized herein are in no way
intended to interpret or limit the terms and conditions hereof, rather, they
are intended for purposes of convenience only.
12. ATTORNEYS' FEES AND LEGAL EXPENSES. In the event of any action
or proceeding to enforce or interpret this Contract or otherwise arising out
of the transaction which is the subject of this Agreement, the prevailing
party shall be entitled to recover, in addition to all other remedies and
relief, reasonable attorneys' fees and legal expenses and costs, including
expert witness fees, whether or not such action or proceeding is prosecuted
to judgment, including attorneys' fees and legal expenses and costs incurred
in connection with any post-judgment motions or proceedings for the
enforcement of any judgment, appellate proceedings, and/or bankruptcy
litigation.
13. INTEGRATION; MODIFICATION; WAIVER. This Agreement, together with
any other agreements, exhibits, or documents expressly referred to in this
Agreement, constitutes the complete and final expression of the agreement of
the parties relating to the subject of this Agreement and supersedes all
previous contracts, agreements, representations, and understandings, either
oral or written. This Agreement cannot be modified or amended, or any of the
terms hereof waived, except by an instrument in writing (referring
specifically to this Agreement) executed by the party against whom
enforcement of the modification or waiver is sought.
14. AGREEMENT IN COUNTERPARTS. This Agreement, or any amendment
thereto, may be executed in multiple counterparts, each of which shall be
deemed an original Agreement, and all of which shall constitute one (1)
Agreement, by each of the parties hereto on the dates respectively indicated
below notwithstanding that all of the Parties are not signatories to the
original or the same counterpart, to be effective as of the date provided in
this Agreement.
15. FACSIMILE TRANSMISSIONS. A facsimile transmission of the
executed signature page from this Agreement, or any other documents to be
delivered in accordance with this Agreement, shall constitute due and proper
execution of such document, and each party making such facsimile delivery
agrees to also deliver a copy of such document bearing the original signature
of such party no later than three (3) days following the date of the
facsimile transmission.
16. NOTICE. Except as otherwise provided in this Agreement, any
notice or other items to be delivered to a party pursuant to this Agreement
shall be in writing and either personally delivered, sent by first class mail
(alone or in combination with a facsimile transmittal), postage prepaid,
addressed to the party to be notified at the address specified in accordance
with this section, or delivered by Federal Express or other comparable
overnight delivery service, delivery costs prepaid and addressed to the party
to be notified at the address specified in accordance with this section. Any
such notice or other items to be delivered shall be deemed duly given,
delivered and received on the date of personal delivery to the party (or such
party's authorized representative) or in the case of mailing, three (3)
business days after deposit in the U.S. Mail, or, in the case of Federal
Express or other comparable overnight delivery service, one (1) business day
following the delivery of such notice or item to such delivery service, as
the case may be; provided, however, in the case a party transmits such notice
or item by facsimile transmission to a facsimile number designated above
together with the separate mailing of the original, then such notice shall be
deemed delivered one (1) day following the date of the facsimile
transmission. Unless a party changes its address or facsimile number for
notice by giving a notice in accordance with this section changing such
address or facsimile number, the address or facsimile number for notice and
delivery of each party shall be as set forth as follows:
If to SWS: SWS ASSOCIATES
Attn: Xxxxx Xxxxxxx
0000 XX Xxxxxxxx Xxxxx
Xxxx, Xxxxxx 00000
Facsimile: 541/318-6200-
If to XXXXXX-XXXXXXXX : XXXXXX-XXXXXXXX CORPORATION
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Corporate Real Estate Manager
Facsimile: 216/896-4032
If to MVLP: MOORPARK L.P.
Attn: Xxxxxxx X. Xxxxxx
000 X. Xxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
Facsimile: (000) 000-0000
If to SMTEK: SMTEK
Attn: Legal Department
0000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Facsimile: -(805) 376-9015
17. VALIDITY. Should any portion of this Agreement be declared
invalid and unenforceable, then such portion shall be deemed to be severable
from this Agreement and shall not affect the remainder of this Agreement.
18. AUTHORITY OF SIGNATORY. Each of the individuals executing this
Agreement where designated below on behalf of any corporation, partnership,
limited liability company, or trust, represents and warrants, by so executing
this Agreement, that he or she has the legal authority and capacity to
execute this Agreement so that it becomes a contract binding upon such
corporation, partnership, limited liability company, or trust and agrees to
indemnify, hold harmless, and defend the parties from any loss, damage, cost,
or expense (including reasonable attorneys' fees) suffered or incurred as a
result of the breach or inaccuracy of such representation and warranty.
19. INDEMNIFICATION. Whenever in this Agreement, a party is
obligated to indemnify, defend and hold harmless another party, such
obligation to provide indemnification specifically includes, but is not
limited to, the obligation to pay reasonable attorneys' fees and other legal
expenses on a continuing basis and upon submission of invoices from legal
counsel reasonably retained by the party entitled to indemnification as and
when such attorneys' fees and legal expenses are incurred, and any dispute
concerning the reasonableness of such attorneys' fees and legal expenses
shall be deferred and resolved upon the conclusion of the applicable action
or proceeding.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
binding as of the Effective Date first set forth above.
"SWS "
SWS Associates,
a California general partnership
By:
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, General Partner
By:
____________, General Partner
"XXXXXX-XXXXXXXX "
XXXXXX-XXXXXXXX CORPORATION,
an Ohio corporation
By:
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx, Vice President
By:
____________, Assistant Secretary
"MVLP "
MOORPARK VENTURE L.P.,
a California limited partnership
By:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
By:
____________, Secretary
"SMTEK "
SMTEK., INC.
a California corporation
By:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
By:
/s/ Xxxxxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxxxxx, Secretary
INTERIM SUB-
SUB-LEASE AGREEMENT
THIS INTERIM SUB-
SUB-LEASE AGREEMENT ( "Sub-Sub-Lease ") is made
effective as of July 20, 2001 ( "Effective Date ") by and among MOORPARK
VENTURE L.P., a California corporation ( "MVLP ") and SMTEK, INC., a
California corporation ( "SMTEK ") and is made with reference to the
following facts, which are a material part of this Sub-Sub-Lease:
A. On January 6, 1984, Metal Bellows Corporation ( "Metal Bellows
"), as tenant, entered into a Lease with SWS Associates, a general
partnership ( "SWS "), as landlord ( "Original Lease "), for the Premises
commonly known and referred to as 000 Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (
"Premises "). On May 29, 1986, Metal Bellows merged into Parker Hannifin,
Inc. ( "Xxxxxx-Xxxxxxxx ") and Xxxxxx-Xxxxxxxx thereby acquired and assumed
all of Metal Bellows' rights and obligations under the Lease. Thereafter,
Xxxxxx-Xxxxxxxx and SWS entered into an Amendment to Lease on May 29, 1986 (
"First Amendment ") and a Second Amendment to Lease on August 15, 1992 (
"Second Amendment "). "Primary Lease " means and refers to the Original
Lease, as amended by the First Amendment and Second Amendment. Any words or
phrases constituting defined terms in the Primary Lease shall have the same
meaning when used in this Sub-Sub-Lease, unless the otherwise stated.
X. Xxxxxx-Xxxxxxxx and MVLP have entered into that certain Agreement
and Escrow Instructions dated May 31, 2001, that First Amendment to Agreement
and Escrow Instructions, dated June 15, 2001, that Second Amendment to
Agreement and Escrow Instructions, dated June 29, 2001 and that Third
Amendment to Agreement and Escrow Instructions, dated July 13, 2001,
providing for the purchase of the Premises by MVLP ( "Purchase Agreement ")
and Xxxxxx-Xxxxxxxx has or will be entering into that certain Real Estate
Purchase and Sale Agreement and Escrow Instructions with SWS ( "Owner Sale
Contract ") whereby SWS is agreeing to convey title to the Premises to MVLP.
Any words or phrases constituting defined terms in the Purchase Agreement or
the Owner Sale Contract shall have the same meaning when used in this Sub-
Sub-Lease, unless the otherwise stated. SMTEK has received a copy of the
Purchase Agreement and the Owner's Sale Contract.
C. The escrow under the Purchase Agreement is not scheduled to close
until on or after March 1, 2002 and Xxxxxx-Xxxxxxxx is requiring as a
condition to entering into the Purchase Agreement that MVLP sublease the
Premises from Xxxxxx-Xxxxxxxx during the pendency of the Escrow.
Accordingly, concurrently with the execution of the Purchase Agreement,
Xxxxxx-Xxxxxxxx and MVLP are entering that certain
Sub-Lease Agreement dated
May 31, 2001 and that First Amendment to
Sub-Lease Agreement, dated July 20,
2001 ( "
Sub-Lease Agreement ") providing for MVLP to sublease the Premises
from Xxxxxx-Xxxxxxxx pending the Closing under the Purchase Agreement and the
Owner Sale Contract; a copy of the Sub-Lease Agreement is annexed as EXHIBIT
"A " to this Sub-Sub-Lease.
D. MVLP is acquiring the Premises at the request of SMTEK in order
for SMTEK to lease the Premises on a long term basis. Concurrently with the
execution of this Sub-Sub-Lease, SMTEK and MVLP are entering into that
certain Standard Industrial/Commercial Single-Tenant Lease-Net dated July 20,
2001( "Final Lease "), which includes that certain Addendum to Lease (
"Addendum "); a copy of the Final Lease is annexed as EXHIBIT "B " to this
Sub-Sub-Lease. Any words or phrases constituting defined terms in the
Purchase Agreement or the Owner Sale Contract shall have the same meaning
when used in this Sub-Sub-Lease, unless the otherwise stated.
E. The Final Lease sets forth the complete terms and conditions on
which MVLP is leasing the Premises to SMTEK for an Original Term of ten (10)
years beginning on Commencement Date of the Final Lease, which is the
scheduled date of the Close of Escrow under the Purchase Agreement, when MVLP
acquires ownership of the Premises.
F. Between the Effective Date of this Sub-Sub-Lease and the
Commencement Date of the Final Lease, SMTEK is subleasing the Premises from
pursuant to the terms of this Sub-Sub-Lease and, thereby, assuming MVLP's
obligations under the Sub-Lease Agreement between MVLP and Xxxxxx-Xxxxxxxx.
The terms and conditions of the Sub-Lease Agreement with Xxxxxx-Xxxxxxxx are
different than the terms and conditions of the Final Lease and the terms and
conditions of the Final Lease shall not be used to interpret the obligations
and liabilities of SMTEK by its assumption, of the Sub-Lease obligations.
G. SMTEK and MVLP have elected to sign this separate Sub-Sub-Lease
to set forth the special lease terms in effect during the Interim Term (as
defined below) primarily for administrative convenience so that from and
after the date Commencement Date of the Final Lease, such Final Lease can be
interpreted and applied without regard to terms and conditions that are only
in effect during the Interim Term under this Sub-Sub-Lease.
IT IS THEREFORE AGREED, in consideration for the covenants,
representations and agreements of the parties set forth in this Sub-Sub-Lease
and for other good and valuable consideration, the receipt and sufficiency of
which is acknowledged by all parties, as follows:
1. GENERAL LEASE AGREEMENT. MVLP hereby leases the Premises to
SMTEK and SMTEK hereby leases the Premises from MVLP. During the Interim
Term (as defined below), such leasing shall be pursuant to (a) this Sub-Sub-
Lease, and to the extent not inconsistent with the terms of this Sub-Sub-
Lease, the terms of the Final Lease, and (b) following the expiration of the
Interim Term, the terms and conditions of the Final Lease, without regard to
the terms of this Sub-Sub-Lease, except as provided in section 7 below. This
Sub-Sub-Lease is and shall be at all times subject and subordinate to the
Primary Lease and the Sub-Lease Agreement.
2. CONTINGENCY. MVLP's obligation to purchase the Premises under
the Purchase Agreement is subject to the satisfaction of certain
contingencies prior to July 20, 2001or such later date as is approved by MVLP
and Xxxxxx-Xxxxxxxx ( "Contingency Expiration Date "), as more particularly
provided in Section 8.3 of the Purchase Agreement. Accordingly, the final
effectiveness of this Sub-Sub-Lease is subject to the satisfaction or waiver
by MVLP of the same contingencies and conditions on or before the
Contingency Expiration Date. MVLP, in its sole discretion, shall have the
right to elect to terminate this Sub-Sub-Lease if any contingencies are not
satisfied to MVLP's satisfaction by giving SMTEK written notice of such
election to terminate on or before the Contingency Expiration Date (
"Termination Notice "). In the event MVLP timely gives such Termination
Notice, then this Sub-Sub-Lease and the Final Lease shall terminate and be of
no further force or effect, except MVLP shall be obligated to promptly
return the Security Deposit to SMTEK. If MVLP does not timely give a
Termination Notice, then MVLP shall be deemed to have waived any such
contingencies and this Sub-Sub-Lease, and the Final Lease shall remain in
full force and effect without further notice or action of either party.
3 INTERIM TERM. The term ( "Interim Term ") of this Sub-Sub-Lease
shall commence on the Commencement Date of the Sub-Lease Agreement ( "Sub-
Sub-Lease Start Date "), which will be the same date as the Contingency
Expiration Date and shall end on the date of the Close of Escrow (as defined
in the Purchase Agreement), unless earlier terminated pursuant to any
provision of this Sub-Sub-Lease; provided, however, the Interim Term shall be
deemed to terminate in the event (a) the Sub-Lease Agreement is terminated,
or (b) the Purchase Agreement is terminated by MVLP on account of the default
of Xxxxxx-Xxxxxxxx or SWS. Upon the expiration or earlier termination of
the Interim Term, the obligations of MVLP and SMTEK under the Sub-Sub-Lease
shall terminate, except as provided in section 7 below concerning the
survival of certain obligations, and the respective rights and obligations of
MVLP and SMTEK shall thereafter be determined in accordance with the Final
Lease without regard to this Sub-Sub-Lease.
3.1 EXTENSION OF SUB-SUB-LEASE START DATE. Notwithstanding any other
provisions and without affecting the validity of SMTEK's obligations under
this Sub-Sub-Lease or the Final Lease, in the event that MVLP and Xxxxxx-
Xxxxxxxx agree to extend the Contingency Expiration Date under the Purchase
Agreement and the Commencement Date of the Sub-Lease Agreement, then the Sub-
Sub-Lease Start Date shall be automatically extended until the extended
Contingency Expiration Date expires; provided, however, (a) MVLP agrees to
give SMTEK written notice of any such extension within five (5) days from
MVLP's approval of such extension, and (b) MVLP agrees not to extend the
Contingency Expiration Date by more than sixty (60) days except with SMTEK's
consent, in its reasonable discretion. In addition, MVLP shall have the
right (but shall not be obligated to) extend the date for the Close of Escrow
by the same number of days as the Contingency Expiration Date is extended, in
which event the expiration date of the Interim Term (and, thus, the
Commencement Date of the Final Lease) shall be extended by the same number of
days. MVLP agrees to give SMTEK written notice of any such extension of the
Close of Escrow within ten (10) days from MVLP's approval of such extension.
3.2 SMTEK'S COOPERATION. If the date for Close of Escrow is so
extended, then SMTEK agrees that the Commencement Date of the Final Lease
shall likewise be extended and SMTEK agrees to cooperate to execute an
amendment to the Final Lease to set forth the extended Commencement Date.
4. SMTEK'S ASSUMPTION OF OBLIGATIONS. Except as provided in this
section and in section 5 below, SMTEK assumes and agrees to timely and fully
perform, for the benefit of MVLP, all obligations of MVLP to be performed
under the Sub-Lease Agreement. The obligations of SMTEK under this Sub-Sub-
Lease and the rights of MVLP as the sub-sub-lessor shall be deemed to be
coexistensive with the obligations of MVLP and the rights of Xxxxxx-Xxxxxxxx
under the Sub-Lease Agreement. Without limiting the generality of the
preceding provision, SMTEK's obligations include the obligation to provide
indemnification to Xxxxxx-Xxxxxxxx under the Sub-Lease Agreement and, in
addition, SMTEK shall be obligated to provide indemnification for the benefit
of MVLP to the same extent.
4.1 EXCEPTION/SECURITY DEPOSIT. Notwithstanding the preceding
provision, the obligation for SMTEK to provide a Security Deposit shall be
determined under section 6 below, which is different than the security
deposit required to be made by MVLP to Xxxxxx under the Sub-Lease Agreement.
4.2 EXCEPTION/INSURANCE. Notwithstanding the preceding provisions,
MVLP shall be responsible for procuring insurance as required to comply with
the Sub-Lease Agreement, provided that SMTEK shall be obligated to reimburse
MVLP for the actual cost of such insurance as a part of the Sub-Sub-Lease
Rent.
4.3 EXCEPTION/INDEMNIFICATION OBLIGATION. Section 7.7 of the Sub-
Lease Agreement provides for MVLP to indemnify, defend and hold harmless
Parker Hannifin with respect to certain matters and SMTEK is agreeing to
indemnify, defend and hold harmless Parker Hannifin and MVLP with respect to
the same matters; provided, however, SMTEK shall not be obligated to
indemnify, defend and hold harmless MVLP for claims arising solely from the
negligence or intentional acts of MVLP, its agents, contractor or employees.
5. RENT. Subject to the provisions of section 5.1 to 5.2 below, the
rent ( "Sub-Sub-Lease Rent ") payable by SMTEK under this Sub-Sub-Lease,
shall equal the Base Rent of Thirty Four Thousand Five Hundred Dollars
($34,500.00) monthly payable under the Sub-Lease Agreement together with any
and all additional amount payable as additional rent become due under the
Sub-Lease Agreement, including, without limitation, the costs of taxes and
insurance as required by the Sub-Lease Agreement. The Sub-Sub-Lease Rent
shall be due and payable five (5) days prior to the date that the applicable
payment is payable from MVLP under the Sub-Lease Agreement and SMTEK shall be
entitled to the benefit of any free Base Rent period that Parker Hannifin
grants under the Sub-Lease Agreement. In addition, LESSEE shall be entitled
to a credit of Eleven Thousand Two Hundred Fifty Dollars ($11,250.00) on the
Base Rent for the first full calendar month that the Base Rent becomes
payable after any free Base Rent period that Parker Hannifin grants under the
Sub-Lease Agreement.
5.1 DELAY. in Completion of Tenant Improvements. The Sub-Sub-Lease
Rent shall be due and payable beginning on the Sub-Sub-Lease Start Date
notwithstanding that the Premises will not be ready for SMTEK's occupancy
except as provided in section. Section 5 of the Final Lease provides for
MVLP to complete certain Tenant Improvements prior to SMTEK's occupancy of
the Premises. If MVLP has not caused the Substantial Completion of such
Tenant Improvements on or before one hundred twenty (120) days following the
Sub-Sub-Lease Start Date ( "Substantial Completion Date "), then SMTEK's
obligation to pay the Sub-Sub-Lease Rent shall be suspended until MVLP causes
such Substantial Completion; provided, however, the Substantial Completion
Date shall be subject to extension on account of any Excusable Delay. If
such Excusable Delays are encountered, the Substantial Completion Date and,
thus, the date SMTEK would be entitled to suspend payment of the Sub-Sub-
Lease Rent under this section, shall be automatically extended for the period
of such Excusable Delays.
5.1.1 "SUBSTANTIAL COMPLETION " DEFINED. The term "Substantial
Completion " means the date upon which MVLP reasonably satisfies all of the
following requirements: (a) the construction of the applicable Capital
Improvements and Tenant Improvements are substantially completed, subject
only to minor corrective work which does not materially affect or limit
SMTEK's use of the Premises; provided, MVLP shall complete any such minor
work within thirty (30) days following Substantial Completion; (b) MVLP has
procured a certificate of occupancy (whether temporary or permanent) or other
applicable permit permitting SMTEK's immediate use and occupancy of the
Premises; and (c) MVLP has given SMTEK written notice stating that such
Substantial Completion has occurred and that the Premises are available for
SMTEK's immediate possession and occupancy ( "Notice of Possession "). MVLP
shall give SMTEK at least ten (10) days written notice in advance of the
estimated date of Substantial Completion.
5.1.2 "EXCUSABLE DELAY " DEFINED. "Excusable Delay " means a delay
arising or on account of (a) SMTEK's failure to timely submit the Tenant
Improvement Plans and permits (or any revisions thereto) as required under
Section 5 of the Addendum to Final Lease, SMTEK's request for special
materials, finishes or installations other than those readily available and
customarily and ordinarily used in similarly situated construction work,
changes to the approved Tenant Improvement Plans and Change Delays resulting
from SMTEK's submission of Change Orders as described in Section 5.4 of the
Addendum to Final Lease, SMTEK's failure to timely pay its Initial
Contribution and any other amounts required to be paid by SMTEK in connection
with such construction or other delays caused by SMTEK ( "SMTEK Delays "),
or (b). delays caused by fire, earthquake or other unavoidable casualties or
inclement weather conditions not reasonably anticipatable, extraordinary
governmental action other than usual permit and inspection procedures, delays
encountered in processing building permits and other governmental approvals
or inspections, delays encountered as a result of the discovery of any
unknown or concealed conditions affecting the Premises, delays causes by
general area wide labor or material shortages or labor disputes (such as
strikes or lock-outs), or any other causes not the fault of MVLP or MVLP's
Contractor, subcontractors, agents or employees.
5.2 CHANGE IN RENT. Notwithstanding any other provision, if the
Close of Escrow under the Purchase Agreement does not occur on or before
March 1, 2002, then the Sub-Sub-Lease Rent shall be deemed automatically
adjusted as of March 1, 2002 to an amount equal to the full amount of the
Rent (including Base Rent and Allowance Amortization Charge) calculated under
the Final Lease at a rate equal to the rate in effect for each month of the
first Lease Year following the Commencement Date of the Final Lease.
6. SECURITY DEPOSIT. SMTEK is delivering to MVLP a Security Deposit
as described in the Final Lease. During the Interim Term this Sub-Sub-Lease
is in effect, such Security Deposit shall also constitute a security deposit
( "Security Deposit ") by SMTEK under this Sub-Sub-Lease as security for
SMTEK's faithful performance of its obligations under this Sub-Sub-Lease. If
SMTEK fails to pay rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Sub-Sub-Lease, MVLP may use, apply or
retain all or any portion of such Security Deposit for the payment of any
rent or other charge in default, for the payment of any other sum to which
MVLP may become obligated by reason of SMTEK's default, or to compensate MVLP
for reasonable loss or damage proximately caused by SMTEK's default under
this Sub-Sub-Lease which MVLP may suffer thereby to the extent MVLP cannot
reasonably mitigate such loss or damage. If any portion of the Security
Deposit has been exhausted during the Interim Term, then SMTEK shall
replenish the Security Deposit to the amount of the Security
Deposit required under the Final Lease as of the Commencement Date of the
Final Lease.
7. DELIVERY OF POSSESSION. MVLP shall be deemed to have delivered
possession of the Premises to SMTEK as of the Sub-Sub-Lease Start Date.
Notwithstanding the preceding provision, prior to the Substantial Completion
of the Tenant Improvements, SMTEK agrees to limit its access to the Premises
to those commercially reasonable activities necessary for SMTEK's planning
for its occupancy and use of the Premises following such Substantial
Completion and, in all events, SMTEK agrees not to interfere with MVLP's
planning or construction of the Tenant Improvements.
8. SURVIVAL OF REPRESENTATIONS AND COVENANTS. Any liability
accruing under this Sub-Sub-Lease on account of a default or on account of
any obligation to provide indemnification, shall survive the expiration or
earlier termination of this Sub-Sub-Lease and remain in effect and shall not
be merged by delivery of possession of the Premises under the Final Lease.
9. ENFORCEMENT OF XXXXXX-XXXXXXXX INDEMNITY OBLIGATIONS. MVLP has
obtained from Xxxxxx-Xxxxxxxx a covenant to indemnity, defend and hold
harmless MVLP from losses or expenses arising from pre-existing Hazardous
Materials contamination of the Premises as more particularly provided in
Section 29.6 of the Sub-Lease Agreement ( "Parker Hannifin Indemnity ").
Notwithstanding any limitation on the liability of MVLP with respect to such
Hazardous Materials contamination, in the event that a claim arises under the
Parker Hannifin Indemnity, MVLP shall either (a) take such commercially
reasonable action as necessary to enforce such Parker Hannifin Indemnity for
the benefit of SMTEK to the extent SMTEK incurs or will incur any out-of-
pocket expense or cost in the performance of its obligations under this Sub-
Sub-Lease for the repair or remediation of the Premises on account of any
items covered under such Parker Hannifin Indemnity, provided that MVLP shall
first be entitled to recover its Legal Expenses (as defined below) prior to
any reimbursement to SMTEK of any such out-of-pocket expenses, or (b) assign
to SMTEK the right to enforce any such claims, provided any such assignment
shall be effective only to the extent SMTEK incurs or will incur any out-of-
pocket expense or cost in the performance of any such repairs or remediation
on account of any items covered by the Parker Hannifin Indemnity, and MVLP
shall be entitled to receive any excess recovery after deduction of SMTEK's
Legal Expenses (as defined below).
9.1 "LEGAL EXPENSES " DEFINED. For purposes of this section, the
term "Legal Expenses " means reasonable attorneys' fees and costs (including
any expert witness fees), including attorneys' fees and costs in connection
with the enforcement of any award or judgment or any appellate proceedings,
which Legal Expenses are incurred by MVLP in the event MVLP elects to enforce
such legal proceedings against Parker Hannifin, or incurred by SMTEK, in the
event MVLP assigns the right to SMTEK to enforce such Parker Hannifin
Indemnity.
10. CONTROLLING LAW. The terms and provisions of this Sub-Sub-Lease
shall be construed in accordance with and governed by the laws of the State
of California.
11. BINDING EFFECT. Subject to any limitations provided in the
Primary Lease or this Sub-Sub-Lease, this Sub-Sub-Lease shall be binding upon
and inure to the benefit of the parties hereto, their heirs, successors and
assigns. As used herein, the singular number includes the plural and the
masculine gender includes the feminine and neuter.
12. CAPTIONS. The paragraph captions utilized herein are in no way
intended to interpret or limit the terms and conditions hereof, rather, they
are intended for purposes of convenience only.
13. ATTORNEYS' FEES AND LEGAL EXPENSES. In the event of any action
or proceeding to enforce or interpret this Sub-Sub-Lease or otherwise arising
out of the transaction which is the subject of this Sub-Sub-Lease, the
prevailing party shall be entitled to recover, in addition to all other
remedies and relief, reasonable attorneys' fees and legal expenses and costs,
including expert witness fees, including attorneys' fees and legal expenses
and costs incurred in connection with any post-judgment motions or
proceedings for the enforcement of any judgment, appellate proceedings,
and/or bankruptcy litigation.
14. INTEGRATION; MODIFICATION; WAIVER. This Sub-Sub-Lease, together
with any other agreements, exhibits, or documents expressly referred to in
this Sub-Sub-Lease, constitutes the complete and final expression of the
agreement of the parties relating to the subject of this Sub-Sub-Lease and
supersedes all previous contracts, agreements, representations, and
understandings, either oral or written. This Sub-Sub-Lease cannot be
modified or amended, or any of the terms hereof waived, except by an
instrument in writing (referring specifically to this Sub-Sub-Lease) executed
by the party against whom enforcement of the modification or waiver is
sought.
15. AGREEMENT IN COUNTERPARTS. This Sub-Sub-Lease, or any amendment
thereto, may be executed in multiple counterparts, each of which shall be
deemed an original Sub-Sub-Lease, and all of which shall constitute one (1)
Sub-Sub-Lease, by each of the parties hereto on the dates respectively
indicated below notwithstanding that all of the Parties are not signatories
to the original or the same counterpart, to be effective as of the date
provided in this Sub-Sub-Lease.
16. FACSIMILE TRANSMISSIONS. A facsimile transmission of the
executed signature page from this Sub-Sub-Lease, or any other documents to be
delivered in accordance with this Sub-Sub-Lease, shall constitute due and
proper execution of such document, and each party making such facsimile
delivery agrees to also deliver a copy of such document bearing the original
signature of such party no later than three (3) days following the date of
the facsimile transmission.
17. NOTICE. Except as otherwise provided in this Sub-Sub-Lease, any
notice or other items to be delivered to a party pursuant to this Sub-Sub-
Lease shall be in writing and either personally delivered, sent by first
class mail (alone or in combination with a facsimile transmittal), postage
prepaid, addressed to the party to be notified at the address specified in
accordance with this section, or delivered by Federal Express or other
comparable overnight delivery service, delivery costs prepaid and addressed
to the party to be notified at the address specified in accordance with this
section. Any such notice or other items to be delivered shall be deemed duly
given, delivered and received on the date of personal delivery to the party
(or such party's authorized representative) or in the case of mailing, three
(3) business days after deposit in the U.S. Mail, or, in the case of Federal
Express or other comparable overnight delivery service, one (1) business day
following the delivery of such notice or item to such delivery service, as
the case may be; provided, however, in the case a party transmits such notice
or item by facsimile transmission to a facsimile number designated above
together with the separate mailing of the original, then such notice shall be
deemed delivered one (1) day following the date of the facsimile
transmission. Unless a party changes its address or facsimile number for
notice by giving a notice in accordance with this section changing such
address or facsimile number, the address or facsimile number for notice and
delivery of each party shall be as set forth as follows:
If to MVLP: MOORPARK VENTURE L.P.
Attn: Xxxxxxx X. Xxxxxx
000 X. Xxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
Facsimile: (000) 000-0000
If to SMTEK: SMTEK
Attn: Legal Department
0000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
18. VALIDITY. Should any portion of this Sub-Sub-Lease be declared
invalid and unenforceable, then such portion shall be deemed to be severable
from this Sub-Sub-Lease and shall not affect the remainder of this Sub-Sub-
Lease.
19. AUTHORITY OF SIGNATORY. Each of the individuals executing this
Sub-Sub-Lease where designated below on behalf of any corporation,
partnership, limited liability company, or trust, represents and warrants, by
so executing this Sub-Sub-Lease, that he or she has the legal authority and
capacity to execute this Sub-Sub-Lease so that it becomes a contract binding
upon such corporation, partnership, limited liability company, or trust and
agrees to indemnify, hold harmless, and defend the parties from any loss,
damage, cost, or expense (including reasonable attorneys' fees) suffered or
incurred as a result of the breach or inaccuracy of such representation and
warranty.
20. INDEMNIFICATION. Whenever in this Sub-Sub-Lease, a party is
obligated to indemnify, defend and hold harmless another party, such
obligation to provide indemnification specifically includes, but is not
limited to, the obligation to pay reasonable attorneys' fees and other legal
expenses to the attorney reasonably retained by the party obligated to
provide such indemnification on a continuing basis and upon submission of as
such attorneys' fees and legal expenses are incurred. The attorney retained
by the party obligated to provide indemnification shall be qualified and
experienced in the field of law which is the subject of the action and shall
be subject to the reasonable approval of the party entitled to
indemnification.
IN WITNESS WHEREOF, the parties have executed this Sub-Sub-Lease to be
binding as of the Effective Date first set forth above.
"MVLP "
MOORPARK VENTURE L.P.,
a California limited partnership
By: MANAGING GP, INC.
a California corporation,
Its General Partner
By:
Xxxxxxx X. Xxxxxx, President
"SMTEK "
SMTEK., INC.
a California corporation
By:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
By:
/s/ Xxxxxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxxxxx, Secretary
