EXHIBIT 10.30
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
1. BASIC PROVISIONS ("BASIC PROVISIONS")
1.1 PARTIES: This Lease ("Lease"), dated APRIL 21, 2002 for
reference purposes only, is made by and between GEWERBEGRUND BAUTRAGER GMBH &
CO. IMMOBILLIEN KG ("Lessor") and DIGITAL THEATER SYSTEMS, INC., a Delaware
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 0000 X. XXXXXXXX XXXXX, XXXXXX XXXXX, XXXXXXXXXX 00000
located in the County of LOS ANGELES, CITY OF AGOURA HILLS, State of California,
and generally described as a two-story concrete tilt-up building consisting of
20,064 square feet. ("Premises")(See also Paragraph 2)
1.3 TERM: FIVE (5) yearS ("Original Term") commencing MAY 16, 2002
("Commencement Date") and ending MAY 15, 2007 ("Expiration Date"). Lessee shall
have the right to extend the Lease Term in accordance with Paragraphs 50 and 54
of the First Addendum hereto. (See also Paragraph 3)
1.4 EARLY POSSESSION: Upon the execution of the Lease, Lessee
shall be granted access to the subject Premises for the purpose of preparing the
Premises for occupancy. Such access shall be subject to all the terms, covenants
and conditions of the Lease other than the payment of the base rental amount
during the period hereof. Prior to entry, Lessee shall furnish Lessor with
liability insurance in accordance with the terms of the Lease. ("Early
Possession Date"). (See also Paragraphs 3.2 and 3.3)
1.5 BASE RENT: $11,035.20 per month based on $0.55 per square foot
per month ("Base Rent"), payable on the first (1st) day of each month commencing
JULY 1, 2002. However, Base Rent pertaining to fifteen (15) days in MAY 2002
shall be at fifty percent (50%) of the Base Rent, or $5,517.60. Calculation of
Base Rent is subject to verification as to the actual square footage of the
Premises. The payment of rent and all other duties and obligations of Lessee
shall commence May 16th, 2002 regardless of whether or not Lessee has completed
Lessee's tenant improvements. (See also Paragraph 4)
1.6 BASE RENT PAID UPON EXECUTION: $16,552.80 as Base Rent for the
period MAY 16 THROUGH JUNE 30, 2002. (SEE ATTACHED ADDENDUM FOR FURTHER
CLARIFICATION).
1.7 SECURITY DEPOSIT: Not applicable. ("Security Deposit"). (See
also Paragraph 5)
1.8 AGREED USE: General office and warehouse, light manufacturing,
assembly and testing and any other lawfully permitted use consistent with
applicable laws and zoning.(See also Paragraph 6)
1.9 INSURING PARTY. Lessee is the "Insuring Party". (See also
Paragraph 8)
1.10 REAL ESTATE BROKERS: REPRESENTATION: The following real estate
brokers (collectively, the "Brokers") and brokerage relationships exist in this
transaction: Xxxxxxx X. Xxxxx of NAI Capital Commercial (805-446-2400)
represents Lessee exclusively; and Janez Properties, Inc. (858-481-5693)
represents Lessor exclusively. Brokers' respective commissions shall be subject
to separate agreements.
1.1 1 GUARANTOR. Not applicable.
1.1 2 ADDENDA AND EXHIBITS. Attached hereto is the First Addendum
consisting of Paragraphs 50 through 63, all of which constitute a part of this
Lease.
2. PREMISES.
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.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee broom
clean and free of debris on the Commencement Date or the Early Possession Date,
whichever first occurs ("Start Date"), and, so long as the required service
contracts described in Paragraph 7.1 (b) below are obtained by Lessee within
thirty (30) days following the Start Date, warrants that the existing
electrical, plumbing, fire sprinkler, lighting, loading doors, if any, and all
other such elements in the Premises, other than those constructed by Lessee,
shall be in good operating condition on said date and that the structural
elements of the roof, bearing walls and foundation of any buildings on the
Premises (the "Building") shall be free of material defects. If a non-compliance
with said warranty exists, Lessor shall, as Lessor's sole obligation with
respect to such matter, except as otherwise provided in this Lease, promptly
after receipt of written notice from Lessee setting forth with specificity the
nature and extent of such non-compliance, rectify same at Lessor's expense. If,
within six (6) months of the Start Date, Lessee does not give Lessor written
notice of any non-compliance with respect to the existing electrical, plumbing,
fire sprinkler and lighting systems, correction of such non-compliance shall be
the obligation of Lessee at Lessee's sole cost and expense. However, throughout
the Original Term and any extension thereof Lessor shall be responsible for any
maintenance and repair of the Building. Other than those items described herein,
Lessor is delivering the Building and Premises in an "as-is, where-is"
condition.
2.3 COMPLIANCE. Other than as otherwise set forth in this Lease
Agreement, Lessor is delivering the Building and Premises in an "as-is,
where-is" condition on the Start Date. Said warranty does not apply to the use
to which Lessee will put the Premises or to any Alterations or Utility
Installations (as defined in Paragraph 7.3(a) made or to be made by Lessee.
NOTE: Lessee is responsible for determining whether or not the zoning is
appropriate for Lessee's intended use, and acknowledges that past uses of the
Premises may no longer be allowed. Lessor shall be responsible for the cost of
ADA compliance pertaining to the first (1st) floor restrooms, subject to a
maximum cost of Ten Thousand Dollars ($10,000.00). If the Applicable
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Requirements are hereafter changed (as opposed to being in existence at the
Start Date, which is addressed in Paragraph 6.2(e) below) so as to require
during the term of this Lease the construction of an addition to or an
alteration of the Building, the remediation of any Hazardous Substance, or the
reinforcement or other physical modification of the Building, other than as a
result of governmental mandated seismic modification (individually and
collectively "Capital Expenditure"), Lessor and Lessee shall allocate the cost
of such work as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital
Expenditures are required as a result of the specific and unique use of the
Premises by Lessee as compared with uses by tenants in general, Lessee shall be
fully responsible for the cost thereof, provided, however that if such Capital
Expenditure is required during the last two (2) years of this Lease and the cost
thereof exceeds six (6) months' Base Rent, Lessee may instead terminate this
Lease unless Lessor notifies Lessee, in writing, within ten (10) days after
receipt of Lessee's termination notice that Lessor has elected to pay the
difference between the actual cost thereof and the amount equal to six (6)
months' Base Rent. If Lessee elects termination, Lessee shall immediately cease
the use of the Premises which requires such Capital Expenditure and deliver to
Lessor written notice specifying a termination date at least thirty (30) days
thereafter. Such termination date shall, however, in no event be earlier than
the last day that Lessee could legally utilize the Premises without commencing
such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the
specific and unique use of the Premises by Lessee, then Lessor shall initially
pay the costs associated with such Capital Expenditures, and the cost thereof
shall be prorated between the Lessor and Lessee 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 Capital Expenditure 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 Capital Expenditures, 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; provided, however, that if such Capital Expenditure is
required during the last two years of this Lease or if Lessor reasonably
determines that it is not economically feasible to pay its share thereof, Lessor
shall have the option to terminate this Lease upon one hundred eighty (180) days
prior written notice to Lessee unless Lessee notifies Lessor, in writing, within
ten (10) days after receipt of Lessor's termination notice that Lessee will pay
for such Capital Expenditure, and Lessee may deduct the costs of such Capital
Expenditures with Interest, from Rent until such costs have been fully paid.
However, if the balance of the Rent due and payable for the remainder of this
Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee
shall have the right to terminate this Lease upon thirty (30) days written
notice to Lessor.
(c) Notwithstanding the above, the provisions concerning
Capital Expenditures are intended to apply only to non-voluntary, unexpected,
and new Applicable Requirements. If the Capital Expenditures are instead
triggered by Lessee as a result of an actual or proposed change in use, change
in intensity of use, or modification to the Premises then, and in that event,
Lessee shall be fully responsible for the cost thereof, and Lessee shall not
have any right to terminate this Lease.
2.4 ACKNOWLEDGEMENTS. Lessee acknowledges that: (a) it has been
advised by Lessor and/or Brokers to satisfy itself with respect to the condition
of the Premises (including but not limited to the electrical, 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, except as set forth in Section 2.2
and 2.3 above, assumes all responsibility therefore as the same relate to its
occupancy of the Premises, and (c) neither Lessor, Lessor's agents, nor any
Broker has made any oral or written representations or warranties with respect
to said matters other than as set forth in this Lease. In addition, Lessor
acknowledges that: (a) Broker has made no representations, promises or
warranties concerning Lessee's ability to honor the Lease or suitability to
occupy the Premises, and (b) it is Lessor's sole responsibility to investigate
the financial capability and/or suitability of all proposed tenants.
2.5 LESSEE AS PRIOR OWNER/OCCUPANT. DELETED IN ITS ENTIRETY.
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 obligations 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 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.
4.1. RENT DEFINED. All monetary obligations of Lessee to Lessor
under the terms of this Lease 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, unless
otherwise set forth in this Agreement on or before the day
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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 to the balance of such Rent,
regardless of Lessor's endorsement of any check so stating.
5. SECURITY DEPOSIT. Intentionally Omitted.
6. USE.
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.
(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 therefore. 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).
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance has come to be located in, on,
under or about the Premises, other than as previously consented to by Lessor,
Lessee shall immediately give written notice of such fact to Lessor, and provide
Lessor with a copy of any report, notice, claim or other documentation which it
has concerning the presence of such Hazardous Substance.
(c) LESSEE REMEDIATION. Lessee shall not knowingly 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 reasonable attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought
onto the Premises by or for Lessee, or by any third party at Lessee's request
(provided, however, that Lessee shall have no liability under this Lease with
respect to underground migration of any Hazardous Substance under the Premises
from adjacent properties). Lessee's obligations shall include, but not be
limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Lessee, and the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the
expiration or termination of this Lease. No termination, cancellation or release
agreement entered into by Lessor and Lessee shall release Lessee from its
obligations under this Lease with respect to Hazardous Substances, unless
specifically so agreed by Lessor in writing at the time of such agreement.
(e) LESSOR INDEMNIFICATION. Lessor and its successors and
assigns shall indemnify, defend, reimburse and hold Lessee, its employees and
lenders, harmless from and against any loss of rents and/or damages,
liabilities, judgments, claims, expenses, penalties, and reasonable attorneys'
and consultants' fees arising out of or involving any and all environmental
damages which existed as a result of Hazardous Substances on the Premises prior
to the Start Date or which are caused by the gross negligence, or intentional
acts of Lessor, its agents or employees. Lessor's obligations, as and when
required by the Applicable
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Requirements, shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the
expiration or termination of this Lease.
(f) INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the
responsibility and pay for any investigations or remediation measures required
by governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior to the Start Date. Lessee shall
cooperate fully in any such activities at the request of Lessor, including
allowing Lessor and Lessor's agents to have reasonable access to the Premises at
reasonable times in order to carry out Lessor's investigative and remedial
responsibilities. Lessor agrees to reimburse Lessee for all expenses incurred in
relation to Lessee cooperation of with Lessor under this Paragraph 6.2(f).
(g) LESSOR TERMINATION OPTION. If a Hazardous Substance
Condition occurs during the term of this Lease, unless Lessee is legally
responsible therefore (in which case Lessee shall make the investigation and
remediation thereof required by the Applicable Requirements and this Lease shall
continue in full force and effect, but subject to Lessor's rights under
Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i)
investigate and remediate such Hazardous Substance Condition, if required, as
soon as possible at Lessor's expense, in which event this Lease shall continue
in full force and effect, or (ii) if the estimated cost to remediate such
condition exceeds twelve (12) times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such Hazardous
Substance Condition, of Lessor's desire to terminate this Lease as of the date
one hundred eighty (180) days following the date of such notice. In the event
Lessor elects to give a termination notice, Lessee may, within ten (10) days
thereafter, give written notice to Lessor of Lessee's commitment to pay the
amount by which the cost of the remediation of such Hazardous Substance
Condition exceeds an amount equal to twelve (12) times the then monthly Base
Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said
funds or satisfactory assurance thereof within thirty (30) days following such
commitment. In such event, this Lease shall continue in full force and effect,
and Lessor shall proceed to make such remediation as soon as reasonably possible
after the required funds are available and Lessee may deduct the costs
associated with the remediation of such Hazardous Substance Condition with
Interest, from Rent until such costs have been fully paid. However, if the
balance of the Rent due and payable for the remainder of this Lease is not
sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the
right to terminate this Lease upon thirty (30) days written notice to Lessor. If
Lessee does not give such notice and provide the required funds or assurance
thereof within the time provided, this Lease shall terminate as of the date
specified in Lessor's notice of termination.
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 reasonable 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 thirty (30) 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 INSPECTION; COMPLIANCE. Lessor and Lessor's Lender and
consultants shall have the right, by escort, to enter into Premises at any time,
in the case of an emergency, and otherwise at reasonable times, upon 24 hour
advance notice, during normal business hours without interfering with Lessee's
business, 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 inspections
reasonably related to the violation or contamination and is shown to be the
result of Lessee's action or inaction.
7. MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) IN GENERAL. Subject to the provisions of Paragraph 2.2
(Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable
Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14
(Condemnation), and any other of Lessor's warranties provided in this Lease,
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, , electrical, lighting
facilities, fixtures, interior walls, interior ceilings, 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
condition equivalent to the condition as of the Start Date.
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(b) SERVICE CONTRACTS. Except as set forth in Xxxxxxxxx 00,
Xxxxxx 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, ("Basic Elements"), if any, as and when installed on the Premises:
(i) landscaping and irrigation systems, and (ii) asphalt and parking lots.
(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 in 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 Paragraphs
2.2 (Condition), 2.3 (Compliance), 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 except
for HVAC equipment and roofs as set forth in Paragraph 57 herein, 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.
(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, 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.
(b) CONSENT. Any Alterations or Utility Installations that
Lessee shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. 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 as soon
as reasonably possible upon completion furnish Lessor with as-built plans and
specifications. For work which costs an amount equal to the greater of 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.
(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
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend and protect itself, Lessor and the Premises against the same and
shall pay and satisfy any such adverse judgment that may be rendered thereon
before the enforcement thereof. 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, Lessor shall pay all
of Lessor's reasonable attorneys' fees and costs.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. 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 later than ninety (90) 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. "Ordinary wear and tear' shall not include any damage or deterioration
that would have been prevented by good maintenance practice. Lessee shall repair
any damage occasioned by the installation, maintenance or removal of Trade
Fixtures, furnishings, and equipment as well as the removal of any storage tank
installed by or for
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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
26 below.
8. INSURANCE; INDEMNITY.
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.
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 may 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 and to any Lender 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.
If the coverage is available and commercially appropriate, such policy or
policies shall insure against all risks of direct physical loss or damage,
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 $10,000.00 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) INSURING PARTY: In the event that Lessee is the Insuring
Party, Lessor shall place and carry, at Lessee's cost and expense, subject to a
maximum of $800.00 per year, contingency property insurance coverage.
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. If reasonably available, and if
Lessor requests Lessee to do so in writing, 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
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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 ten (10) 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. 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. The effect of such releases and waivers is not limited by the
amount of insurance carried or required, or by any deductibles applicable
hereto. The Parties agree to have their respective property damage insurance
carriers waive any right to subrogation that such companies may have against
Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.
8.7 INDEMNITY. Except as otherwise set forth in the Agreement or
for Lessor's negligence, willful misconduct or breach of express warranties,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, 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 or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, or from other sources or places, except where such injury or damage is a
result of Lessor's willful act of misconduct or negligence. 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 Premises or the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations, which can reasonably be repaired in three
(3) months or less from the date of the damage or destruction. Lessor shall
notify Lessee in writing within ten (10) 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, which cannot reasonably be repaired in three (3) months or less
from the date of the damage or destruction. Lessor shall notify Lessee in
writing within ten (10) 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) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence
or discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 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
Lessee'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
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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 therefore. 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 (ii) have this Lease terminate ninety
(90) days thereafter. Lessee shall not be entitled to reimbursement of any funds
contributed by Lessee to repair any such damage or destruction to any unique
improvement as specified in this Paragraph 9.2. Premises Partial Damage due to
flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. If 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 one hundred eighty (180) 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 and Lessee may deduct fifty percent (50%) of
such costs associated with such repairs with Interest, from Rent until fifty
percent (50%) of such costs have been fully paid. However, if the balance of the
Rent due and payable for the remainder of this Lease is not sufficient to
reimburse Lessee for fifty percent (50%) of such costs on an offset basis,
Lessee shall have the right to terminate this Lease upon thirty (30) days
written notice to 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 thirty (30)
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 ninety (90) 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 (10) days after Lessee's receipt of Lessor's
written notice purporting to terminate this Lease, or (ii) the day prior to the
date upon which such option expires. If Lessee duly exercises such option during
such period and provides Lessor with funds (or adequate assurance thereof) to
cover any shortage in insurance proceeds, Lessor shall, at Lessor's commercially
reasonable expense, repair such damage as soon as 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 or a Hazardous Substance Condition for which Lessee
is not responsible under this Lease, 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. 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 sixty (60) 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 sixth (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 6.2(g) or 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.
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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.
10.2 PAYMENT OF TAXES.
(a) PAYMENT OF TAXES. Lessor shall pay for the "Real Property
Taxes". Lessor shall then provide to Lessee both a copy of the most recent tax
xxxx and a photocopy of the check evidencing payment. Within thirty (30) days of
Lessee's receipt, Lessee shall reimbursement Lessor for said actual costs.
Lessee's responsibility to reimburse Lessor for the Real Property Taxes shall be
limited to the amount of such taxes for the July 2001 through June 30, 2002 tax
year, subject to annual increases not to exceed five percent (5.0%). However,
such limitation shall not apply to increase in Real Property Taxes caused by
construction of Lessee's improvements in the Premises.
10.3 JOINT ASSESSMENT: DELETED IN ITS ENTIRETY.
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
thirty (30) days after receipt of a written statement.
11. UTILITIES AND SERVICES. 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.
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 fifty one
percent (51%) 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 fifty one percent (51%) 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 per Paragraph 13.1 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.
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(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 $500 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 term,
covenant, condition and obligation herein to be observed or performed by Lessee
during the term of said assignment or sublease, other than such obligations as
are contrary to or inconsistent with provisions of an assignment or sublease to
which Lessor has specifically consented to in writing.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) 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 and to become due
under the sublease. Sublessee shall rely upon any such notice from Lessor and
shall pay all Rents to Lessor without any obligation or right to inquire as to
whether such Breach exists, notwithstanding any claim from Lessee to the
contrary provided that Lessee has been notified in writing by Lessor as to the
alleged Breach in accordance with Paragraph 13 herein.
(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) Lessor shall deliver a copy of any notice of Default or
Breach by Lessee to the sublessee, who shall have the right to cure the Default
of Lessee within the grace period, if any, specified in such notice. The
sublessee shall have a right of reimbursement and offset from and against Lessee
for any such Defaults cured by the sublessee, provided that Lessee has been
notified in writing by Lessor as to the alleged Default or Breach.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. A "Default" is defined as a failure by the
Lessee to comply with or perform any of the terms, covenants, conditions or
rules under this Lease. A "Breach" 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
other monetary payment required to be made by Lessee hereunder, whether to
Lessor or to a third party, when due within three (3) business days of written
notice from Lessor, 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 five (5) 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) business days following written notice to
Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions
or provisions of this Lease, 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
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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, is not
contested within sixty (60) days of the date of filing of such petition); (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 contested within thirty (30) days; provided, however,
in the event that any provision of this subparagraph (e) is contrary to any
applicable law, such provision shall be of no force or effect, and not affect
the validity of the remaining provisions.
(f) The discovery that any financial statement of Lessee given
to Lessor was materially false.
(g) INTENTIONALLY OMITTED.
13.2 REMEDIES. If Lessee fails to perform any of its affirmative
duties or obligations within ten (10) days for monetary defaults and within
thirty (30) days for non-monetary defaults 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 with supporting documentation
therefore. 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. DELETED IN ITS ENTIRETY.
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) business 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 in any calendar year,
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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 within thirty (30) days following the
date on which it was due, shall bear interest from the thirty-first (31st) day
after it was due. The interest ("Interest") charged shall be equal to the prime
rate charged by Imperial Bank plus 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 the costs associated with any such
cure under this Paragraph 13.6(b) with Interest, until such costs have been
fully paid. However, if the balance of the Rent due and payable for the
remainder of this Lease is not sufficient to fully reimburse Lessee on an offset
basis, Lessee shall have the right to terminate this Lease upon thirty (30) days
written notice to 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, or more
than twenty-five percent (25%) of the land area 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 therefore. 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. BROKERAGE FEES. INTENTIONALLY OMITTED
16. TENANCY STATEMENT/ESTOPPEL CERTIFICATE.
16.1 Each Party (as "Responding Party") shall within ten (10)
business days after written notice from the other Party (the "Requesting Party")
execute, acknowledge and deliver to the Requesting Party an estoppel certificate
in writing, in form similar to the then most current "Tenancy Statement" form
published by the American Industrial Real Estate Association, plus such
additional information, confirmation and/or statements as may be reasonably
requested by the Requesting Party.
16.2 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 provided that such
lender or purchaser shall have first entered into a confidentiality agreement
with Lessee in which such lender or purchaser agrees to maintain the
confidentiality of any such materials supplied in accordance with this Paragraph
16.2. 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, 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, 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.
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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. Except with respect to Lessor's fraud, gross
negligence or willful misconduct, 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 a party to this Lease of a Default or Breach of
any term, covenant or condition hereof by the other party, shall be deemed a
waiver of any other term, covenant or condition hereof, or of any subsequent
Default or Breach by the breaching party the same or of any other term, covenant
or condition hereof. A party's consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of the approving party's consent to,
or approval of, any subsequent or similar act by the other party, 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. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or 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
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located. Any litigation between the Parties hereto concerning this Lease shall
be initiated in the county in which the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall
be subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "Security Device"), now or
hereafter placed 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, 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, 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 brings an action or proceeding to enforce
the terms hereof or declare rights hereunder, the Prevailing Party (as hereafter
defined) in any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorneys' fees. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding is
pursued to decision or judgment. The term, "Prevailing Party" shall mean the
Party who is awarded a final judgment from a court with jurisdiction over such
matter. The 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
provided that such fees shall not exceed five hundred ($500.00) dollars per
notice.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right, by escort, to enter the Premises at any time, in the case
of an emergency, and otherwise at reasonable times, upon 24 hour advance notice
to Lessee, during normal business hours without interfering with Lessee's
business, 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. The placement of signs by Lessor shall be subject to Lessee's
approval, which approval shall not be unreasonably withheld. 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 permanent sign upon the Premises without Lessor's prior written consent,
which consent shall not be unreasonably withheld. All signs must comply with all
Applicable Requirements.
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
lesser interest, shall constitute Lessor's election to have such event
constitute the termination of such interest.
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), not to exceed five hundred
$500 per request incurred in the consideration of, or
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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 therefore. 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 the 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. INTENTIONALLY OMMITTED
38. QUIET 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.
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. Intentionally Ommitted.
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 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 any
calendar year, whether or not the Defaults are cured, or (iii) if Lessee commits
a Breach of this Lease.
40. MULTIPLE BUILDINGS. INTENTIONALLY OMITTED
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 adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay.
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, if requested by the other party, within thirty (30) days after request,
deliver to the other party satisfactory evidence of such authority.
45. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46. OFFER. Preparation of this Lease by either 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.
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.
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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 not attached to this Lease.
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.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER ASTOTHE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THETRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGEDTO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE, AND.
2. RETAIN APPROPRIATE CONSULTANTSTO REVIEW AND INVESTIGATETHE CONDITION OF
THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITEDTO: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.
LESSEE:
Executed at: 0000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx
Date: April 29, 2002
DIGITAL THEATER SYSTEMS, INC., a Delaware Corporation
By: /s/ Xxx Xxxxxxxx
-----------------
Name Printed: Xxx Xxxxxxxx
Title: President & Chief Executive Officer
LESSEE:
Executed at: 0000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx
Date: 4/29/02
DIGITAL THEATER SYSTEMS, INC., a Delaware Corporation
By: /s/ Xxx Xxxxxxxx
-----------------
Name Printed: Xxx Xxxxxxxx
Title: Vice President & Chief Financial Officer
LESSOR:
Executed at: 00000 Xxxx Xxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000
Date: 4/29/02
GEWERBEGRUND BAUTRAGER GMBH & CO. IMMOBILLIEN KG
By: /s/ Dieter Krautzig
--------------------
Name Printed: Dieter Krautzig
Title: President
GEWERBEGRUND BAUTRAGER GMBH & CO. IMMOBILLIEN KG
By: /s/ Xxxxxxxx Graessner
-----------------------
Name Printed: Xxxxxxxx Graessner
Title: Attorney-in-Fact
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FIRST ADDENDUM
(ADDITIONAL LEASE TERMS)
THIS ADDENDUM is attached to and made a part of that certain American Industrial
Real Estate Association Standard Industrial Commercial Single-Tenant Lease - Net
dated April 21st, 2002 (the "Lease") by and between GEWERBEGRUND BAUTRAGER GMBH
& CO. IMMOBILLIEN KG ("Lessor") and DIGITAL THEATER SYSTEMS, INC., a Delaware
corporation ("Lessee"), (collectively the "Parties", or individually a "Party"),
with respect to Premises (the "Premises")(as defined in the Lease) located in
the City of Agoura Hills, Los Angeles County, California. The following new
terms or modifications to existing terms are hereby made a part of the Lease as
though fully set forth therein. In the event of any inconsistency between the
terms of the Lease and this First Addendum, this First Addendum shall control.
50. BASE RENT ADJUSTMENTS: Notwithstanding any provision herein to the
contrary, the monthly Base Rent stipulated to be paid by Lessee to Lessor
hereunder shall be paid in accordance with the following schedule:
Year 2: $14,044.80 per month or ($0.70 per square foot)
Year 3: $16,051.20 per month or ($0.80 per square foot)
Year 4: $16,552.80 per month or ($0.825 per square foot)
Year 5: $17,054.40 per month or ($0.85 per square foot)
51. EARLY TERMINATION: Provided that Lessee is in full compliance with the
terms and conditions of the Lease, Lessee shall have the right to terminate the
Lease commencing with the 25th month of the Lease term by providing the
following:
a) Lessee shall provide Lessor with a minimum of six (6) months
prior written notice; and,
b) Lessee shall reimburse Lessor for the: (i) unamortized portion
of the tenant improvement cost and (ii) the unamortized
portion of the leasing commission at the rate of seven (7%)
percent per annum; both fully amortized over the initial five
(5) year lease term.
52. TENANT IMPROVEMENT ALLOWANCE. Lessor shall contribute the sum of
$50,000.00 for demolition and renovation. This sum shall be payable upon the
Building Department's Final Inspection, receipt of accounting and unconditional
labor and material releases from all material suppliers, subcontractors/General
Contractor. All work performed by Lessee's contractor shall meet all current
building codes and regulations (State and Federal). Lessee shall submit all
plans to Lessor for Lessor's review and approval prior to the commencement of
work described on Lessee's plans. Lessor's consent shall not be unreasonably
withheld or denied.
53. LESSOR'S RESPONSIBILITY: Lessor, at Lessor's sole cost and expense,
shall maintain and repair, the structural integrity of the roof, walls, floors
and the foundations of the Premises. This is subject to and contingent upon
Lessee, Lessee's agents or representative not abusing or misusing the Building
and the Premises.
54. OPTION(S) EXTENSION. Provided that Lessee is not in default by Lessee
with any of the terms and conditions of the Lease, Lessee shall have the right
to extend the Lease Term for TWO (2) ADDITIONAL - five (5) years TERMS
commencing MAY 16TH, 2007 and ending on MAY 15TH, 2012 AND IF EXERCISED, MAY
16TH, 2012 AND ENDING ON MAY 15TH, 2017 (the "Option Extension PERIODS") by
providing Lessor with six (6) months' written notice prior to the expiration of
the Original Term or Extension Term.
55. BASE RENT FIRST OPTION TERM. If Lessee shall exercise its option(s) to
extend the term of this Lease for said additional period of five (5) years, the
monthly Base Rent to be paid hereunder shall be subject to an upward adjustment.
(a) The initial monthly Base Rent commencing as of the beginning
of the Option Term shall not be less than the Base Rent to be paid for
the final month of the Original Term, subject to adjustment, upward
only, in the same percentage proportion that the United States
Department of Labor Bureau of Labor Statistics Consumer Price Index for
Urban Wage Earner and Clerical Workers, Los Angeles, Riverside, Orange
County California ("All Items"), (1982-84 = 100) ("Index") for the
sixtieth (60th) month of the Original Term shall increase over the
Index for the forty-eighth (48th) month of the Original Term. For
purposes of convenience, the calculation of rental adjustments shall be
based on the Index for the second month prior to the final month of the
Original Term as compared to the Index for the forty sixth (46th) month
of the Original Term, provided the adjusted Base Rent shall be no less
than a three percent (3%) increase, nor greater than a six percent (6%)
in the than Base Rent paid for the final month of the Original Term.
Should the Bureau of Labor Statistics discontinue the publication of
the Index or publish the same less frequently, or alter the same in
some other manner, Lessor shall adopt a substitute index or procedure,
which reasonably reflects consumer prices.
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(b) Thereafter, the cost of living adjustments during the Initial
Option Term shall occur every twelve (12) months commencing May 16,
2008 and each May 16th annually thereafter ("Adjustment Dates"),
subject to adjustments upward only in the same percentage as that of
the Consumer Price Index Bureau of Labor Statistics of the U. S.
Department of Labor for Urban Wage Earners and Clerical Workers, Los
Angeles, Riverside, Orange County California ("All Items, 1982/84 =
100) ("Index") shall increase. For purposes of convenience, the
calculation of rental adjustments in Base Rent shall be based on the
Index for the second month prior to the respective Adjustment Date as
compared to the Index for the same month one (1) year earlier.
Notwithstanding the foregoing, in no event shall the adjusted Base Rent
be less than a three percent (3%) per annum increase, nor greater than
a six percent (6%) per annum increase above the Base Rent then in
effect at the time of the adjustment. The sum so calculated shall be
the new Base Rent until the next adjustment in Base Rent. Should the
Bureau of Labor Statistics discontinue the publication of the Index or
publish the same less frequently, or alter the same in some other
manner, Lessor shall adopt a substitute index or procedure, which
reasonably reflects consumer prices.
56. BASE RENT SECOND OPTION TERM. If Lessee shall exercise its option(s) to
extend the term of this Lease for said additional period of five (5) years, the
monthly Base Rent to be paid hereunder shall be subject to an upward adjustment.
(a) The then current monthly Base Rent commencing as of the
beginning of the Second Option Term shall not be less than the Base
Rent to be paid for the final month of the Initial Option Term, subject
to adjustment, upward only, in the same percentage proportion that the
United States Department of Labor Bureau of Labor Statistics Consumer
Price Index for Urban Wage Earner and Clerical Workers, Los Angeles,
Riverside, Orange County California ("All Items"), (1982-84 = 100)
("Index") for the sixtieth (60th) month of the Initial Option Term
shall increase over the Index for the forty-eighth (48th) month of the
Initial Option Term. For purposes of convenience, the calculation of
rental adjustments shall be based on the Index for the second month
prior to the final month of the Initial Option Term as compared to the
Index for the forty sixth (46th) month of the Initial Option Term,
provided the adjusted Base Rent shall be no less than a three percent
(3%) per annum increase, nor greater than a six percent (6%) per annum
increase above the Base Rent then in effect at the time of the
adjustment. Should the Bureau of Labor Statistics discontinue the
publication of the Index or publish the same less frequently, or alter
the same in some other manner, Lessor shall adopt a substitute index or
procedure, which reasonably reflects consumer prices.
(b) Thereafter, the cost of living adjustments during the Second
Option Term shall occur every twelve (12) months commencing May 16,
2012 and each May 16th annually thereafter ("Adjustment Dates"),
subject to adjustments upward only in the same percentage as that of
the Consumer Price Index Bureau of Labor Statistics of the U. S.
Department of Labor for Urban Wage Earners and Clerical Workers, Los
Angeles, Riverside, Orange County California ("All Items, 1982/84 =
100) ("Index") shall increase. For purposes of convenience, the
calculation of rental adjustments in Base Rent shall be based on the
Index for the second month prior to the respective Adjustment Date as
compared to the Index for second month one (1) year earlier.
Notwithstanding the foregoing, in no event shall the adjusted Base Rent
be less than a three percent (3%) per annum increase, nor greater than
a six percent (6%) per annum increase above the Base Rent then in
effect at the time of the adjustment. The sum so calculated shall be
the new Base Rent until the next adjustment in Base Rent. Should the
Bureau of Labor Statistics discontinue the publication of the Index or
publish the same less frequently, or alter the same in some other
manner, Lessor shall adopt a substitute index or procedure, which
reasonably reflects consumer prices.
57. BUILDING REPAIRS. Lessor shall have the right to replace the roof and
all existing HVAC equipment at Lessor's cost and expense at any time during the
Lease Term provide that such work is conducted by a contractor mutually
satisfactory to both Lessor and Lessee. Within thirty (30) days of such
replacement, Lessee shall assume responsibility for repairs and maintenance
thereof, including costs and expenses of such repairs and maintenance, and
become the beneficiary of any and all guarantees and warranties pertaining to
such new work and equipment. Until such replacement, Lessor shall (i) maintain
and repair the roof; and (ii) maintain and repair the HVAC equipment with Lessee
contributing an HVAC Maintenance Allowance of $250.00 per quarter.
58. ADDITIONAL CONTINGENCIES: PHASE I ENVIRONMENTAL REPORT. Lessor, at
Lessor's sole cost and expense, shall deliver to Lessee within forty-five (45)
days of the Lease Commencement Date, a Phase I Environmental Report as prepared
by a qualified environmental firm concerning the subject property. This document
shall be in conformance with the American Society for Testing and Materials
(ASTM E1527-97) standards. Not later than fifteen (15) days nor sooner than
thirty (30) days prior to the expiration or sooner termination of the lease,
Lessee, at Lessee's sole cost and expense, will provide to Lessor a Phase I
Environmental Report concerning the property.
58.1 The report will be current as of a date not more than fifteen
(15) days before the expiration or sooner termination of the lease. Lessee shall
pay for costs of the Phase I Environmental Report except in the event the Phase
I Environmental Report indicated a condition which required remediation and
which
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condition was the responsibility of the Lessor. The purpose of the Phase I
Environmental Report is to determine and provide evidence that Lessee has
complied with all applicable laws, ordinances, rules and regulations of any
governmental agency having jurisdiction concerning the use, storage and/or
disposition of Hazardous Substances on the leased property during the Term of
the lease and/or any extension thereof.
58.2 Failure of the Phase I Environmental Report to discover a
disposal or release of a Hazardous Substance on the Premises, during the term
hereof, shall not limit Lessee's and Lessor's liability.
58.3 The Phase I Environmental Report shall be in writing and shall
be prepared by a licensed contractor or engineer competent and qualified to
perform such investigation on behalf of the Lessee. Lessee shall obtain Lessor's
prior written approval of the organization or individual who will be preparing
the Phase I Environmental Report
58.4 The Phase I Environmental Report shall meet the ASTM E1527-97
Standards or those equivalent standards at the time the Report is prepared. This
Report may include conducting a site reconnaissance to visually assess present
site conditions; interviewing key employees having knowledge of historic
chemical usage, storage and disposal practices, and site usage; and preparing a
written report documenting the prepares' findings conclusions, and
recommendations of the Phase I Environmental Report.
58.5 If the Phase I Environmental Report shall indicate a condition
requiring remediation caused by Lessee, Lessee shall forthwith do such
additional investigation as is recommended in the Phase I Environmental Report
and/or cure the condition(s) specified in the Phase I Environmental Report or
revealed by such additional investigation, at Lessee's sole cost and expense,
and shall complete the additional investigations and the recommended work
without delay.
58.6 It is understood that Lessee is only responsible for any new
conditions arising since the date of the Phase I Environmental Report as
prepared by a other qualified environmental firm, immediately prior to full
possession of the Premises by Lessee.
59. RIGHT OF FIRST OFFERING. Provided that Lessee is not in default with
any of the terms and conditions of the Lease, and in the event that Lessor
elects to sell the Premises, Lessor shall notify, in writing, Lessee first that
Lessor intends to sell the Premises. Lessee shall have fifteen (15) business
days after receipt of such notice to submit an offer to purchase the Premises to
Lessor. In the event that Lessor and Lessee do not reach an agreement on the
purchase and sale of the Premises within thirty (30) days, or in the event that
Lessee decides not to purchase the Premises, this Right of First Offering shall
terminate.
As further consideration for the contemplated improvements or modifications that
Lessee shall make to the Premises, Lessor shall discount the proposed sales
price to Lessee by five (5%) percent of the total consideration. This discount
of five (5%) percent shall also apply to any unsolicited third party offers
received by Lessor during the initial Lease term or any Option terms.
The discount of five (5%) percent shall apply to a negotiated sales price of
$2,000,000.00 or greater. If the sales price is less than $2,000,000.00; then,
the price as offered to Lessee shall be the price at which Lessee may purchase
the subject Property. If Lessee declines to exercise its Right of First Offering
and the terms and conditions of the offer are modified by more than five percent
(5%), or if there is a material change in any seller financing offered, or in
the event that the sale is not consummated within 180 days of the date of the
Notice of Sale, then Lessee's right of first offering shall reapply to said
transaction.
60. RIGHT OF FIRST REFUSAL. Lessor shall not, at any time prior to the
expiration of the term of this Lease, sell the Premises, or any interest
therein, without first giving written notice to Lessee. This Notice of Sale
shall include the exact and complete terms of the proposed sale and shall have
attached thereto a copy of the bona fide offer and counter offer duly executed
by the Lessor and prospective purchaser. Lessee shall then have ten (10)
business days to give written notice to Lessor of Lessee's exercise of Lessee's
right to purchase the Premises, on the same terms, price and conditions set
forth in the Notice of Sale. If Lessee declines to exercise its Right of First
Refusal and the terms and conditions of the offer are modified by more than five
percent (5%), or if there is a material change in any seller financing offered,
or in the event that the sale is not consummated within 180 days of the date of
the Notice of Sale, then Lessee's right of first refusal shall reapply to said
transaction.
As further consideration for the contemplated improvements or modifications that
Lessee shall make to the Premises, Lessor shall discount the proposed sales
price to Lessee by five (5%) percent of the total consideration. This discount
of five (5%) percent shall also apply to any unsolicited third party offers
received by Lessor during the initial Lease term or any Option terms.
The discount of five (5%) percent shall apply to a negotiated sales price of
$2,000,000.00 or greater. If the sales price is less than $2,000,000.00; then,
the price as offered to Lessee shall be the price at which Lessee may purchase
the subject Property. If Lessee declines to exercise its Right of First Refusal
and the terms and conditions of the offer are modified by more than five percent
(5%), or if there is a material change in any
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seller financing offered, or in the event that the sale is not consummated
within 180 days of the date of the Notice of Sale, then Lessee's right of first
refusal shall reapply to said transaction.
61. ANNUAL ROOF INSPECTION. Beginning in September of 2002, and annually
thereafter including the Option Term(s), Lessor shall obtain a written roof
inspection report from a qualified roofing consultant ("Roof Report"). The
purpose of the Roof Report shall be to assess the condition of the roof on the
Premises as of each such inspection date and to make recommendations for the
maintenance procedures to be undertaken to maintain the roof in a watertight
condition. Lessor shall make the repairs recommended in the Roof Report promptly
upon its receipt of each such Roof Report. A copy of said Roof Report shall be
mailed to Lessee. Until such time as a new roof is installed on the subject
Building, Lessee shall not be responsible for the maintenance cost to the roof
except for roof maintenance costs which are attributable to Lessee's negligence
or Lessee's new roof penetrations made after the initial inspection date, which
maintenance costs shall be solely the responsibility of the Lessee.
62. SIGNS. Lessee shall have the right to install its identification sign
on either the exterior of the Premises, subject to the prior written approval by
Lessor and subject to Lessee's agreement to remove such sign and make the
repairs occasioned by such removal at the termination of this Lease. Lessee
agrees by its execution hereof that, in the event it shall install any sign on
the exterior of the Premises, or in any landscaped area adjacent to the
Premises, it shall remove such sign at the termination of this Lease and shall
make any and all repairs to the building exterior and/or landscaping occasioned
by such removal, at its sole cost and expense, not later than ten (10) days
after the termination of this Lease. Such repairs shall include, but not be
limited to, the filling of holes and/or cracks and the painting of portions of
the building exterior which, in the reasonable opinion of Lessor, must be
repainted in order for the removal of such sign to leave no visible effect
63. INDEMNITIES. Lessor and Lessee shall indemnify each other and hold each
other harmless from and against any and all claims arising from their respective
negligence or willful acts.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
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LESSEE:
Executed at: 0000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx
Date: April 29, 2002
DIGITAL THEATER SYSTEMS, INC., a Delaware Corporation
By: /s/ Xxx Xxxxxxxx
-----------------
Name Printed: Xxx Xxxxxxxx
Title: President & Chief Executive Officer
LESSEE:
Executed at: 0000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx
Date: 4/29/02
DIGITAL THEATER SYSTEMS, INC., a Delaware Corporation
By: /s/ Xxx Xxxxxxxx
-----------------
Name Printed: Xxx Xxxxxxxx
Title: Vice President & Chief Financial Officer
LESSOR:
Executed at: 00000 Xxxx Xxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000
Date: 4/29/02
GEWERBEGRUND BAUTRAGER GMBH & CO. IMMOBILLIEN KG
By: /s/ Dieter Krautzig
--------------------
Name Printed: Dieter Krautzig
Title: President
GEWERBEGRUND BAUTRAGER GMBH & CO. IMMOBILLIEN KG
By: /s/ Xxxxxxxx Graessner
-----------------------
Name Printed: Xxxxxxxx Graessner
Title: Attorney-in-Fact
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