EXHIBIT 10.18
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE - GROSS
AIR COMMERCIAL REAL ESTATE ASSOCIATION
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("Lease"), dated for reference purposes only May 25,
2004 , is made by and between GOLKAR ENTERPRISES, LTD
("Lessor") and MOTORCAR PARTS OF AMERICA, INC.
("Lessee"), (collectively the "Parties", or individually a "Party"),
1.2(a) PREMISES: That certain portion of the Project (as defined below).
Including all improvements therein or to be provided by Lessor under the terms
of this Lease, commonly known by the street address of 000 Xxxxx Xxx located in
the City of Torrance, County of Los Angeles State of California, with zip Code
90503 , as outlined on exhibit A attached hereto ("Premises") and generally
described as (describe briefly the nature of the Promises): an approximately
4,005 square foot free standing building, part of a larger industrial complex
comprised of approximately 359,911 square feet
In addition to Lessee's rights to use and occupy the Premises as
hereinafter specified, Lessen shall have non-exclusive rights to the Common
Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall
not have any rights to the roof, exterior walls or utility raceways of the
building containing the Promises ("Building") or to any other buildings in the
Project. The Premises, the Building, the Common Areas, the land upon which they
are located, along with all other buildings and Improvements thereon, are herein
collectively referred to as the "Project." (See also Paragraph 2.)
1.2(b) PARKING: as available unreserved vehicle parking spaces ("Unreserved
Parking Spaces-); and n/a reserved vehicle parking spaces ("Reserved Parking
Spacer"). (See also Paragraph 2.6.)
1.3 TERM: two (2) years and nine (9) months ("Original Term") commencing July
01, 2004 ("Commencement Date") and ending, March 31, 2007 ("Expiration Date").
(See also paragraphs 3.2 and 3.3)
1.4 EARLY POSSESSION: n/a ("Early Possession Date"). (See also Paragraphs 3.2
and 3.3,)
1.5 BASE RENT $3,400.00 per month ("Base Rent"), payable an the first day of
each month commencing July 1, 2004. (See also Paragraph 4.)
[ ] If this box is checked there are provisions in this Lease for the Base Rent
to be adjusted.
1.6 LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: July 01, 2004 percent
(1.11 %) ("Lessee's Share"), 1.7 Base Rent and Other Monies Paid Upon Execution:
(a) BASE RENT: $3, 400.00 for the period July 01, 2004, through July 31, 2004
(b) ESTIMATED COMMON AREA OPERATING EXPENSES: $16.21 for the period July 01-31,
2004
(c) SECURITY DEPOSIT: $ 3,400.00 ("Security Deposit"). (See also Paragraph 5.)
(d) OTHER: $n/a for n/a
(e) TOTAL DUE UPON EXECUTION OF THIS LEASE: $6,816.21
1.8 AGREED USE; general office and related activities for auto parts
manufacturing and distribution (See also Paragraph 6.)
1.9 INSURING PARTY. Lessor is the -insuring Party. (See also Paragraph 8.)
1.10 REAL ESTATE BROKERS: (See also Paragraph 15.)
(a) REPRESENTATION: The following real estate brokers (the "Brokers") and
brokerage relationships exist in this transaction (check applicable boxes):
[ ] n/a represents Lessor exclusively ("Lessor's Broker"):
[ ] n/a represents Lessee exclusively ("Lessee's Broker"); or
[ ] n/a represents both Lessor and Lessee ("Dual Agency").
(b) PAYMENT TO BROKERS: Upon execution and delivery of this Lease by both
Parties, Lessor shall pay to the Brokers the brokerage fee agreed to in a
separate written agreement (or if there 15 no such agreement, the sum of per
agreement or per agmt % of the total Base Rent for the brokerage services
rendered by the Brokers),
1.11 GUARANTOR. The obligations of the Lessee under this Lease are to be
guaranteed by n/a ("Guarantor"), (See also Paragraph 37)
1.12 ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda consisting
of Paragraphs 50 through 55 and Exhibits A through A, 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 Rent, is en approximation which the Parties agree Is
reasonable and any payments based thereon are not subject to revision whether or
not the actual size Is more or less
2.2 CONDITION. Lessor shall deliver that portion of the Premises contained
within the Building ("Unit") to Lessee xxxxx xxxx 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 and In effect within thirty days following
the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems ("HVAC"), loading
doors, if any, and
all other such elements In the Unit, other than those constructed by Lessee,
shall be in good operating condition on sold date and that the structural
elements of the roof, bearing walls and foundation of the Unit shall be free of
material defects. If a non-compliance with such warranty exists as of the Start
Date, or If one of such systems or elements should malfunction or fail within
the appropriate warranty period, Lessor shall, as Lessors sole obligation with
respect to such matter, except as Initials 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. malfunction or
failure, rectify same at Lessor's expense. The warranty periods shall be as
follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the
remaining systems and other elements of the Unit. If Lessee does not give Lessor
the required notice within the appropriate warranty period. Correction of any
such non-compliance, malfunction or failure shall be the obligation of Lessee at
Lessee's sole cost and expense (except for the repairs to the fro sprinkler
systems. roof, foundations, and/or bearing walls see Paragraph 7).
2.3 COMPLIANCE. Lessor warrants that the improvements on the Premises and the
Common Areas comply with the building codes that were In effect at the time that
each such Improvement, or portion thereof, was constructed, and also with all
applicable laws, Covenants or restrictions of record, regulations, and
ordinances in effect on the Start xxxx (Applicable Requirements"). 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. If the Premises do not Comply
with said warranty. Lessor shall, except as otherwise provided, promptly after
receipt of written notice from Lessee setting forth with specificity the nature
and extent of such non-compliance, rectify the same at Lessor's expense. If
Lessee does not give Lessor written notice of a non-compliance with this
warranty within 6 months following the Start Data, correction of that
non-compliance shall be the obligation of Lessee at Lessee's sole cost and
expanse. If the Applicable Requirements are hereafter changed so as to require
during the term of this Lease the construction of an addition to or an
alteration of the Unit, Premises and/or Building, the remediation of any
Hazardous Substance. or the reinforcement or other physical modification of the
Unit. Premises and/or Building ("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 Promises by Lessee as compared
With uses by tenants in general, Losses shall be fully responsible for the cost
thereof, provided, however, that if such Capital Expenditure is required during
the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent,
Lessee may Instead terminate this Lease unless Lessor notifies Lessee, in
writing, within 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 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 90 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 (such as, governmentally mandated seismic
modifications), then Lessor and Lessee shall allocate the obligation to pay for
the portion of such costs reasonably attributable to the Premises pursuant to
the formula sat out in Paragraph 7.1(d): provided, however, that if such Capital
Expenditure Is required during the last 2 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 90 days prior
written notice to Lessee unless Lessee notifies Lessor. In writing, within 10
days after receipt of Lessor's termination notice that Lessee will pay for such
Capital Expenditure. If Lessor dogs not elect to terminate, and fails to tender
Its share of any such Capital Expenditure, Lessee may advance such funds and
deduct same, with Interest, from Rent until Lessor's share of such costs have
been fully paid. If Lessee Is unable to finance Lessor's share. or 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 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 Promises 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
Promises (including but not limited to the electrical, HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable
Requirements and the Americans with Disabilities Act), and their suitability for
Lessee's Intended use, (b) Lessee has made such investigation as it deems
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to Its occupancy of the Premises, and (c) neither Lessor,
Lessor's agents, nor Brokers have 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 (1) Brokers have made no representations,
promises or warranties concerning Lessee's ability to honor the Lease or
suitability to occupy the Premises, and (ii) It is Lessor's sole responsibility
to Investigate the financial capability and/or suitability of all proposed
tenants.
2.5 Intentionally blank.
2.6 VEHICLE PARKING. Lessee shall be entitled to use the number of Unreserved
Parking Spaces and Reserved Parking Spaces specified in Paragraph 1.2(b) on
those portions of the Common Areas designated from time to time by Lessor for
parking. Lessee shall not use more parking spaces than said number. Said parking
spaces shall be used for parking by vehicles no larger than full-size passenger
automobiles or pick-up trucks, herein called Permitted Size Vehicles" Lessor may
regulate the loading and unloading of vehicles by adopting Rules and Regulations
as provided In Paragraph 2.9. No vehicles other than Permitted Size Vehicles may
be parked in the Common Area without the prior written permission of Lessor.
(a) Losses shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked In areas other than
those designated by Lessor for such activities.
(b) Lessee shall not service or store any vehicles in the Common Areas
(c) If Lessee permits or allows any of the prohibited activities described in
this Paragraph 2.6, then Lessor shall have the right, without notice, In
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.
2.7 COMMON AREAS DEFINITION. The term Common Areas" is defined as all areas and
facilities outside the Promises and within the exterior boundary line of the
Project and interior utility raceways and installations within the Unit that are
provided and designated by the Lessor from time to time for the general
non-exclusive use of Lessor. Lessee and other tenants of the Project and their
respective employees, suppliers, shippers, customers, contractors and invitees,
including parking areas, loading and unloading areas, trash areas, roadways,
walkways, driveways and landscaped areas.
2.8 COMMON AREAS - Lessee's Rights. Lessor grants to Lessee, for the benefit of
Lessee and Its employees, suppliers, shippers, contractors, customers and
Invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such case, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Project. Under no circumstances shall the
right herein granted to use the Common Areas be deemed to Include the right to
store any property, temporarily or permanently, in the Common Areas Any such
storage shall be permitted only by the prior written consent of Lessor or
Lessor's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur, then Lessor shall have the
right, without notice, In addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.
2.9 COMMON AREAS - Rules and Regulations. Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from time to time, to establish, modify, amend
and enforce reasonable rules and regulations ("Rules and Regulations") for the
management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Building and the Project and
their invitees. Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause Its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the non-compliance with said Rules and Regulations by
other tenants of the Project.
2.10 COMMON AREAS - CHANGES. Lessor shall have the right, In Lessor's sole
discretion, from time to time:
(a) To make changes to the Common Areas, Including. without limitation, changes
In the
location, size, shape and number of driveways, entrances, perking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas. walkways and utility raceways;
(b) To dose temporarily any of the Common Areas for maintenance purposes so long
as reasonable access to the Promises remains available;
(c) To designate other land outside the boundaries of the Project to be a part
of the Common Areas;
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the Common Areas white engaged in making additions(improvements,
repairs or alterations to the Project, or any portion thereof; and
(f) To do and perform such other acts and make such other changes In, to or with
respect to the Common Areas and Project as Lessor may. In the exercise of sound
business judgment, deem to be appropriate.
3. TERM.
3.1 TERM. The Commencement Data, Expiration Date and Original Term of this Lease
are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If Lessee totally or partially occupies the Premises prior
to the Commencement Date, the obligation to pay Base Rent shall be abated for
the period of such early possession. All other terms of this tease (Including
but not limited to the obligations to pay Lessee's Share of Common Area
Operating Expenses. Real Property Taxes and insurance premiums and to maintain
the Premises) shall, however, be In effect during such period. Any such early
possession shall not affect the Expiration Date.
3.3 DELAY IN POSSESSION. Lessor agrees to use its best commercially reasonable
efforts to deliver possession of the Premises to Lessee by the Commencement
Date. If, despite said efforts, Lessor is unable to deliver possession as
agreed, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease. Lessee shall not, however; be
obligated to pay Rent or perform its other obligations until It receives
possession of the Premises. If possession Is not delivered within 60 days after
the Commencement Data, Lessee may, at Its option, by notice In writing within 10
days after the end of such 60 day period, cancel this Lease, in which event the
Parties shall be discharged from all obligations hereunder. If such written
notice is not received by Lessor within said 10 day period. Lessee's right to
cancel shall terminate. Except as otherwise provided, if possession is not
tendered to Lessee by the Start Date and Lessee does not terminate this Lease,
as aforesaid, any period of rent abatement that Lessee would otherwise have
enjoyed shall run from the date of delivery of possession and continue for a
period equal to what Lessee would otherwise have enjoyed under the terms hereof,
but minus any days of delay caused by the acts or omissions of Lessee. If
possession of the Premises is not delivered within 4 months after the
Commencement Date, this Lease shall terminate unless other agreements are
reached between Lessor and Lessee in writing.
3.4 LESSEE COMPLIANCE. Lessor shall not be required to tender possession of the
Premises to Lessee until Lessee complies with Its obligation to provide evidence
of insurance (Paragraph 8.5). Pending delivery of such evidence. Lessee shall be
required to perform all of Its obligations
under this Lease from and after the Start Date, Including the payment of Rent,
notwithstanding Lessor's election to withhold possession pending receipt of such
evidence of Insurance. Further, if Lessee Is required to perform any other
conditions prior to or concurrent with the Start Date, the Start Date shall
occur but Lessor may elect to withhold possession until such conditions are
satisfied.
4. RENT.
4.1. RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms
of this Lease (except for the Security Deposit) are deemed to be rent ("Rent").
4.2 Common Area Operating Expenses Lessee shall pay to Lessor during the term
hereof, in addition to the Base Rent, Lessee's Share (as specified In Paragraph
1.6.) of all Common Area Operating Expenses, as hereinafter defined, during each
calendar year of the term of this Lease, in accordance with the following
provisions:
(a) "Common Area Operating Expenses" are defined, for purposes of this Lease, as
all costs incurred by Lessor rotating to the ownership and operation of the
Project, including, but not limited to, the following:
(i) The operation, repair and maintenance, in neat, clean, good order and
condition, but not the replacement (see subparagraph (e)), of the following:
(aa) The Common Areas and Common Area improvements, including
parking areas, loading and unloading areas, trash areas, roadways, parkways,
walkways, driveways, landscaped areas, bumpers, irrigation systems, Common Area
lighting facilities, fences and gates, elevators, roofs, and roof drainage
systems.
(bb) Exterior signs and any tenant directories.
(cc) Any fire sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to service the
Common Areas and any utilities not separately metered.
(iii) Trash disposal, pest Control services, property management, security
services, and the costs of any environmental inspections.
(iv) Reserves set aside for maintenance and repair of Common Areas.
(v) Any Increase above the Base Real Property Taxes (as defined In
Paragraph 10).
(vi) Any "Insurance Cost Increase" (as defined In Paragraph 8).
(vii) Any deductible portion of an insured loss concerning the Building or
the Common Areas,
(viii) The coat of any Capital Expenditure to the Building or
the Project not covered under the provisions of Paragraph 2.3 provided; however,
that Lessor shall allocate the cost of any such Capital Expenditure over a 12
year period and Lessee shall not be required to pay more than Lessee's Share of
1/144th of the Cost of such Capital Expenditure In any given month.
(ix) Any other services to be provided by Lessor that are stated elsewhere
in this Lease to be a Common Area Operating Expense.
(b) Any Common Area Operating Expenses and Real Property Taxes that are
specifically attributable to the Unit, the Building or to any other building in
the Project or to the operation, repair and maintenance thereof, shall be
allocated entirely to such Unit, Building, or other
building. However, any Common Area Operating Expenses and Real Property Taxes
that are not specifically attributable to the Building or to any other building
or to the operation, repair and maintenance thereof, shall be equitably
allocated by Lessor to all buildings in the Project.
(c) The inclusion of the Improvements, facilities and services set forth in
Subparagraph 4.2(e) shall not be deemed to Impose an obligation upon Lessor to
either have said Improvements or facilities or to provide those services unless
the Project already has the same. Lessor already provides the services, or
Lessor has agreed elsewhere In this Lease to provide the same or some of them.
(d) Lessee's Share of Common Area Operating Expenses shall be payable by Lessee
within 10 days after a reasonably detailed statement of actual expenses Is
presented to Lessee. At Lessor's option, however, an amount may be estimated by
Lessor from time to time of Lessee's Share of annual Common Area Operating
Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each 12 month period of the Lease term, on the same day as the
Base Rent is due hereunder. Lessor shall deliver to Lessee within 60 days after
the expiration of each calendar year a reasonably detailed statement showing
Lessee's Share of the actual Common Area Operating Expenses Incurred during the
preceding year. If Lessee's payments under this Paragraph 4.2(d) during the
preceding year exceed Lessee's Share as indicated an such statement, Lessor
shall credit the amount of such overpayment against Lessee's Share of Common
Area Operating Expenses next becoming due. If Lessee's payments under this
Paragraph 4.2(d) during the preceding year were less than Lessee's Share as
Indicated on such statement, Lessee shall pay to Lessor the amount of the
deficiency within 10 days after delivery by Lessor to Lessee of the statement.
(e) When a Capital component such as the roof, foundations, exterior walls or a
Common Area capital Improvement, such as the parking lot paving, elevators,
fences, ate. requires replacement, rather than repair or maintenance. Lessor
shall, at Lessor's expense, be responsible for such replacement. Such expenses
and/or costs are not Common Area Operating Expanses.
4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor In
lawful money of the United States, Without offset or deduction (except as
specifically permitted in this Lease), on or before the day on Which It is due.
Rent for any period during the term hereof which Is for less than one 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. In the event that any check,
draft, or other Instrument of payment given by Lessee to Lessor is dishonored
for any reason, Lessee agrees to pay to Lessor the sum of $25.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit as security for Lessee's faithful performance of Its
obligations under this Lease. If Lessee falls to pay Rent, or otherwise Defaults
under this Lease, Lessor may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability. expense, loss or damage which Lessor may
suffer or Incur by reason thereof. If Lessor uses or applies all or any portion
of the Security
Deposit. Lessee shall within 10 days after written request therefor deposit
monies with Lessor sufficient to restore said Security Deposit to the full
amount required by this Lease. If the Base Rent increases during the term of
this Lease, Lessee shall, upon written request from Lessor, deposit additional
monies with Lessor so that the total amount of the Security Deposit shall at all
times bear the same proportion to the increased Base Rent as the initial
Security Deposit bore to the Initial Base Rent. Should the Agreed Use be amended
to accommodate a material change in the business of Lessee or to accommodate a
sublessee or assignee, Lessor shall have the right to Increase the Security
Deposit to the extent necessary, in Lessor's reasonable judgment, to account for
any increased wear and tear that the Premises may suffer as a result thereof. It
a change in control of Lessee occurs during this Lease and following such change
the financial condition of Lassos Is, in Lessor's reasonable judgment,
significantly reduced. Lessee shell deposit such additional monies with Lessor
as shall be sufficient to cause the Security Deposit to be et a commercially
reasonable level based on such change in financial condition. Lessor shall not
be required to keep the Security Deposit separate from its general accounts.
Within 14 days after the expiration or termination of this Lease, If Lessor
elects to apply the Security Deposit only to unpaid Rent, and otherwise within
30 days after the Premises have been vacated pursuant to Paragraph 7.4(c) below.
Lessor shall return that portion of the Security Deposit not used or applied by
Lessor. No part of the Security Deposit -Shall be considered to be held In
trust, to bear interest or to be prepayment for any monies to be paid by Lessee
under this Lease.
6. USE.
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 occupants of
or causes damage to neighboring premises or properties. Lessor shall not
unreasonably withhold or delay its consent to any written request for a
modification of the Agreed Use, so tong as the same will not impair the
structural integrity of the improvements on the Premises or the mechanical or
electrical systems therein, and/or is not significantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after
such request give written notification of same. which notice shall Include an
explanation of Lessors objections to the change In the Agreed 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 Promises 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 moan (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 tiled with, any
governmental authority, and/or (iii) the presence at the Premises of a Hazardous
Substance with respect to which any Applicable Requirements requires that a
notice be given to persons entering or occupying the Premises or neighboring
properties. Notwithstanding the foregoing. Lessee may use any ordinary and
customary materials reasonably required to be used In the normal course of the
Agreed Use, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination or damage or expose
Lessor to any liability therefor. In addition, Lessor may condition its consent
to any Reportable Use upon receiving such additional assurances as Lessor
reasonably deems necessary to protect itself, the public, the Premises and/or
the environment against damage, contamination. Injury and/or liability,
including, but not limited to. the installation (and removal on or before Lease
expiration or termination) of protective modifications (such as concrete
encasements) and/or increasing the Security Deposit.
(b) DUTY TO INFORM LESSOR. If Lessee knows. or has reasonable cause to believe,
that a Hazardous Substance has come to be located in, on, under or about the
Premises. other than as previously consented 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 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) LOSSES INDEMNIFICATION. Lessee shall indemnify, defend and hold Lessor, Its
agents, employees, lenders and ground lessor, if any, harmless from and against
any and 211 loss of rants and/or damages, liabilities, judgments, claims,
expenses, penalties, and attorneys' and consultants' fees arising out of or
involving any Hazardous Substance brought onto the Premises by or for Lessee, or
any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Promises from areas outside of the Project). 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 and all environmental damages, Including the cost of remediation, 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 willful misconduct of
Lessor, its agents or employees. Lessors obligations, as and when required by
the Applicable Requirements, shall include, but not be limited to, the cost of
investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease.
(f) INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the responsibility and
pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous
Substances on the Premises prior to the Start Data, unless such remediation
measure is required as a result of Lessee's use (including "Alterations", as
defined in paragraph 7.3(a) below) of the Premises. in which event Lessee shall
be responsible for such payment. Lessee shall cooperate fully In any such
activities at the request of Lessor, including allowing Lessor and Lessor's
agents to have reasonable access to the Premises at reasonable times in order to
carry out Lessor's investigative and remedial responsibilities.
(g) LESSOR TERMINATION OPTION. If a Hazardous Substance Condition (see Paragraph
9.1(e)) occurs during the term of this Lease, unless Lessee Is legally
responsible therefor (In which case Lessee shall make the Investigation and
remediation thereof required by the Applicable Requirements and 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 reasonably possible at Lessor's expense, in which event this Lease shall
continue In fun force and effect, or (ii) If the estimated cost to remediate
such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever Is greater, give written notice to Lessee, within 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 60 days
following the date of such notice. In 'the event Lessor elects to give a
termination notice, Lessee may, within 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 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 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, 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 recommendations of Lessor's engineers
and/or consultants which relate In any manner to the Promises, without regard to
whether said requirements are now in effect or become effective after the Start
Data_ Lessee shall, within 10 days after receipt of Lessor's written request.
provide Lessor with copies of all permits and other documents, and other
information evidencing Lessee's compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor In
writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning. complaint or report pertaining to or Involving the failure of Lessee or
the Promises to comply with any Applicable Requirements.
6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's' "Lender" (as defined In
Paragraph 30) and consultants shall have the right to enter into Promises at any
time, in the case of an emergency, and otherwise at reasonable times, for the
purpose of inspecting the condition of the Premises and for verifying compliance
by Lessee with this Lease. The cost of any such Inspections shall be paid by
Lessor, unless a violation of Applicable Requirements, or a contamination Is
found to exist or be imminent, or the Inspection Is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor
for the Cost of such Inspection, so long as such Inspection is reasonably
related to the violation or contamination.
7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND ALTERATIONS,
7.1 LESSEE'S OBLIGATIONS.
(a) IN GENERAL. Subject to the provisions of 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), Lessee
shall, at Lessee's sole expense, keep the Premises, Utility Installations
(intended for Lessee's exclusive use, no matter where located), 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, HVAC equipment, electrical, lighting facilities, boilers,
pressure vessels, fixtures, interior walls, interior surfaces of exterior walls,
ceilings, floors, windows, doors, plate glass, and skylights but excluding any
Items which are the responsibility of Lessor pursuant to Paragraph 7.2 Lessee,
in keeping the Promises 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.
(b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole expense, procure and
maintain contracts, with copies to Lessor, In customary form and substance for,
and with contractors specializing and experienced in the maintenance of the
following equipment and improvements, If any, if and when installed on the
Premises: (i) HVAC equipment, (ii) boiler and pressure vessels, (iii)
clarifiers. and (iv) any other equipment. if reasonably required by Lessor.
However, Lessor reserves the right, upon notice to Lessee, to procure and
maintain any or all of such service contracts, and if Lessor so elects, Lessee
shall reimburse Lessor, upon demand, for the cost thereof.
(c) FAILURE TO PERFORM. If Lessee fails to perform Lessee's obligations under
this Paragraph 7.1, Lessor may enter upon the Premises after 10 days' prior
written notice to Losses (except In the case of an emergency, in which case no
notice shall be required). perform such obligations on
Lessee's behalf, and put the Promises In good order, condition and repair, and
Lessee shall promptly reimburse Lessor for the cost thereof.
(d) 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 an Item
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 item. then such Item 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 144 (i.e. 1/144th of
the cost per month). Lessee shall pay Interest on the unamortized balance at a
rate that is commercially reasonable in the judgment of Lessor's accountants.
Lessee may, however, prepay its obligation et any time.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use).
7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation),
Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good
order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler system,
Common Area fire alarm and/or smoke detection systems, fire hydrants, parking
lots, walkways, parkways, driveways, landscaping, fences, signs and utility
systems serving the Common Areas and all parts thereof, as well as providing the
services for which there is a Common Area Operating Expense pursuant to
Paragraph 42 Lessor shall not be obligated to paint the exterior or interior
surfaces of exterior walls nor shall Lessor be obligated to maintain. repair or
replace windows, doors or plate glass of the Premises. Lessee expressly waives
the benefit of any statute now or hereafter in affect to the extent it is
inconsistent with the terms of this Lease.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS. The term "Utility Installations" refers to all floor and window
coverings, air lines, power panels, electrical distribution, security and fire
protection systems, communication systems, lighting fixtures, HVAC equipment,
plumbing, and fencing In or on the Premises. The term "Trade Fixtures" shall
mean Lessee's machinery and equipment that can be removed without doing material
damage to the Promises. The term 'Alterations" shall mean any modification of
the improvements, other than Utility Installations or Trade Fixtures, whether by
addition or deletion. "Lasses 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).
(b) CONSENT. Lessee shall not make any Alterations or Utility Installations to
the Promises without Lessor's prior written consent. Lessee may, however, make
non-structural Utility Installations to the Interior of the Promises (excluding
the roof) without such consent but upon notice to Lessor, as long as they are
riot visible from the outside, do not Involve puncturing, relocating or removing
the roof or any existing walls, and the cumulative cost thereof during this
Lease as extended does not exceed a sum equal to 3 month's Base Rent in the
aggregate or a sum
1
equal to one month's Base Rent in any one year. Notwithstanding the foregoing,
Lessee shall not make or permit any roof penetrations and/or install anything on
the roof without the prior written approval of Lessor. Lessor may, as a
precondition to granting such approval, require Lessee to utilize a contractor
chosen and/or approved by Lessor. 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
promptly upon completion furnish Lessor with as-built plans and specifications_
For work which costs an amount in excess of one month's Base Rent, Lessor may
condition its consent upon Lessee providing a [(on and completion bond in an
amount equal to 150% of the estimated cost of such Alteration or Utility
Installation and/or upon Lessee's posting an additional Security Deposit with
Lessor.
(c) INDEMNIFICATION. Lessee shall pay, when due. all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanic's or
materlalmen's lien against the Premises or any Interest therein. Lessee shall
give Lessor not less than 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 game and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof. If
Lessor shall require, Lessen shall furnish a surety bond in an amount equal to
150% of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessors attorneys' fees and coats.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION,
(a) OWNERSHIP. Subject to Lessor's right to require removal or elect ownership
as hereinafter provided, air Alterations and Utility Installations made by
Lasses shall be the property of Lessee, but considered a part of the Premises.
Lessor may, at any time, alert in writing to be the owner of all or any
specified part of the Lessee Owned Alterations and Utility Installations. Unless
otherwise Instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations
and Utility Installations shall, at the expiration or termination of this Lease,
become the property of Lessor and be surrendered by Lessee with the premises.
(b) REMOVAL. By delivery to Lessee of written notice from Lessor not earlier
than 90 and not later than 30 days prior to the end of the term of this Lease,
Lessor may require that any or all Lessee Owned Alterations or Utility
Installations be removed by the expiration or termination of this Lease. Lessor
may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.
(c) SURRENDER, RESTORATION. Lessee shall surrender the Premises by the
Expiration Date or
any earlier termination date, with all of the improvements, parts and surfaces
thereof broom clean and free of debris, and in good operating order, condition
and state of repair, ordinary wear and tear excepted. Ordinary wear and tear"
shall not include any damage or deterioration that would have been prevented by
good maintenance practice. Notwithstanding the foregoing, if this Lease Is for
12 months or less, then Lessee shall surrender the Premises In the same
condition as delivered to Lessee on the Start Date with NO allowance for
ordinary wear and tear. Lessee shall repair any damage occasioned by the
Installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations
and/or Utility Installations, furnishings, and equipment as wall as the removal
of any storage tank Installed by or for Lessee. Lessee shall also completely
remove from the Promises any and all Hazardous Substances brought onto the
Premises by or for Lessee, or any third party (except Hazardous Substances which
were deposited via underground migration from areas outside of the Project) even
if such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessen 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 OF PREMIUM INCREASES
(a) As used herein, the term 'insurance Cost Increase" Is defined as any
increase In the actual cost of the Insurance applicable to the Building and/or
the Project and required to be carried by Lessor, pursuant to Paragraphs 6.2(b).
8.3(a) and 8.3(b), ("Required Insurance"), over and above the Base Premium, as
hereinafter defined, calculated on an annual basis. Insurance Cost Increase
shall include, but not be limited to, requirements of the holder of a mortgage
or deed of trust covering the Premises, Building and/or Project, increased
valuation of the Premises. Building and/or Project, and/or a general premium
rate Increase. The term Insurance Cost Increase shall not, however, Include any
premium increases resulting from the nature of the occupancy of any other tenant
of the Building. If the parties Insert a dollar amount in Paragraph 1.9, such
amount shall be considered the "Base Premium." The Base Premium shall be the
annual premium applicable to the 12 month period Immediately preceding the Start
Date. If, however, the Project was not insured for the entirety of such 12 month
period, then the Base Premium shall be the lowest annual premium reasonably
obtainable for the Required Insurance as of the Start Date, assuming the most
nominal use possible of the Building. In no event, however, shall Lessee be
responsible for any portion of the premium cost attributable to liability
insurance coverage in excess of $2,000,000 procured under Paragraph 8.2(b).
(b) Losses shall pay any Insurance Cost Increase to Lessor pursuant to Paragraph
4.2. Premiums for policy periods commencing prior to. or extending beyond, the
term of this Lease shall be prorated to coincide with the corresponding Start
Date or Expiration Date.
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 as an
additional Insured 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 $1,000,000 per occurrence with
an annual aggregate of not less than $2,000,000, an "Additional Insured-Managers
or Lessors of Promises Endorsement' and contain the "Amendment of the Pollution
Exclusion Endorsement" for damage caused by heat, smoke or fumes from a hostile
fire. The policy shall not contain any intra-insured exclusions as between
insured persons or organizations, but shall Include coverage for liability
assumed under this Lease as an "insured contract" for the performance of
Lessee's indemnity obligations under this Lease. The limits of said insurance
shall not, however, limit the liability of Lessee nor relieve Lessee of any
obligation hereunder. All Insurance Carried by Lessee shall be primary to and
not contributory with any similar Insurance carried by Lessor. whose insurance
shall be considered excess Insurance only.
(b) CARRIED BY LESSOR. Lessor shall maintain liability Insurance as described in
Paragraph 8.2(a), in addition to, and not In lieu of, the Insurance required to
be maintained by Losses. Lessee shell not be named as an additional Insured
therein.
8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep in force a policy or
policies of Insurance in the name of Lesser. with loss payable to Lessor, any
ground-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
Promises, as the same shall exist from time to time, or the amount required by
any Lender, but In no event more than the commercially reasonable and available
Insurable value thereof. Lessee Owned Alterations and Utility Installations,
Trade Fixtures, and Lessee's personal property shall be Insured by Losses under
Paragraph 8.4. If the coverage is available and Commercially appropriate, such
policy or policies shall insure against all risks of direct physical loss or
damage (except the perils of flood and/or earthquake unless required by a
Lander), including coverage for debris removal and the enforcement of any
Applicable Requirements requiring the upgrading, demolition, reconstruction or
replacement of any portion of the Promises 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 lass than the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where the Premises are located. If
such insurance coverage has a deductible clause, the deductible amount shall not
exceed $1,000 per occurrence.
(b) RENTAL VALUE. Lessor shall also 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 year with an extended period of
indemnity for an additional 180 days ("Rental Value Insurance"). 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 12 month period.
(c) ADJACENT PROMISES. Lessee shall pay for any Increase in the premiums for the
property insurance of the Building and for the Common Areas or other buildings
In the Project If said
increase is caused by Lesses's acts, omissions, use or occupancy of the
Premises.
(d) LESSEE'S IMPROVEMENTS. Since Lessor Is the Insuring Party, Lessor shall not
be required to Insure Lessee Owned Alterations and Utility Installations unless
the item in question has become the property of Lessor under the terms of this
Lease.
8.4 LESSEE'S PROPERTY; 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 firm any
such Insurance shall be used by Lessee for the replacement of personal property,
Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee
shall provide Lessor with written evidence that such Insurance Is In force.
(b) BUSINESS INTERRUPTION. Lessee shall obtain and maintain loss of Income and
extra expense insurance in amounts as will reimburse Lessee for direct or
indirect loss of earnings attributable to ell 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 G-, V. as set forth in the most current issue of Beat's Insurance
Guide', or such other rating as may be required by a Lender. Lessee shall not do
or permit to be done anything which invalidates the required insurance policies.
Lessee shall, prior to the Start Date, deliver to Lessor certified copies of
policies of such insurance or certificates evidencing the existence and amounts
of the required insurance. No such policy shall be Cancelable or subject to
modification except after 30 days prior written notice to Lessor. Lessee shall,
at least 30 days prior to the expiration of such policies, furnish Lessor with
evidence of renewals or "insurance binders" evidencing renewal thereof, or
Lessor may order such insurance and charge the cost thereof to Lessee, which
amount shall be payable by Lessee to Lessor upon demand. Such policies shall be
for a term of at least one year, or the length of the remaining term of this
Lease, whichever Is less. If either Party shall fail to procure and maintain the
Insurance required to be carried by It, the other Party may, but shall not be
required to, procure and maintain the same.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies.
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages against the other, for loss of or damage to Its
property arising out of or Incident to the perils required to be Insured against
herein. The affect 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 for Lessor's gross negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, liens, judgments,
penalties, attorneys' and consultants' fees, expenses and/or liabilities arising
out of, involving, or in connection with, the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by
reason of any of the foregoing matters, Losses 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 riot 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, or from other sources or
places. Lessor shall not be liable for any damages arising from any act or
neglect of any other tenant of Lessor nor from the failure of Lessor to enforce
the provisions of any other lease In the Project Notwithstanding Lessor's
negligence or breach of this Lease, Lessor shall under no circumstances be
liable for Injury to Lessee's business or for any loss of income or profit
therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS,
(a) "Premises Partial Damage" shall mean damage or destruction to the
Improvements on the Promises, other than Lessee Owned Alterations and Utility
Installations, which can reasonably be repaired In 3 months or less from the
data of the damage or destruction, and the cost thereof does not exceed a sum
equal to 6 month's Base Rent Lessor shall notify Lessee In writing within 30
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total.
(b) "Premises Total Destruction" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired In 3
months or less from the date of the damage or destruction and/or the cost
thereof exceeds a sum equal to 0 month's Base Rent Lessor shall notify Lessee In
writing within 30 days from the date 'of the damage or destruction as to whether
or not the damage is Partial or Total.
(c) "Insured Loss" shall mean damage or destruction to Improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described In Paragraph 8.3(a), irrespective of
any deductible amounts or coverage limits Involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the Improvements
owned by Lessor at the time of the occurrence to their condition existing
Immediately prior thereto, including demolition, debris removal and upgrading
required by the operation of Applicable Requirements, and without deduction for
depreciation,
(e) "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 8.2(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 Lassoes
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, in such event, Lessor shall make any applicable
Insurance proceeds available to Lessee an 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 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 coat
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 Promises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within 10 days following
receipt of Written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said 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 10 pays 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 30 days thereafter. Lessee shall not be entitled
to reimbursement of any funds contributed by Lessee to repair any such damage or
destruction. Promises 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 ouch 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 ()) repair such damage as soon as reasonably possible at Lessors 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 30 days after
receipt by Lessor of knowledge of the occurrence of such damage. Such
termination shall be effective 60 days following the date of such notice. In the
event Lessor elects to terminate this Lease, Lessee shall have the right within
10 days after receipt of the termination notice to give written notice to Lessor
or Lessee's commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof Within 30 days after making such commitment. In
such event this Lease shell 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 60 days following such
Destruction. If the damage or destruction was caused by the gross negligence or
willful misconduct of Lessee, Lessor shall have the right to recover Lessor's
damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage Near End of Term. If at any time during the last B months of this
Lease there Is damage for which the cost to repair exceeds one month's Base
Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective
60 days following the date of occurrence of such damage by giving a written
termination notice to Lessee within 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 Promises, 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 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 Lessors commercially reasonable expense, repair such damage as soon as
reasonably possible and this Lease shall continue In full force and affect. If
Losses 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 Lesses'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, but
not to exceed the proceeds received from the Rental Value Insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall
have no liability for any such damage, destruction, remediation. repair or
restoration except as provided herein.
(b) REMEDIES. If Lessor shall be obligated to repair or restore the Premises and
does not commence, in a substantial and meaningful way, such repair or
restoration within 90 days after such obligation shall accrue. Lessee may, at
any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee's election to terminate this Lease on a date not less than 60 days
following the giving of such notice. If Lessee gives such notice and such repair
or restoration Is not commenced within 30 days thereafter, this Lease shall
terminate as of the date specified In said notice. It the repair or restoration
is commenced within such 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 than required to be, used by Lessor.
9.8 WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease shall
govern the effect of any damage to or destruction of the Premises with respect
to the termination of this Lease and hereby waive the provisions of any present
or future statute to the extent inconsistent herewith.
10. REAL PROPERTY TAXES
10.1 DEFINITIONS.
(a) "Read 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 Project. Lessors 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 Project 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 Project is located. The term "Real Property Taxes" shall also
include any tax, fee, levy, assessment or charge, or any Increase therein.
Imposed by reason of events occurring during the term of this Lease, including
but not limited to, a change In the ownership of the Project or any portion
thereof ore change In the improvements thereon.
(b) "Bass Real Property Taxes." As used herein, the term "Base Real Property
Taxes" shall be the amount of Real Property Taxes, which are assessed against
the Premises, Building, Project or Common Areas in the calendar year during
which the Lease is executed. In Calculating Real Property Taxes for any calendar
year, the Real Property Taxes for any real estate tax year shall be Included in
the calculation of Real Property Taxes for such calendar year based upon the
number of days which such calendar year and tax year have In common.
10.2 PAYMENT OF TAXES Lessor shall pay the Real Property Taxes applicable to the
Project, and except as otherwise provided In Paragraph 10.3, any increases in
such amounts over the Base Real Property Taxes shall be included In the
calculation of Common Area Operating Expenses In accordance with the provisions
of Paragraph 4.2.
10.3 ADDITIONAL IMPROVEMENTS Common Area Operating Expenses shall not Include
Real Property Taxes specified in the tax assessors records and work sheets as
being caused by additional Improvements placed upon the Project by other lessees
or by Lessor for the exclusive enjoyment of such other lessees. Notwithstanding
Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time Common
Area Operating Expenses are payable under
Paragraph 4.2, the entirety of any increase In Real Property Taxes If assessed
solely by reason of Alterations, Trade Fixtures or Utility Installations placed
upon the Premises by Lessee or at Lessee's request.
10.4 JOINT ASSESSMENT, If the Building Is not separately assessed, Real Property
Taxes allocated to the Building shall be an equitable proportion of the Real
Property Taxes for all of the land and improvements Included within the tax
parcel assessed, such proportion to be determined by Lessor from the respective
valuations assigned In the assessors work sheets or such other information as
may be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.
10.5 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency all taxes
assessed against and levied upon Lessee Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises. When possible. Lessee shall cause its
Lessee Owned Alterations and Utility Installations. Trade Fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Lessor. If any of Lessee's said property shall be
assessed with Lessor's real property. Lass" shall pay Lessor the taxes
attributable to Lessee's property within 10 days after receipt of a written
statement setting forth the taxes applicable to Lessee's property.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. Notwithstanding the provisions of
Paragraph 4.2, if at any time In Lessor's sole judgment, Lessor determines that
Lessee is using a disproportionate amount of water, electricity or other
commonly metered utilities, or that Lessee Is generating such a large volume of
trash as to require an increase in the size of the dumpster and/or an Increase
in the number of times per month that the dumpster is emptied, then Lessor may
Increase Lessee's Base Rent by an amount equal to such increased costs.
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 Lessors prior
written consent.
(b) A change In the control of Lessee shall constitute an assignment requiring
consent. The transfer, on a cumulative basis, of 25% or more of the voting
control of Lessee shall constitute a change In control for this purpose.
(c) The Involvement of Lessee or Its assets In any transaction, or series of
transactions (by way of merger, sale, acquisition, financing, transfer,
leveraged buy-out or otherwise). whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Not Worth of Lessee by an amount greater than 25%
of such Net Worth as It was represented at the time of the execution Of this
Lease or at the time of the most
recent assignment to which Lessor has consented, or as it exists Immediately
prior to-said transaction or transactions constituting such reduction, whichever
was or is greater, shall be considered an assignment of this Lease to which
Lessor may withhold Its consent. "Net Worth of Lessee" shall mean the net worth
of Lessee (excluding any guarantors) established under generally accepted
accounting principles.
(d) An assignment or subletting without consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1(c). or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unapproved assignment or subletting as a noncurable Breach. Lessor may
either. (i) terminate this Lease, or (ii) upon 30 days written notice. increase
the monthly Be" Rent to 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 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 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 Losses of
any obligations hereunder, or (iii) alter the primary liability of Lessee for
the payment of Rent or for the performance of any other obligations to be
performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations from any
person other than Lessee pending approval or disapproval of an assignment
Neither a delay In the approval or disapproval of such assignment nor the
acceptance of Rent or performance shall constitute a waiver or estoppel of
Lessor's right to exercise Its remedies for Lessee's Default or Breach.
(c) Lessor's consent to any assignment or subletting shall not constitute a
consent to any subsequent assignment or subletting.
(d) in the event of any Default or Breach by Lessee, Lessor may proceed directly
against Lessee, any Guarantors or anyone else responsible for the performance of
Lessee's obligations under this Lease, Including any assignee or subleases.
Without first exhausting Lessor's remedies against any other person or entity
responsible therefore to Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall be In writing,
accompanied by Information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $1.000 or
10% of the current monthly Base Rent applicable to the portion of the Premises
which is the subject of the proposed assignment or sublease, whichever Is
greater, as
consideration for Lessor's considering and processing said request. Lessee
agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested.
(f) Any assignee of, or subleases 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 Sold 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 TERM 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 subleases. Lessee hereby irrevocably authorizes
and directs any such subleases, 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_
Subleases shall rely upon any such notice from Lessor and shall pay all Rents to
Lessor without any obligation or right to Inquire as to whether such Breach
exists, notwithstanding any claim from Lessee to the contrary.
(b) In the event of a Breach by Lessee. Lessor may, at its option, require
subleases 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
subleases 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 subleases shall further assign or sublet all or any part of the Promises
without Lessors 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 sublease.
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 and
Regulations 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 Promises; or the vacating of the Premises without
providing a commercially reasonable level of security, or where the coverage of
the property insurance described In Paragraph 8.3 is jeopardized as a result
thereof, or without providing reasonable assurances to minimize potential
vandalism.
(b) The failure of Lessee to make any payment of Rent or any Security Deposit
required to be made by Lessee hereunder, whether to Lessor or to a third party,
when due, to provide reasonable evidence of insurance or surety bond, or to
fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of 3 business days following
written notice to Lessee.
(c) The failure by Lessee to provide (I) reasonable written evidence of
compliance with Applicable Requirements. (ii) the service Contracts, (iii) the
rescission of an unauthorized assignment or subletting. (iv) an Estoppel
Certificate, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor. (vii) any document requested under Paragraph 41
(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 10 days following written notice to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or provisions of
this Lease, or of the rules adopted under Paragraph 2.9 hereof, other than those
described In subparagraphs 13,1(a), (b) or (c), above, where such Default
continues for a period of 30 days after written notice; provided, however, that
if the nature of Lessee's Default Is such that more than 3D days are reasonably
required for Its cure, then it shall not be deemed to be a Breach If Lessee
commences such cure within said 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. $101 or any successor statute thereto (unless, in the
case of a petition filed against Lessee, the same is dismissed within 60 days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within 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 Leas*, where such seizure Is not discharged within 30 days;
provided, however, in the event that any provision of this subparagraph (a) Is
contrary to any applicable law, such provision shall be of no force or effect,
and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of Lessee or of any Guarantor
given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this Lease Is guaranteed:
(i) the death of a Guarantor, (ii) the termination of a Guarantors liability
with respect to this Lease other than in accordance with the terms of such
guaranty, (iii) a Guarantor's becoming Insolvent or the subject of a bankruptcy
filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's
breach of Its guaranty obligation on an anticipatory basis, and Lessee's
failure, within 60 days following written notice of any such event, to provide
written alternative assurance or security, which, when coupled with the then
existing resources of Lessee, equals or exceeds the combined financial resources
of Lessee and the Guarantors that existed at the time of execution of this
Lease,
13.2 REMEDIES. If Lessee fails to perform any of Its affirmative duties or
obligations, within 10 days after written notice (or in case of an emergency,
without notice). Lessor may, at its option, perform such duty or obligation on
Lessee's behalf, including but not limited to the obtaining of reasonably
required bonds, Insurance policies, or governmental licensee, permits or
approvals. The costs and expenses of any such performance by Lessor shall be due
and payable by Lessee upon receipt of invoice therefor. If any check given to
Lessor by Lessee shall not be honored by the bank upon which it Is drawn.
Lessor, at its option, may require all future payments to be made by Lessee to
be by cashier's check. In the event of a Breach, Lessor may, with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lease'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
Lessen: (1) 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; (Ill) 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 coat of recovering possession of the
Promises, 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 Promises are located at the time of award
plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's
Breach of this Lease shall not waive Lessor's right to recover damages under
Paragraph 12. If termination of this Lease Is obtained through the provisional
remedy of unlawful detainer. Lessor shall have the right to recover in such
proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may
reserve the right to recover all or any part thereof In a separate suit. If a
notice and grace period required under Paragraph 13.1 was not previously given,
a notice to pay rent or quit, or to perform or quit given to Lessee under the
unlawful
detainer statute shall also constitute the notice required by Paragraph 13.1. In
such case, the applicable grace period required by Paragraph 13.1 and the
unlawful detainer statute shall run concurrently, and the failure of Lessee to
cure the Default within the greater of the two such grace periods shall
constitute both an unlawful detainer and a Breach of this Lease entitling Lessor
to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and recover the Rent as
it becomes due, in which event Lessee may sublet or assign, subject only to
reasonable limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Lessor's Interests, shall not
Constitute a termination of the Lessee's right to possession,
(c) Pursue any other remedy now or hereafter available under the laws or
Judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Lessee's right to
possession shall not relieve Lessee from liability under any Indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee's occupancy of the Premises.
13.3 INDUCEMENT RECAPTURE. Any agreement for free or abated rent or other
charges, or for the giving or paying by Lessor to or for Lessee of any cash or
other bonus. Inducement or consideration for Lessee's entering Into this Lease,
all of which concessions are hereinafter referred to as "Inducement Provisions",
shall be deemed conditioned upon Lessee's full and faithful performance of all
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Lessee, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rant, other charge,
bonus, inducement or consideration theretofore abated, given or paid by Lessor
under such an Inducement Provision shall be Immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessen.
The acceptance by Lessor of rent or the cure of the Breach which Initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated In writing by Lessor
at the time of such acceptance.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee of
Rent will cause Lessor to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult to ascertain, Such Costs include,
but are not limited to, processing and accounting charges, and late charges
which may be imposed upon Lessor by any Lender. Accordingly, If any Rent shall
not be received by Lessor within 5 days after such amount shall be due, then,
without any requirement for notice to Lessee, Lasses shall pay to Lessor a
one-time late Charge equal to 10% of each such Overdue amount or $100, whichever
is greater. 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 or 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 3 consecutive installments of Base Rent, then notwithstanding any provision
of this Lease to the contrary, Base Rent shall, at Lessors option, become due
and payable quarterly in advance.
13.5 INTEREST Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base
Rent) or within 30 days following the date on which it was due for non-scheduled
payment, shall bear interest from the date when due, as to scheduled payments,
or the 31st day after it was due as to non-scheduled payments. The Interest
("Interest") charged shall be equal to the prime rate reported In the Wall
Street Journal as published closest prior to the date when due plus 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 falls 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 1466 than 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 boon
performed; provided, however, that If, the nature of Lessors obligation is such
that more than 30 days are reasonably required for its performance, then Lessor
shall not be In breach If performance Is commenced within such 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 30 days after receipt of said notice, or if
having commenced said cure they do not diligently pursue it to completion, then
Lessee may elect to cure said breach at Lessee's expense and offset from Rent an
amount equal to the greater of one month's Base Rent or the Security Deposit,
and to pay en excess of such expense under protest, reserving Lessee's right to
reimbursement from Lessor. Lessee shall document the cost of said cure and
supply said documentation to Lessor.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of Said power
(collectively "Condemnation"). this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than 10% of the floor area of the Unit, or more than 25%
of Lessee's Reserved Parking Spaces, Is taken by Condemnation, Lessee may, at
Lessee's option, to be exercised in writing within 10 days after Lessor shall
have given Lessee written notice of such taking (or in the absence of such
notice, within 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 affect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced In proportion
to the reduction In utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold, the value of the part taken, or for severance damages; provided,
however, that Lessee shall be entitled to any compensation for Lessee's
relocation expenses, loss of business goodwill and/or Trade Fixtures, without
regard to whether or not this Lease Is terminated pursuant to the provisions of
this Paragraph. All Alterations and Utility
Installations made to the Premises by Lessee, for purposes of Condemnation only,
shall be considered the property of the Lessee and Lessee shall be entitled to
any and all compensation which is payable therefor. In the event that this Lease
is not terminated by reason of the Condemnation, Lessor shall repair any damage
to the Premises caused by such Condemnation.
15. BROKERAGE FEES.
15.1 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Lessee and Lessor
each represent and warrant to the other that it has had no dealings with any
person, firm, broker or finder (other than the Brokers, if any) In connection
with this Lease, and that no one other then said named Brokers is entitled to
any commission or finders fee In connection herewith. Lessee and Lessor do each
hereby agree to Indemnify, protect, defend and hold the other harmless from and
against liability for compensation or charges which may be claimed by any such
unnamed broker, finder or other Similar party by reason of any dealings or
actions of the Indemnifying Party, Including any costs, expenses, attorneys'
fees reasonably Incurred with respect thereto.
16 ESTOPPEL CERTIFICATES.
(a) Each Party (as "Responding Party") shall within 10 days after written notice
from the other Party (the "Requesting Party") execute, acknowledge and deliver
to the Requesting Party a statement in writing In form similar to the then most
current "Estoppel Certificate" form published by the AIR Commercial Real Estate
Association, plus such additional Information, confirmation and/or statements as
may be reasonably requested by the Requesting Party.
(b) If the Responding Party shall fall to execute or deliver the Estoppel
Certificate within such 10 day period, the Requesting Party may execute an
Estoppel Certificate stating that: (i) the Lease Is In full force and effect
without modification except as may be represented by the Requesting Party. (ii)
there are no uncured defaults in the Requesting Party's performance, and (iii)
If Lessor is the Requesting Party, not more than one month's rent has been paid
in advance. Prospective purchasers and encumbrances may rely upon the Requesting
Party's Estoppel Certificate, and the Responding Party shall be estopped from
denying the truth of the facts contained In said Certificate.
(c) If Lessor desires to finance, refinance, or sell the Premises, or any part
thereof. Lease* 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 3 years. All such financial statements shall
be received by Lessor and such lender or purchaser in confidence and shall be
used only for the purposes herein set forth.
17. DEFINITION OF LESSOR. The term "Lessor" as used herein shall mean the owner
or owners at the time In question of the fee title to the Promises, or, If this
is a sublease, of the Lessee's interest In the prior lease. In the event of a
transfer of Lessor's title or Interest in the Premises or this Lease. Lessor
shall deliver to the transferee or assignee (In cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be
performed by the Lessor. Subject to the foregoing, the obligations and/or
covenants in this Lease to be performed by the Lessor shall be binding only upon
the Lessor as hereinabove defined. Notwithstanding the above, and subject to the
provisions of Paragraph 20 below, the original Lessor under this Lease, and all
subsequent holders of the Lessors 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 6-2 above.
18. SEVERABLLITY. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way effect the validity of any
other provision hereof.
19. DAYS. Unless otherwise specifically Indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.
20. LIMITATION ON LIABILITY. Subject to the provisions of Paragraph 17 above,
the obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, the individual partners of Lessor or Its or their
Individual partners, directors, officers or shareholders, and Lessee shall look
to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse
against the Individual partners of Lessor, or Its or their Individual partners,
directors, officers or shareholders, or any of their personal assets for such
satisfaction.
21. TIME OF ESSENCE. Time is of the essence with respect to the performance of
oil obligations to be performed or observed by the Parties under this Lease.
22. NO PRIOR OR OTHER AGREEMENTS; 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.
23. NOTICES.
23.1 NOTICE REQUIREMENTS. All notices required or permitted by this Lease or
applicable law 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, 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 Promises 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 mall, 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. Notices
delivered by United States Express Mail or overnight courier that guarantee next
day delivery shall be deemed given 24 hours after delivery of the same to the
Postal Service or courier. If notice is received on a Saturday, Sunday or legal
holiday, it shall be deemed received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term. Covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessors consent
to, or approval of. any act Shall not be deemed to render unnecessary the
obtaining of Lessors consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by
Lessee may be accepted by Lessor on account of monies 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. DISCLOSURES REGARDING THE NATURE OF A REAL ESTATE AGENCY RELATIONSHIP.
(a) When entering into a discussion with a real estate agent regarding a real
estate transaction, a Lessor or Lessee should from the outset understand what
type of agency relationship or representation it has with the agent or agents in
the transaction. Lessor and Lessee acknowledge being advised by the Brokers in
this transaction, as follows;
(i) Lessor's Agent. A Lessor's agent under a listing agreement with the
Lessor acts as the agent for the Lessor only. A Lessor's agent or subagent has
the following affirmative obligations: To the Lessor: A fiduciary duty of utmost
care, integrity, honesty and loyalty in dealings with the Lessor. To the Lessee
and the Lessor: a. Diligent exercise of reasonable skills and care in
performance of the agent's duties. b. A duty of honest and fair dealing and good
faith. c. A duty to disclose all facts known to the agent materially affecting
the value or desirability of the property that are not known to, or within the
diligent attention and observation of, the Parties. An agent Is riot obligated
to reveal to either Party any confidential Information obtained from the other
Xxxxx which does not involve the affirmative duties get forth above.
(ii) Lessee's Agent. An agent can agree to act as agent for the Lessee
only. In these situations, the agent Is not the Lessors agent, even If by
agreement the agent may receive compensation for services rendered, either In
full or in part from the Lessor. An agent acting only for a Lessee has the
following affirmative obligations. To the Lessee. A fiduciary duty of utmost
care, integrity, honesty, and royalty In dealings with the Losses. To the Lessee
and the Lessor; a. Diligent exercise of reasonable skills and care in
performance of the agent's duties. b. A duty of honest and fair dealing and good
faith. c. A duty to disclose all facts known to the agent materially affecting
the value or desirability of the property that are not known to, or within the
diligent attention and observation of. the Parties. An agent is not obligated to
reveal to either Party any confidential information obtained from the other
Party which does not involve the affirmative duties set forth above.
(iii) Agent Representing Both Lessor and Lessee. A real estate agent,
either acting directly or through one or more associate licenses, can legally be
the agent of both the Lessor and the Lessee in a transaction, but only with the
knowledge and consent of both the Lessor and the
Lessee. In a dual agency situation, the agent has the following affirmative
obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost
care, integrity, honesty and loyalty in the dealings with either Lessor or the
Lessee. b. Other duties to the Lessor and the Lessee as stated above in
subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may
not without the express permission of the respective Party. disclose to the
other Party that the Lessor will accept rent in an amount less than that
Indicated In the listing or that the Lessee Is willing to pay a higher rent than
that offered. The above duties of the agent in a real estate transaction do not
relieve a Lessor or Lessee from the responsibility to protect their own
Interests. Lessor and Lessee should carefully read all agreements to assure that
they adequately express their understanding of the transaction. A real estate
agent Is a person qualified to advise about real estate. If legal or tax advice
Is desired, consult a competent professional.
(b) Brokers have no responsibility 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 any breach of duty, error or omission relating to
this Lease shall not exceed 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.
(c) Buyer and Seller agree to identify to Brokers as "Confidential" any
communication or information given Brokers that Is considered by such Party to
be confidential.
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 Lasses holds over, then the Base Rent shall be Increased to
150% of the Base Rent applicable 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 Losses are both covenants and conditions.
In construing this Lease, all headings and titles are for the convenience of the
Parties only and shall not be considered a part of this Lease. Whenever required
by the context, the singular shall include the plural and vice versa. This Lease
shall not be construed as if prepared by one of the Parties, but rather
according to Its fair meaning as a Whole, as If both Parties had prepared it.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State In which the Premises are located. Arty 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 Promises, to any and
all advances made on the security thereof, and to all renewals, modifications,
and extensions thereof. Lessee agrees that the holders of any such Security
Devices (In this Lease together referred to as "Lender") shall have no liability
or obligation to perform any of the obligations of Lessor under this Lease. Any
Lender may elect to have this Lease and/or any Option granted hereby superior to
the lien of its Security Device by giving written notice thereof to Lessee.
whereupon this Lease and such Options shall be deemed prior to such Security
Device, notwithstanding the relative dates of the documentation or recordation
thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph 30.3.
Lessee agrees to attorn to a Lender or any other party who acquires ownership of
the Premises by reason of a foreclosure of a Security Device, and that in the
event of such foreclosure, such new owner shall not; (a) be liable for any act
or omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) be subject to any offsets or defenses which Lease*
might have against any prior lessor, (c) be bound by prepayment of more than one
month's rent, or (d) be liable for the return of any security deposit paid to
any prior lessor.
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 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 Promises. In
the event that Lessor is unable to provide the Non-Disturbance Agreement within
said 60 days, then Lessee may, at Lessee's option, directly contact Lender and
attempt to negotiate for the execution and delivery of a Non-Disturbance
Agreement.
30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided, however,
that. upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises. Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.
31. ATTORNEYS' FEES. If any Party or brings an action or proceeding involving
the Premises whether founded In tort, contract or equity, or to declare rights
hereunder, the Prevailing Party (as hereafter defined) In any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term,
'Prevailing Party' shall include, without limitation, a Party who substantially
obtains or defeats the relief &ought, as the case may be, whether by compromise,
settlement, judgment. or the abandonment by the other Party or Broker of its
claim or defense. The attorneys' 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 ($200
is a reasonable minimum par occurrence for such services and consultation).
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessors agents shall
have the right to enter the Premises at any time. in the case of an emergency,
and otherwise at reasonable times for the purpose of showing the same to
prospective purchasers, lenders, or tenants, 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 8 months of the term hereof place on the Premises any
ordinary "For Lease" signs. Lessee may at any time place On the Promises any
ordinary "Far 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 which may be placed only on
the Premises, Lessee shall not place any sign upon the Project without Lessor
prior written consent. 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 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 In required to en act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Lessors actual reasonable costs
end expenses (Including but not limited to architects', attorneys', engineers'
and other consultants' fees) incurred In the consideration of, or response to, a
request by Lessee for any Lessor consent, Including but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of en Invoice and supporting documentation
therefor. Lessor's consent to any act, assignment or subletting shall not
constitute en 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 10 business days following such request.
3.7 GUARANTOR.
37.1 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. SECURITY MEASURES. Lessee hereby acknowledges that the Rent 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.
40. RESERVATIONS. Lessor reserves the right: (i) to grant, without the consent
or joinder of Lessee, such easements, rights and dedications that Lessor deems
necessary. (ii) to cause the recordation of parcel maps and restrictions, and
(iii) to create and/or install new utility raceways, so long as such easements,
rights, dedications, maps, restrictions, and utility raceways do not
unreasonably Interfere with the use of the Premises by Lessee. Lessee agrees to
sign any documents reasonably requested by Lessor to effectuate such rights.
41. PERFORMANCE UNDER PROTEST. It 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.
42. AUTHORITY. If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, each Individual executing this Lease on
behalf of such entity represents and warrants that he or she Is duly authorized
to execute and deliver this Lease on its behalf. Each party shall, within 30
days after request, deliver to the Other party satisfactory evidence of Such
authority.
43. 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.
44. 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.
44. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in Interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal
financing or refinancing of the Premises.
45. 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
46. WAIVER OF JURY TRIAL. The Parties hereby waive their respective rights to
trial by jury in any action or proceeding Involving the Property or arising out
of this Agreement.
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 [x] is [ ] 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 AIR COMMERCIAL
REAL ESTATE ASSOCIATION OR BY ANY BROKER AS To THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO. THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL
INTEGRITY. THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE
AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S
INTENDED USE,
WARNING: IF THE PREMISES ARE 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 ARE LOCATED.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
MOTORCAR PARTS OF AMERICA, INC. GOLKAR ENTERPRISES, LTD.,
a California limited partnership
By /s/ XXXXXXX XXXXXXX By /s/ XXXXX X XXXXXX
----------------------------- -----------------------------
Xxxxxxx Xxxxxxx Trustee, General Partner
Chief Financial Officer
