Exhibit 10.6
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE - NET
1 BASIC PROVISIONS ("BASIC PROVISIONS")
1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only May
6th 2005, is made by and between FKC HIGHLAND LLC, a Delaware limited
liability company ("LANDLORD") and Fortunet Inc. a Nevada corporation
("TENANT"), (collectively the "PARTIES", or individually a "PARTY")
1.1 PREMISES: That certain portion of the Project (as defined below),
including all improvements therein or to be provided by Landlord under
the terms of this Lease, commonly known by the street address of 0000
Xxxxxxxx Xxxxx, Xxxxx X and D, located in the City of Las Vegas, State
of Nevada, with zip code 89109-1063, as outlined on Exhibit "A"
attached hereto ("PREMISES") and generally described as (describe
briefly the nature of the Premises): 21,922 +/- rentable square feet
industrial / distribution space as part of a multi-tenant industrial
park
1.2 In addition to Tenant's rights to use and occupy the Premises as
hereinafter specified. Tenant 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 Premises
("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 "INDUSTRIAL PROJECT," (See also
Paragraph 2). Notwithstanding anything contained in this Lease to the
contrary, the parties hereto agree and acknowledge that any statement
of size, square footage, or dimension set forth in this Lease or lease
proposals that may have been used in calculating rents or expense
recoveries is a reasonable approximation. All rents and/or expense
recoveries based thereon is not subject to revision or modification
whether or not the actual size is greater or less than stated herein
1.3 PARKING: 5 ("RESERVED PARKING SPACES") 5 reserved vehicle parking
spaces located directly outside the front of 2950 C and D. First
come-first serve for the ("UNRESERVED PARKING SPACES"), (See also
Paragraph 2.6)
1.4 TERM: 66.5 (Lease Months)
COMMENCEMENT DATE: 5/15/2005 ("Commencement Date")
EXPIRATION DATE: 12/31/2010 ("Expiration Date")
1.5 EARLY POSSESSION: May 15th 2005 ("EARLY POSSESSION DATE") (See also
Paragraphs 3.2 and 3.3)
1.6 BASE RENT: Monthly Base Rent is payable in advance on the first day of
each month, per Paragraph 4.1
BASE RENT AMOUNT
-----------------------------------------------------------
FROM TO MONTHLY ANNUALLY
--------- ---------- ---------- -----------
5/15/2005 through 6/14/2005 $ 0.00 $ 0.00
6/15/2005 through 5/31/2006 $ 6,138.00 $ 73,656.00
6/1/2006 through 5/31/2007 $ 9,975.00 $119,700.00
6/1/2007 through 5/31/2008 $10,303.00 $123,636.00
6/1/2008 through 5/31/2009 $10,612.00 $127,344.00
6/1/2009 through 5/31/2010 $10,931.00 $131,172.00
6/1/2010 through 11/30/2010 $10,931.00 $ 65,586.00
1.7 TENANT'S SHARE OF COMMON AREA OPERATING EXPENSES: Nine and Two-Tenths
percent 9.2%) ("TENANT'S SHARE")
1.8 BASE RENT AND OLDER MONIES PAID UPON EXECUTION:
(a) BASE RENT: $ See Base Rent Schedule for the period 5/15/2005 -
6/30/2010
(b) COMMON AREA OPERATING EXPENSES: $2,411.00 ($.11 psf) for the
period 6/1/05 - 6/30/05
(c) SECURITY DEPOSIT: $10,931.00 ("SECURITY DEPOSIT") (See also
Paragraph 5)
(d) TOTAL DUE UPON EXECUTION: $6,138.00 (1st Month's Rent) +
10,931.00 (Security Deposit) + 2,411.00 (1st Month's CAM) = $
19,480.00
1.9 AGREED USE: Facilities, distribution, sales and administration of
gaming equipment and supplies and printing paper for gaming related
uses. Tenant is permitted to maintain a current Nevada State Gaming
License for the permitted uses above only. No gambling or games of
chance which require a Nevada State Gaming License shall be permitted
in or about the Premises. FortuNet and its potential clients will be
allowed to test games prior to the sale and/or installment of
equipment. During the tests, games will be in a gaming mode, however
money exchanges are not permitted during these tests (See also
Paragraph 6)
1.10 INSURING PARTY Landlord is the "INSURING PARTY" (See also Paragraph 8)
1.11 REAL ESTATE BROKERS: (See also Paragraph 15)
1.12 REPRESENTATION: The following real estate brokers (the "BROKERS") and
brokerage relationships exist in this transaction (check boxes):
[ ] ____________________________________________ represents Landlord
exclusively ("LANDLORD'S BROKER"),
[ ] ____________________________________________ represents Tenant
exclusively ("TENANT'S BROKER"), or
[X] Brownstone Commercial - Xxxx Xxxxx Broker represents both
Landlord and Tenant ("DUAL AGENCY")
1.13 PAYMENT TO BROKERS: Upon execution and delivery of this Lease by both
Parties. Landlord shall pay to the Brokers the brokerage fee agreed to
in a separate written agreement (or if there is no such agreement, the
sum of as per separate agreement or _____% of the total Base Rent for
the brokerage services rendered by the Brokers)
1.14 GUARANTOR The obligations of the Tenant under this Lease are to be
guaranteed by Xxxx Xxxxx, as an individual (See attached Guarantee)
("GUARANTOR") (See also Paragraph 37)
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1.15 Addenda and Exhibits. Attached hereto is an Addendum and Exhibits A
through D, all of which constitute a part of this Lease.
2. PREMISES.
2.1 LETTING. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, 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 an 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. Landlord shall deliver that portion of the Premises
contained within the Building ('Unit") to Tenant broom clean and free of debris,
"as-is," "where-is," and "all faults accepted" condition upon 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 Tenant 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
Tenant, shall be in good operating condition on said 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. Landlord shall, as Landlord's sole
obligation with respect to such matter, except as otherwise provided in this
Lease, promptly after receipt of written notice from Tenant setting forth with
specificity the nature and extent of such non-compliance, malfunction or
failure, rectify same at Landlord'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 Tenant does not give
Landlord the required notice within the appropriate warranty period, correction
of any such non-compliance, malfunction or failure shall be the obligation of
Tenant at Tenant's sole cost and expense (except for the repairs to the fire
sprinkler systems, roof, foundations, and/or bearing walls - see Paragraph 7).
2.3 COMPLIANCE. Landlord 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 Date ("APPLICABLE REQUIREMENTS"). Said
warranty does not apply to the use to which Tenant will put the Premises or to
any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made
or to be made by Tenant. NOTE: TENANT IS RESPONSIBLE FOR DETERMINING WHETHER OR
NOT THE APPLICABLE REQUIREMENTS, AND ESPECIALLY THE ZONING, ARE APPROPRIATE FOR
TENANT'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, Landlord
shall, except as otherwise provided, promptly after receipt of written notice
from Tenant setting forth with specificity the nature and extent of such
non-compliance, rectify the same at Landlord's expense. If Tenant does not give
Landlord written notice of a non-compliance with this warranty within 6 months
following the Start Date, correction of that non-compliance shall be the
obligation of Tenant at Tenant's sole cost and expense. 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"), Landlord and Tenant shall allocate the cost of
such work as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures
are required as a result of the specific and unique use of the Premises by
Tenant as compared with uses by tenants in general, Tenant 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. Tenant may Instead terminate this Lease
unless Landlord notifies Tenant, in writing, within 10 days after receipt of
Tenant's termination notice that Landlord has elected to pay the difference
between the actual cost thereof and the amount equal to 6 months' Base Rent. If
Tenant elects termination. Tenant shall immediately cease the use of the
Premises which requires such Capital Expenditure and deliver to Landlord 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
Tenant 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 Tenant (such as, governmentally mandated seismic
modifications), then Landlord and Tenant shall allocate the obligation to pay
for the portion of such costs reasonably attributable to the Premises pursuant
to the formula set 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
Landlord reasonably determines that it is not economically feasible to pay its
share thereof, Landlord shall have the option to terminate this Lease upon 90
days prior written notice to Tenant unless Tenant notifies Landlord, in writing,
within 10 days after receipt of Landlord's termination notice that Tenant will
pay for such Capital Expenditure. If Landlord does not elect to terminate, and
fails to tender its share of any such Capital Expenditure, Tenant may advance
such funds and deduct same, with Interest, from Rent until Landlord's share of
such costs have been fully paid. If Tenant is unable to finance Landlord's
share, or if the balance of the Rent due and payable for the remainder of this
Lease is not sufficient to fully reimburse Tenant on an offset basis. Tenant
shall have the right to terminate this Lease upon 30 days written notice to
Landlord
(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
Tenant as a result of an actual or proposed change in use, change in intensity
of use, or modification to the Premises then, and in that event, Tenant shall be
fully responsible for the cost thereof, and Tenant shall not have any right to
terminate this Lease.
2.4 ACKNOWLEDGEMENTS. Tenant acknowledges that: (a) it has been advised by
Landlord and/or Brokers to satisfy itself with respect to the condition of the
Premises (including but not limited to the electrical, HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable
Requirements and the Americans with Disabilities Act), and their suitability for
Tenant's intended use, (b) Tenant 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 Landlord,
Landlord'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, Landlord acknowledges that: (i) Brokers have made no
representations, promises or warranties concerning Tenant's ability to honor the
Lease or suitability to occupy the Premises, and (ii) it is Landlord's sole
responsibility to investigate the financial capability and/or suitability of all
proposed tenants.
2.5 TENANT AS PRIOR OWNER/OCCUPANT. The warranties made by Landlord in
Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Tenant was the owner or occupant of the Premises. In such event, Tenant
shall be responsible for any necessary corrective work.
2.6 VEHICLE PARKING. Tenant 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
Landlord for parking. 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." Landlord 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 Landlord.
(a) Tenant shall not permit or allow any vehicles that belong to or
are controlled by Tenant or Tenant's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas other than
those designated by landlord for such activities.
(b) Tenant shall not service or store any vehicles in the Common
Areas.
(c) If Tenant permits or allows any of the prohibited activities
described in this Paragraph 2.6, then Landlord 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 Tenant, which
cost shall be immediately payable upon demand by Landlord
2.7 COMMON AREAS - DEFINITION. The term "COMMON AREAS" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Project and interior utility raceways and installations within the Unit
that are provided and designated by the Landlord from time to time for the
general non-exclusive use of Landlord, Tenant 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 - TENANT'S RIGHTS. Landlord grants to Tenant, for the
benefit of Tenant and its employees, suppliers, shippers, contractors, customers
and invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Landlord
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 Landlord or
Landlord's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur then Landlord 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 Tenant, which cost shall be
immediately payable upon demand by Landlord.
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management of the Common Areas and shall have the right, from time to time, to
establish, modify, amend and enforce the Rules and Regulations as contained in
Exhibit "C", attached hereto and made a part hereof by this reference, ("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. Tenant 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. Landlord shall not be responsible to Tenant for the non-compliance with
said Rules and Regulations by other tenants of the Project.
2.10 COMMON AREAS - CHANGES. Landlord shall have the right, in Landlord's
sole discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the 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 while engaged in making additional
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 Landlord may, in the
exercise of sound business judgment, deem to be appropriate.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If Tenant totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession. All other terms of this Lease
(including but not limited to the obligations to pay Tenant'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. Landlord agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Tenant by the
Commencement Date. If, despite said efforts, Landlord is unable to deliver
possession as agreed, Landlord shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease. Tenant 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 Date, Tenant 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 Landlord within said 10 day period,
Tenant's right to cancel shall terminate. Except as otherwise provided, if
possession is not tendered to Tenant by the Start Date and Tenant does not
terminate this Lease, as aforesaid, any period of rent abatement that Tenant
would otherwise have enjoyed shall run from the date of delivery of possession
and continue for a period equal to what Tenant would otherwise have enjoyed
under the terms hereof, but minus any days of delay caused by the acts or
omissions of Tenant. 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 Landlord and Tenant, in writing.
3.4 TENANT COMPLIANCE. Landlord shall not be required to tender possession
of the Premises to Tenant until Tenant complies with its obligation to provide
evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Tenant
shall be required to perform all of its obligations under this Lease from and
after the Start Date, including the payment of Rent, notwithstanding Landlord's
election to withhold possession pending receipt of such evidence of insurance.
Further, if Tenant is required to perform any other conditions prior to or
concurrent with the Start Date, the Start Date shall occur but Landlord may
elect to withhold possession until such conditions are satisfied.
4. RENT
4.1 RENT DEFINED. All monetary obligations of Tenant to Landlord under the
terms of this Lease (except for the Security Deposit) are deemed to be rent
("Rent").
4.2 COMMON AREA OPERATING EXPENSES. Tenant shall pay to Landlord during the
term hereof, in addition to the Base Rent, Tenant'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 Landlord relating 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 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 detection and/or 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) Real Property Taxes (as defined in Paragraph 10).
(vi) The cost of the premiums for the insurance maintained by
Landlord pursuant to Paragraph 8.
(vii) Any deductible portion of an insured loss concerning the
Building or the Common Areas.
(viii) The cost of any Capital Expenditure to the Building or the
Project not covered under the provisions of Paragraph 2.3
provided; however, that Landlord shall allocate the cost of
any such Capital Expenditure over a 12 year period and
Tenant shall not be required to pay more than Tenant's Share
of 1/144th of the cost of such Capital Expenditure in any
given month.
(ix) Any other services to be provided by Landlord 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 Landlord to all
buildings in the Project.
(c) The inclusion of the improvements, facilities and services set
forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon
Landlord to either have said improvements or facilities or to provide those
services unless the Project already has the same, Landlord already provides the
services, or Landlord has agreed elsewhere in this Lease to provide the same or
some of them.
(d) Tenant's Share of Common Area Operating Expenses shall be payable
by Tenant within 10 days after a reasonably detailed statement of actual
expenses is presented to Tenant. At Landlord's option, however, an amount may be
estimated by Landlord from time to time of Tenant's Share of annual Common Area
Operating Expenses and the same shall be payable monthly or quarterly, as
Landlord shall designate, during each 12 month period of the Lease term, on the
same day as the Base Rent is due hereunder. Landlord shall deliver to Tenant
within 60 days after the expiration of each calendar year a reasonably detailed
statement showing Tenant's Share of the actual Common Area Operating Expenses
incurred during the preceding year. If Tenant's payments under this Paragraph
4.2(d) during the preceding year exceed Tenant's Share as indicated on such
statement. Landlord shall credit the amount of such over-payment against
Tenant's Share of Common Area Operating Expenses next becoming due. If Tenant's
payments under this Paragraph 4.2(d) during the preceding year were less than
Tenant's Share as indicated on such statement. Tenant shall pay to Landlord the
amount of the deficiency within 10 days after delivery by Landlord to Tenant of
the statement.
4.3 PAYMENT. Tenant shall cause payment of Rent to be received by Landlord
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 Landlord at its address stated herein or
to such other persons or place as Landlord 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 Landlord's rights to the balance of such Rent, regardless of
Landlord's endorsement of any check so stating. In the event that any check,
draft, or other instrument of payment given by Tenant to Landlord is dishonored
for any reason. Tenant agrees to pay to Landlord the sum of $25 in addition to
any late charges which may be due.
5. SECURITY DEPOSIT. Tenant shall deposit with Landlord upon execution hereof
the Security Deposit as security for Tenant's faithful performance of its
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obligations under this Lease. If Tenant fails to pay Rent, or otherwise Defaults
under this Lease, Landlord may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount due Landlord or to reimburse or
compensate Landlord for any liability, expense, loss or damage which Landlord
may suffer or incur by reason thereof. If Landlord uses or applies all or any
portion of the Security Deposit, Tenant shall within 10 days after written
request therefor deposit monies with Landlord 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, Tenant shall, upon written request from
Landlord, deposit additional monies with Landlord so that the total amount of
the Security Deposit shall at all times bear the same proportion to the
increased Base Rent as initial Security Deposit bore to the initial Base
Rent. Should the Agreed Use be amended to accommodate a material change in the
business of Tenant or to accommodate a subTenant or assignee, Landlord shall
have the right to increase the Security Deposit to the extent necessary, in
Landlord's reasonable judgment, to account for any increased wear and tear that
the Premises may suffer as a result thereof. If a change in control of Tenant
occurs during this Lease and following such change the financial condition of
Tenant is, in Landlord's reasonable judgment, significantly reduced, Tenant
shall deposit such additional monies with Landlord as shall be sufficient to
cause the Security Deposit to be at a commercially reasonable level based on
such change in financial condition. Landlord 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 Landlord 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, Landlord shall
return that portion of the Security Deposit not used or applied by Landlord. 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 Tenant under this
Lease.
6. USE
6.1 USE. Tenant 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. Tenant 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. Landlord shall not
unreasonably withhold or delay its consent to any written request for a
modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements on the Premises or the mechanical or
electrical systems therein, and/or is not significantly more burdensome to the
Premises. If Landlord elects to withhold consent, Landlord shall within 7 days
after such request give written notification of same, which notice shall include
an explanation of Landlord's 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 Landlord 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.
Tenant shall not engage in any activity in or on the Premises which constitutes
a Reportable Use of Hazardous Substances without the express prior written
consent of Landlord and timely compliance (at Tenant's expense) with all
Applicable Requirements. "REPORTABLE USE" shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Tenant 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 Landlord to any liability therefor. In
addition, Landlord may condition its consent to any Reportable Use upon
receiving such additional assurances as Landlord 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 LANDLORD. If Tenant 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 Landlord, Tenant
shall immediately give written notice of such fact to Landlord, and provide
Landlord with a copy of any report, notice, claim or other documentation which
it has concerning the presence of such Hazardous Substance.
(c) TENANT REMEDIATION. Tenant 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
Tenant'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 Tenant, or pertaining to or involving any Hazardous Substance brought onto
the Premises during the term of this Lease, by or for Tenant, or any third
party.
(d) TENANT INDEMNIFICATION. Tenant shall indemnify, defend and hold
Landlord, its agents, employees, lenders and ground Landlord, if any, harmless
from and against any and all loss of rents and/or damages, liabilities,
judgments, claims, expenses, penalties, and attorneys' and consultants' fees
arising out of or involving any Hazardous Substance brought onto the Premises by
or for Tenant, or any third party (provided, however, that Tenant shall have no
liability under this Lease with respect to underground migration of any
Hazardous Substance under the Premises from areas outside of the Project),
Tenant'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 Tenant, 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
Landlord and Tenant shall release Tenant from its obligations under this Lease
with respect to Hazardous Substances, unless specifically so agreed by Landlord
in writing at the time of such agreement.
(e) LANDLORD INDEMNIFICATION. Landlord and its successors and assigns
shall indemnify, defend, reimburse and hold Tenant, 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 Landlord, its agents or employees. Landlord's 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. Landlord shall retain the
responsibility and pay for any investigations or remediation measures required
by governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior to the Start Date, unless such
remediation measure is required as a result of Tenant's use (including
"Alterations", as defined in paragraph 7.3(a) below) of the Premises, in which
event Tenant shall be responsible for such payment. Tenant shall cooperate fully
in any such activities at the request of Landlord, including allowing Landlord
and Landlord's agents to have reasonable access to the Premises at reasonable
times in order to carry out Landlord's investigative and remedial
responsibilities.
(g) LANDLORD TERMINATION OPTION. If a Hazardous Substance Condition
(see Paragraph 9.1(e)) occurs during the term of this Lease, unless Tenant is
legally responsible therefor (in which case Tenant 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 Landlord's rights under
Paragraph 6.2(d) and Paragraph 13). Landlord may, at Landlord's option, either
(i) investigate and remediate such Hazardous Substance Condition, if required,
as soon as reasonably possible at Landlord's expense, in which event this Lease
shall continue in full force and effect, or (ii) if the estimated cost to
remediate such condition exceeds 12 times the then monthly Base Rent or
$100,000, whichever is greater, give written notice to Tenant, within 30 days
after receipt by Landlord of knowledge of the occurrence of such Hazardous
Substance Condition, of Landlord's desire to terminate this Lease as of the date
60 days following the date of such notice. In the event Landlord elects to give
a termination notice. Tenant may, within 10 days thereafter, give written notice
to Landlord of Tenant'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. Tenant shall
provide Landlord 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 Landlord shall proceed to make such remediation as soon as
reasonably possible after the required funds are available. If Tenant 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 Landlord's
notice of termination
6.3 TENANT'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as otherwise
provided in this Lease, Tenant shall, at Tenant'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 Landlord's engineers and/or
consultants which relate in any manner to the Premises, without regard to
whether said requirements are now in effect or become effective after the Start
Date. Tenant shall, within 10 days after receipt of Landlords written request
provide Landlord with copies of all permits and other documents, and other
information evidencing Tenant's compliance with any Applicable Requirements
specified by Landlord, and shall immediately upon receipt, notify Landlord 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 Tenant or the Premises to comply with any Applicable
Requirements.
Page 4 of 26
6.4 INSPECTION; COMPLIANCE. Landlord and Landlord's "LENDER" (as defined in
Paragraph 30) and consultants shall have the right to enter into Premises at any
time, in the case of an emergency, and otherwise at reasonable times, for the
purpose of inspecting the condition of the Premises and for verifying compliance
by Tenant with this Lease. The cost of any such inspections shall be paid by
Landlord, 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, Tenant shall upon request reimburse
Landlord 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 TENANT'S OBLIGATIONS.
(a) IN GENERAL. Subject to the provisions of Paragraph 2.2
(Condition), 2.3 (Compliance), 6.3 (Tenant's Compliance with Applicable
Requirements), 7.2 (Landlord's Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Tenant shall, at Tenant's sole expense, keep the Premises,
Utility Installations (intended for Tenant'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 Tenant, and whether or not the
need for such repairs occurs as a result of Tenant'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
Landlord pursuant to Paragraph 7.2. Tenant, in keeping the Premises in good
order, condition and repair, shall exercise and perform good maintenance
practices, specifically including the procurement and maintenance of the service
contracts required by Paragraph 7.1(b) below. Tenant'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. Tenant shall, at Tenant's sole expense, procure
and maintain contracts, with copies to Landlord, 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 Landlord.
However, Landlord reserves the right, upon notice to Tenant, to procure and
maintain any or all of such service contracts, and if Landlord so elects, Tenant
shall reimburse Landlord, upon demand, for the cost thereof.
(c) FAILURE TO PERFORM. If Tenant fails to perform Tenant's
obligations under this Xxxxxxxxx 0.0, Xxxxxxxx may enter upon the Premises after
10 days' prior written notice to Tenant (except in the case of an emergency, in
which case no notice shall be required), perform such obligations on Tenant's
behalf, and put the Premises in good order, condition and repair, and Tenant
shall promptly reimburse Landlord for the cost thereof.
(d) REPLACEMENT. Subject to Tenant's indemnification of Landlord as
set forth in Paragraph 8.7 below, and without relieving Tenant of liability
resulting from Tenant'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 Landlord, and the cost thereof shall be
prorated between the Parties and Tenant 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 {ie. 1/144th of the cost per month). Tenant shall pay interest on
the unamortized balance at a rate that is commercially reasonable in the
judgment of Landlord's accountants. Tenant may, however, prepay its obligation
at any time.
7.2 LANDLORD'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use),
7.1 (Tenant's Obligations), 9 (Damage or Destruction) and 14 (Condemnation),
Landlord, 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 4.2. Landlord shall not be obligated to paint the exterior or interior
surfaces of exterior walls nor shall Landlord be obligated to maintain, repair
or replace windows, doors or plate glass of the Premises. Tenant expressly
waives the benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS. 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 Tenant's machinery and equipment that can be removed
without doing material damage to the Premises. The term "ALTERATIONS" shall mean
any modification of the improvements, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. "TENANT OWNED ALTERATIONS AND/OR
UTILITY INSTALLATIONS" are defined as Alterations and/or Utility Installations
made by Tenant that are not yet owned by Landlord pursuant to Paragraph 7.4(a).
(b) CONSENT. Tenant shall not make any Alterations or Utility
Installations to the Premises without Landlord's prior written consent. Tenant
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Landlord,
as long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative cost
thereof during this Lease as extended does not exceed a sum equal to 3 month's
Base Rent in the aggregate or a sum equal to one month's Base Rent in any one
year. Notwithstanding the foregoing, Tenant shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Landlord. Landlord may, as a precondition to granting such approval,
require Tenant to utilize a contractor chosen and/or approved by Landlord. Any
Alterations or Utility Installations that Tenant shall desire to make and which
require the consent of the Landlord shall be presented to Landlord in written
form with detailed plans. Consent shall be deemed conditioned upon Tenant's: (i)
acquiring all applicable governmental permits, (ii) furnishing Landlord 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. Tenant shall promptly upon completion
furnish Landlord with as-built plans and specifications. For work which costs an
amount in excess of one month's Base Rent, Landlord may condition its consent
upon Tenant providing a lien and completion bond in an amount equal to 150% of
the estimated cost of such Alteration or Utility Installation and/or upon
Tenant's posting an additional Security Deposit with Landlord.
(c) INDEMNIFICATION. Tenant shall pay, when due, all claims for labor
or materials furnished or alleged to have been furnished to or for Tenant at or
for use on the Premises, which claims are or may be secured by any mechanic's or
materialman's lien against the Premises or any interest therein. Tenant shall
give Landlord not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Landlord shall have the right to post notices
of non-responsibility. If Tenant shall contest the validity of any such lien,
claim or demand, then Tenant shall, at its sole expense defend and protect
itself, Landlord and the Premises against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof. If Landlord shall require, Tenant shall furnish a surety bond in an
amount equal to 150% of the amount of such contested lien, claim or demand,
indemnifying Landlord against liability for the same. If Landlord elects to
participate in any such action, Tenant shall pay Landlord's attorneys' fees and
costs.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to Landlord's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility Installations
made by Tenant shall be the property of Tenant, but considered a part of the
Premises. Landlord may, at any time, elect in writing to be the owner of all or
any specified part of the Tenant Owned Alterations and Utility Installations.
Unless otherwise instructed per paragraph 7.4(b) hereof, all Tenant Owned
Alterations and Utility Installations shall, at the expiration or termination of
this Lease, become the property of Landlord and be surrendered by Tenant with
the Premises.
(b) REMOVAL. By delivery to Tenant of written notice from Landlord not
earlier than 90 and not later than 30 days prior to the end of the term of this
Lease, Landlord may require that any or all Tenant Owned Alterations or Utility
Installations be removed by the expiration or termination of this Lease.
Landlord may require the removal at any time of all or any part of any Tenant
Owned Alterations or Utility Installations made without the required consent.
(c) SURRENDER; RESTORATION. Tenant 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 Tenant shall surrender the Premises in
the same condition as delivered to Tenant on the Start Date with NO allowance
for ordinary wear and tear. Tenant shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Tenant owned Alterations
and/or Utility Installations, furnishings, and equipment as well as the removal
of any storage tank installed by or for Tenant. Tenant shall also completely
remove from the Premises any and all Hazardous Substances brought onto the
Premises by or for Tenant, 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 Tenant to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Tenant and
shall be removed by Tenant. The failure by Tenant to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of
Landlord shall constitute a holdover under the provisions of Paragraph 26 below.
Page 5 of 26
8. INSURANCE; INDEMNITY.
8.1 LIABILITY INSURANCE-TENANT. Without limiting the insurance requirements
contained in Exhibit "D" attached hereto. Tenant shall, at all Tenant's expense,
obtain and keep in force during the term of this Lease a policy of Comprehensive
General Liability insurance utilizing an Insurance Services Office Standard Form
with Broad Form General Liability Endorsement, in an amount of not less than
$1,000,000 per occurrence of bodily injury and property damage combined or in a
greater amount as reasonably determined by Landlord and shall insure Tenant with
Landlord and Landlord's asset management and properly management companies as an
additional insureds against liability arising out of the use, occupancy or
maintenance of the Premises. Compliance with the above requirement shall not
limit the liability of Tenant hereunder.
8.2 PROPERTY INSURANCE-TENANT. Without limiting the insurance requirements
contained in Exhibit "D" attached hereto. Tenant shall, at Tenant's expense,
obtain and keep in force during the term of this Lease, replacement cost fire
and extended coverage insurance, with vandalism and malicious mischief,
sprinkler leakage and earthquake sprinkler leakage endorsements, in an amount
sufficient to cover not less than 100% of the full replacement cost, as the same
may exist from time to time, of all of Tenant's personal property, fixtures,
equipment and tenant improvements.
8.3 INSURANCE POLICIES. Without limiting the insurance requirements
contained in Exhibit "D" attached hereto. Tenant shall deliver to Landlord
copies of liability insurance policies required under Paragraph 8.1 or
certificates evidencing the existence and amounts of such insurance prior to
Tenant's possession of the Premises. Additionally, Tenant shall deliver to
Landlord the certificates showing the additional insureds set forth in Paragraph
5 of Exhibit "D." No such policy shall be cancelable or subject to reduction of
coverage or other modification except after thirty (30) days prior written
notice to Landlord. Tenant shall, at least thirty (30) days prior to the
expiration of such policies, furnish Landlord with renewals thereof.
8.4 WAIVER OF SUBROGATION. Tenant hereby releases and relieves Landlord,
and waives Tenant's entire right of recovery against Landlord, for direct or
consequential loss or damage arising out of or incident to the perils covered by
property insurance carried by Tenant, whether due to the negligence of Landlord
or their agents, employees, contractors and/or invitees. If necessary, all
property insurance policies required under this Lease shall be endorsed to so
provide.
8.5 ASSUMPTION OF RISK AND INDEMNIFICATION.
(a) ASSUMPTION OF RISK. Tenant, as a material part of the
consideration to Landlord, agrees that neither Landlord nor Landlord partners,
members, officers, directors, employees, agents, attorneys, lenders, successors
and assigns (collectively, "Landlord Indemnified Parties") shall be liable to
Tenant for, and Tenant expressly assumes the risk of and waives any and all
claims it may have against Landlord or any Landlord Indemnified Parties with
respect to, (i) any and all damage to property or injury to persons in, upon or
about the Premises or the Industrial Project resulting from the act or omission
(except for the grossly negligent or intentionally wrongful act or omission) of
Landlord, (ii) any such damage caused by other tenants or persons in or about
the Industrial Project, or caused by quasi-public work, (iii) any damage to
property entrusted to employees of the Industrial Project, (iv) any loss of or
damage to property by theft or otherwise, or (v) any injury or damage to persons
or property resulting from any casualty, explosion, falling plaster or other
masonry or glass, steam, gas, electricity, water or rain which may leak from any
part of the Industrial Project or any other portion of the Common Areas or from
the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from any other place, or resulting from dampness. Neither Landlord
nor any Landlord Indemnified Parties will be liable for consequential damages
arising out of any loss of the use of the Premises or any equipment or
facilities therein by Tenant or Tenant's agents, employees, subtenants,
assignees, licensees, contractors or invitees (collectively, "Tenant's Parties")
or for interference with light. Tenant agrees to give prompt notice to Landlord
in case of fire or accidents in the Premises or the Office Building, or of
defects therein or in the fixtures or equipment.
(b) INDEMNIFICATION. Tenant will be liable for, and agrees, to the
maximum extent permissible under applicable law, to promptly indemnify, protect,
defend and hold harmless Landlord and all Landlord Indemnified Parties (defined
in 8.5(a) above), from and against, any and all claims, damages, judgments,
suits, causes of action, losses, liabilities, penalties, fines, expenses and
costs including attorneys' fees and court costs (collectively, "Indemnified
Claims"), arising or resulting from (i) any act or omission of Tenant or any
Tenant Parties; (ii) the use of the Premises, Common Areas, or the industrial
Project and conduct of Tenant's business by Tenant or any Tenant Parties, or any
other activity, work or thing done, permitted or suffered by Tenant or any
Tenant Parties, in or about the Premises, the Industrial Project or elsewhere;
and/or (iii) any default by Tenant of any obligations on Tenant's part to be
performed under the terms of this Lease. In case any claim, action or proceeding
is brought against Landlord or any Landlord Indemnified Parties by reason of any
such Indemnified Claims, Tenant, upon notice from Landlord, agrees to promptly
defend the same at Tenant's sole cost and expense by counsel approved in writing
by Landlord, which approval Landlord will not unreasonably withhold.
(c) SURVIVAL; No Release of Insurers. Tenant's indemnification
obligations under Subparagraph 8.5(b) will survive the expiration or earlier
termination of this Lease. Tenant's covenants, agreements and indemnification
obligations arising pursuant to Sub paragraphs 8.5 (a) and 8.5 (b) above, are
not intended to and shall not relieve any insurance carrier of its obligations
under policies required to be carried by Tenant pursuant to the provisions of
this Lease.
8.6 NO REPRESENTATION OF ADEQUATE COVERAGE. Landlord makes no
representation that the limits or forms of coverage of insurance specified in
this Paragraph 8 are adequate to cover Tenant's property or obligations under
this Lease.
8.7 FAILURE TO MAINTAIN INSURANCE. For any period or periods in which
Tenant fails to maintain any insurance required by this Lease, or, if after ten
(10) days following the Commencement Date, Tenant has not provided Landlord with
the Additional Insured-Manager's or Landlord's, or other required additional
insured Endorsements required to be submitted pursuant to this Lease, without
further notice, Base Rent shall be automatically increased by Two Hundred and
Fifty Dollars ($250.00) per month, until such time as Tenant complies with the
insurance provisions of this Lease. Notwithstanding anything contained herein to
the contrary, the foregoing shall not be construed, interpreted, or deemed (i) a
waiver of any default created by reason of Tenant's failure to provide the
insurance certificates and endorsements called for in this Lease; (ii) limit any
other right or remedy of Landlord; (iii) relieve Tenant of its obligations
regarding maintenance of insurance as provided by the Lease; or (iv) be
considered a policy of insurance in favor of Tenant. Landlord and Tenant agree
the additional monthly charge described herein represents a fair and reasonable
estimate of the additional administrative costs Landlord will incur by reason of
any failure by Tenant to provide the required insurance documentation to
Landlord.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
improvements on the Premises, other than Tenant Owned Alterations and Utility
Installations, which can reasonably be repaired in 3 months or less from the
date of the damage or destruction, and the cost thereof does not exceed a sum
equal to 6 month's Base Rent. Landlord shall notify Tenant 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 Tenant 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 6 month's Base Rent. Landlord shall notify Tenant
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 Tenant 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 Landlord at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is an
Insured Loss occurs, then Landlord shall, at Landlord's expense, repair such
damage (but not Tenant's Trade Fixtures or Tenant Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Tenant shall, at Landlord's
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, Landlord shall make any
applicable insurance proceeds available to Tenant on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in
force or the insurance proceeds are not sufficient to effect such repair, the
insuring Party shall promptly contribute the shortage in proceeds as and when
required to complete said repairs. In the event, however, such shortage was due
to the fact that, by reason of the unique nature of the improvements, full
replacement cost insurance coverage was not commercially reasonable and
available, Landlord shall have no obligation to pay for the shortage in
insurance proceeds or to fully restore the unique aspects of the Premises unless
Tenant provides Landlord 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 Landlord 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, Landlord may
nevertheless elect by written notice to Tenant within 10 days thereafter to; (i)
make such restoration and repair as is commercially reasonable with Landlord
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect, or
Page 6 of 26
(ii) have this Lease terminate 30 days thereafter. Tenant shall not be entitled
to reimbursement of any funds contributed by Tenant to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject
to Paragraph 9.3, notwithstanding that there may be some insurance coverage,
but the net proceeds of any such insurance shall be made available for the
repairs if made by either Party.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Tenant (in which event Tenant shall make the repairs at Tenant's expense),
Landlord may either: (i) repair such damage as soon as reasonably possible at
Landlord's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Tenant within
30 days after receipt by Landlord of knowledge of the occurrence of such damage.
Such termination shall be effective 60 days following the date of such notice.
In the event Landlord elects to terminate this Lease, Tenant shall have the
right within 10 days after receipt of the termination notice to give written
notice to Landlord of Tenant's commitment to pay for the repair of such damage
without reimbursement from Landlord. Tenant shall provide Landlord with said
funds or satisfactory assurance thereof within 30 days after making such
commitment. In such event this Lease shall continue in full force and effect,
and Landlord shall proceed to make such repairs as soon as reasonably possible
after the required funds are available. If Tenant 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 Tenant, Landlord shall have the right to
recover Landlord's damages from Tenant, except as provided in Paragraph 8.6.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last 6 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, Landlord may terminate this Lease
effective 60 days following the date of occurrence of such damage by giving a
written termination notice to Tenant within 30 days after the date of occurrence
of such damage. Notwithstanding the foregoing, if Tenant at that time has an
exercisable option to extend this Lease or to purchase the Premises, then Tenant
may preserve this Lease by, (a) exercising such option and (b) providing
Landlord 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 Tenant's receipt of Landlord's written notice purporting to terminate
this Lease, or (ii) the day prior to the date upon which such option expires. If
Tenant duly exercises such option during such period and provides Landlord with
funds (or adequate assurance thereof) to cover any shortage in insurance
proceeds, Landlord shall, at Landlord's commercially reasonable expense, repair
such damage as soon as reasonably possible and this Lease shall continue in full
force and effect. If Tenant 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 Tenant's option shall be extinguished.
9.6 ABATEMENT OF RENT; TENANT'S REMEDIES.
(a) ABATEMENT. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Tenant is not
responsible under this Lease, the Rent payable by Tenant for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Tenant's use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value insurance. All other
obligations of Tenant hereunder shall be performed by Tenant, and Landlord shall
have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.
(b) REMEDIES. If Landlord 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, Tenant may, at
any time prior to the commencement of such repair or restoration, give written
notice to Landlord and to any Lenders of which Tenant has actual notice, of
Tenant's election to terminate this Lease on a date not less than 60 days
following the giving of such notice. If Tenant 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. If 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 Tenant to
Landlord. Landlord shall, in addition, return to Tenant so much of Tenant's
Security Deposit as has not been, or is not then required to be, used by
Landlord.
9.8 WAIVE STATUTES. Landlord and Tenant agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1 DEFINITION. As used herein, the term "REAL PROPERTY TAXES" shall
include any form of assessment; real estate, general, special, ordinary or major
structural defects pre-existing Tenant's occupancy, 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 Landlord in the Project, Landlord's right to other income
therefrom, and/or Landlord'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 or a change in
the improvements thereon. 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. Landlord shall pay the Real Property Taxes
applicable to the Project, and except as otherwise provided in Paragraph 10.3,
any such amounts shall be included in the calculation of Common Area Operating
Expenses in accordance with the provisions of Paragraph 4.2.
10.3 ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Project by
other Tenants or by Landlord for the exclusive enjoyment of such other Tenants.
Notwithstanding Paragraph 10.2 hereof, Tenant shall, however, pay to Landlord 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
Tenant or at Tenant'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 Landlord from the
respective valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Landlord's reasonable determination
thereof, in good faith, shall be conclusive.
10.5 PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon Tenant Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Tenant contained in the Premises. When possible, Tenant shall cause its
Tenant 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 Landlord. If any of Tenant's said property shall be
assessed with Landlord's real property, Tenant shall pay Landlord the taxes
attributable to Tenant's property within 10 days after receipt of a written
statement setting forth the taxes applicable to Tenant's property.
11. UTILITIES. Tenant 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 Landlord's sole judgment, Landlord determines
that Tenant is using a disproportionate amount of water, electricity or other
commonly metered utilities, or that Tenant 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 Landlord may
increase Tenant's Base Rent by an amount equal to such increased costs.
12. ASSIGNMENT AND SUBLETTING.
Page 7 of 26
12.1 LANDLORD'S CONSENT REQUIRED.
(a) Tenant shall not voluntarily or by operation of law assign,
transfer, mortgage or encumber (collectively, "ASSIGN OR ASSIGNMENT") or sublet
all or any part of Tenant's interest in this Lease or in the Premises without
Landlord's prior written consent.
(b) A change in the control of Tenant shall constitute an assignment
requiring consent. The transfer, on a cumulative basis, of 25% or more of the
voting control of Tenant shall constitute a change in control for this purpose.
(c) The involvement of Tenant 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 Tenant's assets occurs, which results or will
result in a reduction of the Net Worth of Tenant 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 Landlord 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 Landlord may withhold its consent. "NET WORTH
OF TENANT" shall mean the net worth of Tenant (excluding any guarantors)
established under generally accepted accounting principles.
(d) An assignment or subletting without consent shall, at Landlord'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 Landlord elects
to treat such unapproved assignment or subletting as a noncurable Breach,
Landlord may either; (i) terminate this Lease, or (ii) upon 30 days written
notice, increase the monthly Base 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 Tenant 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) Tenant's remedy for any breach of Paragraph 12.1 by Landlord shall
be limited to compensatory damages and/or injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Landlord's consent, no assignment or subletting
shall: (i) be effective without the express written assumption by such assignee
or subTenant of the obligations of Tenant under this Lease, (ii) release Tenant
of any obligations hereunder, or (iii) alter the primary liability of Tenant for
the payment of Rent or for the performance of any other obligations to be
performed by Tenant.
(b) Landlord may accept Rent or performance of Tenant's obligations
from any person other than Tenant 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 Landlord's right to exercise its remedies for Tenant's Default or Breach.
(c) Landlord'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 Tenant, Landlord may
proceed directly against Tenant, any Guarantors or anyone else responsible for
the performance of Tenant's obligations under this Lease, including any assignee
or subTenant, without first exhausting Landlord's remedies against any other
person or entity responsible therefore to Landlord, or any security held by
Landlord.
(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by Information relevant to Landlord's determination as
to the financial and operational responsibility and appropriateness of the
proposed assignee or subTenant, 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 Landlord's considering and processing said
request. Tenant agrees to provide Landlord with such other or additional
information and/or documentation as may be reasonably requested.
(f) Any assignee of, or subTenant 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 Tenant during the
term of said assignment or sublease, other than such obligations as are contrary
to or inconsistent with provisions of an assignment or sublease to which
Landlord has specifically consented to in writing.
(g) Landlord's consent to any assignment or subletting shall not
transfer to the assignee or subTenant any Option granted to the original Tenant
by this Lease unless such transfer is specifically consented to by Landlord in
writing. (See Paragraph 39.2)
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Tenant 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) Tenant hereby assigns and transfers to Landlord all of Tenant's
interest in all Rent payable on any sublease, and Landlord may collect such Rent
and apply same toward Tenant's obligations under this Lease; provided, however,
that until a Breach shall occur in the performance of Tenant's obligations,
Tenant may collect said Rent. Landlord 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 subTenant for any failure of Tenant to perform and comply
with any of Tenant's obligations to such subTenant. Tenant hereby irrevocably
authorizes and directs any such subTenant, upon receipt of a written notice from
Landlord staling that a Breach exists in the performance of Tenant's obligations
under this Lease, to pay to Landlord all Rent due and to become due under the
sublease. SubTenant shall rely upon any such notice from Landlord and shall pay
all Rents to Landlord without any obligation or right to inquire as to whether
such Breach exists, notwithstanding any claim from Tenant to the contrary.
(b) In the event of a Breach by Tenant, Landlord may, at its option,
require subTenant to attorn to Landlord, in which event Landlord shall undertake
the obligations of the subLandlord under such sublease from the time of the
exercise of said option to the expiration of such sublease; provided, however,
Landlord shall not be liable for any prepaid rents or security deposit paid by
such subTenant to such subLandlord or for any prior Defaults or Breaches of such
subLandlord.
(c) Any matter requiring the consent of the subLandlord under a
sublease shall also require the consent of Landlord.
(d) No subTenant shall further assign or sublet all or any part of the
Premises without Landlord's prior written consent.
(e) Landlord shall deliver a copy of any notice of Default or Breach
by Tenant to the subTenant, who shall have the right to cure the Default of
Tenant within the grace period, if any, specified in such notice. The subTenant
shall have a right of reimbursement and offset from and against Tenant for any
such Defaults cured by the subTenant.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. A "DEFAULT" is defined as a failure by the Tenant 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 Tenant to cure such Default
within any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the Premises
without providing a commercially reasonable level of security, or where the
coverage of the property insurance described in Paragraph 8.3 is jeopardized as
a result thereof, or without providing reasonable assurances to minimize
potential vandalism.
(b) The failure of Tenant to make any payment of Rent or any Security
Deposit required to be made by Tenant hereunder, whether to Landlord 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 Tenant.
(c) The failure by Tenant 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 Landlord may
reasonably require of Tenant under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Tenant.
(d) A Default by Tenant 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 Tenant's Default is such that more than 30 days
are reasonably required for its cure, then it shall not be deemed to be a Breach
if Tenant 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. Section 101 or any successor statute
thereto (unless, in the case of a petition filed against Tenant, the same is
dismissed within 60 days); (iii) the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where possession is not restored to
Tenant within 30 days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where such seizure is not discharged within 30
days; provided, however, in the event that any provision of this subparagraph
(e) is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of Tenant or of any
Guarantor given to Landlord was materially false.
(g) If the performance of Tenant's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory basis, and
Tenant'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 Tenant, equals or exceeds the combined financial
resources of Tenant and the Guarantors that existed at the time of execution of
this Lease.
Page 8 of 26
13.2 REMEDIES. If Tenant fails to perform any of its affirmative duties or
obligations, within 10 days after written notice (or in case of an emergency,
without notice), Landlord may, at its option, perform such duty or obligation on
Tenant's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Landlord shall be
due and payable by Tenant upon receipt of Invoice therefor. If any check given
to Landlord by Tenant shall not be honored by the bank upon which it is drawn,
Landlord, at its option, may require all future payments to be made by Tenant to
be by cashier's check. In the event of a Breach, Landlord may, with or without
further notice or demand, and without limiting Landlord in the exercise of any
right or remedy which Landlord may have by reason of such Breach:
(a) Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession to Landlord. In such event Landlord shall be
entitled to recover from Tenant: (i) the unpaid Rent which had been earned at
the time of termination; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Tenant proves
could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Tenant proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by the Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Landlord in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of the District within which the Premises are located
at the time of award plus one percent. Efforts by Landlord to mitigate damages
caused by Tenant's Breach of this Lease shall not waive Landlord's right to
recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer. Landlord shall have the
right to recover in such proceeding any unpaid Rent and damages as are
recoverable therein, or Landlord 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 Tenant 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 Tenant 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 Landlord to the remedies provided for in
this Lease and/or by said statute.
(b) Continue the Lease and Tenant's right to possession and recover
the Rent as it becomes due, in which event Tenant 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 Landlord's interests, shall not
constitute a termination of the Tenant'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 Tenant's right
to possession shall not relieve Tenant from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Tenant'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 Landlord to or for Tenant of any cash or
other bonus, inducement or consideration for Tenant's entering into this Lease,
all of which concessions are hereinafter referred to as "INDUCEMENT PROVISIONS",
shall be deemed conditioned upon Tenant's full and faithful performance of all
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Tenant, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by Landlord
under such an Inducement Provision shall be immediately due and payable by
Tenant to Landlord, notwithstanding any subsequent cure of said Breach by
Tenant. The acceptance by Landlord of rent or the cure of the Breach which
initiated the operation of this paragraph shall not be deemed a waiver by
Landlord of the provisions of this paragraph unless specifically so stated in
writing by Landlord at the time of such acceptance.
13.4 LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant
of Rent will cause Landlord 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 Landlord by any Lender. Accordingly, if any
Rent shall not be received by Landlord within 5 days after such amount shall be
due, then, without any requirement for notice to Tenant, Tenant shall pay to
Landlord 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 Landlord will incur by
reason of such late payment. Acceptance of such late charge by Landlord shall in
no event constitute a waiver of Tenant'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
Landlord's option, become due and payable quarterly in advance.
13.5 INTEREST. Any monetary payment due Landlord hereunder, other than late
charges, not received by Landlord, 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 LANDLORD.
(a) NOTICE OF BREACH. Landlord shall not be deemed in breach of this
Lease unless Landlord fails within a reasonable time to perform an obligation
required to be performed by Landlord. For purposes of this Paragraph, a
reasonable time shall in no event be less than 30 days after receipt by
Landlord, and any Lender whose name and address shall have been furnished Tenant
in writing for such purpose, of written notice specifying wherein such
obligation of Landlord has not been performed; provided, however, that if the
nature of Landlord's obligation is such that more than 30 days are reasonably
required for its performance, then Landlord shall not be in breach if
performance is commenced within such 30 day period and thereafter diligently
pursued to completion.
(b) PERFORMANCE OF TENANT ON BEHALF OF LANDLORD. In the event that
neither Landlord 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 Tenant may elect to cure said breach at Tenant's expense and
offset from Rent an amount equal to the greater of one month's Base Rent or the
Security Deposit, and to pay an excess of such expense under protest, reserving
Tenant's right to reimbursement from Landlord. Tenant shall document the cost of
said cure and supply said documentation to Landlord.
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 Tenant's Reserved Parking Spaces, is taken by Condemnation, Tenant may, at
Tenant's option, to be exercised in writing within 10 days after Landlord shall
have given Tenant 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 Tenant does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in proportion
to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Landlord, 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 Tenant shall be entitled to any compensation for Tenant'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 Tenant, for purposes of Condemnation only, shall be considered the property
of the Tenant and Tenant 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, Landlord shall repair any damage to the Premises caused by
such Condemnation.
15. BROKERAGE FEES.
15.1 ADDITIONAL COMMISSION. In addition to the payments owed pursuant to
Paragraph 1.10 above, and unless Landlord and the Brokers otherwise agree in
writing, Landlord agrees that: (a) if Tenant exercises any Option, (b) if Tenant
acquires from Landlord any rights to the Premises or other premises owned by
Landlord and located within the Project, (c) if Tenant remains in possession of
the Premises, with the consent of Landlord, after the expiration of this Lease,
or (d) if Base Rent is increased, whether by agreement or operation of an
escalation clause herein, then, Landlord shall pay Brokers a fee in accordance
with the schedule of the Brokers in effect at the time of the execution of this
Lease.
15.2 ASSUMPTION OF OBLIGATIONS. Any buyer or transferee of Landlord's
interest in this Lease shall be deemed to have assumed Landlord's obligation
hereunder. Brokers shall be third party beneficiaries of the provisions of
Paragraphs 1.10, 15, 22 and 31. If Landlord fails to pay to Brokers any amounts
due as and for brokerage fees pertaining to this Lease when due, then such
amounts shall accrue interest. In addition, if Landlord fails to pay any amounts
to Tenant's Broker when due, Tenant's Broker may send written notice to Landlord
and Tenant of such failure and if Landlord fails to
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pay such amounts within 10 days after said notice. Tenant shall pay said monies
to its Broker and offset such amounts against Rent. In addition Tenant's Broker
shall be deemed to be a third party beneficiary of any commission agreement
entered into by and/or between Landlord and Landlord's Broker for the limited
purpose of collecting any brokerage fee owed.
15.3 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Tenant and
Landlord each represent and warrant to the other that it has had no dealings
with any person, firm, broker or finder (other than the Brokers, if any) in
connection with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder's fee in connection herewith. Tenant and
Landlord 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
American Industrial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.
(b) If the Responding Party shall fail to execute or deliver the
Estoppel Certificate within such 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 Landlord 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 Landlord desires to finance, refinance, or sell the Premises,
or any part thereof, Tenant and all Guarantors shall deliver to any potential
lender or purchaser designated by Landlord such financial statements as may be
reasonably required by such lender or purchaser, including but not limited to
Tenant's financial statements for the past 3 years. All such financial
statements shall be received by Landlord and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. DEFINITION OF LANDLORD. The term "Landlord," as used in this Lease, so far
as covenants or obligations on the part of Landlord are concerned, means and
includes only the owner or owners, at the time in question, of the fee title of
the Premises or the Tenants under any ground lease, if any. In the event of any
transfer, assignment or other conveyance or transfers of any such title (other
than a transfer for security purposes only), Landlord herein named (and in case
of any subsequent transfers or conveyances, the then grantor) will be
automatically relieved from and after the date of such transfer, assignment or
conveyance of all liability as respects the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed, so long as the transferee assumes in writing all such covenants and
obligations of Landlord arising after the date of such transfer. Landlord and
Landlord's transferees and assignees have the absolute right to transfer all or
any portion of their respective title and interest in the Industrial Project,
the Building, the Premises and or this Lease without the consent of Tenant, and
such transfer or subsequent transfer will not be deemed a violation on
Landlord's part of any of the terms and conditions of this Lease.
18. SEVERABILITY. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. 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 LANDLORD LIABILITY. Notwithstanding anything in this Lease to
the contrary, and in consideration of the benefits accruing hereunder to Tenant,
Tenant on behalf of itself and all successors and assigns of Tenant covenants
and agrees that, in the event of any actual or alleged failure, breach, claim,
damage, cause of action or obligation or default hereunder by Landlord; (a)
Tenant's recourse against Landlord for monetary damages will be limited to
Landlord's interest in the Building including, subject to the prior rights of
any Mortgagee, Landlord's interest in the rents of the Building and any
insurance proceeds payable to Landlord; (b) except as may be necessary to secure
jurisdiction of a partnership or limited liability company, no partner,
investor, trustee, director, officer, employee, agent, shareholder, advisor,
manager, or member of Landlord (collectively referred to as "Landlord Party")
shall be sued or named as a party in any suit or action and no service of
process shall be made against any Landlord Party; (c) no Landlord Party shall be
required to answer or otherwise plead to any service of process; (d) no judgment
will be taken against any Landlord Party and any judgment taken against any
Landlord Party may be vacated and set aside at any time after the fact; (e) no
writ of execution will be levied against the assets of any Landlord Party; (f)
the obligations under this Lease do not constitute personal obligations of the
individual Landlord Party, and Tenant shall not seek recourse against the
individual Landlord Party or any of their personal assets for satisfaction of
any liability in respect to this Lease; and (g) these covenants and agreements
are enforceable both by Landlord and also by any Landlord Party.
21. TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease. Tenant hereby acknowledges that neither the real estate broker
listed in Paragraph 1.10 hereof nor any cooperating broker on this transaction
nor the Landlord or any employee or agents of any of said person has made any
oral or written warranties or representations to Tenant relative to the
condition or use by Tenant of the Premises or the Industrial Project and Tenant
acknowledges that Tenant assumes all responsibility regarding the Occupational
Safety Health Act, the legal use and adaptability of the Premises and the
compliance thereof with all applicable laws and regulations in effect during the
term of this Lease.
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, or by facsimile transmission,
and shall be deemed sufficiently given if served in a manner specified in this
Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease
shall be that Party's address for delivery or mailing of notices. Either Party
may by written notice to the other specify a different address for notice,
except that upon Tenant's taking possession of the Premises, the Premises shall
constitute Tenant's address for notice. A copy of all notices to Landlord shall
be concurrently transmitted to such party or parties at such addresses as
Landlord may from time to time hereafter designate in writing.
23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given 48 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantee next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices transmitted by facsimile transmission or similar
means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient), provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.
24.WAIVERS. No waiver by Landlord of the Default or Breach of any term, covenant
or condition hereof by Tenant, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Tenant
of the same or of any other term, covenant or condition hereof. Landlord's
consent to or approval of, any act shall not be deemed to render unnecessary the
obtaining of Landlord's consent to, or approval of any subsequent or similar act
by Tenant, 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
Landlord shall not be a waiver of any Default or Breach by Tenant. Any payment
by Tenant may be accepted by Landlord on account of moneys or damages due
Landlord, notwithstanding any qualifying statement or conditions made by Tenant
in connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Landlord
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 Landlord or Tenant should from the outset
understand what type of agency relationship or representation it has with the
agent or agents in the transaction. Landlord and Tenant acknowledge being
advised by the Brokers in this transaction, as follows:
(i) Landlord's Agent. A Landlord's agent under a listing
agreement with the Landlord acts as the agent for the Landlord only. A
Landlord's agent or subagent has the following affirmative obligations: To the
Landlord: A fiduciary duty of utmost care, integrity, honesty, and loyalty in
dealings
Page 10 of 26
with the Landlord. To the Tenant and the Landlord: (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 properly 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.
(ii) Tenant's Agent. An agent can agree to act as agent for the
Tenant only. In these situations, the agent is not the Landlord's agent, even if
by agreement the agent may receive compensation for services rendered, either in
full or in part from the Landlord. An agent acting only for a Tenant has the
following affirmative obligations. To the Tenant: A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Tenant. To the Tenant
and the Landlord: (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 Landlord and Tenant. A real estate
agent, either acting directly or through one or more associate licenses, can
legally be the agent of both the Landlord and the Tenant in a transaction, but
only with the knowledge and consent of both the Landlord and the Tenant. In a
dual agency situation, the agent has the following affirmative obligations to
both the Landlord and the Tenant: (a) A fiduciary duty of utmost care,
integrity, honesty and loyalty in the dealings with either Landlord or the
Tenant, (b) Other duties to the Landlord and the Tenant as stated above in
subparagraphs (i) or (ii) In representing both Landlord and Tenant, the agent
may not without the express permission of the respective Party, disclose to the
other Party that the Landlord will accept rent in an amount less than that
indicated in the listing or that the Tenant 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 Landlord or Tenant from the responsibility to protect their own
interests. Landlord and Tenant 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. Tenant 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 Tenant 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 Landlord
to any holding over by Tenant.
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 Tenant are both covenants and conditions.
In construing this Lease, all headings and titles are for the convenience of the
Parties only and shall not be considered a part of this Lease. Whenever required
by the context, the singular shall include the plural and vice versa. This Lease
shall not be construed as if prepared by one of the Parties, but rather
according to its fair meaning as a whole, as if both Parties had prepared it.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Tenant
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 Landlord 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 Tenant, 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. In the event that Landlord transfers title to the
Premises, or the Premises are acquired by another upon the foreclosure or
termination of a Security Device to which this Lease is subordinated (i) Tenant
shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to
such new owner, and upon request, enter into a new lease, containing all of the
terms and provisions of this Lease, with such new owner for the remainder of the
term hereof, or, at the election of such new owner, this Lease shall
automatically become a new Lease between Tenant and such new owner, upon all of
the terms and conditions hereof, for the remainder of the term hereof, and (ii)
Landlord shall thereafter be relieved of any further obligations hereunder and
such new owner shall assume all of Landlord's obligations hereunder, except that
such new owner shall not: (a) be liable for any act or omission of any prior
Landlord or with respect to events occurring prior to acquisition of ownership;
(b) be subject to any offsets or defenses which Tenant might have against any
prior Landlord, (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 Landlord.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Landlord after the execution of this Lease, Tenant'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 Tenant's possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long
as Tenant is not in Breach hereof and attorns to the record owner of the
Premises. Further, within 60 days after the execution of this Lease, Landlord
shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises. In the event that Landlord is unable to provide the
Non-Disturbance Agreement within said 60 days, then Tenant may, at Tenant'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 Landlord or a Lender in connection with a sale,
financing or refinancing of the Premises, Tenant and Landlord shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.
31. ATTORNEYS' FEES. If any Party or Broker brings an action or proceeding
involving the Premises 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 or Broker who substantially obtains or defeats the relief sought, as the
case may be, whether by compromise, settlement, judgment, or the abandonment by
the other Party or Broker of its claim or defense. The attorneys' 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,
Landlord 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
per occurrence for such services and consultation).
32. LANDLORD'S ACCESS; SHOWING PREMISES; REPAIRS. Landlord and Landlord's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or tenants, and making such alterations,
repairs, improvements or additions to the Premises as Landlord may deem
necessary. All such activities shall be without abatement of rent or liability
to Tenant. Landlord may at any time place on the Premises any ordinary "FOR
SALE" signs and Landlord may during the last 6 months of the term hereof place
on the Premises any ordinary "FOR LEASE" signs. Tenant may at any time place on
the Premises any ordinary "FOR SUBLEASE" sign.
33. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, any auction
upon the Premises without Landlord's prior written consent. Landlord shall not
be obligated to exercise any standard of reasonableness in determining whether
to permit an auction. Exclude Internet Auctions.
34. SIGNS. Except for ordinary "For Sublease" signs which may be placed only on
the Premises, Tenant shall not place any sign upon the Project without
Landlord's prior written consent. All signs must comply with all provisions as
contained in Exhibit "B" attached hereto and made a part hereof by this
Page 11 of 26
reference.
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Landlord, the voluntary or other surrender of this Lease by Tenant, the mutual
termination or cancellation hereof, or a termination hereof by Landlord for
Breach by Tenant, shall automatically terminate any sublease or lesser estate in
the Premises; provided, however, that Landlord may elect to continue any one or
all existing subtenancies. Landlord'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 Landlord's election to have such event
constitute the termination of such interest.
36. CONSENTS. Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Landlord's actual reasonable
costs and expenses (including but not limited to architects', attorneys',
engineers' and other consultants' fees) incurred in the consideration of, or
response to, a request by Tenant For any Landlord 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 Tenant upon receipt of an invoice and
supporting documentation therefor. Landlord's consent to any act, assignment or
subletting shall not constitute an acknowledgment that no Default or Breach by
Tenant 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 Landlord at the time of such consent. The failure to specify
herein any particular condition to Landlord's consent shall not preclude the
imposition by Landlord 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.
37. GUARANTOR.
37.1 EXECUTION. The Guarantors, if any, shall each execute a guaranty in
the form most recently published by the American Industrial Real Estate
Association, and each such Guarantor shall have the same obligations as Tenant
under this Lease.
37.2 DEFAULT. It shall constitute a Default of the Tenant if any Guarantor
fails or refuses, upon request to provide: (a) evidence of the execution of the
guaranty, including the authority of the party signing on Guarantor's behalf to
obligate Guarantor, and in the case of a corporate Guarantor, a certified copy
of a resolution of its board of directors authorizing the making of such
guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d)
written confirmation that the guaranty is still in effect.
38. QUIET POSSESSION. Subject to payment by Tenant of the Rent and performance
of all of the covenants, conditions and provisions on Tenant's part to be
observed and performed under this Lease, Tenant shall have quiet possession and
quiet enjoyment of the Premises during the term hereof.
39. OPTIONS. If Tenant is granted an option, as defined below, then the
following provisions shall apply.
39.1 DEFINITION. "OPTION" shall mean: (a) the right to extend the term of
or renew this Lease or to extend or renew any lease that Tenant has on other
property of Landlord; (b) the right of first refusal or first offer to lease
either the Premises or other property of Landlord; (c) the right to purchase or
the right of first refusal to purchase the Premises or other property of
Landlord.
39.2 OPTIONS PERSONAL TO ORIGINAL TENANT. Any Option granted to Tenant in
this Lease is personal to the original Tenant, and cannot be assigned or
exercised by anyone other than said original Tenant and only while the original
Tenant is in full possession of the Premises and, if requested by Landlord, with
Tenant certifying that Tenant has no intention of thereafter assigning or
subletting.
39.3 MULTIPLE OPTIONS. In the event that Tenant has any multiple Options to
extend or renew this Lease, a later Option cannot be exercised unless the prior
Options have been validly exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Tenant shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Tenant), (iii) during the
time Tenant is in Breach of this Lease, or (iv) in the event that Tenant has
been given 3 or more notices of separate Default, whether or not the Defaults
are cured, during the 12 month period immediately preceding the exercise of the
Option.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Tenant's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) An Option shall terminate and be of no further force or effect,
notwithstanding Tenant's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term, (i) Tenant fails to
pay Rent for a period of 30 days after such Rent becomes due (without any
necessity of Landlord to give notice thereof), (ii) Landlord gives to Tenant 3
or more notices of separate Default during any 12 month period, whether or not
the Defaults are cured, or (iii) if Tenant commits a Breach of this Lease.
40. SECURITY MEASURES. Tenant hereby acknowledges that the Rent payable to
Landlord hereunder does not include the cost of guard service or other security
measures, and that Landlord shall have no obligation whatsoever to provide same.
Tenant assumes all responsibility for the protection of the Premises, Tenant,
its agents and invitees and their property from the acts of third parties.
41. RESERVATIONS. Landlord reserves the right: (i) to grant, without the consent
or joinder of Tenant, such easements, rights and dedications that Landlord 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 Tenant. Tenant agrees to
sign any documents reasonably requested by Landlord to effectuate such rights.
42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay.
43. 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.
44.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.
45.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.
46.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 Tenant's obligations hereunder. Tenant 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.
47.MULTIPLE PARTIES. If more than one person or entity is named herein as either
Landlord or Tenant, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.
48.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 is not attached to this Lease.
00.XX ORAL AGREEMENT. This Lease covers in full each and every agreement of
every kind or nature whatsoever between the parties and their respective agents
and representatives hereto concerning this lease, and all preliminary
negotiations and agreements of whatsoever kind or nature are merged herein, and
there are no oral agreements or implied covenants. Landlord specifically does
not warrant that any other occupancy, present or future, in the Industrial
Project of which the Premises are a part, shall remain an occupant during the
term of this lease.
51. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees that the terms
of this Lease are confidential and constitute proprietary
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information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant, Tenant's partners, managers, members,
officers, directors, employees, agents and attorneys agree they shall not
intentionally and voluntarily disclose the terms and conditions of this Lease to
any newspaper or other publication or any other tenant or apparent prospective
tenant of the Building or other portion of the Industrial Project, or real
estate agent, either directly or indirectly, without the prior written consent
of Landlord, provided, however, that Tenant may disclose the terms to
prospective subtenants or assignees under this Lease.
52. AMERICANS WITH DISABILITIES ACT. Landlord agrees to be responsible for and
shall pay all remedial costs associated with, and shall use commercially
reasonable diligence in complying with, the Americans with Disabilities act
("ADA"), as it relates to the Common Areas of the Building only, based solely on
requirements existing and imposed on Landlord as of the Commencement Date. Any
changes, modifications, rehabilitation or repair to the Common Area required by
any amendment to ADA or any regulations thereunder which are enacted or become
effective after the Commencement Date, shall be Landlord's responsibility, but
the cost thereof shall be an Operating Expense for purposes of this Lease.
Notwithstanding anything contained herein to the contrary, Landlord shall have
no duty, obligation or responsibility, nor shall Landlord be obligated to expend
any moneys over and above the work specified in the Work Letter to make the
Premises comply with any requirements of ADA or any other similar laws,
including life-fire safety codes, physical handicap codes and/or earthquake
safety codes.
53. LEGAL ADVICE; NEUTRAL INTERPRETATION; HEADINGS. Each party has received
independent legal advice from their attorneys with respect to the advisability
of executing this Lease and the meaning of the provisions hereof. The provisions
of this Lease shall be construed as to their fair meaning, and not for or
against any party based upon any attribution to such party as the source of the
language in question. Headings used in this Lease are for convenience of
reference only and shall not be used in construing this Lease.
1. JOINT DRAFTING: This Lease shall not be construed in favor of or against
either party, but shall be construed as if both parties prepared this Lease.
Landlord and Tenant acknowledge that they have been represented, or have had the
opportunity to be represented, by counsel of their own choice. Neither Landlord
and Tenant is relying upon any legal advice from the other party's counsel
regarding the subject matter hereof. Both parties acknowledge that they
understand the terms and conditions of this Lease and the terms and conditions
of all other documents and agreements executed in connection herewith and that
they sign the same freely. Neither Landlord nor Tenant shall deny the
enforceability of any provision of this Lease or any of the other documents or
agreements executed in connection herewith on the basis that it did not have
legal counsel or that it did not understand any such term or condition. This
Lease and any ambiguities or uncertainties contained in this Lease shall be
equally and fairly interpreted for the benefit of and against all parties to
this Lease and shall further be construed and interpreted without reference to
the identity of the party or parties preparing this document, it being expressly
understood and agreed that the parties hereto participated equally in the
negotiation and preparation of this Lease or have had equal opportunity to do
so. Accordingly, the parties hereby waive the legal effect of of any successor
and/or amended statute which in part states that in cases of uncertainly, the
language of the contract should be interpreted most strongly against the party
who caused the uncertainly to exist. The captions used herein are for
convenience only and are not a part of this Lease and do not in any way limit or
amplify the terms and provisions hereof.
LANDLORD AND TENANT 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 LANDLORD AND TENANT WITH RESPECT TO THE
PREMISES.
Dated: 5-11-05 Dated: 5-11-05
LANDLORD: TENANT:
FCK HIGHLAND, LLC, Fortunet Inc.
a Delaware limited liability company A Nevada coporation
By: FKC LLC, By: /s/ Xxxx Xxxxx
a California limited liability ------------------------------------
company, XXXX XXXXX
its sole member Print Name
Its President
By: Xxxxxxx VI, Inc.,
a California corporation,
its manager
/s/ Xxxxxx. X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Illegible
-------------------------------------
Illegible
Page 13 of 26
ADDENDUM TO LEASE
This Addendum to Lease (the "Addendum") is entered into in connection with and
as part of that certain Lease dated May 6th 2005, incorporated herein by this
reference, by and between FKC HIGHLAND LLC, a Delaware limited liability company
("LANDLORD") and Fortunet Inc. a Nevada corporation ("TENANT"),
In the event any inconsistency between the provisions of this Addendum and the
Lease, the provisions of this Addendum shall prevail.
Notwithstanding anything to the contrary contained in the Lease, the parties
further agree as follows:
55. CONDITION OF PREMESIS
The Premises shall be delivered to Tenant in its current "As-is, "Where-is,
"with all Faults Accepted" condition. Tenant hereby acknowledges receipt of
that certain Phase I environmental report dated April 25th 2005 prepared by
AB Geoscience & Environmental Consultants. Landlord represents, the
Landlord's actual knowledge the DATA contained in the Current phase I
report is accurate and complete.
56. INDUSTRIAL WASTE WAIVER
Tenant acknowledges Landlord shall terminate service to that certain
industrial waste wasted connection contained within the Premises, at
Landlord's sole cost and expense after Landlord's deliverance of the
Premises to Tenant. Landlord endeavors to minimize disruption to Tenant's
use and enjoyment to the Premises during each work.
57. CONDITIONAL RENT ABATEMENT
Provided Tenant is not in default under this Lease (or would be in default
under this Lease but for the passage of time or giving of notice, or both),
Landlord hereby agrees to xxxxx the period of 6/15/2005 to 5/13/2006 total
abatement of ($56,019.00) during the term of this lease of Tenant's
obligation to pay Monthly Base Rent (such total amount of abated Monthly
Base Rent being hereinafter referred to as the "Abated Amount"). During
such abatement period, Tenant shall remain responsible for the payment of
all other monetary obligations under this Lease, including, without
limitation, Tenant's Percentage of Operating Expenses, utilities,
additional rent, and any expenses relative to Tenant's use and occupancy of
the Premises. In the event of a default by Tenant under the terms of this
Lease which results in early termination of this Lease, then as a part of
the recovery elsewhere expressly permitted under this Lease, Landlord shall
be entitled to a recovery of the Abated Amount.
Dated: 5-11-05 Dated: 5-11-05
LANDLORD: TENANT:
FCK HIGHLAND, LLC, Fortunet Inc.
a Delaware limited liability company A Nevada corporation
By: FKC LLC. By: /s/ Xxxx Xxxxx
a California limited liability ------------------------------------
company, XXXX XXXXX
its sole member Print Name
Its President
By: Xxxxxxx VI. Inc.,
a California corporation,
its manager
/s/ Xxxxxx. X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Illegible
-------------------------------------
Illegible
Page 14 of 26
