EXHIBIT 10.1
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STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-TENANT LEASE-GROSS
1. Basic Provisions ("Basic Provisions")
1.1 Parties: This Lease ("Lease"), dated for reference purposes only,
July 26, 1996 is made by and between Xxxxxxx X. Xxxxx, a married man as
his sole and separate property and Xxxxxxx Strong-Tie Company, Inc.
(collectively the "Parties," or individually a "Party").
1.2 Premises: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and
commonly known by the street address of 2955 Merced Street, San Leandro,
located in the county of Alameda, State of California, and generally
described briefly the nature of the property) +/-48,000 square foot
concrete tilt-up warehouse/manufacturing building, APN #77B-853-4, as
more particularly described in Exhibit "A" ("Premises"). (see Paragraph
2 for further provisions.)
1.3 Term: Five (5) years and zero (0) months ("Original Term")
commencing October 1, 1996 or such earlier date as possession is
delivered ("Commencement Date") and ending August 31, 2001(Expiration
Date"). (See Paragraph 3 for further provisions.)
1.4 Early Possession: Upon execution of lease ("Early Possession
Date") (See Paragraphs 3.2 and 3.3 for further provisions.)
1.5 Base Rent: $20,160.00 per month (Base Rent"), payable on the
first (1) day of each month commencing November 1, 1996 (or thirty days
following date possession is delivered to tenant if delivered prior to
October 1, 1996). (See Paragraph 4 for further provisions.)
If this is checked, there are provisions in this Lease for the Base Rent
to be adjusted.
1.6 Base Rent Paid Upon Execution: $20,160.00 as Base Rent for the
period November, 1996.
1.7 Security Deposit: $ None ("Security Deposit"). (See Paragraph 5
for further provisions.)
1.8 Permitted Use: Assembly, warehousing, research and development
and related office functions (See Paragraph 6 for further provisions.)
1.9 Insuring Property: Lessor is the "Insuring Party." $1905/yr is
the "Base Premium." (See Paragraph 8 for further provisions.)
1.10 Real Brokers: The following real estate brokers (collectively,
the "Brokers") and brokerage relationships exist in this transaction and
are consented to by the Parties (check applicable boxes): Xxxxxx Xxxxxx,
BT Commercial Real Estate Group, Inc. represents [X] Lessor exclusively
("Lessor's Broker") both Lessor and Lessee, and Xxxxxxx Xxxxx, CB
Commercial Real Estate Group, Inc. represents Lessee exclusively
("Lessee's Broker"); both Lessee and Lessor. (See Paragraph 15 for
further provisions.)
1.11 Guarantor. The obligations of the Lessee under this Lease are to
be guaranteed by None. ("Guarantor"). ( See Paragraph 37 for further
provisions.)
1.12 Addenda, Attached hereto is an Addendum or Addenda consisting of
Paragraphs 49 through 72 and Exhibits all of which constitute a part of
this Lease.
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee hereby from Lessor, the
Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of square footage set forth in this
Lease, or that may have been used in calculating rental, is an
approximation which Lessor and Lessee agree is reasonable and the rental
based thereon is not subject to revision whether or not the actual
square footage is more or less.
2.2 Condition. Lessor shall deliver the Premises to Lessee clean and
free of debris on the Commencement Date and warrants to Lessee that the
existing plumbing, fire sprinkler system, lighting, air conditioning,
heating, and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the
Commencement Date. If a non-compliance with said warranty exists as of
the Commencement Date, Lessor shall, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessee setting
forth with specificity the nature and extent of such non-compliance,
rectify same at Lessor's expense. If Lessee does not give Lessor written
notice of a non-compliance with this warranty within thirty (30) days
after the Commencement Date, correction of that non-compliance shall be
obligation of Lessee at Lessee's sole cost and expense.
2.3 Compliance with Covenants, Restrictions and Building Code. Lessor
warrants to Lessee that the improvements on the Premises comply with all
applicable covenants or restrictions of record and applicable building
codes, regulations and ordinances in effect on the Commencement Date.
Said warranty does not apply to the use to which Lessee will put the
Premises or to any Alternations or Utility Installations (as defined in
Paragraph 7.3(a)) made or to be made by Lessee. If the Premises do not
comply with said warranty, Lessor shall, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessee setting
forth with specificity the nature and extent of such non-compliance,
rectify the same at Lessor's expense. SEE ADDENDUM PARAGRAPH 49
2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it
has been advised by the Brokers to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical
and fire sprinkler systems, security, environmental aspects, compliance
with Applicable Law, as defined in Paragraph 6.3) and the present and
future suitability of the Premises for Lessee's intended use, (b) that
Lessee has made such investigation as it deems necessary with reference
to such matters and assumes all responsibility therefor as the same
relate to Lessee's occupancy of the Premises and/or the term of this
Lease, and (c) that neither Lessor, nor any of Lessor's agents, has made
any oral or written representations or warranties with respect to the
said matters other than as set forth in this Lease.
2.5 Lessee Prior Owner/Occupant. The warranties made by Lessor in
this Paragraph 2 shall be of no force or effect if immediately prior to
the date set forth in Paragraph 1.1 Lessee was the owner or occupant of
the Premises. In such event, Lessee shall, at Lessee's sole cost and
expense, correct any non-compliance of the Premises with said
warranties.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.
3.2 Early Possession. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent
shall be abated for the period of such early possession. All other terms
of this Lease, however, shall be in effect during such period. Any such
early possession shall not affect nor advance the Expiration Date of the
Original Term.
3.3 Delay In Possession. If for any reason Lessor cannot deliver
possession of the Premises to Lessee as agreed herein by the Early
Possession Date, one is specified, by the Commencement Date, Lessor
shall not be subject to any liability herefor, nor shall such failure
affect the validity of this Lease, or the obligations of Lessee
hereunder, or extend the term hereof, but in such case, Lessee shall
not, except as otherwise provided herein, be obligated to pay rent or
perform any other obligation of Lessee under the terms of this Lease
until Lessor delivers possession of the Premises to Lessee. If
possession of the Premises is not delivered to Lessee within sixty (60)
days after the Commencement Date, Lessee may, at its option, by notice
in writing to Lessor within ten (10) days thereafter, cancel this Lease,
in which event the Parties shall be discharged from all obligations
hereunder; provided, however, that if such written notice by Lessee is
not received by Lessor within said ten (10) day period. Lessee's right
to cancel this Lease shall terminate and be of no furhter force or
effect. Except as may be otherwise provided, and regardless of when the
term actually commences, if possession is not tendered to Lessee when
required by this Lease does not terminate this Lease, as aforesaid, the
period free of the obligation to pay Base Rent, if any, that Lessee
would otherwise have enjoyed shall run from the date of delivery of
possession and continue for a period equal to what Lessee would
otherwise have enjoyed under the terms hereof, but minus any days of
delay caused by the acts, changes or omissions of Lessee.
4. Rent
4.1 Base Rent. Lessee shall cause payment of Base Rent and other rent
or charges, as the same may be adjusted from time to time, to be
received by Lessor in lawful money of the United States, without offset
or deduction, on or before the day on which it is due under the terms of
this Lease. Base Rent and all other rent and charges for any period
during the term hereof which is for less than one (1) full calendar
month shall be prorated based upon the actual number of days of the
calendar month involved. Payment of Base Rent and other charges shall be
made to Lessor at its address stated herein or to such other persons or
at such other addresses as Lessor may from time to time designate in
writing to Lessee.
6. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the
purposes set forth in Paragraph 1.8, or any other use which is
comparable thereto, and for no other purpose. Lessee shall not use or
permit the use of the Premises in a manner that creates waste or a
nuisance, or that disturbs owners and/or occupants of, or causes damage
to, neighboring premises or properties. Lessor hereby agrees to not
unreasonably withhold or delay its consent to any written request by
Lessee, Lessees assignees or subtenants, and by prospective assignees
and subtenants of the Lessee, its assignees and subtenants, for a
modification of said permitted purpose for which premises may be used or
occupied, so long as the same will not impair the structural integrity
of the improvements on the Premises, the mechanical or electrical
systems therein, is not significantly more burdensome to the Premises
and the improvements thereon, and is otherwise permissible pursuant to
this Paragraph 6. If Lessor elects to withhold such consent, Lessor
shall within five (5) business days give a written notification of same,
which notice shall include an explanation of Lessor's reasonable
objections to the change in use.
6.2 Hazard Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance"
as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or
effect, either by itself or in combination with other materials expected
to be on the Premises, is either: (I) potentially injurious to the
public health, safety or welfare, the environment or the Premises, (ii)
regulated or monitored by any governmental authority, or (iii) a basis
for liability of Lessor to any governmental agency or third party under
any applicable statute or common law theory. Hazardous Substance shall
include, but not be limited to, hydrocarbons, petroleum, gasoline, crude
oil or any products, by-products or fractions thereof. Lessee shall not
engage in any activity in, on or about the Premises which constitutes a
Reportable Use (as hereinafter defined) of Hazardous Substances without
the express prior written consent of Lessor and compliance in a timely
manner (at Lessee's sole cost and expense) with all Applicable Law (as
defined in Paragraph 6.3). "Reportable Use" shall mean (I) the
installation or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires a permit from, or with respect to
which a report, notice, registration or business plan is required to be
filed with, any governmental authority. Reportable Use shall also
include Lessee's being responsible for the presence in, on or about the
Premises of a Hazardous Substance with respect to which any Applicable
Law requires that a notice be given to persons entering or occupying the
Premises or neighboring properties. Notwithstanding the foregoing,
Lessee may, without Lessor's prior consent, but in compliance with all
Applicable Law, use any ordinary and customary materials reasonably
required to be used by Lessee in the normal course of Lessee's business
permitted on the Premises, so long as such use is not a Reportable Use
and does not expose the Premises or neighboring properties to any
meaningful risk of contamination or damage or expose Lessor to any
liability therefor. In addition, Lessor may (but without any obligation
to do so) condition its consent to the use or presence of any Hazardous
Substance, activity or storage tank by Lessee upon Lessee's giving
Lessor such additional assurances as Lessor, in its reasonable
discretion, deems necessary to protect itself, the public, the Premises
and the environment against damage, contamination or injury and/or
liability therefrom or therefor, including, but not limited to, the
installation (and removal on or before lease expiration or earlier
termination) of reasonably necessary protective modifications to the
Premises (such as concrete encasements) and/or the deposit of an
additional Security Deposit under Paragraph 5 hereof.
(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause
to believe, that a Hazardous Substance, or a condition involving or
resulting from same, has come to be located in, on, under or about the
Premises,. other than as previously consented to by Lessor, Lessee shall
immediately give written notice of such fact to Lessor. Lessee shall
also immediately give Lessor a copy of any statement, report, notice,
registration, application, permit, business plan, license, claim, action
or proceeding given to, or received from, any governmental authority or
private party, or persons entering or occupying the Premises, concerning
the presence, spill, release, discharge of, or exposure to, any
Hazardous Substance or contamination in, on, or about the Premises,
including but not limited to all such documents as may be involved in
any Reportable Uses Involving the Premises.
(c) Indemnification. Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and
the Premises, harmless from and against any and all loss of rents and/or
damages, liabilities, judgments, costs, claims, liens, expenses,
penalties, permits and attorney's and consultant's fees arising out of
or involving any Hazardous Substance or storage tank brought onto the
Premises by or for Lessee or under Lessee's control. Lessee's
obligations under this Paragraph 6 shall include, but not be limited to,
the effects of any contamination or injury to person, property or the
environment created or suffered by Lessee, and the cost of investigation
(including consultant's and attorney's fees and testing), removal,
remediation, restoration and/or abatement thereof, or of any
contamination therein involved, and shall survive the expiration or
earlier termination of this Lease. No termination, cancellation or
release agreement entered into by Lessor and Lessee shall release Lessee
from its obligations under this Lease with respect to Hazardous
Substances or storage tanks, unless specifically so agreed by Lessor in
writing at the time of such agreement. SEE ADDENDUM PARAGRAPH 50 AND
PARAGRAPH 51.
6.3 Lessee's Compliance with Law. Except as otherwise provided in
this lease, Lessee, shall, at Lessee's sole cost and expense, fully,
diligently and in a timely manner, comply with all "Applicable Law",
which term is used in this Lease to include all laws, rules,
regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of
Lessor's engineers and/or consultants, relating in any manner to the
Premises (including but not limited to matters pertaining to (I)
industrial hygiene, (ii) environmental conditions on, in, under or about
the Premises, including soil and groundwater conditions, and (iii) the
use, generation, manufacture, production, installation, maintenance,
removal, transportation, storage, spill or release of any Hazardous
Substance or storage tank), now in effect or which may hereafter come
into effect, and whether or not reflecting a change in policy from any
previously existing policy. Lessee shall, within five (5) days after
receipt of Lessor's written request, provide Lessor with copies of all
documents and information, including, but not limited to, permits,
registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with any Applicable Law specified by
Lessor, and shall immediately upon receipt, notify Lessor in writing
(with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or
involving failure by Lessee or the Premises to comply with any
Applicable Law. SEE ADDENDUM PARAGRAPH 52.
6.4 Inspection; Compliance. Lessor and Lessor's Lender(s) (as defined
in Paragraph 8.3(a)) 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 inspecting the condition of the Premises and for
verifying compliance by Lessee with this Lease and all Applicable Laws
(as defined in Paragraph 6.3), and to employ experts and/or consultants
in connection therewith and/or to advise Lessor with respect to Lessee's
activities, including but not limited to the installation, operation,
use, monitoring, maintenance, or removal of any Hazardous Substance or
storage tank on or from the Premises. The costs and expenses of any such
inspections shall be paid by the party requesting same, unless a Default
or Breach of this lease, violation of Applicable law, or a
contamination, caused or materially contributed to by Lessee is found to
exist or be imminent, or unless the inspection is requested or ordered
by a governmental authority as the result of any such existing or
imminent violation or contamination. In any such case, Lessee shall upon
request reimburse Lessor or Lessor's Lender, as the case may be, for the
costs and expenses of such Inspections.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures and
Alterations.
7.1 Lessee's Obligations.
(a) Subject to the provisions of Paragraphs 2.2 (Lessor's warranty as
to condition), 2.3 (Lessor's warranty as to compliance with covenants,
etc.), 7.2 (Lessor's obligations to repair), 9 (damage and destruction)
and 14 (Condemnation), Lessee shall, at Lessee's sole cost and expense
and at all times, keep the interior of the building comprising a part of
the Premises clean and in good order, condition and repair. Lessee shall
not cause or permit any Hazardous Substance to be spilled or released
in, on, under or about the Premises (including through the plumbing or
sanitary sewer system) and shall promptly, at Lessee's expense, take all
investigatory and/or remedial action reasonably recommended, whether or
not formally ordered or required, for the cleanup of any contamination
of, and for the maintenance, security and/or monitoring of, the
Premises, the elements surrounding same, or neighboring properties, that
was caused or materially contributed to by Lessee, or pertaining to or
involving any Hazardous Substance and/or storage tank brought onto the
Premises by or for Lessee or under its control. Lessee, in keeping the
interior of Premises clean and in good order, condition and repair,
shall exercise and perform good maintenance practices.
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain contracts, with copies to Lessor, in customary form and
substance for, and with contractors specializing and experienced in, the
inspection, maintenance and service of the following equipment and
improvements, if any, located on the Premises: (I) heating, air
conditioning and ventilation equipment, (ii) boiler, fired, or unfired
pressure vessels, (iii) fire sprinkler and/or standpipe and hose or
other automatic fire extinguishing systems, including fire alarm and/or
smoke detection.
7.2 Lessor's Obligations. Upon receipt of written notice of the need
for such repairs and subject to Paragraph 13.5, Lessor shall, at
Lessor's expense, keep the foundations, exterior roof and structural
aspects of the Premises in good order, condition and repair, Lessor
shall not, however, be obligated to paint the exterior surface of the
exterior walls or to maintain the windows, doors or plate glass or the
interior surface of exterior walls. Lessor shall not, in any event, have
any obligation to make any repairs until Lessor receives written notice
of the need for such repairs. It is the intention of the Parties that
the terms of this Lease govern the respective obligations of the Parties
as to maintenance and repair of the Premises. Lessee and Lessor
expressly waive the benefit of any statute now or hereafter in effect to
the extent it its inconsistent with the terms of this Lease with respect
to, or which affords Lessee the right to make repairs at the expense of
Lessor or to terminate this Lease by reason of, any needed repairs. SEE
ADDENDUM PARAGRAPHS 53, 54, AND 55.
7.3 Utility Installations; Trade Fixtures; Alterations.
(a) Definitions; Consent Required. The term "Utility Installations"
is used in this Lease to refer to all carpeting, window coverings, air
lines, power panels, electrical distribution, security, fire protection
systems, communication systems, lighting fixtures, heating, ventilating,
and air conditioning equipment, plumbing, and fencing in, on or about
the Premises. The term "Trade Fixtures" shall mean Lessee's machinery
and equipment that can be removed without doing material damage to the
Premises. The term "Alterations" shall mean any modification of the
improvements on the Premises from that which are provided by Lessor
under the terms of this Lease, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. "Lessee Owned Alterations
and/or Utility Installations" are defined as Alterations made by lessee
that are not yet owned by Lessor as defined in Paragraph 7.4(a). Lessee
shall not make any Alterations or Utility Installations in, on, under or
about the Premises without Lessor's prior written consent. Lessee may,
however, make non-structural Utility Installations to the interior of
the Premises (excluding the roof), 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 the term
of this Lease as extended costs does not exceed $25,000 (and the
individual cost for each non-structural Utility Installation does not
exceed $5,000).
(b) Consent. Any alterations or Utility Installations that Lessee
shall desire to make require the consent of the Lessor shall be
presented to Lessor in written form with proposed detailed plans. All
consents given by Lessor, whether by virtue of Paragraph 7.3(a) or by
subsequent specific consent, shall be deemed conditioned upon: (i)
Lessee's acquiring all applicable permits required by governmental
authorities, (ii) the furnishing of copies of such permits together with
a copy of the plans and specifications for the Alteration or Utility
Installation to Lessor prior to commencement of the work there on, and
(iii) the compliance by Lessee with all conditions of said permits in a
prompt and expeditious manner. Any Alterations or Utility Installations
by Lessee during the term of this Lease shall be done in a good and
workmanlike manner, with good and sufficient materials, and in
compliance with all Applicable Law. Lessee shall promptly upon
completion thereof furnish Lessor with as-built plans and specifications
thereof. Lessor may (but without obligation to do so) condition its
consent to any requested Alteration or Utility Installation that costs
$10,000 or more upon Lessee's providing Lessor with a lien and
completion bond in an amount equal to one and one-half times the
estimated cost of such Alteration or Utility Installation and/or upon
Lessee's posting an additional Security Deposit with Lessor under
Paragraph 36 hereof.
(c) Indemnification. Lessee shall pay, when due, all claims for labor
or materials furnished or alleged to have been furnished to or for
Lessee at or use on the Premises, which claims are or may be secured by
any mechanics' or materialmen's lien against the Premises or any
interest therein. Lessee shall give Lessor not less than ten (10) days'
notice prior to the commencement of any work in, on or about the
Premises, and Lessor shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If Lessee
shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense defend and protect
itself, Lessor and the Premises against the same and shall pay and
satisfy any such adverse judgment that may be rendered thereon before
the enforcement thereof against the Lessor or the Premises. If Lessor
shall require, Lessee shall furnish to Lessor a surely bond satisfactory
to Lessor in an amount equal to one and one-half times the amount of
such contested lien claim or demand, indemnifying Lessor against
liability for the same, as required by law for the holding of the
Premises free from the effect of such lien or claim. In addition, Lessor
may require Lessee to pay Lessor's attorney's fees and costs in
participating in such action if Lessor shall decide it is to its best
interest to do so.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require their removal or
become the owner thereof as hereinafter provided in this Paragraph 7.4,
all Alterations and Utility Additions made to the Premises by Lessee
shall be the property of and owned by Lessee, but considered a part of
the Premises. Unless otherwise instructed per subparagraph 7.4(b)
hereof, all Lessee Owned Alterations and Utility Installations shall, at
the expiration or earlier termination of this Lease, become the property
of Lessor and remain upon and be surrendered by Lessee with the
Premises.
(b) Lessor may require the removal at any time of all or any part of
any Lessee Owned Alterations or Utility Installations made without the
required consent of Lessor. SEE ADDENDUM PARAGRAPH 56.
(c) Surrender/Restoration. Lessee shall surrender the Premises by the
end of the last day of the Lease term or any earlier termination date,
with all of the improvements, parts and surfaces thereof clean and free
of debris and in good operating order, condition and state of repair,
ordinary wear and tear excepted. "Ordinary wear and Tear" shall not
include any damage or deterioration that would have been prevented by
good maintenance practice or by Lessee performing all of its obligations
under this Lease. Except as otherwise agreed or specified in writing by
Lessor, the Premises, as surrendered, shall include the Utility
Installations. The obligation of Lessee shall include the repair of any
damage occasioned by the installation, maintenance or removal of
Lessee's Trade Fixtures, furnishings, equipment, and Alterations and/or
Utility Installations, as well as the removal of any storage tank
installed by or for Lessee, and the removal, replacement, or remediation
of any soil, material or ground water contaminated by Lessee, all as may
then be required by Applicable Law and/or good service practice.
Lessee's Trade Fixtures shall remain the property of Lessee and shall be
removed by Lessee subject to its obligation to repair and restore the
Premises per this Lease.
8. Insurance; Indemnity.
8.1 Payment of Premium Increases.
(a) Lessee shall pay to Lessor any insurance cost increase
("Insurance Cost Increases") occurring during the term of this Lease.
"Insurance Cost Increase" is defined as any increase in the actual cost
of the insurance required under Paragraphs 8.2(b), 8.3(a), and 8.3(b).
("Required Insurance"), over and above the Base Premium, as hereinafter
defined, calculated on an annual basis. "Insurance Cost Increase" shall
include, but not be limited to, increases resulting from the nature of
Lessee's occupancy, any act or omission of Lessee, requirements of the
holder of a mortgage or deed of trust covering the premises, increased
valuation of the Premises, and/or a premium rate increase. If the
parties insert a dollar amount in Paragraph 1.9, such amount shall be
considered the "Base Premium." In lieu thereof, if the Premises have
been previously occupied, the "Base Premium" shall be the annual premium
applicable of the most recent occupancy. If the Premises have never been
occupied, the "Base Premium" shall be the lowest annual premium
reasonably obtainable for the Required Insurance as of the commencement
of the Original Term, assuming the most nominal use possible of the
Premises. In no event, however, shall Lessee be responsible for any
portion of the premium cost attributable to liability insurance coverage
in excess of $1,000,000 procured under paragraph 8.2(b) (Liability
Insurance Carried By Lessor).
(b) Lessee shall pay any such Insurance Cost Increase to Lessor
within thirty (30) days after receipt by Lessee of a copy of the premium
statement other reasonable evidence of the amount due. If the insurance
policies maintained hereunder cover other property besides the Premises,
Lessor shall also deliver a statement of the amount of such Insurance
Cost Increase attributable only to the Premises showing in reasonable
detail the manner in which such amount was computed. Premiums for policy
periods commencing prior to, or extending beyond, the term of this Lease
shall be to coincide with the corresponding Commencement or Expiration
of the Lease term.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force during
the term of this Lease a Commercial General Liability policy of
insurance protecting Lessee and Lessor (as an additional insured)
against claims for bodily injury and property damage based upon,
involving or out of the ownership, use, occupancy or maintenance of
the Premises and all areas appurtenant thereto. Such insurance shall be
on an occurrence providing single limit coverage in an amount not less
than $1,000,000 per occurrence with an "Additional Insured-Managers or
Lessors of Premises" Endorsement and contain the "Amendment of the
Pollution Exclusion" for damage caused by heat, smoke, or fumes from a
hostile fire. The policy shall not contain any intra-insured exclusions
as between insured persons or organizations, but shall include coverage
for liability assumed under this Lease as an "insured contract" for the
performance of Lessee's indemnity obligations under this Lease. The
limits of said insurance required by this Lease or as carried by Lessee
shall not, however, limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All insurance to be carried by Lessee shall be
primary to and not contributory with any similar insurance carried by
Lessor, whose insurance shall be considered excess insurance only.
(b) Carried By Lessor. In the event Lessor is the Insuring Party,
Lessor shall also maintain liability insurance described in Paragraph
8.2(a), above, in addition to, and in lieu of, the insurance required to
be maintained by Lessee. Lessee shall not be named as an additional
insured therein.
8.3 Property Insurance-Building, Improvements and Rental Value.
(a) Building and Improvements. The Insuring Party shall obtain and
keep in force during the term of this Lease an "all risk" policy or
policies in the name of Lessor, with loss payable to Lessor and to the
holders of any mortgages, deeds of trust or ground leases on the
Premises ("Lender(s)"), insuring loss or damage to the Premises. The
amount of such insurance shall be equal to the Full replacement cost of
the Premises, as the same shall exist from time to time, or the amount
required by Lenders, but in no event more than the commercially
reasonable and available insurable value thereof if, by reason of the
unique nature or age of the improvements involved, such latter amount is
less than full replacement cost. If the coverage is available and
commercially appropriate, such policy or policies shall insure against
all risks of direct physical loss or damage (except the perils of flood
and/or earthquake unless required by a Lender), including coverage for
sprinkler leakage and any additional costs resulting from debris removal
and reasonable amounts of coverage for the enforcement of any ordinance
or law regulating the reconstruction or replacement of any undamaged
sections of the Premises required to be demolished or removed by reason
of the enforcement of any building, zoning, safety or land use laws as
the result of a covered cause of loss, but not including plate glass
insurance. Said policy or policies shall also contain an agreed
valuation provision in lieu of any coinsurance clause, waiver of
subrogation, and inflation guard protection causing an increase in the
annual property insurance coverage amount by a factor of not less than
the adjusted U.S. Department of Labor Consumer Price Index for all Urban
Consumers for the city nearest to where the Premises are located. SEE
ADDENDUM PARAGRAPH 57
(b) Rental Value. Lessor shall, in addition, obtain and keep in force
during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and Lender(s), insulting the loss of
the full rental and other charges payable by Lessee to Lessor under this
Lease for one (1) year (including all real estate taxes, insurance
costs, and any scheduled rental increases.) Said insurance shall
provide that in the event the Lease is terminated by reason of an
insured loss, the period of indemnity for such coverage shall be
extended beyond the date of the completion of repairs or replacement of
the Premises, to provide for one full year's loss of rental revenues
from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental
income, property taxes, insurance premium costs and other expenses, if
any, otherwise payable by Lessee, for the next twelve (12) month period.
(c) Adjacent Premises. If the Premises are part of a larger building,
or if the Premises are part of a group of buildings owned by Lessor
which are adjacent to the Premises, the Lessee shall pay for any
increase in the premiums for the property insurance of such building or
buildings if said increase is caused by Lessee's acts, omission's, use
or occupancy of the Premises.
(d) Tenant's Improvements. The Lessor shall not be required to insure
Lessee Owned Alterations and Utility Installations unless the item in
question has become the property of Lessor under the terms of this
Lease.
8.4 Lessee's Property Insurance. Subject to the requirements of
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessor's option, by endorsement to a policy already carried, maintain
insurance coverage on all of Lessee's personal property, in, on, or
about the Premises similar in coverage to that carried by the Insuring
Party under Paragraph 8.3. Such insurance shall be full replacement cost
coverage with a deductible of not to exceed $25,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the
replacement of personal property. Lessee shall be the Insuring Party
with respect to the insurance required by this Paragraph 8.4 and shall
provide Lessor with written evidence that such insurance is in force.
8.5 Insurance Policies. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the
Premises are located, and maintaining during the policy term a "General
Policyholders Rating" of at least B+, V, or such other rating as may be
required by a Lender having a lien on the Premises, as set forth in the
most current issue of "Best's Insurance Guide." Lessee shall not do or
permit to be done anything which shall invalidate the insurance policies
referred to in this Paragraph 8. Lessee shall cause to be delivered to
Lessor certified copies of, or certificates evidencing the existence and
amounts of, the insurance, and with the additional insureds, required
under Paragraph 8.2(a) and 8.4. No such policy shall be cancelable or
subject to modification except after (30) days prior written notice to
Lessor. Lessee shall at least (30) days prior to the expiration of such
policies, furnish Lessor with evidence of renewal thereof, or Lessor may
order such insurance and charge the cost thereof to Lessee, which amount
shall be payable by Lessee upon demand.
8.6 Waiver of Subrogation. Without affecting any other rights or
remedies, Lessee and Lessor ("Waiving Party") each hereby release and
relieve the other, and waive their entire right to recover damages
(whether in contract or in tort) against the other, for loss of or
damage to the Waiving Party's property arising out of incident to t he
perils required to be insured against under Paragraph 8. The effect of
such releases and waivers of the right to recover damages shall not be
limited by the amount of insurance carried or required, or by any
deductibles applicable thereto.
8.7 Indemnity. Except for Lessor's negligence and/or breach of
express warranties, Lessee shall indemnify, protect, defend and hold
harmless the Premises, Lessor and its agents, Lessor's master or ground
lessor, Partners and Lenders, from and against any and all claims, loss
of rents and/or damages, costs, liens, judgments, penalties, permits,
attorney's and consultants fees, expenses and/or liabilities arising out
of, involving, or in dealing with, the occupancy of the Premises by
Lessee, the conduct of Lessee's business, any act omission or neglect of
Lessee, its agents, contractors, employees or invitees, and out of any
Default or Breach by Lessee in the performance in a timely manner of any
obligation on Lessee's part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit
of any action or proceeding involved therein, and whether or not (in the
case of claims made against Lessor) litigated and/or reduced to
judgment, and whether well founded or not. In case any action or
proceeding be brought against Lessor by reason of any of the foregoing
matters, Lessee upon notice from Lessor shall defend the same at
Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first
paid any such claim in order to be so indemnified.
8.8 Exemption of Lessor from Liability. Except to the extent caused
by Lessor's negligence or willful misconduct. Lessor shall not be liable
for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees,
customers, or any other person in or about the Premises, whether such
damage or injury is caused by or results from fire, steam, electricity,
gas, water or rain, or from the breakage, leakage, obstruction or other
defects of pipes, fire sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, or from any other cause, whether the
said injury or damage results from conditions arising upon the Premises
or upon other portions of the building of which the Premises are a part,
or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible
or not. Lessor shall not be liable for any damages arising from any act
or neglect of any other tenant of Lessor. Not withstanding Lessor's
negligence or breach of this Lease, Lessor shall under no circumstances
be liable for injury to Lessee's business or for any loss of income or
profit therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, the repair cost of which damage or destruction is
less than 50% of the then Replacement Cost of the Premises immediately
prior to such damage or destruction, excluding from such calculation the
value of the land and Lessee Owned Alterations and Utility
Installations.
(b) "Premises Total Destruction" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility
Installations the repair cost of which damage or destruction is 50% or
more of the then Replacement Cost of the Premises immediately prior to
such damage or destruction, excluding from such calculation the value of
the land and Lessee Owned Alterations and Utility Installations.
(c) "Insured Loss" shall mean damage or destruction to improvements
on the Premises, other than Lessee Owned Alterations and Utility
Installation, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible
amounts or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of occurrence to their
condition existing immediately prior thereto, including demolition,
debris removal and upgrading required by the operation of applicable
building codes, ordinances or laws, and without deduction for
depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination
by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or
under the Premises.
9.2 Partial Damage-Insured Loss. If a Premises Partial Damage that is
an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair
such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations
and Utility Installations) as soon as reasonably possible and this Lease
shall continue in full force and effect. Notwithstanding the foregoing,
if the required insurance was not in force or the 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, the shortage in proceeds was due to the fact that, by reason of
the unique nature of the improvements, full replacement cost insurance
coverage was not commercially reasonable and available, Lessor shall
have no obligation to pay for the shortage in insurance proceeds or to
fully restore the unique aspects of the Premises unless Lessee provides
Lessor with the funds to cover same, or adequate assurance thereof,
within ten (10) days following receipt of written notice of such
shortage and request therefor. If Lessor receives said funds or adequate
assurance thereof within said (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 Lessor
does not receive such funds or assurance within said period, Lessor may
nevertheless elect by Written notice to Lessee within (10) ten days
thereafter to make restoration and repair as is commercially reasonable
with Lessor paying any shortage in proceeds, in which case this Lease
shall remain in full force and effect. If in such case Lessor does not
so elect, then this Lease shall terminate thirty (30) days following the
occurrence of the damage or destruction. Unless otherwise agreed, Lessee
shall in no event have any right to reimbursement from Lessor for any
funds contributed by Lessee to repair any such damage or destruction.
Premises Partial Damage due to flood or earthquake shall be subject to
Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that there may
be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.
9.3 Partial Damage-Uninsured Loss. If a Premises Partial Damage that
is not an Insured Loss occurs, unless caused by a negligent or willful
act of Lessee (in which event Lessee shall make the repairs at Lessee's
expense and this Lease shall continue in full force and effect, but
subject to Lessor's rights under Paragraph 13), Lessor may at Lessor's
option, either: (I) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force
and effect, or (ii) give written notice to Lessee within thirty (30)
days after receipt by Lessor of knowledge of the occurrence of such
damage of Lessor's desire to terminate this Lease as of the date sixty
(60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this
Lease, Lessee shall have the right within ten (10) days after the
receipt of such notice to give written notice to Lessor of Lessee's
commitment to pay for the repair of such damage totally at Lessee's
expense and without reimbursement from Lessor. Lessee shall provide
Lessor with the required funds or satisfactory assurance thereof within
thirty (30) days following Lessee's said commitment. In such event this
Lease shall continue in full force and effect, and Lessor shall proceed
to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the
funds or assurance thereof within the times specified above, this Lease
shall terminate as of the date specified in Lessor's notice of
termination.
9.4 Total Destruction. Notwithstanding any other provision hereof, if
a Premises Total Destruction occurs (including any destruction required
by any authorized public authority), this Lease shall terminate thirty
(30) days following the date of such Premises Total Destruction, whether
or not the damage or destruction is an Insured Loss or was caused by
negligent or willful act of Lessee. In the event, however, that the
damage or destruction was caused by Lessee, Lessor shall have the right
to recover Lessor's damages from Lessee except as released and waived in
Paragraph 8.6.
9.5 Damage Near End of Term. If at any time during the last six (6)
months of the term of this Lease there is damage for which the cost to
repair exceeds one (1) month's Base Rent, whether or not an Insured
Loss, Lessor may, at Lessor's option, terminate this Lease effective
sixty (60) days following the date of occurrence of such damage by
giving written notice to Lessee of Lessor's election to do so within
thirty (30) days after the date of occurrence of such damage. Provided,
however, if Lessee at that has an exercisable option to extend this
Lease or to purchase the Premises, then Lessee may preserve this Lease
by, within twenty (20) days following the occurrence of the damage, or
before the expiration of the time provided in such option for its
exercise, whichever is earlier ("Exercise Period"), (I) exercising such
option and (ii) providing Lessor with any shortage in insurance proceeds
(or adequate assurance thereof) needed to make the repairs. If Lessee
duly exercises such option during said Exercise Period and provides
Lessor with funds (or adequate assurance thereof) to cover any shortage
in insurance proceeds. Lessor shall, at Lessor's expense repair such
damage as soon as reasonably possible and this Lease shall continue in
full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during said Exercise Period, then Lessor
may at Lessor's option terminate this Lease as of the expiration of said
sixty (60) day period following the occurrence of such damage by giving
written notice to lessee of Lessor's election to do so within ten (10)
days after the expiration of the Exercise Period, notwithstanding any
term or provision in the grant of option to the contrary.
9.6 Abatement of Rent; Lessee's Remedies.
(a) In the event of damage described in Paragraph 9.2 (Partial
Damage-Insured), whether or not Lessor or Lessee repairs or restores the
Premises, the Base Rent, Real Property Taxes, insurance premiums, and
other charges, if any, payable by Lessee hereunder for the period during
which such damage, its repair or the restoration continues (not to
exceed the period for which rental value insurance is required under
Paragraph 8.3(b), shall be abated in proportion to the degree to which
Lessee's use of the Premises is impaired. Except for abatement of Base
Rent, Real Property Taxes, insurance premiums, and other charges, if
any, as aforesaid, all other obligations of Lessee hereunder shall be
performed by Lessee, and Lessee shall have no claim against Lessor for
any damage suffered by reason of any such repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commerce, in a
substantial and meaningful way, the repair or restoration of the
Premises within (90) days after such obligation shall accrue, Lessee
may, at any time prior to the commencement of such repair or
restoration, given written notice to Lessor and to any Lenders of which
Lessee has actual notice of Lessee's election to terminate this Lease on
a date not less than sixty (60) days following the giving of such
notice. If Lessee gives such notice to Lessor and such Lenders and such
repair or restoration is not commenced within (30) days after receipt of
such notice, this Lease shall terminate as of the date specified in said
notice. If Lessor or a Lender commences the repair or restoration of the
Premises within (30) days after receipt of such notice, this Lease shall
continue in full force and effect. "Commence" as used in this Paragraph
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. SEE ADDENDUM PARAGRAPH 58
9.7 Hazardous Substance Conditions. If a Hazardous Substance
Conditions occurs, unless Lessee is legally responsible thereto (in
which case Lessee shall make the investigation and remediation thereof
required by Applicable Law and this Lease shall continue in full force
and effect, but subject to Lessor's rights under Paragraph 13), Lessor
may at Lessor's option either (I) investigate and remediate such
Hazardous Substance Condition, if required, as soon as reasonably
possible at Lessor's expense, in which event this Lease shall continue
in full force and effect, or (ii) if the estimated cost to investigate
and remediate such condition exceeds twelve (12) times the then monthly
Base Rent or $100,000, whichever is greater, give written notice to
Lessee within thirty (30) days after receipt by Lessor of knowledge of
the occurrence of such Hazardous Substance Condition of Lessor's desire
to terminate this Lease as of the date sixty (60) days following the
giving of such notice. In the event Lessor elects to give such notice of
Lessor's intention to terminate this Lease, Lessee shall have the right
within ten (10) days after the receipt of such notice to give written
notice to Lessor of Lessee's commitment to pay for the investigation and
remediation of such Hazardous Substance Condition totally at Lessee's
expense and without reimbursement from Lessor except to the extent of an
amount equal to twelve (12) times the then monthly Base Rent or
$100,000, whichever is greater. Lessee shall provide Lessor with the
funds required of Lessee or satisfactory assurance thereof within thirty
(30) days following Lessee's said commitment. In such event this Lease
shall continue in full force and effect, and Lessor shall proceed to
make such investigation and remediation as soon as reasonably possible
and the required funds are available. If Lessee does not give such
notice and provide the required funds are available. If Lessee does not
give such notice and provide the required funds or assurance thereof
within the times specified above, this Lease shall terminate as of the
date specified in Lessor's notice of termination. If a Hazardous
Substance Condition occurs for which Lessee is not legally responsible,
there shall be abatement of Lessee's obligations under this Lease to the
same extent as provided in Paragraph 9.6(a) for a period of not to
exceed twelve (12) months. SEE ADDENDUM PARAGRAPH 59
9.8 Termination-Advance Payments. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by
Lessee to Lessor. Lessor shall, in additon, return to Lessee so much of
Lessee's Security Deposit has not been, or is not then required to be,
used by Lessor under the terms of this Lease.
9.9 Waive Statutes. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the
Premises with respect to the termination of this Lease and hereby waive
the provisions of any present or future statute to the extent
inconsistent herewith.
10. Real Property Taxes.
10.1 (a) Payment of Taxes. Lessor shall pay the Real Property Taxes,
as defined in Paragraph 10.2 applicable to the Premises; provided,
however, that Lessee shall pay, in addition to rent, the amount, if any,
by which Real Property Taxes applicable to the Premises increase over
the fiscal tax year during which the Commencement Date occurs ("Tax ).
Subject to Paragraph 10.1(b), payment of any such Tax Increase shall be
made by Lessee within thirty (30) days after receipt of Lessor's written
statement setting forth the amount due and the computation thereof.
Lessee shall promptly furnish Lessor with satisfactory evidence that
such taxes have been paid. If any such taxes to be paid by Lessee shall
cover any period of time prior to or after the expiration or earlier
termination of the term hereof, Lessee's share of such taxes shall be
equitably prorated to cover only the period of time within the tax
fiscal year his Lease is in effect, and Lessor shall reimburse Lessee
for any overpayment after such proration.
(b) Advance Payment. In order to insure payment when due and before
delinquency of any or all Real Property Taxes, Lessor reserves the
right, at Lessor's option, to estimate the current Real Property Taxes
applicable to the Premises, and to require such current year's Tax
Increase to be paid in advance to Lessor by Lessee, wither (I) in a lump
sum amount equal to the amount due, at least twenty (20) days prior to
the applicable delinquency date, or (ii) monthly in advance with the
payment of the Base Rent. If Lessor elects to require payment monthly in
advance, the monthly payment shall be that equal monthly amount which,
over the number of months remaining before the month in which the
applicable tax installment would become delinquent and without interest
thereon), would provide a fund large enough to fully discharge before
delinquency the estimated Tax Increase to be paid. When the actual
amount of the applicable Tax Increase is known, the amount of such equal
monthly advance payment shall be adjusted as required to provide the
fund needed to pay the applicable Tax Increase before delinquency. If
the amounts paid to Lessor by Lessee under the provisions of this
Paragraph are insufficient to discharge the obligations of Lessee to pay
such Tax Increase as the same becomes due, Lessee shall pay to Lessor,
upon Lessor's demand, such additional sums as are necessary to pay such
obligation. All moneys paid to Lessor under this Paragraph may be
intermingled with other moneys of Lessor and shall not bear interest. In
the event of a Breach by Lessee in the performance of the obligations of
Lessee under this Lease, then any balance of funds paid to Lessor under
the provisions of this Paragraph may, subject to proration as provided
in Paragraph 10.1(a), at the option of Lessor, be treated as an
additional Security Deposit under Paragraph 5.
(c) Additional Improvements. Notwithstanding Paragraph 10.1(a)
hereof, Lessee shall pay to Lessor upon demand therefor the entirety of
any increase in Real Property Taxes assessed by reason of Alterations or
Utility Installations placed upon the Premises by Lessee or at Lessee's
request.
10.2 Definition of "Real Property Taxes" As used herein, the term
"Real Property Taxes" shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license
fee, commercial rental tax, improvement bond or bonds, levy or tax
(other than inheritance, personal income or estate taxes) imposed upon
the Premises by any authority having the direct or indirect power to
tax, including any city, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other improvement
district thereof, levied against any legal or equitable interest of
Lessor in the Premises or in the real property of which the Premises are
a part, Lessor's right to rent or other income therefrom, and/or
Lessor's business of leasing the Premises. The term "Real Property
Taxes" shall also include any tax, fee, levy, assessment or charge, or
any increase therein, imposed by reason of events occurring, or changes
in applicable law taking effect, during the term of this Lease,
including but not limited to a change of the ownership of the Premises
or in the improvements thereon, the execution of this Lease, or any
modification, amendment or transfer thereof, and whether or not
contemplated by the Parties. SEE ADDENDUM PARAGRAPH 60 AND 61.
10.3 Joint Assessment. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the
respective valuations assigned in the assessor's work sheets or such
other information as may be reasonably available. Lessor's reasonable
determination thereof, in good faith, shall be conclusive.
10.4 Personal Property Taxes. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee Owned Alterations,
Utility Installations, Trade Fixtures, furnishings, equipment and all
personal property of Lessee contained in the Premises or elsewhere.
When, possible, Lessee shall cause its Trade Fixtures, furnishings,
equipment and all other personal property to be assessed and billed
separately from the real property of Lessor. If any of Lessee's said
personal property shall be assessed with Lessor's with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee
within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property or, at Lessor's option, as
provided in Paragraph 10.1(b).
11. Utilities. Lessee shall pay for all water, gas, heat, light,
power, telephone, trash disposal and other utilities and services
supplied to the Premises, together with any taxes thereon. If any such
services are not separately metered to Lessee, Lessee shall pay a
reasonable proportion, to be determined by Lessor, of all charges
jointly metered with other premises.
12. Assignment and Subletting
12.1 Lessor's Consent Required
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively,
"assignment") or sublet all or any part of Lessee's interest in this
Lease or in the Premises without Lessor's prior written consent given
under and subject to the terms of Paragraph 36. SEE ADDENDUM PARAGRAPH
62
(b) Lessee's remedy for any breach this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and Subletting. SEE
ADDENDUM PARAGRAPH 63
(a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by
such assignee or sublessee of the obligations of Lessee under this
Lease, (ii) release Lessee of any obligations hereunder, or (iii) after
the primary liability of Lessee for the payment of Base Rent and other
sums due Lessor hereunder or for the performance of any other
obligations to be performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such
assignment nor the acceptance of any rent or performance shall
constitute a waiver or estoppel of Lessor's right to exercise its
remedies for the Default or Breach by Lessee of any of the terms,
convenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by
Lessee or to any subsequent or successive assignment or subletting by
the sublessee. However, Lessor may consent to subsequent sublettings and
assignments of the sublease or any amendments or modifications thereto
without notifying Lessee or anyone else liable on the Lease or sublease
and without obtaining their consent, and such action shall not relieve
such persons from liability under this Lease or sublease.
(d) In the event of any Default or Breach of lessee's obligations
under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or any one else responsible for the performance of the
Lessee's obligations under this Lease, including sublessee, without
first exhausting Lessor's remedies against any other person or entity
responsible therefor to Lessor, or any security held by Lessor or
Lessee.
(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to lessor's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including but not
limited to the intended use and/or required modification of the
Premises, if any, together with a non-refundable deposit of $1,000 or
ten percent (10%) of the current monthly Base Rent, whichever is
greater, as reasonable consideration for Lessor's considering and
processing the request for consent. Lessee agrees to provide Lessor with
such other or additional information and/or documentation as may be
reasonably requested by Lessor.
(f) Any assignee if, or sublessee under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed,
for the benefit of Lessor, to have assumed and agreed to conform and
comply with each and every term, covenant, condition and obligation
herein to be observed or performed by Lessee during the term of said
assignment or sublease, other than such obligations as are contrary to
or inconsistent with provisions of an assignment or sublease to which
Lessor has specifically consented in writing.
12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting Lessee of
all or any part of the Premises and shall be deemed included in all
subleases under this Lease whether or not expressly incorporated
therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a
portion of the Premises heretofore or hereafter made by Lessee, and
Lessor may collect such rent and income and apply same toward Lessee's
obligations under this Lease; provided, however, that until a Breach (as
defined in Paragraph 13.1) shall occur in the performance of Lessee's
obligations under this Lease, Lessee may, except as otherwise provided
in this Lease, receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other assignment of
such sublease to Lessor, nor by reason of the collection of the rents
from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such
sublessee under sublease. Lessee hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Lessor
stating that a Breach exists in the performance of Lessee's obligations
under this Lease, to pay to Lessor the rents and other charges due and
to become due under the sublease. Sublessee shall rely upon any such
statement and request from Lessor and shall pay such rents and other
charges to Lessor without any obligation or right to inquire as to
whether such Breach exists and notwithstanding any notice from or claim
from Lessee to the contrary. Lessee shall have no right or claim against
said sublessee, or, until the Breach has been cured, against Lessor, for
any such rents and other charges so paid by said sublessee to Lessor.
SEE ADDENDUM PARAGRAPH 64
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any
obligation to so, may require any sublessee to attorn to Lessor, in
which event Lessor shall undertake the obligations of the sublessor
under such sublease from the time of the exercise of said option to the
expiration of such sublease; provided, however, Lessor shall not be
liable for any prepaid rents or security deposit paid by such sublease
to such sublessor or for any other prior Defaults or Breaches of such
sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor under
a sublease shall also require the consent of Lessor herein.
(d) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of
Lessee within the grace period, if any, specified in such notice. The
sublessee shall have the right of reimbursement and offset from and
against Lessee for any such Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such
occurrence for legal services and costs in the preparation and service
of a notice of Default, and that Lessor may include the cost services
and costs in said notice as rent due and payable to cure said default. A
"Default" is defined as a failure by the Lessee to observe, comply with
or perform any of the terms, covenants, conditions or rules applicable
to Lessee under this Lease. A "Breach" is defined as the occurrence of
any one or more of the following Defaults, and, where a grace period for
cure after notice is specified herein, the failure by Lessee to cure
such Default prior to the expiration of the applicable grace period,
shall entitle Lessor to pursue the remedies set forth in Paragraphs 13.2
and/or 13.3:
(a) The abandonment of the Premises.
(b) Except as expressly otherwise provided in this Lease, the failure
by Lessee to make any payment of Base Rent or any other monetary payment
required to be made by Lessee thereunder, as and when due, the failure
by Lessee to provide Lessor with reasonable evidence of insurance or
surely bond required under this Lease, or the failure of Lessee to
fulfill any obligation under this Lease which endangers or threatens
life or property, where such failure continues for a period of three (3)
days following written notice thereof by or on behalf of Lessor to
Lessee.
(c) Except as expressly otherwise provided in this Lease, the failure
by Lessee to provide Lessor with reasonable written evidence (in duly
executed original form, if applicable) of (i) compliance with applicable
law per Paragraph 6.3, (ii) the inspection, maintenance and service
contracts required under Paragraph 7.1(b), (iii) the recission of an
unauthorized assignment or subletting per Paragraph 7.1(b), (iv) a
Tenancy Statement per Paragraphs 16 or 37, (v) the subordination or
non-subordination of this Lease per Paragraph 30, (vi) the guaranty of
the performance of Lessee's obligations under this Lease if required
under Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any other
documentation or information which Lessor may reasonably require of
lessee under the terms of this Lease, where any such failure continues
for a period of ten (10) days following written notice by or on behalf
of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40
hereof, that are to be observed, complied with or performed by Lessee,
other than those described in subparagraphs (a), (b) or (c), above,
where such Default continues for a period of thirty (30) days are
reasonably required for its cure, then it shall not be deemed to be a
Breach of this Lease by Lessee if Lessee commences such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
(e) The occurrence of any of the following events: (I) The making by
lessee of any general arrangement or assignment for the benefit of
creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S.C.
sec. 101 of any successor statute thereto (unless, in the case of a
petition filed against lessee, the same is dismissed within sixty (60);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of
Lessee's interest in this Lease, where possession is not restored to
Lessee within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located
at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days; provided, however, in
the event that any provision of this subparagraph (e) is contrary to any
applicable law, such provision shall be of no force or effect, and not
affect the validity of the remaining provisions.
(f) The discovery by Lessor that any financial statement given to
lessor by Lessee or any Guarantor of Lessee's obligations hereunder was
materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (I) the death of guarantor, (ii) the termination of a
guarantor's liability with respect to this lease other than in
accordance with the terms of such guaranty, (iii) a guarantor's becoming
insolvent or the subject of a bankruptcy filing, (iv) a guarantor's
refusal to honor the guaranty, or (v) a guarantor's breach of its
guaranty obligation on an anticipatory breach basis, and Lessee's
failure, within sixty (60) days following written notice by or on behalf
of Lessor to Lessee of any such event, to provide Lessor with written
alternative assurance or security, which, when coupled with the then
existing resources of Lessee, equals or exceeds the combined financial
resources of Lessee and the guarantors that existed at the time of
execution of this Lease.
13.2 Remedies. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after
written notice to Lessee (or in case of an emergency, without notice),
Lessor may at its option (but without obligation to do so), perform such
duty or obligation on Lessee's behalf, including but not limited to the
obtaining of reasonably required bonds, Insurance policies, or
governmental licenses, permits or approvals. The cost and expenses of
any such performance by Lessor shall be due and payable by Lessee to
Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn, Lessor, at its
option, may require all future payments to be made under this Lease by
Lessee to be made only by cashier's check. In the event of a Breach of
this Lease by Lessee, as defined in Paragraph 13.1, with or without
further notice or demand, and without limiting Lessor in the exercise of
any right or remedy which Lessor may have by reason of such Breach,
Lessor may:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately surrender possession of the
Premises to Lessor. In such event Lessor shall be entitled to recover
from Lessee: (I) the worth at the time of the award of the unpaid rent
which had been earned at the time of the award of the unpaid rent which
had been earned at the time of termination; (ii) the worth at the time
of award of the amount by which the unpaid rent which would have been
earned after termination until the time of award exceeds the amount of
such rental loss that the Lessee proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate
Lessor for all the detriment proximately caused by the Lessee's failure
to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not
limited to the cost of recovering possession of the Premises, expenses
of reletting, including necessary renovation and alteration of the
Premises, reasonable attorney's fees, and that portion of the leasing
commission paid by Lessor 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 prior sentence shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%). Efforts by Lessor
to mitigate damages caused by Lessee's Default or Breach of this Lease
shall not waive Lessor's right to recover damages under this Paragraph.
If termination of this Lease is obtained through the provisional remedy
of unlawful detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein, or
Lessor may reserve therein the right to recover all or any part thereof
in a separate suit for such rent and/or damages. If a notice and grace
period required under subparagraphs 13.1(b), (c) or (d) was not
previously given, a notice to pay rent or quit, or to perform or quit,
as the case may be, given to Lessee under any statute authorizing the
forfeiture of leases for unlawful detainer shall also constitute the
applicable notice for grace period purposes required by subparagraphs
13.1(b), (c) or (d). In such case, the applicable grace period under
subparagraphs 13.1 (b), (c), or (d) and under the unlawful detainer
statute shall run concurrently after the one such statutory notice, and
the failure of Lessee to cure the Default within the greater of the two
such grace periods shall constitute both an unlawful detainer and a
Breach of this Lease entitling Lessor to the remedies provided for in
this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's
Breach and abandonment and recover the rent as it becomes due, provided
Lessee has the right to sublet or assign, subject only to reasonable
limitations. See paragraphs 12 and 36 for the limitations on assignment
and subletting which limitations Lessee and Lessor agree are reasonable.
Acts of maintenance or preservation, efforts to relate the Premises, or
the appointment of a receiver to protect the Lessor's interest under the
Lease, shall not constitute a termination of the Lessee's right to
possession.
(c) Pursue any other remedy now or hereafter available to a lessor
under the laws or judicial decisions of the state wherein the Premises
are located.
(d) The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not relieve Lessee
from liability under any indemnity provisions of this Lease as to
matters occurring or accruing during the term hereof or by reason of
Lessee's occupancy of the Premises.
13.3 Inducement Recapture in Event of Breach. Any agreement by Lessor
for free or abated rent or other charges applicable to the Premises, or
for the giving or paying by Lessor to or for Lessee of any cash or other
bonus, inducement or consideration for Lessee's entering into this
Lease, all of which concessions are hereinafter referred to as
"Inducement Provisions," shall be deemed conditioned upon Lessee's full
and faithful performance of all of the terms, covenants and conditions
of this Lease to be performed or observed by Lessee during the initial
twelve (12) months of the Lease Term. Upon the occurrence of a Breach of
this Lease by Lease by Lessee, as defined in Paragraph 13.1, any such
inducement Provision shall automatically be deemed deleted from this
Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by
Lessor under such an Inducement Provision shall be immediately due and
payable by Lessee to Lessor, and recoverable by Lessor as additional
rent due under this Lease, notwithstanding any subsequent cure of said
Breach by Lessee. the acceptance by Lessor of rent of the cure of the
Breach which initiated the operation of this Paragraph shall not be
deemed a waiver by Lessor of the provisions of this Paragraph unless
specifically so stated in writing by Lessor at the time of such
acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by
Lessee to Lessor or rent and other sums due hereunder will cause Lessor
to incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. Such costs include, but are
not limited to, processing and accounting charges, and late charges
which may be imposed upon Lessor by the terms of any ground lease,
mortgage or trust deed covering the Premises. Accordingly, if any
installment of rent or any other sum due from Lessee shall not be
received by Lessor or Lessor's designee within five (5) days after such
amount shall be due, then, without any requirement for notice to Lessee,
Lessee shall pay to Lessor a late charge equal to six percent (6%) of
such overdue amount. the parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur
by reason of late payment by Lessee. Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Lessee's Default or
Breach with respect to such overdue amount, nor prevent Lessor from
exercising any of the other rights and remedies granted hereunder. In
the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of Base Rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to
the contrary, Base Rent shall, at Lessor's option, become due and
payable quarterly in advance.
13.5 Breach By Lessor. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an
obligation required to be performed by Lessor. For purposes of this
Paragraph 13.5, a reasonable time shall in no event be less than thirty
(30) days after receipt by Lessor, and by the holders of any ground
Lease, mortgage or deed of trust covering the Premises whose name and
address shall have been furnished Lessee in writing for such purpose, of
written notice specifying wherein such obligation of Lessor has not been
performed; provided, however, that if the nature of Lessor's obligation
is such that more than thirty (30) days after such notice are reasonably
required for its performance, then Lessor shall not be in breach of this
Lease if performance is commenced within such thirty (30) day period and
thereafter diligently pursued to completion.
14. Condemnation. If the Premises or any portion thereof are taken
under the power of eminent domain or sold under the threat of the
exercise of said power (all of which are herein called "Condemnation"),
this Lease shall terminate as to the part so taken as of the date the
condemning authority takes title or possession, whichever first occurs.
If more than ten percent (10%) of the floor area of the Premises, or
more than twenty-five percent (25%) of the land area not occupied by any
building, is taken by condemnation, Lessee may, at Lessee's option, to
be exercised in writing within ten (10) days after Lessor shall have
given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have
taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease
in accordance with the foregoing, this Lease shall remain in full force
and effect as to the portion of the Premises remaining, except that the
Base Rent shall be reduced in the same proportion as the rentable floor
area of the Premises taken bears to the total rentable floor area of the
building located on the Premises. No reduction of Base Rent shall occur
if the only portion of the Premises taken is land on which there is no
building. Any award for the taking of all or any part of the Premises
under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Lessor, whether such
award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages;
provided, however, that Lessee shall be entitled to any compensation
separately awarded to Lessee for Lessee's relocation expenses and/or
loss of Lessee's Trade Fixtures. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent
of its net severance damages received, over and above the legal and
other expenses incurred by Lessor in the condemnation matter, repair any
damage to the Premises caused by such condemnation, except to the extent
that Lessee has been reimbursed therefor by the condemning authority.
Lessee shall be responsible for the payment of any amount in excess of
such net severance damages required to complete such repair.
15. Broker's Fee
15.1 The Brokers named in Paragraph 1.10 are the procuring causes of
this Lease.
15.5 Lessee and Lessor each represent and warrant to the other that it
has had no dealings with any person, firm, broker or finder (other than
the Brokers, if any named in Paragraph 1.10) in connection with the
negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and that no broker or other person, firm or entity
other than said named Brokers is entitled to any commission or finder's
fee in connection with said transaction. Lessee and Lessor do each
hereby agree to Indemnify, protect, defend and hold the other harmless
from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by
reason of any dealings or actions of the indemnifying Party, including
any costs, expenses, attorneys' fees reasonably incurred with respect
thereto.
16. Tenancy Statement.
16.1 Each Party (as "Responding Party") shall within ten (10) days
after written notice from the other Party (the "Requesting Party")
execute, acknowledge and deliver to the Requesting Party a statement in
writing in form similar to the then most current "Tenancy Statement"
form published by the American Industrial Real Estate Association, plus
such additional information, confirmation and/or statements as may be
reasonably requested by the Requesting Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises,
any part thereof, or the building of which the Premises are a part,
Lessee and all Guarantors of Lessee's performance hereunder shall
deliver to any potential lender or purchaser designated by Lessor such
financial statements of Lessee and such Guarantors as may be reasonably
required by such tender or purchaser, including but not limited to
Lessee's financial statements for the past three (3) years. All such
financial statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the purposes herein
set forth. SEE ADDENDUM PARAGRAPH 65.
17. Lessor's Liability. The term "Lessor" as used herein shall mean
the owner or owners at the time in question of the fee title to the
Premises, or, if this is a sublease, of the Lessee's interest in the
prior lease. In the event of a transfer of Lessor's title or interest in
the Premises or in this Lease, Lessor shall deliver to the transferee or
assignee (in cash or by credit) any unused Security Deposit held by
Lessor, at the time of such transfer or assignment. Except as provided
in Paragraph 15, upon such transfer or assignment and delivery of the
Security Deposit, as aforesaid, the prior Lessor shall be relieved of
all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the
foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as
hereinabove defined.
18. Severability. The invalidity of any provision of the Lease, as
determined by a court of competent jurisdiction, shall in no way affect
the validity of any other provision hereof.
19. Interest on Past-Due Obligation. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within thirty
(30) days following the date on which it was due, shall bear interest
from the thirty-first (31st) day after it was due at the rate of 12% per
annum, but not exceeding the maximum rate allowed by law, in addition to
the late charge provided for in Paragraph 13.4.
20. Time of Essence. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the
Parties under this Lease.
21. Rent Defined. All monetary obligations of Lessee to Lessor under
the terms of this Lease are deemed to be rent.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease
contains all agreements between the Parties with respect to any matter
mentioned herein, and no other prior or contemporaneous agreement or
understanding shall be effective.
23. Notices.
23.1 All notices required or permitted by this Lease shall be in
writing and may be delivered in person (by hand or by messenger or
courier service) or may be sent by regular, certified or registered mail
or U.S. Postal Service Express Mail, with postage prepaid, or by
facsimile transmission, and shall be deemed sufficiently given if served
in a manner specified in this Paragraph 23. The addresses noted adjacent
to a Party's signature on this Lease shall be that Party's address for
delivery or mailing of notice purposes. Either Party may by written
notice to the other specify a different address for notice purposes,
except that upon Lessee's taking possession of the Premises, the
Premises shall constitute Lessee's address for the purpose of mailing or
delivering notices to Lessee. A copy of all notices required or
permitted to be given to Lessor hereunder shall be concurrently
transmitted to such party or parties at such addresses as Lessor may
from time to time hereafter designate by written notice to Lessee.
23.2 Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the
receipt card, or if no delivery date is shown, the postmark thereon. If
sent by regular mail the notice shall be deemed given forty-eight (48)
hours after the same is addressed as required herein and mailed with
postage prepaid. Notices delivered by United States Express Mail or
overnight courier that guarantees next day delivery shall be deemed
given twenty-four (24) hours after delivery of the same to the United
states Postal Service or courier. If any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served
or delivered upon telephone confirmation of receipt of the transmission
thereof, provided a copy is also delivered via delivery or mail. If
notice is received on a Sunday or legal holiday, it shall be deemed
received on the next business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any
term, covenant or condition hereof by Lessee, shall be deemed a waiver
of any other term, covenant or condition hereof, or of any subsequent
Default or Breach by Lessee of the same or of any other term, covenant
or condition hereof. Lessor's consent to, or approval of, any act shall
not be deemed to render unnecessary the obtaining of Lessor's consent
to, or approval of, any subsequent or similar act by Lessee, or be
construed as the basis of an estoppel to enforce the provision or
provisions of the Lease requiring such consent. Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting rent, the
acceptance of rent by Lessor shall not be a waiver of any preceding
Default or Breach by Lessee of any provision hereof, other than the
failure of Lessee to pay the particular rent so accepted. Any payment
given Lessor by Lessee may be accepted by Lessor on account of moneys or
damages due Lessor, notwithstanding any qualifying statements or
conditions made by Lessee in connection therewith, which such statements
and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of
deposit of such payment.
25. Recording. Either Lessor or Lessee shall, upon request of the
other, execute, acknowledge and deliver to the other a short form
memorandum of this Lease and option to purchase the Premises for
recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto SEE
ADDENDUM PARAGRAPH 66.
26. No Right to Holdover. Except as provided in Paragraph 71 of the
Addendum to this Lease, Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier
termination of this Lease. SEE ADDENDUM PARAGRAPH 67.
27. Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all
other remedies at law or in equity.
28. Covenants and Conditions. All provisions of the Lease to be
observed or performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This Lease shall be binding upon
the parties, their personal representatives, successors and assigns and
be governed by the laws of the State in which the Premises are located.
Any litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "Security
Device"), now or hereafter placed by Lessor upon the real property of
which the Premises are a part, to any and all advances made on the
security thereof, and to all renewals, modifications, consolidations,
replacements, and extensions thereof. Lessee agrees that the Lenders
holding any such Security Device shall have no duty, liability or
obligation to perform any of the obligations of Lessor under this Lease,
but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default
and allow such Lender thirty (30) days following receipt of such notice
for the cure of said default before invoking any remedies Lessee may
have by reason thereof. If any Lender shall elect to have this Lease
and/or any Option granted hereby superior to the lien of its Security
Device and shall give written notice thereof to Lessee, this Lease and
such Options shall be deemed prior to such Security Device,
notwithstanding the relative dates of the documentation or recordation
thereof.
30.2 Attornment. Subject to the non-disturbance provisions of
Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party
who acquires ownership of the Premises by reason of a foreclosure of a
Security Device, and that in the event of such foreclosure, such new
owner shall not: (I) be liable for any act or omission of any prior
lessor or with respect to events occurring prior to acquisition of
ownership, (ii) be subject to any offsets or defenses which Lessee might
have against any prior lessor, or (iii) be bound by prepayment of more
than one (1) month's rent.
30.3 Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall be subject to receiving assurance (a "non-disturbance
agreement") from the Lender that Lessee's possession and this Lease,
including any options to extend the term hereof, will not be disturbed
so long as Lessee is not in Breach hereof and attorns to the record
owner of the Premises.
30.4 Self-Executing. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents;
provided, however, that, upon written request from Lessor or a Lender in
connection with a sale, financing or refinancing of the Premises, Lessee
and Lessor shall execute such further writings as may be reasonably
required to separately document any such subordination or
non-subordination, attornment and/or non-disturbance agreement as is
provided for herein.
31. Attorney's Fees. If any Party brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing
Party (as hereafter defined) in any such proceeding, action, or appeal
thereon, shall be entitled to reasonable attorney's fees. Such fees may
be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The
term, "Prevailing Party" shall include, without limitation, a Party who
substantially obtains or defeats the relief sought, as the case may be,
whether by compromise, settlement, judgment, or the abandonment by the
other Party of its claim or defense. The attorney's fee award shall not
be computed in accordance with any court fee schedule, but shall be such
as to fully reimburse all attorney's fees reasonably incurred. Lessor
shall be entitled to attorney's fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently
commenced in connection with such Default or resulting Breach.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's
agents shall have the right to enter the Premises at any time, in the
case of emergency, and otherwise at reasonable times and with prior
notice (except if an emergency exists) for the purpose of showing the
same to prospective purchasers, lenders, (or lessees, during the last
six months of the Lease Term), and making such alterations, repairs,
improvements or additions to the Premises or to the building of which
they are a part, as Lessor may reasonable deem necessary. Lessor may at
any time place on or about the Premises or building any ordinary "For
Sale" signs and Lessor may at any time during the last one hundred
twenty (120) days of the term hereof place on or about the Premises any
ordinary "For Lease" signs. SEE ADDENDUM PARAGRAPH 54.
33. Auctions. Lessee shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises
without first having obtained Lessor's prior written consent.
Notwithstanding anything to the contrary in this Lease, Lessor shall not
be obligated to exercise any standard of reasonableness in determining
whether to grant such consent.
34. Signs. Lessee shall not place any sign upon the Premises, except
that Lessee may, with Lessor's prior written consent, install (but not
on the roof) such signs as are reasonably required to advertise Lessee's
own business. The installation of any sign on the Premises by or for
Lessee shall be subject to the provisions of Paragraph 7 (Maintenance,
Repairs, Utility Installations. Trade Fixtures and Alterations). Unless
otherwise expressly agreed herein, Lessor reserves all rights to the use
of the roof and the right to install, and all revenues from the
installation of, such advertising signs on the Premises, including the
roof, as do not unreasonably interfere with the conduct of Lessee's
business.
35. Termination; Merger. Unless specifically stated otherwise in
writing by Lessor, the voluntary or other surrender of this Lease by
Lessee, the mutual termination or cancellation hereof, or a termination
hereof by lessor for Breach by Lessee, shall automatically terminate any
sublease or lesser estate in the Premises; provided, however, Lessor
shall, in the event of any such surrender, termination or cancellation,
have the option to continue any one or all of any existing subtenancies.
Lessor's failure within ten (10) days following any such event to make a
written election to the contrary by written notice to the holder of any
such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. Consents.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a Party is
required to an act by or for the other Party, such consent shall not be
unreasonably withheld or delayed. Lessor's actual reasonable costs and
expenses (including but not limited to architects', attorneys',
engineers' or other consultants' fees) incurred in the consideration of,
or response to, a request by Lessee for any Lessor consent pertaining to
this Lease or the Premises, including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous
Substance, practice or storage tank, shall be paid by Lessee to Lessor
upon receipt of an invoice and supporting documentation therefor.
Subject to Paragraph 12.2(e) (applicable to assignment or subletting),
lessor may, as a condition to considering any such request by Lessee,
require that Lessee deposit with Lessor an amount of money (in addition
to the Security Deposit held under Paragraph 5) reasonably calculated by
Lessor to represent the cost Lessor will incur in considering and
responding to Lessee's request. Except as otherwise provided, any unused
portion of said deposit shall be refunded to Lessee without interest.
Lessor's consent to any act, assignment of this Lease or subletting of
the Premises by Lessee shall not constitute an acknowledgment that no
Default or Breach by Lessee of this Lease exists, nor shall such consent
be deemed a waiver of any then existing Default or Breach, except as may
be otherwise specifically stated in writing by Lessor at the time of
such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify
herein any particular condition to Lessor's consent shall not preclude
the imposition by Lessor at the time of consent of such further or other
conditions as are then reasonable with reference to the particular
matter for which consent is being given.
37. Guarantor.
37.1 If there are to be any Guarantors of this Lease per Paragraph
1.11, the form of the guaranty to be executed by each such Guarantor
shall be in the form most recently published by the American Industrial
Real Estate Association, and each said Guarantor shall have the same
obligations as Lessee under this Lease, including but not limited to the
obligation to provide the Tenancy Statement and information called for
by Paragraph 16.
37.2 It shall constitute a Default of the Lessee under this Lease if
any such Guarantor fails or refuses, upon reasonable request by Lessor
to give: (a) evidence of the due execution of the guaranty called for by
this lease, including the authority of the Guarantor (and of the party
signing on Guarantor's behalf) to obligate such Guarantor on said
guaranty, and including in the case of a corporate Guarantor, a
certified copy of a resolution of its board of directors authorizing the
making of such guaranty, together with a certificate of incumbency
showing the signature of the persons authorized to sign on its behalf,
(b) current financial statements of Guarantor as may from time to time
be requested by Lessor, (c) a Tenancy Statement, or (d) written
confirmation that the guaranty is still in effect.
38. Quiet Possession. Upon payment by Lessee of the rent for the
Premises and the observance and performance of all of the covenants,
conditions and provisions on Lessee's part to be observed and performed
under this Lease, Lessee shall have quiet possession of the Premises for
the entire term hereof subject to all of the provisions of this Lease.
39. Options.
39.1 Definition. As used in this Paragraph 39 the word "Option" has
the following meaning: (a) the right to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on
other property of Lessor; (b) the right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right
of first refusal to lease other property of Lessor or the right of first
offer to lease other property of Lessor; (c) the right to purchase the
Premises, or the right of first refusal to purchase the Premises, or the
right of first offer to purchase the Premises, or the right to purchase
other property of Lessor, or the right of first refusal to purchase
other property of Lessor, or the right of first offer to purchase other
property of Lessor.
39.2 Options Personal To Original Lessee. Each Option granted to
Lessee in this Lease is personal to the original Lessee named in
Paragraph 1.1 hereof, and cannot be voluntarily or involuntarily
assigned or exercised by any person or entity other than said original
Lessee while the original Lessee
is in full and actual possession of the Premises and without the
intention of thereafter assigning or subletting. The Options, if any,
herein granted to Lessee are not assignable, either as a part of an
assignment of this Lease or separately or apart therefrom, and no Option
may be separated from this Lease in any manner, by reservation or
otherwise. SEE ADDENDUM PARAGRAPH 68
39.3 Multiple Options. In the event that Lessee has any Multiple
Options to extend or renew this Lease, a later Option cannot be
exercised unless the prior Options to extend or renew this lease have
been validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary: (I) during the
period commencing with the giving of any notice of Default under
Paragraph 13.1 and continuing until the notice Default is cured or (ii)
during the time Lessee is in Breach of this Lease, or (iii) in the event
that Lessor has given to Lessee three(3) or more notices of Default
under Paragraph 13.1, whether or not the Defaults are cured, during the
twelve (12) month period immediately preceding the exercise of the
Option.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise
an Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's
due and timely exercise of the Option, if, after such exercise and
during the term of this Lease, (I) Lessee fails to pay to Lessor a
monetary obligation of Lessee for a period of thirty (30) days after
such obligation becomes due (without any necessity of Lessor to give
notice thereof to Lessee), or (ii) Lessor gives to Lessee three (3) or
more notices of Default under Paragraph 13.1 during any twelve (12)
month period, whether or not the Defaults are cures, or (iii) if Lessee
commits a Breach of this Lease.
40. Multiple Buildings. If the Premises are part of a group of
buildings controlled by Lessor, Lessee agrees that it will abide by,
keep and observe all reasonable rules and regulations which Lessor may
make from time to time for the management, safety, care, and cleanliness
of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as for the convenience of other
occupants or tenants of such other buildings and their invitees, and
that Lessee will pay its fair share of common expenses incurred in
connection therewith.
41. Security Measures. lessee hereby acknowledges that the rental
payable to Lessor hereunder does not include the cost of guard service
or other security measures, and that Lessor shall have no obligation
whatsoever to provide same. Lessee assumes all responsibility for the
protection of the Premises, Lessee, its agents and invitees and their
property from the acts of third parties.
42. Reservations. Lessor reserves to itself the right, from time to
time, to grant, without the consent or joinder of Lessee, such
easements, rights and dedications that Lessor deems necessary, and to
cause the recordation of parcel maps and restrictions, so long as such
easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Lessee. Lessee
agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.
43. Performance Under Protest. If at any time a dispute shall arise
as to any amount or sum of money to be paid by one Party to the other
under the provisions hereof, the Party against whom the obligation to
pay the money is asserted shall have the right to make payment "under
protest" and such payment shall not be regarded as a voluntary payment
and there shall survive the right on the part of said Party to institute
suit for recovery of such sum. If it shall be adjudged that there was no
legal obligation on the part of said Party to pay such sum or any part
thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of
this Lease.
44. Authority. If either Party hereto is a corporation, trust, or
general or limited partnership, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly
authorized to execute and deliver this Lease on its behalf. If Lessee is
a corporation, trust or partnership, Lessee shall, within thirty (30)
days after request by Lessor, deliver to Lessor evidence satisfactory to
Lessor of such authority.
45. Conflict. Any conflict between the printed provisions of this
Lease and the typewritten or handwritten provisions shall be controlled
by the typewritten or handwritten provisions.
46. Offer. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to lease to
Lessee. This Lease is not intended to be binding until executed by all
Parties hereto. SEE ADDENDUM XXXXXXXXX 00
00. Amendments. This Lease may be modified only in writing, signed by
the parties in interest at the time of the modification. The parties
shall amend this Lease from time to time to reflect any adjustments that
are made to the Base Rent or other rent payable under this Lease. As
long as they do not materially change Lessee's obligations hereunder,
Lessee agrees to make such reasonable non-monetary modifications to this
Lease as may be reasonable required by an institutional, insurance
company, or pension plan Lender in connection with the obtaining of
normal financing or refinancing of the property of which the Premises
are a part.
48. Multiple Parties. Except as otherwise expressly provided herein,
if more than one person or entity is named herein as either Lessor or
Lessee, the obligations of such Multiple Parties shall be the joint and
several responsibility of all persons or entities named herein as such
Lessor or Lessee.
SEE ADDENDUM PARAGRAPH 70, 71 AND 72.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE
SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO, THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE
ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF
LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL, FURTHER, EXPERTS SHOULD BE CONSULTED TO
EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE OF
ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES
AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY
SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX
CONSEQUENCES OF THIS LEASE, IF THE SUBJECT PROPERTY IS LOCATED IN A
STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE
PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place on the dates
specified above to their respective signatures.
Executed at Walnut Creek, CA Executed at Pleasanton, CA
on August 29, 1996 on August 23, 1996
by LESSOR: Xxxxxxx X. Xxxxx by LESSEE: Xxxxxxx Strong-tie
Company, Inc.
By /s/Xxxxxxx X. Xxxxx By /s/Xxxxx Xxxxxx
---------------------------- ----------------------------
Name Printed: Xxxxxxx X. Xxxxx Name Printed: Xxxxx Xxxxxx
Title: Owner/Lessor Title: CFO
By By
Name Printed: Name Printed:
Title: Title:
Address: Address:
Tel No. (000)000-0000 Tel No. (000)000-0000
Fax No. (000)000-0000 Fax No.
ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-TENANT LEASE-GROSS
This is an addendum ("Addendum") to that certain Standard
Industrial/Commercial Single-Tenant Lease-Gross dated July 26, 1996 by
and between Xxxxxxx X. Xxxxx, as Lessor, and Xxxxxxx Strong Tie Company,
Inc., as Lessee, and is hereby made a part of such aforementioned Lease.
49. The following provision is hereby added to Paragraph 2.3 of
the Lease:
The preceding terms of this Paragraph 2.3 to the contrary
notwithstanding, Lessor shall be under no obligation to remedy or cure
any such non-compliance unless the applicable governmental agency or
agencies having jurisdiction over such compliance requires Lessor to
remedy the same or such non-compliance threatens the health or safety of
the occupants of the Building as reasonably determined by Lessor and
Lessee.
50. The following provisions are hereby added to Paragraph 6.2(c)
of the Lease:
Lessee acknowledges that Lessor has delivered to Lessee a Phase I
Environmental Site Assessment prepared by Aegis (Project No. 94-029),
dated March 4, 1994, and Phase II data prepared by California Laboratory
Services (Client I.D. No. N1159; Job No. 791159, Project No. 24330.1)
(collectively, the "Environmental Reports"), which discloses that there
are certain Hazardous Substances that exist on, in or under the
Premises. Lessee agrees to accept the Premises notwithstanding the
possible existence of such Hazardous Substances as disclosed in the
aforesaid Environmental Reports. Lessor shall indemnify, protect,
defend and hold Lessee, its agents and employees harmless from and
against any and all losses and/or damages, liabilities, judgments,
costs, claims, liens, expenses, penalties, permits and attorneys' and
consultants' fees arising out of or involving any Hazardous Substances
(or storage tank) brought onto the Premises by Lessor. Lessor's
obligations under this Paragraph 6.2 shall include, but not be limited
to, the effects of any contamination or injury to person, property or
the environment created or suffered by Lessee (or any prior tenant or
occupant of the Premises), and the cost of investigation (including
reasonable consultants' and attorneys' fees and testing), removal,
remediation, restoration and/or abatement thereof, or any contamination
therein involved, arising out of or related to any Hazardous Substances
(or storage tank) brought onto the Premises by Lessor. In addition,
Lessor shall indemnify, protect, defend and hold Lessee, its agents and
employees harmless from and against any and all costs of cleaning up or
remediating any of the Hazardous Substances that are expressly referred
to in the Environmental Reports referred to above and which may exist as
of the Commencement Date of this Lease. The obligations of Lessor under
this paragraph shall survive the expiration or earlier termination of
this Lease. No termination, cancellation or release agreement entered
into by Lessor and Lessee shall release Lessor from its obligations
under this Lease with respect to the Hazardous Substances (or storage
tank) referred to in this paragraph unless specifically so agreed by
Lessee in writing at the time of such agreement.
51. The following provisions are hereby added as Paragraph 6.2(d):
(d) Lessee Caused Contamination. Anything in this Lease to
the contrary notwithstanding, Lessee shall not be liable under this
Lease for the cleanup or remediation of any Hazardous Substances that
are caused by persons or entities other than Lessee or its agents,
employees, contractors or representatives.
52. The provisions of Paragraph 6.3 to the contrary
notwithstanding, Lessee shall make any alteration, addition or change of
any sort to the Premises that is required by any Applicable Law because
of: (i) Lessee's particular use or change of use of the Premises; (ii)
Lessee's application for any permit or governmental approval; (iii)
Lessee's construction or installation of any alterations, additions,
improvements or trade fixtures or (iv) any Hazardous Substance caused
on, in or under the Premises by Lessee or its agents, employees,
contractors or representatives. Any other alteration, addition or
change required by Applicable Laws which are not the responsibility of
Lessee pursuant to the immediately preceding sentence shall be made by
Lessor (subject to Lessor's right to reimbursement from Lessee as
specified below).
In the event any capital improvements are required to be
constructed in order to comply with Applicable Law (excluding any
Hazardous Substances law) not in effect or applicable to the Premises as
of the Commencement Date, Lessee shall pay to Lessor, as additional
rent, the amortized cost of such capital improvement to be determined as
follows:
(a) All costs paid by Lessor to construct such capital
improvements required by Applicable Law as described above (and which
are the responsibility of Lessor to construct as provided above) shall
be amortized over the use of the life of such improvement (as reasonably
determined by Lessor in accordance with generally accepted principles)
with interest on the unamortized balance at the then prevailing rate
Lessor would pay if it borrowed funds to construction such improvements
from an institutional lender (but in no event to exceed the maximum
legal rate), and Lessor shall inform Lessee of the monthly amortization
payment required to so amortize such costs and shall also provide Lessee
with the information upon which such determination is made.
(b) As additional rent, Lessee shall pay at the same time
that monthly Base Rent is due an amount equal to such monthly
amortization payment for each month after such improvements are
completed until the first to occur of (i) the expiration of the Lease
Term (as it may be extended) or (ii) the end of the term over which such
costs were amortized.
53. Subject to the provisions of Paragraph 9 (Damage and
Destruction) and Paragraph 14 (Condemnation), Lessor shall repair and
maintain in good order and condition the roof covering, the exterior of
the building, all equipment or facilities serving the Premises
(excepting therefrom the HVAC system which is to be maintained pursuant
to the terms of Paragraph 17.1(b)), the parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, striping, bumpers, irrigation systems,
exterior lighting facilities and fences and gates located in, on, about
or adjacent to the Premises. All costs and expenses incurred by Lessee
in connection with performing its maintenance and repair obligations
described in the immediately preceding sentence shall constitute an
"Operating Expense". A reasonable management fee not to exceed four
percent (4%) of the gross revenues payable by Lessee to Lessor under
this Lease shall also be included as an Operating Expense.
For purposes of this Lease, the term "Operating Expense Base Year"
shall mean the calendar year 1997 and the term "Comparison Year" shall
mean each calendar year, or portion thereof, following the Operating
Expense Base Year. As additional rent hereunder, Lessee shall pay to
Lessor the amount by which the Operating Expenses incurred by Lessor in
the administration, operation, maintenance and repair of the Premises as
described above for each Comparison Year during the Lease Term exceeds
the total Operating Expenses payable by Lessor for the Operating Expense
Base Year ("Excess Expenses"). Lessee's Excess Expenses shall be
payable during the Lease Term in monthly installments on the first day
of each month in advance, without deduction, offset, prior notice or
demand, and shall be payable concurrently with monthly installments of
Base Rent. Lessee's Excess Expenses shall be based upon an estimate of
the Excess Expenses for such calendar year. As close as reasonably
possible to the end of each calendar year, Lessor shall notify Lessee of
Lessor's estimate of the Excess Expenses for the following calendar
year. An amount equal to one-twelfth (1/12) of such Excess Expenses
shall be payable monthly by Lessee commencing on the first day of the
calendar year for which such estimate is given and continuing throughout
the remainder of said calendar year. Until notice of the Excess
Expenses for any subsequent calendar year is delivered to Lessee, Lessee
shall continue to pay on the basis of the prior estimate. Lessor may
from time to time during the Lease Term, but not more than twice each
calendar year, adjust the current estimate of Excess Expenses to reflect
current expenditures. Following written notice to Lessee of such
revised estimate, any subsequent payments by Lessee of Excess Expenses
shall be based upon such revised estimate. Within 90 days after the end
of each calendar year, or such later date after Lessor reviews the
annual statement of Operating Expenses, Lessor shall provide Lessee with
a reasonably detailed statement showing the actual Operating Expenses
for the applicable Comparison Year in excess of the Base Year Operating
Expenses. If Lessee's payments of Excess Expenses for any subsequent
calendar year are less than or exceed the amount shown in such annual
statement as the Excess Expenses (as prorated to reflect any partial
year during the Lease Term), then Lessee's account shall be adjusted
accordingly. Lessee shall pay any deficiency upon receipt of Lessor's
invoice, and all credits will be applied by Lessor to the payment(s)
next due for Excess Expenses (or reimbursed in cash if such credit
arises at the end of the Lease Term). Within 60 days of after the date
of Lessee's receipt of the statement of actual Operating Expenses for
any Comparison Year, Lessee may give Lessor written notice of its intent
to review the books and records relating to the Operating Expenses for
such Comparison Year. Lessee shall provide Lessor with at least 10 days
prior written notice of the date upon which it intends to review such
books and records. The review shall be performed during normal business
hours at Lessee's principal place of business or such other location as
may be designated by Lessor, and shall be performed at Lessee's sole
cost and expense. Promptly following the completion of Lessee's review
of such books and records, Lessee shall provide Lessor with a copy of
the results of such review and Lessee's conclusions regarding any
overstatement or understatement by Lessor of actual Operating Expenses
for such Comparison Year. In the event Lessee's review shows an
underpayment or overpayment of Excess Expenses by Lessee for such
Comparison Year, then, subject to Lessor's confirmation by its own
review of said records, the parties shall promptly meet to resolve any
discrepancy. In the event Lessee fails to provide Lessor with written
notice of its intent to review such books and records within said 60 day
period, Lessee shall be deemed to have approved the statement of actual
Operating Expenses for the applicable Comparison Year.
The preceding to the contrary notwithstanding, if Lessor elects to paint
the exterior of the Premises during Lease Term, Lessee shall pay to
Lessor, within 30 days following a receipt of a written invoice, a
portion of the cost of such paint job in the ratio that the balance of
the Lease Term bears to the "useful life" of the paint job.
54. In the event the Premises (or any portion thereof) is rendered
unusable during and as a consequence of any repair work undertaken by or
on behalf of Lessor, pursuant to the terms of Paragraph 7.2 or 32 of the
Lease or Paragraph 53 of this Addendum, then the Base Rent shall be
abated in such proportion that the Lessee's business is interfered with
as a result of not being able to use the applicable portion of the
Premises and such abatement shall continue for each day that the
Premises (or a portion thereof) is rendered unusable.
55. In the event of an emergency that threatens the health or
safety of Lessee or its employees, agents or invitees or threatens risk
of damage to Tenant's property, if Lessor is unable to perform any of
its maintenance obligations in time to prevent injury or damage to
person or property (after Lessee has exercised reasonable efforts to
contact Lessor) then, Lessee may perform Lessor's maintenance or repair
obligations to the extent necessary to protect Lessee's property and/or
the health and safety of individuals within the Premises. The costs
reasonably incurred by Lessee in performing Lessor's maintenance
obligations in an emergency situation described above may be offset
against such Lessee's Base Rent (but in no event may Lessee offset more
than one months' Base Rent).
56. If Lessor requires Lessee to remove any Lessee Owned
Alterations and/or Utility Installations, Lessee shall so remove the
same prior to the expiration or sooner termination of the Lease Term and
Lessee shall repair any and all damage, if any, caused by such removal.
Notwithstanding the foregoing, Lessee shall not be obligated to remove
any Lessee Owed Alterations and/or Utility Installations with respect to
which the following is true: (i) Lessee was required, or elected, to
obtain the approval of Lessor to the installation of the Lessee Owed
Alteration and/or Utility Installation in question; (ii) at the time
Lessee requested Lessor's approval, Lessee requested of Lessor in
writing that Lessor inform Lessee of whether or not Lessor would require
Lessee to remove such Lessee Owned Alteration and/or Utility
Installation at the expiration of the Lease Term; and (iii) at the time
Lessor granted its approval, it did not inform Lessee that it would
require Lessee to remove such Lessee Owned Alteration and/or Utility
Installation at the expiration of the Lease Term.
57. The "All Risk" policy of property insurance to be maintained
by the Insuring Party shall not be required to cover any Lessee Owned
Alterations or Utility Installations; it being understood and agreed
that in the event any such Lessee Owned Alterations or Utility
Installations should be damaged or destroyed, Lessor shall be under no
obligation to repair, restore or rebuild the same. The parties hereby
acknowledge and agree that Lessee shall not be required to insure any
Lessee Owned Alterations or Utility Installations.
58. If the Premises are damaged by any peril and Lessor does not
elect to terminate this Lease or is not entitled to terminate this Lease
pursuant to the terms of Paragraph 9, then as soon as reasonably
practicable, Lessor shall furnish Lessee with the written opinion of
Lessor's architect or construction consultant as to when the restoration
work required of Lessor may be completed. Lessee shall have the right
to terminate this Lease in the event the Premises are damaged by any
peril and, in the reasonable opinion of Lessor's architect or
construction consultant, the restoration of the Premises cannot be
substantially completed within one hundred eighty (180) days after the
date of such damage. Such right of Lessee to terminate the Lease may be
exercised only by delivery to Lessor of a written notice of election to
terminate within ten (10) days after Lessee receives from Lessor the
estimate of the time needed to complete such restoration.
Notwithstanding the foregoing, if the estimated time to substantially
complete such restoration is within one hundred eighty (180) days after
the date of damage to the Premises and Lessor undertakes such repairs
but does not substantially complete the same within one hundred eighty
(180) days after the date of such damage, Lessee shall not be entitled
to terminate this Lease so long as Lessor is diligently pursuing such
restoration to completion.
59. If a Hazardous Substance Condition occurs for which Lessee is
not legally responsible, and such Hazardous Substance Condition or the
investigation or remediation thereof would render a substantial portion
of the Premises unusable and substantially interfere with the operation
of Lessee's business for a period of not less than one hundred eighty
(180) consecutive days, then Lessee may terminate this Lease by written
notice to Lessor given not later than ten (10) days following the
expiration of such one hundred eighty (180) day period.
60. The term "Real Property Taxes" shall not include any penalty,
fees, interest or late charges imposed on Lessor or non-payment or late
payment of Real Property Taxes unless such penalty fees, interest or
late charges are imposed because Lessee did not pay the Tax Increase in
a timely manner as required by the Lease (and then Lessee shall only be
responsible or liable for the penalty fees, interest or late charges
that are attributable to the amount of the Tax Increase that was not
paid in a timely manner).
61. Subject to any limitations or restrictions imposed by any
deeds of trust or mortgages now or hereafter covering or affecting the
Premises, Lessee shall have the right to contest or review the amount or
validity of any Real Property Tax by appropriate legal proceedings (but
which is not to be deemed or construed in any way as relieving,
modifying or extending Lessee's covenant to pay any Tax Increase at the
time and in the manner as provided in Paragraph 10 of the Lease).
However, as a condition of Lessee's right to contest, if such contested
Real Property Tax is not paid before such contest and if the legal
proceedings shall not operate to prevent or stay the collection of the
Real Property Tax so contested, Lessee shall before instituting any such
proceeding, protect the Premises and the interest of Lessor and of the
beneficiary of a deed of trust or the mortgagee of a mortgage affecting
the Premises against any lien upon the Premises by a surety bond, issued
by an insurance company acceptable to Lessor, and in an amount equal to
the greater of one and one-half (1 1/2) times the amount contested and
the interest and penalties in connection therewith. Any contest as to
the validity or amount of any Real Property Tax, whether such contest is
made before or after payment, shall be made by Lessee in Lessee's own
name, or, if required by law, in the name of Lessor or both Lessor and
Lessee. Lessee shall defend, indemnify and hold harmless Lessor from
and against any and all costs or expenses, including attorney fees, in
connection with any such proceedings brought by Lessee, whether in its
own name or not. Lessee shall be entitled to retain any refund of any
such contested Real Property Tax and penalties or interest thereon which
have been paid by Lessee. Nothing contained herein shall be construed
as affecting or limiting Lessor's right to contest any Real Property Tax
at Lessor's expense.
62. If Lessee is a corporation, the following shall be deemed a
voluntary assignment of Lessee's interest in this Lease: (i) any
dissolution, merger, consolidation or other reorganization of or
affecting Lessee, whether or not Lessee is the surviving corporation;
and (ii) if the capital stock of Lessee is not publicly traded, the sale
or transfer to one person or entity (or to any group of related persons
or entities) of stock possessing more than thirty-three and one-third
percent (33-(%) of the total combined voting power of all classes of
Lessee's capital stock issued, outstanding and entitled to vote for the
election of directors. If Lessee is a partnership, any withdrawal or
substitution (whether voluntary, involuntary or by operation of law, and
whether occurring at any time or over a period of time) of any partner
owning twenty-five percent (25%) or more (cumulatively) of any interest
in the capital or profits of the partnership, or the dissolution of the
partnership, shall be deemed a voluntary assignment of Lessee's interest
in this Lease.
63. Notwithstanding anything contained in Paragraph 12.1, so long
as Lessee otherwise complies with the provisions of Xxxxxxxxx 00, Xxxxxx
may enter into any of the following transfers (a "Permitted Transfer")
without Lessor's prior written consent, and Lessor shall not be entitled
to receive any part of any Subrent (as defined below) resulting
therefrom that would otherwise be due it pursuant to the terms below:
(i) Lessee may sublease all or part of the Premises or
assign its interest in this Lease to any corporation which controls, is
controlled by or is under common control with the original Lessee to
this Lease by means of an ownership interest of more than fifty percent
(50%);
(ii) Lessee may assign its interest in this Lease to a
corporation which results from a merger, consolidation or other
reorganization in which Lessee is not the surviving corporation, so long
as the surviving corporation has a net worth at the time of such
assignment that is equal to or greater than the net worth of Lessee
immediately prior to such transaction; and
(iii) Lessee may assign this Lease to a corporation
which purchases or otherwise acquires all or substantially all of the
assets of Lessee, so long as such acquiring corporation has a net worth
at the time of such assignment that is equal to or greater than the net
worth of Lessee immediately prior to such transaction.
In the event of any Permitted Transfer as described above, Lessee
shall not be released of its liability for the performance of any or all
of its obligations under the Lease.
64. If Lessee assigns its interest in this Lease, then Lessee
shall pay to Lessor fifty percent (50%) of all Subrent (as defined
below) received by Lessee over and above (i) the assignee's agreement to
assume the obligations of Lessee under this Lease; and (ii) all
Permitted Transfer Costs (as defined below) related to such assignment.
In the case of an assignment, the amount of Subrent owed to Lessor shall
be paid to Lessor on the same basis, whether periodic or in lump sum,
that such Subrent is paid to Lessee by the assignee. If Lessee sublets
any part of the Premises, then with respect to the space so subleased,
Lessee shall pay to Lessor fifty percent (50%) of the positive
difference, if any, between (i) all Subrent paid by the subtenant to
Lessee, less (ii) the sum of all monthly Base Rent and additional rent
allocable to the space sublet and all Permitted Transfer Costs related
to such sublease. Such amount shall be paid to Lessor on the same
basis, whether periodic or in lump sum, that such Subrent is paid to
Lessee by its subtenant. In calculating Lessor's share of any periodic
payments, all Permitted Transfer Costs shall be first recovered by
Lessee. As used above, the term "Subrent" shall mean any consideration
of any kind received, or to be received, by Lessee as a result of the
assignment, transfer or subletting, if such sums are related to Lessee's
interest in this Lease or in the Premises, including payments from or on
behalf of the transferee (in excess of the book value thereof) for
Lessee's assets, fixtures, leasehold improvements, inventory, good will,
equipment, furniture and general intangibles. As used above, the term
"Permitted Transfer Costs" shall mean all reasonably leasing commissions
paid to third parties not affiliated with Lessee in order to obtain the
assignment or subletting in question, and all tenant improvement costs
reasonably incurred by Lessee in order to obtain the assignment or
subletting in question.
65. The provisions of Paragraph 16.2 of the Lease to the contrary
notwithstanding, the parties hereto acknowledge and agree that Lessee
shall not be obligated to deliver financial statements of Lessee to
Lessor or its lender but shall, upon reasonable request, deliver to
Lessor or its lender (or prospective lender) consolidated financial
statements of Xxxxxxx Manufacturing, Inc. The foregoing
notwithstanding, if at any time during the Lease Term, Tenant is no
longer a wholly owned subsidiary of Xxxxxxx Manufacturing, Inc., then
Tenant shall, upon reasonable request by Lessor or its lender (or
prospective lender), furnish to such requesting party separate financial
statements for Lessee.
66. In the event Lessee requests that Lessor execute, acknowledge
and deliver to Lessee a Short Form Memorandum of Lease and/or Option to
Purchase the Premises, Lessee shall concurrently therewith deliver to
Lessor a quitclaim deed, quitclaiming or releasing to Lessor all of
Lessee's right, title and interest under this Lease or the Option to
Purchase the Premises, as the case may be (or a termination agreement
with respect to the option to purchase the Premises evidencing the
termination or expiration of such option), in recordable form, and
Lessor agrees not to record such quitclaim deed or termination of option
prior to the date the Lease terminates or the option lapses or expires,
as the case may be.
67. Any holding over by Lessee beyond the expiration of the Lease
Term (or earlier termination of this Lease) shall not constitute a
renewal or extension of the Lease or give Lessee any rights in or to the
Premises except as expressly provided in this Lease. Any holding over
after such expiration or earlier termination of this Lease with the
written consent of Lessor shall be construed to be a tenancy from month-
to-month on the same terms and conditions herein specified insofar as
applicable except that the monthly Base Rent shall be increased to an
amount equal to one hundred fifty percent (150%) of the monthly Base
Rent payable during the last full calendar month of the Lease Term.
Lessee shall indemnify, defend and hold harmless Lessor from and against
any and all damages, losses, liabilities, claims, actions, causes of
action, costs and expenses (including, without limitation, reasonable
attorneys' fees and court costs) arising from or related to any holding
over by Lessee without Lessor's written consent.
68. The provisions of Paragraph 39.2 to the contrary
notwithstanding, Lessee may assign the option to purchase the Premises
or the right of first refusal to purchase the Premises as described in
Paragraphs 71 and 72 below, respectively, to an entity controlled by,
under common control with, or that controls Lessee.
69. The provisions of Paragraph 46 of the Lease to the contrary
notwithstanding, the rights and obligations of Lessor and Lessee under
the Lease and this Addendum attached thereto shall be conditioned upon
the termination of Lessor's existing leases with Cellular One and Full
Cycle Global, Inc., and the vacating of such leased premises by such
existing tenants not later than September 30, 1996. In the event such
existing tenants have not terminated their leases and vacated their
leased premises on or before September 30, 1996, this Lease and the
Addendum thereto shall be terminated and be of no force or effect, and
Lessor shall return to Lessee any advanced rental payments paid by
Lessee pursuant to the terms of the Lease.
70. Prior to the Commencement Date, Lessor will furnish to the
Premises the following improvements:
(a) Store front to be installed on southerly side of building
where drive-in door is located.
(b) A twelve foot (12") wall-up door to be installed in
demising wall separating both spaces.
In addition to the foregoing, Lessor shall deliver the Premises to
Lessee in broom-swept condition with all doors, lights and HVAC operable
and in good working condition.
71. Option to Purchase the Premises. Lessor hereby grants Lessee
an option to purchase the Premises on the following terms and
conditions:
(a) The term of such option shall commence as of the
Commencement Date and shall expire on the date twelve (12) months
following the Commencement Date of the Lease.
(b) The option shall be exercised, if at all, by Lessee
giving written notice of exercise of the option to Lessor during the
Option Term. The notice shall specify the date on which Lessee desires
to close the purchase ("Closing Date") and shall designate a title
insurance company to consummate the close ("Title Company"). The
Closing Date designated by Lessee shall be not less than ten (10) days
nor more than thirty (30) days after the giving of the exercise notice
(but in no event shall the Closing Date occur later than 12 months
following the Commencement Date of the Lease). Time is of the essence
with respect to the exercise of the Option to Purchase and the Closing
Date.
(c) The purchase price for the Premises shall be paid in all
cash at the close of escrow on the Closing Date. The purchase price for
the Premises ("Purchase Price") shall be determined as follows:
(i) If the close of escrow occurs during the first six
(6) months of the term of the Lease, the Purchase Price shall be equal
to the sum of (A) One Million Nine Hundred Twenty-five Thousand Dollars
($1,925,000), plus (B) the amount of any and all capital expenditures
incurred by Lessor with respect to the Premises or improvements
constructed thereon during the period following the execution of this
Lease and the Closing Date.
(ii) If the Closing Date occurs during the second six
(6) months of the term of the Lease, the Purchase Price shall be equal
to the sum of (A) One Million Nine Hundred Seventy-five Thousand Dollars
($1,975,000), plus (B) the amount of any and all capital expenditures
incurred by Lessor with respect to the Premises or improvements
constructed thereon during the period following the execution of this
Lease and the Closing Date.
(d) On or before the Closing Date, Lessee shall pay and
deliver to the Title Company in escrow, by cashier's check, certified
check or wire transfer, the Purchase Price for the Premises. Lessee
shall instruct the Title Company to deliver the Purchase Price to Lessor
at such time as the Title Company is prepared to record the grant deed
conveying the Premises to Lessee and is prepared to issue a CLTA
Standard Owner's Policy of title insurance to Lessee as provided below.
(e) Following Lessee's timely exercise of the option to
purchase, Lessee's obligation to purchase the Premises shall be
conditioned upon the Title Company being prepared and willing to issue
to Lessee a CLTA Standard Owner's Policy of title insurance in the
amount of the Purchase Price subject only to non-delinquent real
property taxes and assessments and such other title matters as encumber
the Premises as of the date of execution of this Lease and any other
title matters created by Lessee's acts. In the event Lessee closes
escrow on the purchase of the Premises pursuant to the terms of this
Paragraph 71, Lessor shall cause any deed of trust then encumbering the
Premises to be reconveyed.
(f) Lessor represents, warrants and covenants that Lessor has
not granted to any third party a right to purchase the Premises or any
interest therein which is superior to the rights of Lessee under this
Paragraph 71.
(g) On the Closing Date, Lessor shall convey title to the
Premises pursuant to a grant deed. Title to the Premises shall be
delivered free and clear of all deeds of trust, and subject only to non-
delinquent real property taxes and assessments and title matters
affecting the Premises as of the date this Lease is executed. The cost
of the title insurance policy shall be borne by Lessee.
(h) Real property taxes and assessments and rents shall be
prorated as of the close of escrow. All escrow fees, documentary
transfer taxes, city conveyance taxes, if any, and title insurance
premiums shall be borne by Lessee. Each party shall be responsible for
its own attorneys' fees incurred in connection with the purchase and
sale of the Premises.
(i) Time is of the essence with respect to the option to
purchase. If the option to purchase is not exercised in the manner
provided herein, or if the close of escrow does not occur within twelve
(12) months following the Commencement Date of the Lease, Lessee shall
have no right to purchase the Premises and this option may not be
revived by any subsequent payment or further action by Lessee.
(j) Lessor and Lessee each represent and warrant to the other
that it has had no dealings with any real estate broker or agent in
connection with the purchase option described above other than the
brokers identified in Paragraph 1.10. Each party agrees to indemnify,
defend and hold the other party harmless from and against any and all
liabilities, obligations, actions, suits, proceedings, costs and
expenses (including, without limitation, reasonable attorneys' fees and
court costs) in connection with any compensation, commission or charge
claimed by any other broker, agent or the like who alleges that it is
owed compensation, commission or charge by reason of contact with such
party with respect to the purchase of the Premises pursuant to the terms
of this Paragraph 71.
72. Right of First Refusal. If, at any time after the first
twelve (12) months of the Lease Term and prior to the expiration or
earlier termination of the Lease Term, Lessor receives a bona fide offer
to purchase the Premises from a third party unrelated to Lessor, which
offer Lessor determines to be acceptable to it, Lessor shall deliver to
Lessee the terms of such third party offer setting forth the proposed
purchase price and all other material terms of the sale of the Premises.
Delivery of such third party offer to Lessee shall constitute an offer
to sell the Premises to Lessee on the same terms and conditions as set
forth in the third party offer. Lessee shall have twenty (20) days
following receipt of such third party offer to deliver to Lessor written
notice of its acceptance of the terms of the third party offer and to
execute a purchase and sale agreement incorporating the terms of such
third party offer. If Lessee fails to notify Lessor of its election to
purchase the Premises or fails to execute an agreement for purchase and
sale therefor within the aforementioned twenty (20) day period, then
Lessee's right of first refusal shall terminate with respect to the
Premises and Lessor may sell the Premises to a third party, free and
clear of any rights of Lessee under this Paragraph 72, provided that
Lessor enters into an agreement for purchase and sale of the Premises
with a third party on terms no less favorable to Lessor (except that the
purchase price to be paid by the third party may be not less than
ninety-five (95%) of the purchase price set forth in the third party
offer delivered to Lessee) within six (6) months from the date of
delivery of the third party offer. If Lessor fails to enter into such
third party sale agreement within such six (6) month period, then the
terms of this Paragraph 72 shall again apply to the Premises.
If Lessee is in default under the Lease at the time Lessee would
otherwise be entitled to exercise its right of first refusal hereunder,
then Lessee shall have no right of first refusal with respect to the
Premises, and Lessor may sell the Premises to a third party, free and
clear of any rights of Lessee under this Paragraph 72.
If Lessee acquires the Premises pursuant to this Paragraph 72,
Lessor agrees to pay to the Brokers identified in Paragraph 1.10 of the
Lease a real estate brokerage commission pursuant to a separate written
agreement; provided, however, that no such commission shall have been
earned by the brokers identified in Paragraph 1.10 of the Lease or be
otherwise due and payable to such brokers if escrow fails to close for
any reason whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum
as of this 29th day of August, 1996.
LESSOR:
/s/Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
LESSEE:
XXXXXXX STRONG TIE COMPANY, INC., a California corporation
By: /s/Xxxxx Xxxxxx
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Its: CFO
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