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BUSINESS PARK NET LEASE
ARTICLE I SALIENT LEASE TERMS
THIS BUSINESS PARK NET LEASE (this "Lease") is dated for reference purposes only
as of April 16, 1996.
1.1 RENT GATEWAY NORTH Properties. L.L.C.
PAYMENT: x/x XxxxXxxx
Xxxx. Xxxx XX-000
X.0, Xxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
1.2 PARTIES Lessor: Gateway Corporate Properties. L.L.C., a
AND Delaware limited liability corporation
NOTICE c/o Divco Western Property Management,L.L.C.
ADDRESSES: Attn: Xxxxxx Xxxxxxx
000 Xxxx Xx. Xxxx Xxxxxx, Xxxxx #0000
Xxx Xxxx, Xxxxxxxxxx 00000
LESSEE: Innova Corporation. a WASHINGTON corporation
Attn: President
0000 Xxxxx 000XX Xxxxxx, Xxxxx 000
XXXXXXX, Xxxxxxxxxx 00000
1.3 PREMISES: (A) Name and Location of Complex:
Xxxxxxx Xxxxx
Xxxxx 000xx Xxxxxx and East Marginal Way
Tukwila, Washington
(B) Leased Premises: 0000 Xxxxx 000xx Xxxxxx,
Xxxxx 000 Xxxxxxx, XX 00000
(C) Approximately 35,929 RENTABLE (EXCLUDING
MEZZANINE LEVEL WHICH IS APPROX. 3,000
SQ.FT.) SQUARE FEET WHICH SHALL BE DEEMED TO
BE THE ACTUAL SQUARE FOOTAGE OF THE LEASED
PREMISES
1.4 TERM: (A) Commencing November 1, 1996
(B) Sixty months
1.5 RENT (A) Minimum Monthly: SEE ADDENDUM.
(B) Advance Rent: $23,864.00
1.6 SECURITY
DEPOSIT: $23,864.00
1.7 USE: Premises used solely for: General office and the
assembly and storage of radios.
1.8 INITIAL PRO RATA %: 13.49% (35,929 shell/266,356). 266,356 SHALL BE
DEEMED TO BE THE ACTUAL SQUARE FOOTAGE OF THE
COMPLEX.
1.8(A) PRO RATA %
OF BUILDING: 70.20% (35,929 shell/51,179). 51,179 SHALL BE DEEMED
TO BE THE ACTUAL SQUARE FOOTAGE OF THE BUILDING.
1.9 DECLARATION OF Date of Recordation April 22, 1993
RESTRICTIONS: Book n/a__________Page n/a_________
Document Number 9304222029
1.10 BROKER(S): Xxxxxxxx Xxxx Company N.W.
1.11 CONTENTS: This Lease consists of.
Sections I through 49.14
Addenda: I & 11
Exhibits:
A - Legal Description of Complex
B - Plan of Complex and Floor Plan of Leased Premises
C - Construction Obligations
D - Acknowledgment of Commencement of Term
E - Rules and Regulations
F - HAZARDOUS MATERIALS LIST
In addition to he terms defined throughout this lease, the above terms
are incorporated in this Lease as indicated above and referenced herein.
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ARTICLE 2 PREMISES
2.1 Demising Clause. Lessor hereby leases to Lessee, and Lessee hires
from Lessor a portion of the Complex as hereinafter defined.
2.2 Description. The "Complex" is that parcel of real property, or
parcels of real property in common ownership with, and contiguous to, the parcel
of which the Leased Premises forms a part, which is described with particularity
in Exhibit "A" attached hereto and made a part hereof by reference, and
described generally in Section 1.3(A) hereof. The premises leased herein are
described in Section 1.3(B) and delineated on Exhibit "B," which is attached
hereto and made a part hereof by reference, consisting of the approximate amount
of square footage as specified in Section 1.3(C) hereof. The term "Building"
shall refer to the Building in which the Leased Premises are located. The
portion leased herein to Lessee is hereinafter referred to as the "Leased
Premises." Lessor reserves the area beneath and above the Building as well as
the exterior thereof together with the right to install, maintain, use, repair
and replace pipes, ducts, conduits, wires, and structural elements leading
through the Leased Premises serving other parts of the Complex, so long as such
items are concealed by walls, flooring or ceilings. Such reservation in no way
affects the maintenance obligations imposed herein.
2.3 Covenants, Conditions and Restrictions. The parties agree that this
Lease is subject to the effect of (a) any covenants, conditions, restrictions,
easements, mortgages or deeds of trust, ground leases, rights of way of record,
and any other matters or documents of record; (b) any zoning laws of the city,
county and state where the Complex is situated; and (c) general and special
taxes not delinquent. Lessee agrees that as to its leasehold estate, Lessee and
all persons in possession or holding under Lessee will conform to and will not
violate the terms of any covenants, conditions or restrictions of record which
may now or hereafter encumber the property (hereinafter the "restrictions").
This Lease is subordinate to the restrictions and any amendments or
modifications thereto. Lessor will comply with and perform all of the duties
imposed by the Restrictions to the extent applicable.
2.4 Declaration of Restrictions. The Leased Premises are subject to a
Declaration of Restrictions as referenced in Section 1.9 hereof.
ARTICLE 3 TERM
3.1 Commencement Date. The term of this Lease shall commence on the
date specified in Section 1.4(A) hereof and shall be for the term specified in
Section 1.4(B) hereof, plus any partial month at the commencement of the term.
3.2 Acknowledgment of Commencement. After delivery of the Leased
Premises to Lessee, Lessee shall execute a written acknowledgment of the date of
commencement in the form attached hereto as Exhibit "D" and by this reference it
shall be incorporated herein.
ARTICLE 4 PRE-TERM POSSESSION
4.1 Conditions of Entry. In the event the Leased Premises are to be
constructed or remodeled by Lessor, Lessor may notify Lessee when the Leased
Premises are ready for Lessee's fixturing or Lessee's work, which may be prior
to substantial completion of the Leased Premises by Lessor. Lessee may thereupon
enter the Leased Premises for such purposes at its own risk, to make such
improvements as Lessee shall have the right to make, to install fixtures,
supplies, inventory and other property. Lessee agrees that it shall not in any
way interfere with the progress of Lessor's work by such entry. Should such
entry prove an impediment to the progress of Lessor's work, in Lessor's
judgment, Lessor may demand that Lessee forthwith vacate the Leased Premises
until such time as Lessor's work is complete, and Lessee shall immediately
comply with this demand.
4.2 During the course of any pre-term possession, whether such pre-term
period arises because of an obligation of construction on the part of Lessor, or
otherwise, all terms and conditions of this Lease, except for rent and
commencement, shall apply, particularly with reference to indemnity by Lessee of
Lessor under Article 14 herein for all occurrences within or about the Leased
Premises.
ARTICLE 5 DELAY IN DELIVERY OF POSSESSION
5.1 Delay. If Lessor, for any reason whatsoever, cannot deliver
possession of the Leased Premises to Lessee at the commencement of the Lease
term, this Lease shall not be void or voidable, nor shall Lessor be liable for
any loss or damage resulting therefrom, but in that event, there shall be a
proportionate reduction of rent covering the period between the commencement of
the Lease term and the time when Lessor can deliver possession. The Lease term
shall be extended by such delay for an equal period.
ARTICLE 6 MINIMUM RENT
6.1 Payment. Lessee shall pay to Lessor at the address specified in
Section 1.1, or at such other place as Lessor may otherwise designate, as
"Minimum Monthly Rent" for the Leased Premises the amount specified in Section
1.5(A) hereof, payable in advance on the first day of each month during the
Lease term. If the Lease term commences on other than the first day of a
calendar month, the rent for the first partial month shall be prorated
accordingly.
6.2 All payments of Minimum Monthly Rent (including sums defined as
rent in Section 29.2) shall be in lawful money of the United States, and payable
without deduction, offset, counterclaim, prior notice or demand.
6.3 Advance Rent. The amount specified in Section 1.5(B) hereof is paid
herewith to Lessor upon execution of this Lease as advance rent, receipt of
which is hereby acknowledged, provided, however, that such amount shall be held
by Lessor as a "Security Deposit" pursuant to Section 17.1 hereof until it is
applied by Lessor to the first Minimum Monthly Rent due hereunder.
6.4 Late Payment. If during any twelve (12) month period Lessee fails
on more than one occasion to make any payment of Minimum Monthly of Minimum
Monthly Rent to Lessor on the date when it is due, then Lessor may, by giving
written notice to Lessee, require that Lessee pay the Lessee pay the Minimum
Monthly Rent to Lessor quarterly in advance.
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ARTICLE 7 TAXES
7.1 Definition. In this Article 7 the terms "Real Property Taxes" and
"Taxes" are used interchangeably. "Real Property Taxes" as used in this Lease
shall include all Real Property Taxes on the Building, the Complex, the land on
which the Building is situated, and the various estates in the Building and the
land, including this Lease, as well as all personal property taxes levied on the
property used in the operation of the Building or land, whether or not now
customary or within the contemplation of the parties to this Lease. "Taxes" also
shall include the reasonable cost to Lessor of contesting the amount, validity,
or applicability of any Taxes mentioned in this section. Further included in the
definition of Taxes herein shall be general and special assessments, fees of
every kind and nature, commercial rental tax, levy, penalty or tax (other than
inheritance or estate taxes) imposed by any authority having the direct or
indirect power to tax, as against any legal or equitable interest of Lessor in
the Leased Premises or in the real property of which the Leased Premises are a
part, as against Lessor's right to rent or other income therefrom, or as against
Lessor's business of leasing the Leased Premises, any tax, fee, or charge with
respect to the possession, leasing, transfer of interest, operation, management,
maintenance, alteration, repair, use, or occupancy by Lessee, of the Leased
Premises or any portion thereof, the Building, or the Complex, or any tax
imposed in substitution, partially or totally, for any tax previously included
within the definition of Taxes herein, or any additional tax, the nature of
which may or may not have been previously included within the definition of
Taxes. The term "Real Property Taxes" or "Taxes" shall not include any tax which
may be levied upon or against the net income or profits of Lessor or its
successors or assigns.
7.2 Assessments. With respect to any general or special assessments
which may be levied upon or against the Leased Premises, the Building, the
Complex, or the underlying realty, or which may be evidenced by improvement or
other bonds, and which may be paid in annual or semi-annual installments, only
the current amount of such installment, prorated for any partial year, and
statutory interest, shall be included within the computation of Taxes for which
Lessee is responsible hereunder.
7.3 Separate Assessment. If the Leased Premises are assessed separately
by the county assessor or other taxing agency, Lessee shall pay to such agency
at least ten (10) days prior to the date when such Taxes would be delinquent,
all Real Property Taxes as hereinabove defined applicable to the Leased Premises
or arising under Section 7.1 above. In the event the Leased Premises share
parking and Common Areas with other premises, the provisions of Section 7.4
below shall apply to Taxes thereon.
7.4 Proration. If the Leased Premises are not separately assessed as an
individual tax unit as described in the previous section, Lessee shall pay, as
additional rent, to Lessor, within ten (10) days after receipt of billing, its
pro rata share of all Real Property Taxes stated in the tax xxxx in which the
Leased Premises are included, including the parking and Common Areas, as well as
the improvements on all of said land, or otherwise arising under the provisions
of this Article. Pro rata share is defined as that fraction the numerator of
which is the Rentable square footage in the Leased Premises and the denominator
of which is the Rentable square footage included within the tax xxxx.
7.5 Estimated Payments. Lessor may, at its option, estimate the amount
of Taxes next due and collect from Lessee on a monthly or quarterly basis, at
Lessor's option, the amount of Lessee's estimated tax obligation. On or before
March 1 of each year during the term, Lessor shall provide Lessee with a
reconciliation of Lessee's account with respect to such estimated tax payments.
In event it is established upon such reconciliation that Lessee has not paid
sufficient amount in estimated tax payments to cover its pro rata share for the
year in question, Lessee shall pay to Lessor the full amount of any such
shortage within ten (10) days of date of billing. If it is established that
Lessee has made an overpayment of its tax obligation upon such reconciliation,
Lessee shall receive, at Lessor's option, either a credit applicable to the next
ensuing estimated tax payments, or a credit to a tax reserve account to be held
by Lessor for application to sums due in respect of reassessment or escape
assessments applicable to the period in question, but yet to be billed.
7.6 Personal Property Taxes. Lessee shall pay prior to delinquency all
Taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Lessee contained in the Leased Premises or
elsewhere. When possible, Lessee shall cause such 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 real property, Lessee shall pay Lessor Taxes
attributable to Lessee within ten (10) days after receipt of a written statement
setting forth the Taxes applicable to Lessee's property.
7.7 Net Rent. It is the intention of Lessor and Lessee that the rental
received by Lessor be net of any Taxes of any sort to be paid by Lessor, subject
to the exclusions stated in Section 7.1. In the event it shall not be lawful
for Lessee to reimburse Lessor for any of the Taxes covered by this Article, the
Minimum Monthly Rent payable to Lessor under the terms of this Lease shall be
increased by the amount of the portion allocable to Lessee so as to net to
Lessor the amount which would have been receivable by Lessor if such tax had not
been imposed.
ARTICLE 8 COMMON AREAS AND COMMON AREA COSTS
8.1 Definition of Common Areas. The term "Common Areas" as used herein
means all areas and facilities outside the Leased Premises, within the exterior
boundaries of the Complex, that are provided and designated by Lessor from time
to time for the general use and convenience of Lessee and of other tenants of
Lessor having the common use of such areas, and their respective authorized
representatives and invitees. Common Areas include, without limitation,
driveways, parking areas, sidewalks, and landscaped areas, all as generally
described on Exhibit "B" attached hereto. Exhibit "B" is tentative and Lessor
reserves the right to make alterations thereto from time to time.
8.2 Rights and Duties of Lessor. Lessor shall, in a manner
substantially similar to other industrial parks in the south Seattle industrial
market, maintain the Common Areas, establish and enforce reasonable rules and
regulations concerning such areas, close any of the Common Areas to whatever
extent required in the opinion of Lessor's counsel to prevent a dedication of
any of the Common Areas or the accrual of any rights of any person or of the
public to the Common Areas, close temporarily any of the Common Areas for
maintenance purposes, and make changes to the Common Areas including, without
limitation, changes in the location of driveways, entrances, exits, vehicular
parking spaces, parking area, the designation of areas for the exclusive use of
others, the direction of the flow of traffic or construction of additional
Buildings thereupon. Lessee hereby acknowledges that Lessor is under no
obligation to provide security for the Common Areas but may do so at its option.
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8.3 Payment by Lessee. Lessee shall pay to Lessor, as additional rent,
its proportionate share of Common Area Costs as hereinafter defined, within ten
(10) days of receiving a xxxx therefor from Lessor, but no more frequently than
monthly. Lessee's proportionate share (or "pro rata %") shall be that fraction
of Common Area Costs the numerator of which is the number of RENTABLE square
feet in the Leased Premises and the denominator of which is the SQUARE
FOOTAGE (PRESENTLY 266,356 SQUARE FEET) of buildings in the Complex having the
use of the Common Areas. Lessee's initial pro rata % of Common Area Costs is
stated in Section 1.8. Lessor may xxxx Lessee estimated charges in accordance
with Section 8.5. Notwithstanding the preceding provisions of this Section 8.3,
Lessee's proportionate share as to certain expenses included in Common Area
Costs may be calculated differently to yield a higher percentage share for
Lessee as to certain expenses in the event Lessor permits other tenants in the
Complex to incur such expenses directly rather than have Lessor incur the
expense in common for the Complex. In such case Lessee's proportionate share of
the applicable expense shall be calculated as having as its denominator the
gross leasable area of all Premises in the Complex less the gross leasable area
of tenants who have incurred such expense directly. In any case where Lessee,
with Lessor's consent, incurs such expenses directly, Lessee's proportionate
share of Common Area Costs will be calculated specially so that expenses of the
same character which are incurred by Lessor for the benefit of other tenants in
the Complex shall not be pro-rated to Lessee. Nothing herein shall imply that
Lessor will permit Lessee or any other tenant of the Complex to incur Common
Area Costs. Any such permission shall be in the sole discretion of Lessor, which
Lessor may grant or withhold in its arbitrary judgment.
8.4 Definition of Common Area Costs. "Common Area Costs" means all sums
(including "Capital Costs" as hereinafter defined and to the extent stated
herein) expended by Lessor for the supervision, maintenance, repair, replacement
and operation of the Complex, painting the exterior walls of the buildings in
the Complex, as well as liability insurance premiums and security services for
the Complex, community association dues or assessments and/or property owner's
association dues and assessments which may be imposed upon Lessor by virtue of
any recorded instrument affecting title to the Complex, plus an allowance of
THREE PERCENT (3%) OF THE GROSS RENTAL REVENUE OF THE COMPLEX TO LESSOR FOR A
MANAGEMENT FEE. Capital Costs are defined as those expenditures which do not
normally recur more frequently than at five (5) year intervals in the normal
course of operation and maintenance of the Complex. Notwithstanding anything
above which may be to the contrary, Common Area Costs shall include a portion of
all Capital Costs, representing any costs of capital improvements made by Lessor
to the Complex for the purpose of reducing recurring expenses or utility costs
and from which Lessee can expect a reasonable benefit, or that are required by
governmental law, ordinance, regulation or mandate, not applicable to the
Complex at the time of the original construction. The portion thereof to be
included each year in Common Area Costs shall be that fraction allocable to the
calendar year in question calculated by amortizing the cost over the reasonably
useful life of such improvement, as determined by Lessor, with interest on the
unamortized balance at ten percent (10%) per annum or such higher rate as may
have been paid by Lessor for funds borrowed for the purpose of constructing such
improvements, but in no event to exceed the highest rate permissible by law.
8.5 Estimated Payments. Lessor shall have the right, at its option, to
estimate Lessee's pro rata share of Common Area Costs due in the future from
Lessee and to collect from Lessee on a monthly or quarterly basis, as Lessor may
elect, the amount of Lessee's estimated pro rata share of such costs. Lessor
shall provide Lessee with a reconciliation of Lessee's account at least
annually, and if such reconciliation shall indicate that Lessee's account is
insufficient to satisfy Lessee's pro rata share of Common Area Costs for the
period estimated, Lessee shall immediately pay to Lessor any deficiency. Any
excess in such account indicated by the reconciliation shall be credited to
Lessee's account to reduce the estimated payments for the next ensuing period.
8.6 Refuse Disposal. Lessee shall arrange and pay for Refuse Disposal
service at the Leased Premises. Lessee shall pay Lessor, within ten (10) days of
being billed therefor, for the removal from the Leased Premises, the Building,
or the Complex, of any refuse or rubbish which Lessee shall fail to have
removed.
8.7 Lessee's Right to Audit Annual Reconciliations. Within thirty (30)
days after receipt of Lessor's annual reconciliation, Lessee shall have the
right, after at least ten (10) days prior written notice to Lessor, to examine
and conduct an audit at the offices of Lessor or its property manager, the books
and records of Lessor pertaining solely to the Common Area Costs for the
immediately preceding calendar year covered in such annual reconciliation
statement. Such audit shall be conducted by an independent certified accounting
firm retained by Lessee, but subject to the reasonable approval of Lessor. All
expenses of the audit shall be borne by Lessee. If Lessee's audit reveals a
discrepancy in the comparative annual reconciliation statement, Lessee shall
deliver a copy of the audit and supporting calculations to Lessor within thirty
(30) days after completion of the audit. If Lessee or Lessor are unable to
resolve the discrepancy within thirty (30) days after Lessor's receipt of the
audit, either Lessee or Lessor may upon written notice to the other have the
matter decided by A DIFFERENT independent certified public accounting firm
(I.E., OTHER THAN THE FIRM ENGAGED BY LESSEE TO CONDUCT THE AUDIT) approved by
Lessee and Lessor (the "CPA Firm"), which approval shall not be unreasonably
withheld or delayed. The CPA Firm shall review the applicable records and each
party shall be entitled to deliver written evidence to the CPA Firm to support
such party's position within twenty (20) days after the appointment of the CPA
Firm. The CPA Firm shall render its findings within thirty (30) days after its
appointment, which determination shall be binding on the parties. If the
determination of the CPA Firm is five percent (5%) or less than the amount
determined by Lessor, then Lessee shall bear all costs and expenses for such CPA
Firm. If the determination of the CPA Firm is more than five percent (5%) of the
amount determined by Lessor, then Lessor shall bear all costs and expenses for
the CPA Firm and the cost for Lessee's audit by an outside accounting firm (if
one was obtained).
ARTICLE 9 ASSIGNMENT AND SUBLETTING
9.1 Lease is Personal. The purpose of this Lease is to transfer
possession of the Leased Premises to Lessee for Lessee's personal use in return
for certain benefits, including rent, to be transferred to the Lessor. Lessee's
right to assign or sublet as stated in this Article is subsidiary and incidental
to the underlying purpose of this Lease. Lessee acknowledges and agrees that it
has entered into this Lease in order to acquire the Leased Premises for its own
personal use and not for the purpose of obtaining the right to convey the
leasehold to others.
9.2 "Transfer of the Leased Premises" Defined. The terms "Transfer of
the Leased Premises" or "Transfer" as used herein shall include any assignment
of all or any part of this Lease (including assignment by operation of law),
subletting of all or any part of the Leased Premises or transfer of possession,
or right of possession or contingent right of possession of all or any portion
of the Leased Premises, including without limitation, concession, mortgage,
devise, hypothecation, agency, franchise or management agreement, or to suffer
any other person (the agents and servants of Lessee excepted) to occupy or use
the said Leased Premises or any portion thereof. If Lessee is a corporation
which is not deemed a public corporation, or is an unincorporated association or
partnership, or Lessee consists of more than one party, the transfer, assignment
or hypothecation of any stock or interest in such corporation, association,
partnership or ownership interest, in the aggregate in excess of FIFTY PERCENT
(50%) shall be deemed a Transfer of the Leased Premises; provided, however, that
the foregoing limitation shall not apply to a Transfer to an affiliate of Lessee
as permitted in section 9.4(c) below. In ADDITION, IF LESSEE BECOMES A PUBLICLY
HELD CORPORATION WHOSE STOCK IS REGULARLY TRADED ON A NATIONAL STOCK EXCHANGE OR
IS REGULARLY TRADED in THE OVER-THE-COUNTER MARKET AND QUOTED ON THE NASDAQ, THE
RESTRICTION OF THE TRANSFER OF SHARES IN LESSEE THAT ARE SOLD, IF AND WHEN IT
BECOMES A PUBLICLY HELD CORPORATION AND SUBSEQUENT SHARES REGULARLY TRADED ON
SUCH EXCHANGES, SHALL NOT BE DEEMED A TRANSFER REQUIRING THE CONSENT OF LESSOR.
9.3 No Transfer Without Consent. Lessee shall not suffer a Transfer of
the Leased Premises or any interest therein, or any part thereof, or any right
or privilege appurtenant thereto without the prior written consent of Lessor,
and a consent to one Transfer of the Leased Premises shall not be deemed to be a
consent to any subsequent Transfer of the Leased Premises. Any Transfer of the
Leased Premises without such consent shall be void, and shall, at the option of
Lessor, terminate this Lease.
9.4 When Consent Granted.
(a) The consent of Lessor to a Transfer may not be unreasonably
withheld, provided should Lessor withhold its consent for any of the following
reasons, which list is not exclusive, such withholding shall be deemed to be
reasonable:
(i) Financial strength of the proposed transferee is not at
least equal to that of Lessee at the time of execution of this Lease;
(ii) A proposed transferee whose occupation of the Leased
Premises would cause a diminution in the reputation of the Complex or the other
businesses located therein;
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(iii) A proposed transferee whose impact on the common
facilities or the other occupants of THE Complex would be disadvantageous; or
(iv) A proposed transferee whose occupancy will require a
variation in the terms of the Lease.
(b) [INTENTIONALLY RESERVED]
(c) Notwithstanding the foregoing, Lessee shall have the right,
without the consent of Lessor, but upon prior written notice to Lessor, to
assign this Lease to a company incorporated or to be incorporated by Lessee,
provided that Lessee owns or beneficially controls all the issued and
outstanding shares of capital stock of the company.
9.5 Procedure for Obtaining Consent.
(a) Lessor need not commence its review of any proposed Transfer,
or respond to any request by Lessee with respect to such, unless and until it
has received from Lessee adequate descriptive information concerning the
business to be conducted by the proposed transferee, the transferee's financial
capacity, and such other information as may reasonably be required in order to
form a prudent judgment as to the acceptability of the proposed Transfer,
including, without limitation, the following:
(i) The past two years' Federal Income Tax returns of the
proposed transferee (or in the alternative the past two years' audited annual
Balance Sheets and Profit and Loss statements, certified correct by a Certified
Public Accountant);
(ii) Banking references of the proposed transferee;
(iii) A resume of the business background and experience of the
proposed transferee;
(iv) At least five (5) business references for the proposed
transferee;
(v) An executed copy of the instrument by which Lessee proposes
to effectuate the Transfer.
(vi) A certified statement, including the calculation, of the
amount of unamortized cost of Lessee's leasehold improvements to the Leased
Premises.
(b) Lessee shall reimburse Lessor as additional rent for Lessor's
reasonable costs and attorneys' fees incurred in conjunction with the processing
and documentation of any proposed Transfer of the Leased Premises, whether or
not consent is granted.
9.6 Recapture. By written notice to Lessee (the "Termination Notice")
within twenty (20) business days following submission to Lessor by Lessee of the
information specified in Section 9.5, Lessor may (1) terminate this Lease in the
event of an assignment of this Lease or sublet of the entire Leased Premises, or
(2) terminate this Lease as to the portion of the Leased Premises to be sublet,
if the sublet is to be of less than the entire Leased Premises. Upon the
termination date of this Lease, if Lessor exercises its rights under this
Section 9.6, Lessor shall pay to Lessee the unamortized cost of Lessee's
leasehold improvements multiplied by that fraction the numerator of which is the
Rentable Area for assignment or sublease, and the denominator of which is the
Rentable Area of the entire Leased Premises before such Transfer. In the event
Lessor elects to terminate under the provisions hereof, and the area to be
terminated is less than the entire Leased Premises, an amendment to this Lease
shall be executed in which Lessee's obligations for rent and other charges shall
be reduced in proportion to the reduction in the size of the Leased Premises
caused thereby to the portion of the Leased Premises offered for sublease by
restating the description of the Leased Premises, and its monetary obligations
hereunder shall be reduced by multiplying such obligations by a fraction, the
numerator of which is the Rentable Area of the Leased Premises offered for
sublease and the denominator of which is the Rentable Area of the Leased
Premises immediately prior to such termination. For purposes hereof, the term
"Rentable Area" of a floor shall mean all areas available or held for the
exclusive use and occupancy of the occupants or future occupants of the Complex,
measured from the inside finished surface of the dominant portion of the
permanent outer Building walls, excluding stairs, elevator shafts, flues, pipe
shafts, vertical ducts, and the like, and their enclosing walls, which serve
more than one floor of the Building, but not stairs, dumbwaiters, lifts, and the
like, exclusively serving a tenant occupying offices on more than one floor. No
deductions shall be made for columns and projections necessary to the Building.
For purposes hereof, the Rentable Area of an office on a floor shall be computed
by multiplying (a) the number of square feet computed by measuring to the
finished surface of the office side of corridor and other permanent walls, to
the center of partitions that separate the office from similar adjoining areas,
and to the inside finished surface of the permanent outer Building walls
("Usable Area") by (b) that fraction the numerator of which is Rentable Area and
the denominator of which is Usable Area.
9.7 Effect of Transfer. If Lessor consents to a Transfer, the following
conditions shall apply:
(a) Each and every covenant, condition or obligation imposed upon
Lessee by this Lease and each and every right, remedy or benefit afforded Lessor
by this Lease shall not be impaired or diminished as a result of such Transfer.
(b) On a monthly basis, any sums of money, or other economic
consideration received by Lessee from the Transferee in such month (whether or
not for a period longer than one month), including higher rent, bonuses, key
money, or the like which exceed, in the aggregate, the total sums which Lessee
pays Lessor under this Lease in such month, or the prorated portion thereof if
the Leased Premises transferred is less than the entire Leased Premises, shall
be payable FIFTY PERCENT (50%) to Lessor and FIFTY PERCENT (50%) to Lessee, and
Lessor's share shall be paid with Lessee's payment of Minimum Monthly Rent.
(c) No Transfer, whether or not consent of Lessor is required
hereunder, shall relieve Lessee of its primary obligation to pay the rent and to
perform all other obligations to be performed by Lessee hereunder. The
acceptance of rent by Lessor
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from any person shall not be deemed to be a waiver by Lessor of any provision of
this Lease or to be a consent to any Transfer of the Leased Premises.
(d) If Lessor consents to a sublease, such sublease shall not
extend beyond the expiration of the term of this Lease.
(e) No Transfer shall be valid and no transferee shall take
possession of the Leased Premises or any part thereof unless, within ten (10)
days after the execution of the documentary evidence thereof, Lessee shall
deliver to Lessor a duly executed duplicate original of the Transfer instrument
in form satisfactory to Lessor which provides that (i) the transferee assumes
Lessee's obligations for the payment of rent and for the full and faithful
observance and performance of the covenants, terms and conditions contained
herein, (ii) such transferee will, at Lessor's election, attorn directly to
Lessor in the event Lessee's Lease is terminated for any reason on the terms set
forth in the instrument of transfer and (iii) such instrument of transfer
contains such other assurances as Lessor reasonably deems necessary.
ARTICLE 10 PROPERTY INSURANCE
10.1 Use of Premises. No use shall be made or permitted to be made on
the Leased Premises, nor acts done, which will increase the existing rate of
insurance upon the Building in which the Leased Premises are located or upon any
other Building in the Complex or cause the cancellation of any insurance policy
covering the Building, or any part thereof, nor shall Lessee sell, or permit to
be kept, used or sold, in or about the Leased Premises, any article which may be
prohibited by the standard form of "All-Risk" fire insurance policies. Lessee
shall, at its sole cost and expense, comply with any and all requirements
pertaining to the Leased Premises, of any insurance organization or company,
necessary for the maintenance of reasonable property damage and commercial
general liability insurance, covering the Leased Premises, the Building, or the
Complex.
10.2 Increase in Premiums. Lessee agrees to pay Lessor, as additional
rent, any increases in such premiums resulting from the nature of Lessee's
occupancy or any act or omission of Lessee. All payments of additional rent by
Lessee to Lessor pursuant to this Section 10.2 shall be made within ten (10)
days after receipt by Lessee of Lessor's billing therefor.
10.3 Pro Rata Share of Premiums.
(a) Lessee shall pay to Lessor, during the term hereof, as
additional rent, its pro rata share of the insurance premiums for any property
insurance carried by Lessor covering the Complex (the "Complex Insurance
Premium"). Such pro rata share is defined as that fraction of the insurance
premiums the numerator of which is the RENTABLE square footage in the Leased
Premises and the denominator of which is the total square footage in all
premises to which the Complex Insurance Premium is applicable. In the event that
the property insurance carried by Lessor covering the Complex is a blanket
policy in which other properties not related to the Complex are included, the
Complex Insurance Premium shall be calculated as that portion of such blanket
policy insurance premium which, in Lessor's good faith judgment, is properly
allocable to the Complex. The sum due under this subsection shall be in addition
to that which may be due under the previous section of this Lease.
(b) Lessee shall pay any such premium portion to Lessor within ten
(10) days after receipt by Lessee of Lessor's billing therefor.
10.4 Estimated Payments. Lessor may, at its option, estimate the amount
of insurance premiums for property insurance to be due in the future from Lessee
and collect from Lessee on a monthly or quarterly basis, at Lessor's option, the
amount of Lessee's estimated insurance premium obligation. Prior to March 1 of
each year, Lessor shall provide Lessee with a reconciliation of Lessee's account
along with a billing for any shortage in the event of a deficiency or statement
for credit applicable to the next ensuing insurance premium payments, if an
overpayment has been made by Lessee.
10.5 Personal Property Insurance. Lessee shall maintain in full force
and effect on all of its fixtures, furniture and equipment and other business
personal property in the Leased Premises a policy or policies providing
protection against any peril included within the classification "All Risk" to
the extent of at least ninety percent (90%) of their replacement cost, or that
percentage of the replacement cost required to negate the effect of a
coinsurance provision, whichever is greater. No such policy shall have a
deductible in a greater amount than One Thousand Dollars ($1,000.00). Lessee
shall also insure in the same manner the physical value of all its leasehold
improvements and alterations in the Leased Premises. During the term of this
Lease, the proceeds from any such policy or policies of insurance shall be used
for the repair or replacement of the fixtures, equipment, and leasehold
improvements so insured. Lessor shall have no interest in said insurance, and
will sign all documents necessary or proper in connection with the settlement of
any claim or loss by Lessee. Lessee shall also maintain business interruption
insurance and insurance for all plate glass upon the Leased Premises. All
insurance specified in this Section 10.5 to be maintained by Lessee shall be
maintained by Lessee at its sole cost.
ARTICLE 11 LIABILITY INSURANCE
11.1 Lessee's Insurance. Lessee shall, at Lessee's expense, obtain and
keep in force during the term of this Lease, a commercial general liability
insurance policy insuring Lessee against the risks of bodily injury and property
damage, personal injury, contractual liability, completed operations, products
liability, host liquor liability, owned and nonowned automobile liability
arising out of the ownership, use, occupancy or maintenance of the Leased
Premises and all areas appurtenant thereto. Such insurance shall be a combined
single limit policy in an amount not less than ONE MILLION DOLLARS
($1,000,000.00) per occurrence with a TWO MILLION DOLLAR ($2,000,000.00) annual
aggregate and an umbrella policy of THREE MILLION DOLLARS ($3,000,000.00) any
one occurrence. Lessor and any lender and any other party in interest designated
by Lessor shall be named as additional insured(s). The policy shall contain
cross-liability endorsements and shall insure performance by Lessee of the
indemnity provisions of this Lease; shall be primary, not contributing with, and
not in excess of coverage which Lessor may carry; shall state that Lessor is
entitled to recovery for the negligence of Lessee even though Lessor is named as
an additional insured; shall provide for severability of interest; shall provide
that an act or omission of one of the insured or additional insureds which would
void or otherwise reduce coverage shall
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not void or reduce coverages as to the other insured or additional insureds; and
shall afford coverage after the term of this Lease (by separate policy or
extension if necessary) for all claims based on acts, omissions, injury or
damage which occurred or arose (or the onset of which occurred or arose) in
whole or in part during the term of this Lease. The limits of said insurance
shall not limit any liability of Lessee hereunder. Not more frequently than
every three (3) years, if, in the reasonable opinion of Lessor, the amount of
liability insurance required hereunder is not adequate, Lessee shall promptly
increase said insurance coverage as required by Lessor, but in no event shall
said increase in the amount of said coverage be greater than five percent (5%)
per year commencing on the Commencement Date of this Lease.
11.2 Workers' Compensation Insurance. Lessee shall carry
Workers' Compensation Insurance as required by law, including an employers'
liability endorsement.
ARTICLE 12 INSURANCE POLICY REQUIREMENTS
12.1 General Requirements. All insurance policies required to be
carried by Lessee hereunder shall conform to the following requirements:
(a) The insurer in each case shall carry a designation in "Best's
Insurance Reports" as issued from time to time throughout the term as follows:
Policyholders' rating of A; financial rating of not less than VII;
(b) The insurer shall be qualified to do business in the state in
which the Leased Premises are located;
(c) The policy shall be in a form and include such endorsements as
are acceptable to Lessor;
(d) Certificates of insurance shall be delivered to Lessor at
commencement of the term and certificates of renewal, at least thirty (30) days
prior to the expiration of each policy;
(e) Each policy shall require that Lessor be notified in writing by
the insurer at least thirty (30) days prior to any cancellation or expiration of
such policy, or any reduction in the amounts of insurance carried.
ARTICLE 13 LESSEE INSURANCE DEFAULT
13.1 Rights of Lessor. In the event that Lessee fails to obtain any
insurance required of it under the terms of this Lease, Lessor may, at its
option, but is not obligated to, obtain such insurance on behalf of Lessee and
xxxx Lessee, as additional rent, for the cost thereof. Payment shall be due
within ten (10) days of receipt of the billing therefor by Lessee.
ARTICLE 14 INDEMNIFICATION, WAIVER OF CLAIMS AND SUBROGATION
14.1 Intent and Purpose. This Article 14 is written and agreed to in
respect of the intent of the parties to assign the risk of loss, whether
resulting from negligence of the parties or otherwise, to the party who is
obligated hereunder to cover the risk of such loss with insurance. Thus, the
indemnity and waiver of claims provisions of this Lease have as their object, so
long as such object is not in violation of public policy, the assignment of risk
for a particular casualty to the party carrying the insurance for such risk,
without respect to the causation thereof.
14.2 Waiver of Subrogation. Lessor and Lessee release each other, and
their respective authorized representatives, from any claims for damage to any
person or to the Leased Premises and the Building and other improvements in
which the Leased Premises are located, and to the furniture, fixtures, and other
business personal property, Lessee's improvements and alterations of either
Lessor or Lessee, in or on the Leased Premises and the Building and other
improvements in which the Leased Premises are located, including loss of income,
that are caused by or result from risks insured or required under the terms of
this Lease to be insured against under any property insurance policies carried
or to be carried by either of the parties.
14.3 Form of Policy. Each party shall cause each such insurance policy
obtained by it to provide that the insurance company waives all rights of
recovery by way of subrogation against either party in connection with any
damage covered by such policy. Neither party shall be liable to the other for
any damage caused by any peril included within the classification "All Risk"
which is insured against under any property insurance policy carried under the
terms of this Lease. If any such insurance policy cannot be obtained with a
waiver of subrogation without payment of an additional premium charge above
that charged by the insurance companies issuing such policies without waiver of
subrogation, the party receiving the benefit shall elect to either forfeit the
benefit or shall pay such additional premium to the insurance carrier requiring
such additional premium.
14.4 Indemnity. Lessee, as a material part of the consideration to be
rendered to Lessor, shall indemnify, defend, protect and hold harmless Lessor
against all actions, claims, demands, damages, liabilities, losses, penalties,
or expenses of any kind which may be brought or imposed upon Lessor or which
Lessor may pay or incur by reason of injury to person or property, from whatever
cause, all or in any way connected with the condition or use of the Leased
Premises, or the improvements or personal property therein or thereon, including
without limitation any liability or injury to the person or property of Lessee,
its agents, officers, employees or invitees. Lessee agrees to indemnify, defend
and protect Lessor and hold it harmless from any and all liability, loss, cost
or obligation on account of, or arising out of, any such injury or loss however
occurring, including breach of the provisions of this Lease and the negligence
of the parties hereto. Nothing contained herein shall obligate Lessee to
indemnify Lessor against its own sole or gross negligence or willful acts, for
which Lessor shall indemnify Lessee.
Lessor's Indemnity. Lessor, as a material part of the consideration to
be rendered to Lessee, shall indemnify, defend, protect and hold harmless Lessee
against all actions, claims, demands, damages, liabilities, losses, penalties,
or expenses of any kind which may be brought or imposed upon Lessee or which
Lessee may pay or incur by reason of injury to person or property, from whatever
cause, all or in any way connected with the condition or use of the Common
Areas, or the improvements or personal property therein or thereon, including
without limitation any liability or injury to the person or property of Lessor,
its agents, officers, employees or invitees. Lessor agrees to indemnify, defend
and protect Lessee and hold it harmless from any and all liability, loss, cost
or obligation on account of, or arising out of, any such injury or loss however
occurring, including the negligence of the parties hereto. Nothing contained
herein shall obligate Lessor to indemnify Lessee against its own sole or gross
negligence or willful acts, for which Lessee shall indemnify Lessor.
14.5 Defense of Claims. In the event any action, suit or proceeding is
brought against Lessor by reason of any such occurrence, Lessee, upon Lessor's
request, will at Lessee's expense resist and defend such action, suit or
proceeding, or cause the same to be resisted and defended by counsel designated
either by Lessee or by the insurer whose policy covers the occurrence and in
either case approved by Lessor. The obligations of Lessee under this Section
arising by reason of any occurrence taking place during the Lease term shall
survive any termination of this Lease.
14.6 Waiver of Claims. Except to the extent caused by Lessor's sole
gross negligence or intentional misconduct, Lessee, as a material part of the
consideration to be rendered to Lessor, hereby waives all claims against Lessor
for damages or injury, as described below, from any cause arising at any time,
including breach of the provisions of this Lease and the negligence of the
parties hereto:
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(a) damages to goods, wares, merchandise and loss of business in,
upon or about the Leased Premises and injury to Lessee, its agents, employees,
invitees or third persons, in, upon or about the Leased Premises; and
(b) (notwithstanding anything to the contrary contained in this
Lease, including, without limitation, the definition of "Common Area Costs" in
Section 8.4, which includes "policing") damages to goods, wares, merchandise and
loss of business, in, upon or about the Leased Premises or the Complex, and
injury to Lessee, its agents, employees, invitees or third persons in, upon or
about the Leased Premises or the Complex, where such damage or injury results
from Lessor's failure to police or provide security for the Complex or Lessor's
negligence in connection therewith.
14.7 References. Wherever in this Article the term Lessor or Lessee is
used and such party is to receive the benefit of a provision contained in this
Article, such term shall refer not only to that party but also to its officers,
directors, employees, partners and agents.
ARTICLE 15 DESTRUCTION
15.1 Rights of Termination. In the event the Leased Premises suffers
(a) an "uninsured property loss" (as hereinafter defined), or (b) a property
loss which cannot be repaired within one hundred twenty (120) days from the date
of destruction under the laws and regulations of state, federal, county or
municipal authorities, or other authorities with jurisdiction, Lessor may
terminate this Lease as at the date of the damage upon written notice to Lessee
following the casualty. In the event of a property loss to the Leased Premises
which cannot be repaired within one hundred and sixty-five (165) days of the
occurrence thereof, Lessee shall have the right to terminate the Lease by
written notice to Lessor within twenty (20) days following notice from Lessor
that the time for restoration shall exceed one hundred and sixty-five (165)
days. For purposes of this Lease, the term "uninsured property loss" shall mean
any loss arising from a peril not covered by the standard form of "All Risk"
property insurance policy.
15.2 Repairs. In the event of a property loss which may be repaired
within one hundred twenty (120) days from the date of the damage, or, in the
alternative, in the event the parties do not elect to terminate this Lease under
the terms of Section 15.1 above, then this Lease shall continue in full force
and effect and Lessor shall forthwith undertake to make such repairs to
reconstitute the Leased Premises to as near the condition as existed prior to
the property loss as practicable. Such partial destruction shall in no way annul
or void this Lease except that Lessee shall be entitled to a proportionate
reduction of Minimum Monthly Rent following the property loss and until the time
the Leased Premises are restored. Such reduction shall be an amount which
reflects the degree of interference with Lessee's business. So long as Lessee
conducts its business in the Leased Premises, there shall be no abatement until
the parties agree on the amount thereof. If the parties cannot agree within
forty-five (45) days of the property loss, the matter shall be submitted to
arbitration under the rules of the American Arbitration Association. Upon the
resolution of the dispute, the settlement shall be retroactive and Lessor shall
within ten (10) days thereafter refund to Lessee any sums due in respect of the
reduced rental from the date of the property loss. Lessor's obligations to
restore shall in no way include any construction originally performed by Lessee
or subsequently undertaken by Lessee, but shall include solely that property
constructed by Lessor prior to commencement of the term hereof.
15.3 Repair Costs. The cost of any repairs to be made by Lessor,
pursuant to Section 15.2 of this Lease, shall be paid by Lessor utilizing
available insurance proceeds. Lessee shall reimburse Lessor upon completion of
the repairs for any deductible for which no insurance proceeds will be obtained
under Lessor's insurance policy, or if other premises are also repaired, a pro
rata share based on total costs of repair equitably apportioned to the Leased
Premises. Lessee shall, however, not be responsible to pay any deductible or its
share of any deductible to the extent that Lessee's payment would be in excess
of $10,000 if Lessee's consent has not been received by Lessor, unless such
denial of consent by Lessee is unreasonable. Lessee shall not be responsible for
any portion of the deductible if the damage is not to the Leased Premises,
unless such damage is caused by Lessee, its contractors, agents, employees, or
invitees.
15.4 Waiver. Lessee hereby waives all statutory or common law rights of
termination in respect to any partial destruction or property loss which Lessor
is obligated to repair or may elect to repair under the terms of this Article.
Further, in event of a property loss occurring during the last two (2) years of
the original term hereof or of any extension, Lessor need not undertake any
repairs and may cancel this Lease unless Lessee has the right under the terms of
this Lease to extend the term for an additional period of at least five (5)
years and does so within thirty (30) days of the date of the property loss.
15.5 Lessor's Election. In the event that the Complex or Building in
which the Leased Premises is situated be destroyed to the extent of not less
than thirty-three and one-third percent (33-1/3%) of the replacement cost
thereof, Lessor may elect to terminate this Lease, whether the Leased Premises
be injured or not, in the same manner as in Section 15.1 above. At all events, a
total destruction of the Complex of which the Leased Premises form a part, or
the Leased Premises itself, shall terminate this Lease.
ARTICLE 16 ACCORD AND SATISFACTION
16.1 Acceptance of Payment. No payment by Lessee or receipt by Lessor
of a lesser amount of Minimum Monthly Rent or any other sum due hereunder, shall
be deemed to be other than on account of the earliest due rent or payment, nor
shall any endorsement or statement on any check or any letter accompanying any
such check or payment be deemed an accord and satisfaction, and Lessor may
accept such check or payment without prejudice to Lessor's right to recover the
balance of such rent or payment or pursue any other remedy available in this
Lease, at law or in equity. Lessor may accept any partial payment from Lessee
without invalidation of any contractual notice required to be given herein (to
the extent such contractual notice is required) and without invalidation of any
notice required to be given pursuant to California Code of Civil Procedure
Section 1161, et seq., or of any successor statute thereto.
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ARTICLE 17 SECURITY DEPOSIT
17.1 Payment on Lease Execution. Lessee shall pay Lessor upon execution
hereof the sum specified in Section 1.6. This sum is designated as a Security
Deposit and shall remain the sole and separate property of Lessor until actually
repaid to Lessee (or at Lessor's option the last assignee, if any, of Lessee's
interest hereunder), said stun not being earned by Lessee until all conditions
precedent for its payment to Lessee have been fulfilled. As this sum both in
equity and at law is Lessor's separate property, Lessor shall not be required to
(1) keep said deposit separate from his general accounts, or (2) pay interest,
or other increment for its use. If Lessee fails to pay rent or other charges
when due hereunder, or otherwise defaults with respect to any provision of this
Lease, including and not limited to Lessee's obligation to restore or clean the
Leased Premises following vacation thereof, Lessee, at Lessor's election, shall
be deemed not to have earned the right to repayment of those portions thereof
used or applied by Lessor for the payment of any rent or other charges in
default, or for the payment of any other sum to which Lessor may become
obligated by reason of Lessee's default, or to compensate Lessor for any loss or
damage which Lessor may suffer thereby. Lessor may retain such portion of the
Security Deposit as it reasonably deems necessary to restore or clean the Leased
Premises following vacation by Lessee. The Security Deposit is not to be
characterized as rent until and unless so applied in respect of a default by
Lessee.
17.2 Restoration of Deposit. If Lessor elects to use or apply all or
any portion of the Security Deposit as provided in Section 17.1, Lessee shall
within ten (10) days after written demand therefor pay to Lessor in cash, an
amount equal to that portion of the Security Deposit used or applied by Lessor,
and Lessee's failure to so do shall be a material breach of this Lease. The ten
(10) day notice specified in the preceding sentence shall insofar as not
prohibited by law, constitute full satisfaction of notice of default provisions
required by law or ordinance.
ARTICLE 18 USE
18.1 Permitted Use. The Leased Premises may be used and occupied only
for the purposes specified in Section 1.7 hereof, and for no other purpose or
purposes. Lessee shall promptly comply with all laws, ordinances, orders and
regulations affecting the Leased Premises, their cleanliness, safety, occupation
and use.
ARTICLE 19 COMPLIANCE WITH LAWS AND REGULATIONS
19.1 Lessee's Obligations. Lessee, shall, at its sole cost and expense,
comply with all of the requirements of all municipal, state and federal
authorities now in force, or which may hereafter be in force, pertaining to the
Leased Premises, and shall faithfully observe in the use of the Leased Premises
all municipal ordinances and state and federal statutes now in force or which
may hereafter be in force. The judgment of any court of competent jurisdiction,
or the admission of Lessee in any action or proceeding against Lessee, whether
Lessor be a party thereto or not, that any such ordinance or statute pertaining
to the Leased Premises has been violated, shall be conclusive of that fact as
between Lessor and Lessee.
19.2 Condition of Leased Premises. Subject to Lessor's work, if any, as
referred to in Exhibit "C" to this Lease, Lessee hereby accepts the Leased
Premises in the condition existing as of the date of occupancy, subject to all
applicable zoning, municipal, county and state laws, ordinances, rules,
regulations, orders, restrictions of record, and requirements in effect during
the Term or any part of the Term hereof regulating the Leased Premises.
19.3 Hazardous Materials.
(a) Hazardous Materials Defined. As used herein, the term
"Hazardous Materials" shall mean (i) any hazardous or toxic wastes, materials or
substances, and any other pollutants or contaminants, which are or may become
regulated by any applicable local, state or federal laws, including but not
limited to, 33 U.S.C. Section 1251 et seq., 42 U.S.C. Section 6901 et seq., 42
U.S.C. Section 7401 et seq., 42 U.S.C. Section 9601 et seq., and California
Health and Safety Code Section 25100 et seq., and 25300 et seq., California
Water Code, Section 13020 et seq., or any successor(s) thereto (collectively
"Environmental Laws"); (ii) petroleum; (iii) asbestos; (iv) polychlorinated
biphenyls; and (v) radioactive materials.
(b) Use, etc., of Hazardous Materials. Lessee agrees that during
the Term of this Lease, there shall be no use, presence, disposal, storage,
generation (collectively "Hazardous Use"), or intentional Release, as defined in
42 U.S.C. Section 9601 (22), or any successor(s) thereto, or threatened Release
of Hazardous Materials on, from or under the Leased Premises except to the
extent that, and in accordance with such conditions as, Lessor may have
previously approved in writing. Lessor consents to Lessee's use of office and
janitorial supplies typically used in the ordinary course of business and the
list of materials set forth in Exhibit F (Hazardous Materials List) attached
hereto for use in the manner for which they were designed and in such limited
amounts as may be normal and customary in such a facility, provided that such
usage and storage is in full compliance with Environmental Laws, and all
judicial and administrative decisions pertaining thereto. Lessee shall not be
entitled to install any tanks under, on or about the Leased Premises for the
storage of Hazardous Materials without the express written consent of Lessor,
which may be given or withheld in Lessor's sole arbitrary judgment. For the
purposes of this Section 19.3, the terms Hazardous Use and Release shall include
Hazardous Use(s) and/or Release(s) of Hazardous Materials on, from or under the
Leased Premises by LESSEE OR ANY OF LESSEE'S PARTIES (HEREINAFTER DEFINED),
WHETHER KNOWN OR UNKNOWN TO LESSEE, AT ANY TIME DURING LESSEE'S OCCUPANCY OF ANY
PORTION OF THE LEASED PREMISES, INCLUDING, WITHOUT LIMITATION, DURING ANY PERIOD
IN WHICH LESSEE (OR ANY OF ITS AFFILIATES) OCCUPIED ANY PORTION OF THE LEASED
PREMISES UNDER A SUBLEASE OR OTHER OCCUPANCY AGREEMENT PRIOR TO THE COMMENCEMENT
DATE OF THIS LEASE).
(c) Hazardous Materials Report; When Required. Lessee shall submit
to Lessor a written report with respect to Hazardous Materials ("Report") in the
form prescribed in subparagraph (d) below on the following dates:
(i) Within ten (10) days after the Commencement Date,
(ii) Within ten (10) days after each anniversary of the
Commencement Date during the Term,
(iii) At any time within ten (10) days after written request
by Lessor, and
(iv) At any time when there has been or is planned any
condition which constitutes or would constitute a change in the information
submitted in the most recent Report, including any notice of violation as
referred to in subparagraph (d)(vii) below.
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(d) Hazardous Materials Report; Contents. The Report shall contain,
without limitation, the following information:
(i) Whether on the date of the Report and (if applicable)
during the period since the last Report there has been any Hazardous Use on,
from or under the Leased Premises.
(ii) If there was such Hazardous Use, the exact identity of the
Hazardous Materials, the dates upon which such materials were brought upon the
Leased Premises, the dates upon which the Hazardous Materials were removed
therefrom, and the quantity, location, use and purpose thereof.
(iii) If there was such Hazardous Use, any governmental permits
maintained by Lessee with respect to such Hazardous Materials, the issuing
agency, original date of issue, renewal dates (if any) and expiration date.
Copies of any such permits and applications therefor shall be attached.
(iv) If there was such Hazardous Use, any governmental
reporting or inspection requirements with respect to such Hazardous Materials,
the governmental agency to which reports are made and/or which conducts
inspections, and the dates of all such reports and/or inspections (if
applicable) since the last Report. Copies of any such Reports shall be attached.
(v) If there was such Hazardous Use, identification of any
operation or business plan prepared for any government agency with respect to
Hazardous Use.
(vi) Any liability insurance carried by Lessee with respect to
Hazardous Materials, the insurer, policy number, date of issue, coverage
amounts, and date of expiration. Copies of any such policies or certificates of
coverage shall be attached.
(vii) Any notices of violation of Environmental Laws, written
or oral, received by Lessee from any governmental agency since the last Report,
the date, name of agency, and description of violation. Copies of any such
written notices shall be attached.
(viii) Such other pertinent information or documents as are
requested by Lessor in writing.
(e) Release of Hazardous Materials: Notification and Cleanup. If at
any time during the term Lessee knows or believes that any Release of any
Hazardous Materials has come or will come to be located upon, about, or beneath
the Leased Premises, then Lessee shall, as soon as reasonably possible, either
prior to the Release or following the discovery thereof by Lessee, give verbal
and follow-up written notice of that condition to Lessor. Lessee covenants to
investigate, clean up and otherwise remediate any Release of Hazardous Materials
at Lessee's cost and expense; such investigation, cleanup and remediation shall
be performed only after Lessee has obtained Lessor's written consent, which
shall not be unreasonably withheld; provided, however, that Lessee shall be
entitled to respond immediately to an emergency without first obtaining Lessor's
written consent. All cleanup and remediation shall be done to the reasonable
satisfaction of Lessor. It is the express intention of the parties hereto that
Lessee shall be liable under this Section 19.3(e) for any and all conditions
covered hereby which were caused or created by Lessee or any of its officers,
partners, members, managers, directors, employees, contractors, agents, and
invitees (collectively, "Lessee's Parties").
(f) Inspection and Testing by Lessor. Lessor shall have the right
at all times during the term of this Lease to (i) inspect the Leased Premises,
and to (ii) conduct tests and investigations to determine whether Lessee is in
compliance with the provisions of this Section. Except in case of emergency,
Lessor shall give reasonable notice to Lessee before conducting any inspections,
tests, or investigations. The cost of all such inspections, tests and
investigations shall be borne by Lessee, if Lessor reasonably believes them to
be necessary. Neither any action nor inaction on the part of Lessor pursuant to
this Section 19.3(f) shall be deemed in any way to release Lessee from, or in
any way modify or alter, Lessee's responsibilities, obligations, and/or
liabilities incurred pursuant to Section 19.3 hereof.
(g) Indemnity. Lessee shall indemnify, defend and hold Lessor
harmless from and against any and all claims, judgments, damages, penalties,
fines, liabilities, losses, suits, administrative proceedings and costs
(including, but not limited to, attorneys' and consultants' fees) arising from
or related to Hazardous Use or Release of Hazardous Materials on or about the
Leased Premises caused by the acts or omissions of Lessee or any of Lessee's
Parties.
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19.4 [INTENTIONALLY RESERVED]
19.5 Indemnity. Lessee agrees to indemnify, defend, protect and hold
harmless Lessor, its directors, officers, employees, partners, and agents from
and against any and all losses, claims, demands, actions, damages (whether
direct or consequential), penalties, liabilities, costs and expenses, including
all attorneys' fees and legal expenses, arising out of any violation or alleged
violation of any of the laws or regulations referred to in Section 19.1, or
breach of any of the provisions of Section 19.1.
ARTICLE 20 UTILITIES
20.1 Payment by Lessee. Lessee, from the time it first enters the
Leased Premises for the purpose of setting fixtures, or from the commencement of
this Lease, whichever date shall first occur, and throughout the term of this
Lease, shall pay all charges including connection fees for water, gas, heat,
sewer, power, telephone services and any other utility supplied to or consumed
in or on the Leased Premises. Lessee shall not allow refuse, garbage or trash to
accumulate outside of the Leased Premises except on the day of scheduled
scavenger pick-up services, and then only in areas designated for that purpose
by Lessor. Lessor shall not be responsible or liable for any interruption in
utility services, nor shall such interruption affect the continuation or
validity of this Lease.
20.2 Separate Meters. Lessor reserves the right to install separate
meters for any utility servicing the Leased Premises for which a meter is not
presently installed, in which event Lessee shall make payments, when due,
directly to the utility involved.
20.3 Joint Meters. If any utility services are not separately metered
to Lessee, Lessee shall pay a proportion to be reasonably determined by Lessor
of all charges jointly metered with other leased premises or occupants in the
Complex. All payments to Lessor in respect thereof shall be due within ten (10)
days after receipt of the billing by Lessee.
ARTICLE 21 ALTERATIONS
21.1 Consent of Lessor; Ownership. Lessee shall not make, or suffer to
be made, any alterations to the Leased Premises, or any part thereof, without
the written consent of Lessor first had and obtained. Lessor shall not
unreasonably withhold consent unless alteration involves or affects structural
components of the Building, utilities serving the Building or other tenants, or
involves a disruption of the Building's fire/safety system. Any additions to, or
alterations of, the Leased Premises, except trade fixtures, shall upon
expiration or termination of this Lease become a part of the realty and belong
to Lessor. Except as otherwise provided in this Lease, Lessee shall have the
right to remove its trade fixtures placed upon the Leased Premises provided that
Lessee restores the Leased Premises as indicated below.
21.2 Requirements. Any alterations, additions or installations
performed by Lessee (hereinafter collectively "alterations") shall be subject to
strict conformity with the following requirements:
(a) All alterations shall be at the sole cost and expense of
Lessee;
(b) Prior to commencement of any work of alteration, Lessee shall
submit detailed plans and specifications, including working drawings
(hereinafter referred to as "Plans"), of the proposed alterations, which shall
be subject to the consent of Lessor in accordance with the terms of Section
21.1 above;
(c) Following approval of the Plans by Lessor, Lessee shall give
Lessor at least ten (10) days' prior written notice of commencement of work in
the Leased Premises so that Lessor may post notices of non-responsibility in or
upon the Leased Premises as provided by law;
(d) No alterations shall be commenced without Lessee having
previously obtained all appropriate permits and approvals required by and of
governmental agencies;
(e) All alterations shall be performed in a skillful and
workmanlike manner, consistent with the best practices and standards of the
construction industry, and pursued with diligence in accordance with the Plans
previously approved by Lessor and in full accord with all applicable laws and
ordinances. All material, equipment, and articles incorporated in the
alterations is to be new, and of recent manufacture, and of the most suitable
grade for the purpose intended;
(f) Lessee must obtain the prior written approval from Lessor for
Lessee's contractor prior to commencement of the work. Lessee's contractor shall
maintain all of the insurance reasonably required by Lessor, including, without
limitation, commercial general liability and workers' compensation. The limits
of such insurance shall be the same as those specified in Article 11;
(g) As a condition of approval of the alterations, Lessor may
require performance and labor and materialmen's payment bonds issued by a surety
approved by Lessor, in a sum equal to the cost of the alterations guarantying
the completion of the alterations free and clear of all liens and other charges
in accordance with the Plans. Such bonds shall name Lessor as beneficiary;
(h) The alterations must be performed in a manner such that they
will not interfere with the quiet enjoyment of the other lessees in the Complex.
21.3 Liens. Lessee shall keep the Leased Premises and the Complex in
which the Leased Premises are situated free from any liens arising out of any
work performed, materials furnished or obligations incurred by Lessee. In the
event a mechanic's or other lien is filed against the Leased Premises or the
Complex of which the Leased Premises forms a part as a result of a claim arising
through Lessee, Lessor may demand that Lessee furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to at least one hundred fifty percent
(150%) of the amount of the contested lien claim or demand, indemnifying Lessor
against liability for the
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same and holding the Leased Premises free from the effect of such lien or claim.
Such bond must be posted within ten (10) days following notice from Lessor. In
addition, Lessor may require Lessee to pay Lessor's attorneys' fees and costs in
participating in any action to foreclose such lien if Lessor shall decide it is
to its best interest to do so. Lessor may pay the claim prior to the enforcement
thereof, in which event Lessee shall reimburse Lessor in full, including
attorneys' fees, for any such expense, as additional rent, with the next due
rental.
21.4 Restoration. Lessee shall return the Leased Premises to Lessor at
the expiration or earlier termination of this Lease in good and sanitary order,
condition and repair, free of rubble and debris, broom clean, reasonable wear
and tear excepted. However, Lessee shall ascertain from Lessor at least thirty
(30) days prior to the termination of this Lease, whether Lessor desires the
Leased Premises, or any part thereof, restored to its condition prior to the
making of permitted alterations, installations and improvements, and if Lessor
shall so desire, then Lessee shall forthwith restore said Leased Premises or the
designated portions thereof as the case may be, to its original condition,
entirely at its own expense, excepting normal wear and tear. If, at the time
Lessee asks for Lessor's consent to alter the Leased Premises, Lessee requests
in writing that Lessor decide whether the requested alteration will have to be
removed at the end of the Lease, then the Lessor will provide a decision at the
time the alteration request is granted. All damage to the Leased Premises
caused by the removal of such trade fixtures and other personal property that
Lessee is permitted to remove under the terms of this Lease and/or such
restoration shall be repaired by Lessee at its sole cost and expense prior to
termination.
ARTICLE 22 MAINTENANCE AND REPAIRS
22.1 Obligations of Lessor and Lessee. Lessee shall, at its sole cost
and expense, keep and maintain the Leased Premises and appurtenances, and every
part thereof in good and sanitary order, condition and repair including all
necessary replacements. Notwithstanding the foregoing, Lessor shall perform all
necessary repairs, maintenance and replacement of the foundation, roof and
structural parts of the Building. The cost thereof shall be paid by Lessor and
reimbursed by Lessee on a pro rata basis in the manner provided in this Lease
with respect to Common Area Costs, including amortization of Capital Costs.
Lessee's pro rata share shall be a fraction, the numerator of which shall be the
number of square feet in the Leased Premises, and the denominator of which shall
be the number of square feet in the Building. All such amounts shall be due
within ten (10) days after Lessee's receipt of billing. Lessee shall, at its
sole cost, keep and maintain all utilities, fixtures and mechanical equipment
used by Lessee in good order, condition and repair. In the case of equipment
installed by Lessor for Lessee, or installed by Lessee and being or to become
the property of Lessor, such as heating, ventilating and air conditioning
equipment, or other mechanical equipment, Lessee shall maintain a service
contract for its regular maintenance with a service company acceptable to
Lessor, at Lessee's expense. Evidence of such a service contract will be
provided to Lessor at its request.
22.2 HVAC System. Notwithstanding the provisions of the preceding
Section, Lessor may elect at any time upon written notice to Lessee to perform
the maintenance of the heating, ventilating and air conditioning system
(hereinafter "HVAC") for the account of Lessee. In such event, Lessee shall pay
the full cost of the maintenance contract for the HVAC in the Leased Premises
within ten (10) days of receipt of billing therefor from Lessor, as well as for
costs of repair or replacement of parts thereof as necessary, in the reasonable
judgment of Lessor. Lessor may, at its option, elect to have the HVAC in the
Leased Premises maintained in common with other equipment in the Complex. In
such event Lessee shall pay its pro rata share of such maintenance costs which
share shall be established in an equitable manner by Lessor based upon the
relative tonnage in the Leased Premises compared to the total tonnage under
contract, or some other reasonable means of allocation as selected by Lessor.
Lessor's good faith judgment as to the allocation of the charges described in
this paragraph shall be conclusive. Included in the charges to be allocated to
Lessee shall be, without limitation: the maintenance contract upon the HVAC,
extended warranties and any repairs and replacements not covered by the
maintenance contract or warranty. Lessor may elect to replace the HVAC system,
if necessary, and in such event the cost thereof shall be amortized in the
manner provided in this Lease with respect to amortization of other Capital
Costs. Lessee shall pay to Lessor, within ten (10) days after receipt of
billing, its pro rata share of such amortization, established on an equitable
basis according to the relative tonnage in the Leased Premises as compared to
the entire area served by the system. Notwithstanding the preceding contained
in Articles 22.1 or 22.2, there is another option that Lessor, at its option,
may elect: Lessor may elect to contract with a HVAC service provider for
quarterly filter changes and periodic inspections of the HVAC equipment
("Periodic Inspections"). The costs of such Periodic Inspections are to be
billed back to Lessee. If the service contract Lessor enters into covers more
HVAC equipment than that which is serving the Leased Premises, then Lessee shall
pay their share as determined by numerator being the tonnage of HVAC equipment
serving the Leased Premises and the denominator being the total tonnage of all
of the HVAC equipment covered by the service contract. HVAC related costs, other
than Periodic Inspections, necessary to maintain the HVAC system in top
operating condition (repairs, replacements, coil cleaning, etc.) shall be the
responsibility of Lessee. All costs due by Lessee to Lessor in this section
shall be due within ten (10) days after receipt of billing.
22.3 Condition of Premises. Except as to the construction obligations
of Lessor, if any, stated in Exhibit "C" to this Lease, Lessee shall accept the
Leased Premises in "as is" condition as of the date of execution of this Lease
by Lessee, and Lessee acknowledges that the Leased Premises in such condition
are in good and sanitary order, condition and repair.
22.4 Waiver. Lessee waives all rights it may have under law to make
repairs at Lessor's expense.
ARTICLE 23 CONDEMNATION
23.1 Definitions.
(a) "Condemnation" means (i) the exercise of any governmental
power, whether by legal proceedings or otherwise, by a condemnor and/or (ii) a
voluntary sale or transfer by Lessor to any condemnor, either under threat of
condemnation or while legal proceedings for condemnation are pending.
(b) "Date of taking" means the date the condemnor has the right to
possession of the property being condemned.
(c) "Award" means all compensation, sums or anything of value
awarded, paid or received on a total or partial condemnation.
(d) "Condemnor" means any public or quasi-public authority, or
private corporation or individual, having the power of condemnation.
23.2 Total Taking. If the Leased Premises are totally taken by
condemnation, this Lease shall terminate on the date of taking.
23.3 Partial Taking
(a) If any portion of the Leased Premises is taken by condemnation,
this Lease shall remain in effect, except that Lessee can elect to terminate
this Lease if any of the Lease Premises is taken.
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(b) If any part of the Common Areas of the Complex are taken by
condemnation, this Lease shall remain in full force and effect so long as there
is no material interference with the access to the Leased Premises, except that
if thirty percent (30%) or more of the Common Area is taken by condemnation,
either party shall have the election to terminate this Lease pursuant to this
Section.
(c) If any of the Building in which the Leased Premises are
located is taken, Lessor shall have the election to terminate this Lease in the
manner prescribed herein.
23.4 Termination or Abatement. If either party elects to terminate this
Lease under the provisions of Section 23.3 (such party is hereinafter referred
to as the "Terminating Party"), it must terminate by giving notice to the other
party (the "Nonterminating Party") within thirty (30) days after the nature and
extent of the taking have been finally determined (the "Decision Period"). The
Terminating Party shall notify the Nonterminating Party of the date of
termination, which date shall not be earlier than sixty (60) days after the
Terminating Party has notified the Nonterminating Party of its election to
terminate nor later than the date of taking. If Notice of Termination is not
given within the Decision Period, the Lease shall continue in full force and
effect except that Minimum Monthly Rent shall be reduced by subtracting
therefrom an amount calculated by multiplying the Minimum Monthly Rent in effect
prior to the taking by a fraction the numerator of which is the number of square
feet taken from the Leased Premises and the denominator of which is the number
of square feet in the Leased Premises prior to the taking.
23.5 Restoration. If there is a partial taking of the Leased Premises
and this Lease remains in full force and effect pursuant to this Article,
Lessor, at its cost, shall accomplish all necessary restoration so that the
Leased Premises is returned as near as practical to its condition immediately
prior to the date of the taking, but in no event shall Lessor be obligated to
expend more for such restoration than the extent of funds actually paid to
Lessor by the condemnor.
23.6 Award. Any award arising from the condemnation or the settlement
thereof shall belong to and be paid to Lessor except that Lessee shall receive
from the award compensation for the following if specified in the award by the
condemning authority, so long as it does not reduce Lessor's award in respect of
the real property: Lessee's trade fixtures, tangible personal property,
goodwill, loss of business and relocation expenses. At all events, Lessor shall
be solely entitled to all award in respect of the real property, including the
bonus value of the leasehold. Lessee shall not be entitled to any award until
Lessor has received the above sum in full.
ARTICLE 24 EMPLOYEE PARKING
24.1 Designated Areas. Lessor shall have the right by written notice to
Lessee, to designate specific areas of the Complex for employee parking. If
Lessor so designates an employee parking area, then automobiles of Lessee, its
employees and agents shall not park within the parking area except in areas
delineated by Lessor as "employee parking." Lessee shall be entitled to park in
common with other tenants of Lessor. Lessee agrees not to overburden the parking
facilities and agrees to cooperate with Lessor and other tenants in the use of
parking facilities. Lessor reserves the right in its absolute discretion, to
determine whether parking facilities are becoming crowded and, in such event, to
allocate and assign parking spaces among Lessee and other Lessees. Upon request,
Lessee shall provide Lessor with the license plate numbers of all employees.
ARTICLE 25 ABANDONMENT
25.1 Lessee to Occupy. Lessee shall not abandon the Leased Premises at
any time during the Lease term, nor permit the Leased Premises to remain
unoccupied for a period longer than ten (10) consecutive days during the Lease
term, and if Lessee shall abandon, vacate or surrender the Leased Premises, or
be dispossessed by process of law, or otherwise, any personal property belonging
to Lessee and remaining on the Leased Premises after such ten (10) day period
shall, at the option of Lessor, be deemed abandoned. Notwithstanding the
preceding, Lessee will not be considered to have abandoned the Leased Premises
if the Lessee is continuing to make timely payments of rent, additional rents,
and estimated payments and is fulfilling all other obligations required of
Lessee by this Lease.
ARTICLE 26 ENTRY BY LESSOR
26.1 Rights of Lessor. Lessee shall permit Lessor and Lessor's agents
and any mortgagee under a mortgage or beneficiary under a deed of trust
encumbering the Building containing the Leased Premises and such party's agents
to enter the Leased Premises at all reasonable times for the purpose of
inspecting the same or for the purpose of maintaining the Building, or for the
purpose of making repairs, alterations or additions to any portion of the
Building, including the erection and maintenance of such scaffolding, canopies,
fences and props as may be required, or for the purpose of posting notices of
non-responsibility for alterations, additions or repairs, or for the purpose of
placing upon the Building any usual or ordinary "for sale" signs, without any
rebate of Rent and without any liability to Lessee for any loss of occupation or
quiet enjoyment of the Leased Premises thereby occasioned, and shall permit
Lessor, at any time within ninety (90) days prior to the expiration of this
Lease, to place upon the Leased Premises any usual or ordinary "to let" or "to
lease" signs. This Section in no way affects the maintenance obligations of the
parties hereto.
ARTICLE 27 SIGNS
27.1 Approval, Installation and Maintenance. Lessee shall not place on
the Leased Premises or on the Complex, any exterior signs or advertisements nor
any interior signs or advertisements that are visible from the exterior of the
Leased Premises, without Lessor's prior written consent, which Lessor reserves
the right to withhold for any aesthetic reason in its sole judgment. The cost of
installation and regular maintenance of any such signs approved by Lessor shall
be at the sole expense of Lessee. At the termination of this Lease, or any
extension thereof, Lessee shall remove all his signs, and all damage caused by
such removal shall be repaired at Lessee's expense.
ARTICLE 28 DEFAULT
28.1 Definition. The occurrence of any of the following shall
constitute a material default and breach of this Lease by Lessee:
(a) Any failure by Lessee to pay the rental or to make any other
payment required to be made by Lessee hereunder within ten (10) days
after delivery by Lessor to Lessee of a notice of default and the
failure of Lessee to cure within said (10) day period the default. The
foregoing notice and opportunity to cure is in lieu of and not in
addition to any notice and cure under applicable law;
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(b) The abandonment of the Leased Premises by Lessee in violation
of Section 25.1 hereof;
(c) A failure by Lessee to observe and perform any other provision
of this Lease to be observed or performed by Lessee, where such failure
continues for ten (10) days after written notice thereof by Lessor to Lessee;
provided, however, that if the nature of the default is such that the same
cannot reasonably be cured within the ten (10) day period allowed, Lessee shall
not be deemed to be in default if Lessee shall, within such ten (10) day period,
commence to cure and thereafter diligently prosecute the same to completion;
(d) Either (1) the appointment of a receiver (except a receiver
appointed at the instance or request of Lessor) to take possession of all or
substantially all of the assets of Lessee, or (2) a general assignment by Lessee
for the benefit of creditors, or (3) any action taken or suffered by Lessee
under any insolvency or bankruptcy act shall constitute a breach of this Lease
by Lessee. In such event, Lessor may, at its option, declare this Lease
terminated and forfeited by Lessee, and Lessor shall be entitled to immediate
possession of the Leased Premises. Upon such notice of termination, this Lease
shall terminate immediately and automatically by its own limitation;
(e) Any two (2) failures by Lessee to observe and perform any
provision of this Lease during any twelve (12) month period of the term, as such
may be extended, shall constitute, at the option of Lessor, a separate and
noncurable default.
ARTICLE 29 REMEDIES UPON DEFAULT
29.1 Termination and Damages. In the event of any default by Lessee,
then in addition to any other remedies available to Lessor herein or at law or
in equity, Lessor shall have the immediate option to terminate this Lease and
all rights of Lessee hereunder by giving written notice of such intention to
terminate. In the event that Lessor shall elect to so terminate this Lease, then
Lessor may recover from Lessee:
(a) The worth at the time of award of any unpaid rent which had
been earned at the time of such termination; plus
(b) 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 Lessee proves could have been
reasonably avoided; plus
(c) 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 Lessee proves could be reasonably avoided; plus
(d) Any other amount necessary to compensate Lessor for all the
detriment proximately caused by Lessee's failure to perform its obligations
under this Lease or which in the ordinary course of events would be likely to
result therefrom; and
(e) At Lessor's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by the applicable
law in the state in which the Leased Premises are located.
29.2 Definitions.
(a) The term "rent," as used in this Lease, shall be deemed to be
and to mean the Minimum Monthly Rent and all other sums required to be paid by
Lessee pursuant to the terms of this Lease.
(b) As used in subsections 29.1(a) and (b) above, the "worth at
the time of award" is computed by allowing interest at the rate of ten percent
(10%) per annum. As used in subsection 29.1(c) above, the "worth at the time of
award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank for the region in which the Complex is located at the time
of award plus one percent (1%).
29.3 Personal Property.
(a) In the event of any default by Lessee, Lessor shall also have
the right, with or without terminating this Lease, to reenter the Leased
Premises and remove all persons and property from the Leased Premises; such
property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Lessee.
(b) In the event of default, all of Lessee's fixtures, furniture,
equipment, improvements, additions, alterations and other personal property
shall remain upon the Leased Premises and in that event, and continuing during
the length of such default, Lessor shall have the sole right to take exclusive
possession of such property and to use it, rent or charge free, until all
defaults are cured or, at Lessor's option, at any time during the term of this
Lease, to require Lessee to forthwith remove such property. The rights stated
herein are in addition to Lessor's rights described in Section 30.1.
29.4 Recovery of Rent; Reletting.
(a) In the event of the vacation or abandonment of the Leased
Premises by Lessee or in the event that Lessor shall elect to reenter as
provided in Section 29.3 above, or shall take possession of the Leased Premises
pursuant to legal proceeding or pursuant to any notice provided by law, then if
Lessor does not elect to terminate this Lease as provided in Section 29.1 above,
this Lease shall continue in effect for so long as Lessor does not terminate
Lessee's right to possession, and Lessor may enforce all its rights and remedies
under this Lease, including, without limitation, Lessor's right from time to
time, without terminating this Lease, to either recover all rental as it becomes
due or relet the Leased Premises or any part thereof for such term or terms and
at such rental or rentals and upon such other terms and conditions as Lessor, in
its sole discretion, may deem advisable with the right to make alterations and
repairs to the Leased Premises. Acts of maintenance or preservation or efforts
to relet the Leased Premises or the appointment of a receiver upon initiation of
Lessor or other legal proceeding granting Lessor or its agent possession to
protect Lessor's interest under this Lease shall not constitute a termination of
Lessee's right to possession.
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(b) In the event that Lessor shall elect to so relet, then rentals
received by Lessor from such reletting shall be applied: first, to the payment
of any indebtedness other than rent due hereunder from Lessee to Lessor; second,
to the payment of any cost of such reletting; third, to the payment of the cost
of any alterations and repairs to the Leased Premises; fourth, to the payment
of rent due and unpaid hereunder; and the residue, if any, shall be held by
Lessor and applied in payment of future rent as the same may become due and
payable hereunder. Should that portion of such rentals received from such
reletting during any month, which is applied by the payment of rent hereunder,
be less than the rent payable during that month by Lessee hereunder, then Lessee
shall pay such deficiency to Lessor immediately upon demand therefor by Lessor.
Such deficiency shall be calculated and paid monthly. Lessee shall also pay to
Lessor, as soon as ascertained, any costs and expenses incurred by Lessor in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.
(c) No reentry or taking possession of the Leased Premises or any
other action under this Section shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Lessee or
unless the termination thereof be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Lessor because of any
default by Lessee, Lessor may at any time after such reletting elect to
terminate this Lease for any such default.
(d) Lessor has the remedy described in California Civil Code
Section 1951.4 (Lessor may continue Lease in effect after Lessee's breach and
abandonment and recover rent as it becomes due, if Lessee has right to sublet or
assign, subject only to reasonable limitations).
29.5 No Waiver. Efforts by Lessor to mitigate the damages caused by
Lessee's default in this Lease shall not constitute a waiver of Lessor's right
to recover damages hereunder, nor shall Lessor have any obligation to mitigate
damages except as required under applicable law.
29.6 Curing Defaults. Should Lessee fail to repair, maintain, and/or
service the Leased Premises, or any part or contents thereof at any time or
times, or perform any other obligations imposed by this Lease or otherwise, then
after having given Lessee reasonable notice of the failure or failures and a
reasonable opportunity, which in no case shall exceed thirty (30) days provided
that Lessee can demonstrate to Lessor's satisfaction that Lessee commenced to
cure the default within ten (10) days of Lessor's notice and has been diligently
pursuing the completion, to remedy the failure, Lessor may perform or contract
for the performance of the repair, maintenance, or other Lessee obligation, and
Lessee shall pay Lessor for all direct and indirect costs incurred in connection
therewith within thirty (30) days of receiving a xxxx therefor from Lessor.
29.7 Cumulative Remedies. The various rights, options, election powers,
and remedies of Lessor contained in this Article and elsewhere in this Lease
shall be construed as cumulative and no one of them exclusive of any others or
of any legal or equitable remedy which Lessor might otherwise have in the event
of breach or default, and the exercise of one right or remedy by Lessor shall
not in any way impair its right to any other right or remedy.
ARTICLE 30 FORFEITURE OF PROPERTY AND LESSOR'S LIEN
30.1 Removal of Personal Property. Lessee agrees that as at the date
of termination of this Lease or repossession of the Leased Premises by Lessor,
by way of default or otherwise, it shall remove all personal property to which
it has the right to ownership pursuant to the terms of this Lease.
ARTICLE 31 SURRENDER OF LEASE
31.1 No Merger. The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, shall not work as a merger, and shall,
at the option of Lessor, terminate all or any existing subleases or
subtenancies, or may, at the option of Lessor, operate as an assignment to it of
any or all such subleases or subtenancies.
ARTICLE 32 LESSOR'S EXCULPATION
32.1 Limited Liability. In the event of default, breach, or violation
by Lessor (which term includes Lessor's partners, co-venturers, co-tenants,
officers, directors, employees, agents, or representatives) of any Lessor's
obligations under this Lease, Lessor's liability to Lessee shall be limited to
its ownership interest in the Leased Premises (or its interest in the Complex,
if applicable) or the proceeds of a public sale of such interest pursuant to
foreclosure of a judgment against Lessor, and applicable insurance coverage for
the recovery of any judgment against Lessor. Lessor may, at its option, and
among its other alternatives, relieve itself of all liability under this Lease
by conveying the Leased Premises to Lessee. Notwithstanding any such conveyance,
Lessee's leasehold and ownership interest shall not merge.
32.2 No Recourse. Lessor (as defined in Section 32.1) shall not be
personally liable for any deficiency beyond its interest in the Leased Premises
and applicable insurance coverage for the recovery of any judgment against
Lessor.
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ARTICLE 33 ATTORNEYS' FEES
33.1 Actions, Proceedings, etc. Lessee hereby agrees to pay, as
additional rent, all reasonable attorneys' fees and disbursements, and all other
court costs or expenses of legal proceedings or other legal services which
Lessor may incur or pay out by reason of, or in connection with:
(a) any action or proceeding brought by Lessor wherein
Lessor obtains a final judgment or award against Lessee (including arbitration)
on account of any default by Lessee in the observance or performance of any
obligation under this Lease including, but not limited to, matters involving
payment of rent and additional rent, alterations or other Lessee's work and
subletting or assignment;
(b) any action or proceeding brought by Lessee against
Lessor (or any officer, partner, or employee of Lessor) in which Lessee fails to
secure a final judgment against Lessor;
(c) any other appearance by Lessor (or any officer,
partner, or employee of Lessor) as a witness or otherwise in any action or
proceeding whatsoever involving or affecting Lessee or this Lease;
(d) any assignment, sublease, or leasehold mortgage
proposed or granted by Lessee (whether or not permitted under this Lease), and
all negotiations with respect thereto; and
(e) any alteration of the Leased Premises by Lessee, and
all negotiations with respect thereto.
In any action or proceeding referred to in subsection (a),
Lessee shall be entitled to recover its attorneys' fees and costs if Lessee is
the prevailing party against Lessor.
33.2 Survival. Lessee's obligations under this Section shall survive
the expiration or any other termination of this Lease. This Section is intended
to supplement (and not to limit) other provisions of this Lease pertaining to
indemnities and/or attorney's fees.
33.3 Counsel Fees. Should it be necessary for Lessor to employ legal
counsel to enforce any of the provisions of this Lease, Lessee agrees to pay,
as additional rent, all attorneys' fees and court costs reasonably incurred
thereby, whether or not Lessor commences any legal action or proceeding.
ARTICLE 34 NOTICES
34.1 Writing. All notices, demands and requests required or permitted
to be given or made under any provision of this Lease, shall be in writing and
shall be given or made by personal service or by mailing same by registered or
certified mail, return receipt requested, postage prepaid, or by reputable
courier which provides written evidence of delivery, addressed to the
respective party at the address set forth in Section 1.2 of this Lease or at
such other address as the party may from time to time designate, by a written
notice, sent to the other in the manner aforesaid.
34.2 Effective Date. Any such notice, demand or request ("notice")
shall be deemed given or made on the third day after the date so mailed.
Notwithstanding the foregoing, notice given by personal delivery to the party
at its address as aforesaid shall be deemed given on the day on which delivery
is made. Notice given by a reputable courier service which provides written
evidence of delivery shall be deemed given on the business day immediately
following deposit with the courier service.
34.3 Authorization to Receive. Each person and/or entity whose
signature is affixed to this Lease as Lessee or as guarantor of Lessee's
obligations ("obligor") designates such other obligor its agent for the purpose
of receiving any notice pertaining to this Lease or service of process in the
event of any litigation or dispute arising from any obligation imposed by this
Lease.
ARTICLE 35 SUBORDINATION
35.1 Priority of Encumbrances. This Lease shall be subordinate to
any ground lease, mortgage, deed of trust, or any other hypothecation for
security now or hereafter placed upon the real property of which the Leased
Premises are a part and to any and all advances made on the security thereof
and to all renewals, modifications, consolidations, replacements and extensions
thereof. Notwithstanding such subordination, Lessee's right to quiet possession
of the Leased Premises shall not be disturbed if Lessee is not in default and
so long as Lessee shall pay the rent and observe and perform all the provisions
of this Lease, unless this Lease is otherwise terminated pursuant to its terms.
If any mortgagee, trustee or ground lessor shall elect to have this Lease prior
to the lien of its mortgage, deed of trust or ground lease, and shall give
written notice thereof to Lessee, this Lease shall be deemed prior to such
mortgage, deed of trust or ground lease, whether this Lease is dated prior or
subsequent to the date of said mortgage, deed of trust or ground lease or the
date of recording thereof.
35.2 Execution of Documents. Lessee agrees to execute any documents
required to effectuate such subordination or to make this Lease prior to the
lien of any mortgage, deed of trust or ground lease, as the case may be, and
failing to do so within ten (10) days after written demand, does hereby make,
constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact and in
Lessee's name, place and stead, to do so. It is understood by all parties that
Lessee's failure to execute the subordination documents referred to above may
cause Lessor serious financial damage by causing the failure of a financing or
sale transaction.
35.3 Attornment. If the holder of any ground lease, mortgage, deed
of trust or security described above (or its successor-in-interest), enforces
its remedies provided by law or under the pertinent mortgage, deed of trust or
security instrument and succeeds to Lessor's interest in the Leased Premises,
Lessee shall, upon request of any person succeeding to the interest of such
lender as result of such enforcement, automatically become the lessee of said
successor-in-interest without change in the terms or other provisions of this
Lease, provided, however, that said successor-in-interest shall not be (i)
bound by any payment of rent for more than thirty (30) days in advance, except
prepayment in the nature of security for the performance by Lessee of its
obligations under this Lease, (ii) bound by any modification or amendment of
this Lease to shorten the term or decrease the monthly rent without the consent
of such lender or such successor-in-interest, (iii) liable for any act or
omission of any previous landlord (including Lessor), (iv) subject to any
offset, defense, recoupment or counterclaim that Lessee may have given to any
previous landlord (including Lessor), or (v) liable for any
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deposit that Lessee may have given to any previous landlord (including Lessor)
that has not, as such, been transferred to said successor-in-interest. Within
ten (10) days after receipt of request by said successor-in-interest, Lessee
shall execute and deliver an instrument or instruments confirming such
attornment, including a non-disturbance, attornment and subordination agreement
in a form required by any such successor-in-interest.
ARTICLE 36 ESTOPPEL CERTIFICATES
36.1 Execution by-Lessee. Within ten (10) days after receipt of written
request by Lessor, Lessee shall execute and deliver to Lessor an estoppel
certificate acknowledging such facts regarding this Lease as Lessor may
reasonably require, including without limitation, that (i) (all provided that
the following is true and correct) this Lease is in full force and effect,
binding and enforceable in accordance with its terms and unmodified (or if
modified, specifying the written modification documents); (ii) no default exists
on the part of Lessor or Lessee under this Lease; (iii) there are no events
which with the passage of time, or the giving of notice, or both, would create a
default under this Lease; (iv) no rent in excess of one month's rent has been
paid in advance; (v) Lessee has not received any written notice of any other
sale, assignment, transfer, mortgage or pledge of this Lease or the rent due
hereunder; and (vi) Lessee has no defense, setoff, recoupment or counterclaim
against Lessor. Any such estoppel certificate may be relied upon by Lessor, any
lender or any prospective purchaser of the Building or Complex or any interest
therein. Failure to comply with this Article shall be a material breach of this
Lease by Lessee giving Lessor all rights and remedies under Article 29 hereof,
as well as a fight to damages caused by the loss of a loan or sale which may
result from such failure by Lessee.
36.2 Financing. If Lessor desires to finance or refinance the Leased
Premises, or any part thereof, or the Building, Lessee hereby agrees to deliver
to any lender designated by Lessor such financial statements of Lessee as may be
reasonably required by such lender. Such statements shall include the past three
(3) years' financial statements of Lessee. All such financial statements shall
be received by Lessor in confidence and shall be used only for the purposes
herein set forth.
ARTICLE 37 WAIVER
37.1 Effect of Waiver. The waiver by Lessor of any breach of any Lease
provision shall not be deemed to be a waiver of such Lease provision or any
subsequent breach of the same or any other term, covenant or condition therein
contained. The subsequent acceptance of rent hereunder by Lessor shall not be
deemed to be a waiver of any preceding breach by Lessee of any provision of this
Lease, other than the failure of Lessee to pay the particular rental so
accepted, regardless of Lessor's knowledge of such preceding breach at the time
of acceptance of such rent.
ARTICLE 38 HOLDING OVER
38.1 Month-to-Month Tenancy on Acceptance. If Lessee should remain in
possession of the Leased Premises after the expiration of the Lease term and
without executing a new Lease, then, upon acceptance of rent by Lessor, such
holding over shall be construed as a tenancy from month to month, subject to all
the conditions, provisions and obligations of this Lease as existed during the
last month of the term hereof, so far as applicable to a month to month tenancy,
except that the Minimum Monthly Rent shall be equal to one and a half times the
Minimum Monthly Rent payable immediately prior to the expiration or sooner
termination of the Lease.
ARTICLE 39 SUCCESSORS AND ASSIGNS
39.1 Binding Effect. The covenants and conditions herein contained
shall, subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of all of the parties hereto;
and all of the parties hereto shall be jointly and severally liable hereunder.
ARTICLE 40 TIME
40.1 Time of the Essence. Time is of the essence of this Lease with
respect to each and every article, section and subsection hereof.
ARTICLE 41 EFFECT OF LESSOR'S CONVEYANCE
41.1 Release of Lessor. If, during the term of this Lease, Lessor shall
sell its interest in the Building or Complex of which the Leased Premises forms
a part, or the Leased Premises, then from and after the effective date of the
sale or conveyance, Lessor shall be released and discharged from any and all
obligations and responsibilities under this Lease, except those already accrued.
ARTICLE 42 TRANSFER OF SECURITY
42.1 Transfer to Purchaser. If any security be given by Lessee to
secure the faithful performance of all or any of the covenants of this Lease on
the part of Lessee, Lessor may transfer and/or deliver the security, as such, to
the purchaser of the reversion, in the event that the reversion be sold, and
thereupon Lessor shall be discharged from any further liability in reference
thereto.
ARTICLE 43 CORPORATE AUTHORITY
43.1 Authorization to Execute. If Lessee is a corporation, each
individual executing this Lease on behalf of said corporation represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf
of said corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the Bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. Further, Lessee shall, within thirty (30) days after execution
of this Lease, deliver to Lessor a certified copy of a resolution of the Board
of Directors of said corporation authorizing or ratifying the execution of this
Lease.
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ARTICLE 44 WAIVER OF CALIFORNIA CODE SECTIONS
44.1 Waiver by Lessee. In this Lease, numerous provisions have been
negotiated by the parties, some of which provisions are covered by statute.
Whenever a provision of this Lease and a provision of any statute or other law
cover the same matter, the provisions of this Lease shall control. Therefore,
Lessee waives (for itself and all persons claiming under Lessee) the provisions
of Civil Code Sections 1932(2) and 1933(4) with respect to the destruction of
the Leased Premises; Civil Code Sections 1941 and 1942 with respect to Lessor's
repair duties and Lessee's right to repair; Code of Civil Procedure Section
1265.130, allowing either party to petition the Superior Court to terminate this
Lease in the event of a partial taking of the Leased Premises by condemnation as
herein defined; and any right of redemption or reinstatement of Lessee under any
present or future case law or statutory provision (including Code of Civil
Procedure Sections 473 and 1179 and Civil Code Section 3275) in the event Lessee
is dispossessed from the Leased Premises for any reason. This waiver applies to
future statutes enacted in addition to or in substitution for the statutes
specified herein.
ARTICLE 45 WASTE
45.1 Waste or Nuisance. Lessee shall not commit, or suffer to be
committed, any waste upon the Leased Premises, or any nuisance, or other act or
thing which may disturb the quiet enjoyment of any other tenant or occupant of
the Complex in which the Leased Premises are located.
ARTICLE 46 BANKRUPTCY
46.1 Bankruptcy Events. If at any time during the term of this Lease
there shall be filed by or against Lessee in any court pursuant to any statute
either of the United States or of any State a petition in bankruptcy or
insolvency or for reorganization or for the appointment of a receiver or trustee
of all or a portion of Lessee's property, or if a receiver or trustee takes
possession of any of the assets of Lessee, or if the leasehold interest herein
passes to a receiver, or if Lessee makes an assignment for the benefit of
creditors or petitions for or enters into an arrangement (any of which are
referred to herein as "a bankruptcy event"), then the following provisions shall
apply:
(a) At all events any receiver or trustee in bankruptcy or Lessee
as debtor in possession ("debtor") shall either expressly assume or reject this
Lease within sixty (60) days following the entry of an "Order for Relief."
(b) In the event of an assumption of the Lease by a debtor,
receiver, or trustee, such debtor, receiver, or trustee shall immediately after
such assumption (1) cure any default or provide adequate assurances that
defaults will be promptly cured; and (2) compensate Lessor for actual pecuniary
loss or provide adequate assurances that compensation will be made for actual
pecuniary loss; and (3) provide adequate assurance of future performance.
For the purposes of this paragraph 46.1 (b), adequate assurance of
future performance of all obligations under this Lease shall include, but is not
limited to:
(i) written assurance that rent and any other consideration due
under the Lease shall first be paid before any other of Lessee's costs of
operation of its business in the Leased Premises are paid;
(ii) written agreement that assumption of this Lease will not
cause a breach of any provision hereof including, but not limited to, any
provision relating to use or exclusivity in this or any other Lease, or
agreement relating to the Leased Premises, or if such a breach is caused, the
debtor, receiver or trustee will indemnify Lessor against such loss (including
costs of suit and attorney's fees), occasioned by such breach;
(c) Where a default exists under the Lease, the party assuming the
Lease may not require Lessor to provide services or supplies incidental to the
Lease before its assumption by such trustee or debtor, unless Lessor is
compensated under the terms of the Lease for such services and supplies provided
before the assumption of such Lease.
(d) The debtor, receiver, or trustee may only assign this Lease if
adequate assurance of future performance by the assignee is provided, whether or
not there has been a default under the Lease. Any consideration paid by any
assignee in excess of the rental reserved in the Lease shall be the sole
property of, and paid to, Lessor. Upon assignment by the debtor or trustee, the
obligations of the Lease shall be deemed to have been assumed, and the assumptor
shall execute an assignment agreement on request of Lessor.
(e) Lessor shall be entitled to the fair market value for the
Leased Premises and the services provided by Lessor (but in no event less than
the rental reserved in the Lease) subsequent to the commencement of a bankruptcy
event.
(f) Lessor specifically reserves any and all remedies available to
Lessor in Article 29 hereof or at law or in equity in respect of a bankruptcy
event by Lessee to the extent such remedies are permitted by law.
(g) Nothing in this Article 46 shall be deemed to limit any rights
which Lessee may have under the law.
ARTICLE 47 LATE CHARGES
47.1 Late Payment by Lessee. Lessee acknowledges that late payment by
Lessee to Lessor of rent or any other payment due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impractical to fix. Such costs include, without
limitation, processing and accounting charges, and late charges that may be
imposed on Lessor by the terms of any encumbrance and note secured by any
encumbrance covering the Leased Premises. Therefore, if any installment of rent,
or any other payment due hereunder from Lessee is not received by Lessor when
due, Lessee shall pay to Lessor an additional sum of $500.00 as a late charge;
provided, however, that if such payment has not been received within ten (10)
days after Lessor's delivery of written notice of default to Lessee, then Lessee
shall pay to Lessor a late charge of ten percent (10%) of such past due payment.
The parties agree that this late charge represents a fair and reasonable
estimate of the cost that Lessor will incur by reason of late payment by Lessee.
Acceptance of any late charge shall not constitute a waiver of Lessee default
with respect to the overdue amount, or prevent Lessor from exercising any other
rights or remedies available to Lessor.
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ARTICLE 48 MORTGAGEE PROTECTION
48.1 Notice and Right to Cure Default. Lessee agrees to give any
mortgagee(s) and/or trust deed holders, by registered mail, a copy of any notice
of default served upon Lessor, provided that prior to such notice Lessee has
been notified, in writing (by way of Notice of Assignment of Rents and Leases,
or otherwise), of the address of such mortgagees and/or trust deed holders.
Lessee further agrees that if Lessor shall have failed to cure such default
within the time provided for in this Lease, then the mortgagees and/or trust
deed holders shall have an additional thirty (30) days within which to cure such
default or, if such default cannot be cured within that time, then such
additional time as may be necessary if within such thirty (30) days, any
mortgagee and/or trust deed holder has commenced and is diligently pursuing the
remedies necessary to cure such default (including but not limited to
commencement of foreclosure proceedings, if necessary to effect such cure), in
which event this Lease shall not be terminated while such remedies are being so
diligently pursued.
ARTICLE 49 MISCELLANEOUS PROVISIONS
49.1 Captions. The captions of this Lease are for convenience only and
are not a part of this lease and do not in any way limit or amplify the terms
and provisions of this Lease.
49.2 Number and Gender. Whenever the singular number is used in this
Lease and when required by the context, the same shall include the plural, the
plural shall include the singular, and the masculine gender shall include the
feminine and neuter genders, and the word "person" shall include corporation,
firm or association. If there be more than one Lessee, the obligations imposed
under this Lease upon Lessee shall be joint and several.
49.3 Modifications. This instrument contains all of the agreements,
conditions and representations made between the parties to this Lease and may
not be modified orally or in any other manner than by an agreement in writing
signed by all of the parties to this Lease.
49.4 Payments. Except as otherwise expressly stated, each payment
required to be made by Lessee shall be in addition to and not in substitution
for other payments to be made by Lessee.
49.5 Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
49.6 No Offer. The preparation and submission of a draft of this Lease
by either party to the other shall not constitute an offer, nor shall either
party be bound to any terms of this Lease or the entirety of the Lease itself
until both parties have fully executed a final document and an original
signature document has been received by both parties. Until such time as
described in the previous sentence, either party is free to terminate
negotiations with no obligation to the other.
49.7 Disputed Sums. Under the terms of this Lease numerous charges are
and may be due from Lessee to Lessor including, without limitation, Common Area
charges, real estate taxes, insurance reimbursement and other items of a similar
nature including advances made by Lessor in respect of Lessee's default at
Lessor's option. In the event that at any time during the term there is a bona
fide dispute between the parties as to the amount due for any of such charges
claimed by Lessor to be due, the amount demanded by Lessor shall be paid by
Lessee until the resolution of the dispute between the parties or by litigation.
Failure by lessee to pay the disputed sums until resolution shall constitute a
default under the terms of the Lease.
49.8 Lessee's Remedies. Notwithstanding anything to the contrary
contained in this Lease, if any provision of this Lease expressly or impliedly
obligates Lessor not to unreasonably withhold its consent or approval, an action
for declaratory judgment or specific performance will be Lessee's sole right and
remedy in any dispute as to whether Lessor has breached such obligation.
49.9 Light, Air and View. No diminution of light, air, or view by any
structure which may hereafter be erected (whether or not by Lessor) shall
entitle Lessee to any reduction of Rent, result in any liability of Lessor to
Lessee, or in any other way affect this Lease or Lessee's obligations hereunder.
49.10 Public Transportation Information. To the extent required by law,
Lessee shall establish and maintain during the Term hereof a program to
encourage maximum use of public transportation by personnel of Lessee employed
on the Leased Premises, including without limitation the distribution to such
employees of written materials explaining the convenience and availability of
public transportation facilities adjacent or proximate to the Complex,
staggering working hours of employees, and encouraging use of such facilities,
all at Lessee's sole reasonable cost and expense. Lessee shall comply with all
requirements of any local transportation management ordinance.
49.11 Rules and Regulations. Lessee agrees to comply with all
reasonable rules and regulations adopted and promulgated by Lessor and
applicable to all tenants in the Complex for the lawful, orderly, clean, safe,
aesthetic, quiet, and beneficial use, operation, maintenance, management, and
enjoyment of the Complex.
49.12 Joint and Several Liability. Should Lessee consist of more than
one person or entity, they shall be jointly and severally liable on this Lease.
49.13 Survival of Obligations. All obligations of Lessee which may
accrue or arise during the term of this Lease or as a result of any act or
omission of Lessee during said term shall, to the extent they have not been
fully performed, satisfied or discharged, survive the expiration or termination
of this Lease.
49.14 Real Estate Brokers. Lessor and Lessee each represents and
warrants to the other party that it has not authorized or employed, or acted by
implication to authorize or employ, any real estate broker or salesman to act
for it in connection with this Lease, except for the Broker identified in
Article 1. Lessor and Lessee shall each indemnify, defend and hold the other
party harmless from and against any and all claims by any real estate broker or
salesman whom the indemnifying party authorized or employed, or acted by
implication to authorize or employ, to act for the indemnifying party in
connection with this Lease. The real estate broker identified in Article 1 shall
be paid by Lessor in accordance with the terms of a separate agreement between
the Lessor and the broker.
49.15 Authority. Lessor represents and warrants to Lessee that Divco
Western Property Management is the duly authorized agent for Lessor with
authority to execute this Lease on behalf of Lessor and that the person signing
this Lease on behalf of Lessee has been duly authorized to execute and deliver
this Lease on behalf of Lessor.
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IN WITNESS WHEREOF, Lessor AND Lessee HAVE executed this Lease as of the day and
year first written above.
LESSOR: GATEWAY NORTH PROPERTIES, L.L.C.,
A DELAWARE LIMITED LIABILITY CORPORATION
By Divco Western Property Management, L.L.C.,
its duly authorized agent
By: /s/ XXXXXX XXXXXXX
--------------------------------------
Xxxxxx Xxxxxxx
Its: Manager
-------------------------------------
Date: 8/6/96
------------------------------------
LESSEE: INNOVA CORPORATION,
A WASHINGTON CORPORATION
By: /s/ XXXX XXXXXXXXX
--------------------------------------
Print: Xxxx Xxxxxxxxx
-----------------------------------
Its: CFO
-------------------------------------
Date: 7/30/96
------------------------------------
FOR OFFICE USE ONLY:
PREPARED BY:______________
REVIEWED BY:______________
APPROVED BY:______________
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NOTARY
LESSOR
STATE OF CALIFORNIA )
) ss.
COUNTY OF SANTA XXXXX )
On this 6th day of August, 1996, before me, the undersigned, a Notary Public
and for the State of California, duly commissioned and sworn, personally
appeared Jordan Abernon, to me known to be the Manager of Divco Western
Property Management, L.L.C., the limited liability corporation that executed
the within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned and on oath stated that he/she was authorized to execute said
instrument.
WITNESS my hand and official seal hereto affixed the day and year in
this certificate above written.
GREAT XXXXXXX XXXXXXXX /s/ XXXXXXX XXXXXXXX
SEAL Comm. #1055930 -----------------------------
OF THE NOTARY PUBLIC -- CALIFORNIA Xxxxxxx Xxxxxxxx
STATE OF SANTA XXXXX COUNTY Notary Public in and for
CALIFORNIA Comm. Exp. April 18, 1999 the State of California
My Appointment Expires 4/18/99
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 30th day of July, 1996, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Xxxx X. Xxxxxxxxx, to me known to be the Chief Financial
Officer of Innova Corporation, the corporation that executed the within and
foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes therein
mentioned and on oath stated that he/she was authorized to execute said
instrument.
WITNESS my hand and official seal hereto affixed the day and year in
this certificate above written.
XXXX X. XXXXXXX /s/ XXXX XXXXXXX
NOTARY PUBLIC ------------------------------
COMMISSION EXPIRES Xxxx Xxxxxxx
JUNE 30, 1998 Notary Public in and for
STATE OF WASHINGTON the State of Washington
My Appointment Expires 6/30/98
25
ADDENDUM TO LEASE
This Addendum to Lease ("Addendum") shall constitute part of that certain Lease
("Lease") dated as of APRIL 16, 1996 by and between GATEWAY NORTH PROPERTIES,
L.L.C. ("Lessor") and INNOVA CORPORATION, INC. ("Lessee"), and the terms hereof,
shall, for all purposes, be incorporated into the Lease. Whenever any
inconsistency appears between the main portion of the Lease and this Addendum,
the provisions of the Addendum shall prevail.
I. LEASE CLAUSE ADDITIONS:
Paragraph 1.5 (A) - Rent
The Minimum Monthly Rent pursuant to Paragraph 1.5(a) is subject to adjustment
per the following schedule:
Months 0 1 - 12 Twenty-three thousand eight hundred and sixty-four dollars
($23,864.00) per month; plus NNN.
Months 13 - 24 Twenty-five thousand six hundred and fifteen dollars
($25,615.00) per month plus NNN.
Months 25 - 36 Twenty-seven thousand three hundred and sixty-seven dollars
($27,367.00) per month plus NNN.
Months 37 - 48 Twenty-nine thousand four hundred and sixty-nine dollars
($29,469.00) per month plus NNN.
Months 49 - 60 Thirty thousand six hundred and seventy-six dollars
($30,676.00) per month plus NM.
page 1 of 1
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EXHIBIT A
LEGAL DESCRIPTION
New Parcels A, B, and C of the City of Tukwila Boundary Line Adjustment
#89-8-BLA as recorded under King County recording #9003121480, records of King
County, Washington.
27
EXHIBIT B
[GATEWAY NORTH
28 ACRE BUSINESS PARK - SITE PLAN]
28
EXHIBIT X-0
[XXXXXXX XXXXX
XXXXXXXX 0 - XXXXX XXXX]
00
EXHIBIT "C"
CONSTRUCTION OBLIGATIONS
INNOVA CORPORATION, INC.
Lessor, as part of this Lease Agreement, agrees to construct tenant improvements
in accordance with the following description and the floor plan attached hereto
as Exhibit "C-1". Any item or quantity of work exceeding the improvements
outlined below and on Exhibit "C-1" shall be performed by Lessor's contractor at
Lessee's sole expense, and shall include, without limitation, architectural
fees, permits, construction materials, labor, Contractor's overhead and profit
and Washington State Sales Tax. Working (construction) drawings for special
installations shall be furnished to Lessor by Lessee, who shall be responsible
for the design, function and maintenance of the special improvements, whether or
not installed by Lessor at Lessee's request.
The tenant improvements to be installed by Lessor within the Premises prior to
the commencement of the Lease Term on a time is of the essence basis shall
consist of the following:
(THIS DESCRIPTION AND EXHIBIT C-1 will BE INSERTED IN SUBSEQUENT LEASE DRAFT)
page 1 of 1
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EXHIBIT "C"
CONSTRUCTION OBLIGATIONS
INNOVA CORPORATION, INC.
Lessor, as part of this Lease Agreement, agrees to construct tenant improvements
in accordance with the following description and the floor plan attached hereto
as Exhibit "C-1". Any item or quantity of work exceeding the improvements
outlined below and on Exhibit "C-1" shall be performed by Lessor's contractor at
Lessee's sole expense, and shall include, without limitation, architectural
fees, permits, construction materials, labor, Contractor's overhead and profit
and Washington State Sales Tax. Working (construction) drawings for special
installations shall be furnished to Lessor by Lessee, who shall be responsible
for the design, function and maintenance of the special improvements, whether or
not installed by Lessor at Lessee's request.
The tenant improvements to be installed by Lessor within the Premises prior to
the commencement of the Lease Term on a time is of the essence basis shall
consist of the following:
1. Construct a standard demising wall along building gridline #13.
2. Separate gas and electrical services so that the sections of the
building between grid lines #9 through #13 are independent from grid
lines #13 through #16. Electrical panels and transformers serving the
area within building grid lines #13 through #16 are to be located
within gridlines #13 through #16.
3. Relocate existing double doors and metal frame to column line #9. Frame
and install wood trim to threshold where door was removed and paint
(paint supplied by Lessee).
4. On column line #9 in what was formerly the Corinthian reception room,
install a building standard door with hardware and finish to match
existing. Paint east wall of former Corinthian reception room to match
the remainder of the room.
5. Phasing: The demising wall is to be built first. Then the doors are to
be installed.
6. Dust: When working on the wall along gridline #9, the only attempt to
limit dust will be the draping of plastic sheeting over the section of
wall that is undergoing alteration.
7. This space is leased in "as is" condition. Other than those
improvements outlined in this Exhibit, no other improvements are the
obligation of Lessor to perform. The walls of the former Corinthian
space could clearly use a coat of paint, but other than that noted in
number 4 above, no paint will be provided by Lessor.
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EXHIBIT C-1
[MAP]
32
DOOR SCHEDULE:
1 3'-0" X 8'-0" S.C. WOOD AND FRAME, 2 PAIR BUTTS, LATCHSET, SILENCERS,
WALL STOP FINISH AND HARDWARE TO MATCH EXISTING IN OFFICES
NOTES:
1. ONLY WORK BEING DONE IS AN ADDITION OF A DEMISING WALL AT GRIDLINE 13,
2 DOORS AT GRIDLINE 9 AND A SEPARATION OF UTILITIES.
2. VERIFY EX. UTILITIES FOR EX. INNOVA SPACE (GRIDLINES 1-9) ARE SEPARATED
FROM ALL OTHER UTILITIES.
3. CREATE SEPARATION OF UTILITIES (ELECTRIC AND GAS) FOR NEW INNOVA SPACE
(GRIDLINES 9-13) AND EX. VACANT SPACE (GRIDLINES 13-16.)
4. NO CHANGE IN ENERGY CODE, DUE TO NO CHANGE IN LIGHTING PLAN OR EX.
BUILDING ENVELOPE.
Innova Exhibit C-la
33
EXHIBIT "D"
ACKNOWLEDGMENT OF COMMENCEMENT
This Acknowledgment is made as of ________________, with reference to
that certain Lease Agreement (hereinafter referred to as the "lease") dated
_____________________, by and between_______________, as "Lessor" therein, and
___________________________, as "Lessee", for the demised premises situated
at_______________________.
The undersigned hereby confirms the following:
1. That the Lessee accepted possession of the Demised Premises (as
described in said lease) on___________________ , and acknowledges that the
premises are as represented by the Lessor and in good order, condition and
repair; and that the improvements, if any, required to be constructed for Lessee
by Lessor under this lease have been so constructed and are satisfactorily
completed in all respects.
2. That all conditions of said lease to be performed by Lessor
prerequisite to the full effectiveness of said lease have been satisfied and
that Lessor had fulfilled all of its duties of an inducement nature.
3. That in accordance with the provisions of Article 3 of said lease
the commencement date of the term is_______________________________ , and that,
unless sooner terminated, the original term thereof expires
on______________________.
4. That said lease is in full force and effect and that the same
represents the entire agreement between Lessor and Lessee concerning said lease.
5. That there are no existing defenses which Lessee has against the
enforcement of said lease by Lessor, and no offsets or credits against rentals.
6. That the minimum rental obligation of said lease is presently in
effect and that all rentals, charges and other obligations on the part of Lessee
under said lease commenced to accrue on____________________________.
7. That the undersigned Lessee has not made any prior assignment,
hypothecation or pledge of said lease or of the rents thereunder.
LESSEE:
BY:_________________________________
BY:_________________________________
34
EXHIBIT "E"
GATEWAY NORTH
RULES AND REGULATIONS
1. Any directory provided by Lessor for the building will be for the
display of the name and location of Lessees, and Lessor reserves the
right to exclude any other names.
2. Lessee shall not place any new or additional locks on any doors of the
Premises or rekey any existing locks without the consent of Lessor.
3. Lessor reserves the right to exclude or expel from the common areas any
person who, in the judgment of Lessor, is intoxicated, under the
influence of drugs or who shall in any manner violate any of the rules
and regulations.
4. Lessee shall not do or permit to be done within the Premises anything
which would unreasonably annoy or interfere with the rights of other
tenants of the building.
5. Lessee shall not permit its employees or invitees to loiter in or about
the common areas, or to obstruct any of the parking, truck maneuvering
or other common areas, or to place, empty or throw any rubbish, litter,
trash or material of any nature upon any common area.
6. No storage of materials, equipment or property of any kind is permitted
outside the Premises and any such property may be removed by Lessor at
Lessee's risk and expense.
7. Lessee shall not make or permit any use of the Premises which may be
dangerous to life, limb or property or any noise, odor or vibrations to
emit from the Premises which are objectionable to Lessor or other
occupants of the Building, or to create, maintain or permit a nuisance
or any violation or any regulation of any governmental agency thereon.
8. Lessee shall not commit or permit to be committed any waste, damage or
injury to the Premises, the Building or parking, loading and other
common areas adjoining and shall promptly repair the same at its
expense.
9. Lessee understands that any equipment required for maintenance of the
Premises is Lessee's responsibility and that Lessor has no equipment
available for Lessee's use therefore, e.g. ladders or lifts for
relamping, etc.
10. Lessee shall use the Premises and shall operate its equipment on the
Premises in a safe and prudent manner, and any damage or cracks
occurring in the floor of the Premises shall be promptly repaired by
Lessee at its expense.
11. Lessee shall not at any time display a "For Rent" sign upon the
Premises.
12. Lessee shall be responsible for keeping a copy of the lease and
Lessor's current rules and regulations upon the Premises.
13. Lessee agrees to cause its employees to park only in such areas as may
be designated by Lessor from time to time for employee parking.
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14. Lessee shall not waste electricity or water and agrees to cooperate
fully with Lessor to assure the most effective and economical use of
utilities services as may be provided to the Building by Lessor.
15. Lessee shall keep Lessor advised of the current telephone numbers of
Lessee's employees who may be contacted in an emergency, i.e. fire,
break-in, vandalism, etc. If Lessor shall deem it necessary to respond
to such emergency in Lessee's behalf, Lessee shall pay all costs
incurred for services ordered by Lessor to secure or otherwise protect
the Premises and the contents thereof, including a premium charge for
any time spent by Lessor's employees in responding to such emergency.
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EXHIBIT "F"
HAZARDOUS MATERIALS LIST
INNOVA CORPORATION, INC.
ACETONE: QUANTITY LESS THAN TWO GALLONS
ISOPROPANOL: QUANTITY LESS THAN TWO GALLONS
"FLUX-OFF": QUANTITY LESS THAN TWO GALLONS
