Exhibit 10.16 - Commercial Lease between Coral Tree Commerce Center
Associates as Landlord, and the Company, as Tenant,
dated April 10, 1996.
CORAL TREE COMMERCE CENTER
INDUSTRIAL LEASE
Quadrax Corporation
April 10, 1996
WPA DEVELOPMENT
0000 Xxxxx Xxx., Xxxxx X
Xxxxx, XX. 00000
(000) 000-0000
CORAL TREE COMMERCE CENTER
TABLE OF CONTENTS
1. Parties
2. Premises, Parking and Common Areas
2.1 Premises
2.2 Vehicle Parking
2.3 Common Areas - Definition
2.4 Common Areas - Lessee's Rights
2.5 Common Areas - Rules and Regulations
2.6 Common Areas - Changes
3. Term
3.1 Term
3.2 Delay in Possession
3.3 Early Possession
3.4 Option to Extend Lease
4. Rent
4.1 Base Rent
4.2 Operating Expenses
4.3 Increased Base Rent
5. Security Deposit
6. Uses and Uses Prohibited
6.1 Use
6.2 Compliance With Law
6.3 Condition of Premises
6.4- - Uses Prohibited
6.5 Toxic, Radioactive and Hazardous Materials
7. Maintenance, Repairs, Alterations and Common Area Services
7.1 Lessor's Obligations
7.2 Lessee's Obligation
7.3 Alterations and Additions
7.4 Utility Additions
8. Insurance; Indemnity
8.1 Liability Insurance - Lessee
8.2 Liability Insurance - Lessor
8.3 Property Insurance
8.4 Payment of Premiums and Premium Increases
8.5 Insurance Policies
8.6 Waiver of Subrogation
8.7 Indemnity
8.8 Exemption of Lessor from Liability
9. Damage or Destruction
9.1 Definitions
9.2 Premises Partial Damage
9.3 Premises Total Destruction; Premises Building
Total Destruction;
Industrial Center Buildings Total Destruction
9.4 Damage Near End of Term
9.5 Lessor's Failure to Repair Timely
9.6 Termination - Advance Payments
9.7 Waiver
10. Real Property Value
10.1 Payment of Taxes
10.2 Additional Improvements
10.3 Definition of Real Property Tax
10.4 Joint Assessment
10.5 Personal Property Tax
11. Utilities
12. Subletting and Assignment
12.1 No Assignment; consent required to Sublet
12.2 Lessee Affiliate
12.3 Terms and Conditions Applicable to Subletting
12.4 Attorney's Fees 16
13. Default; Remedies
13.1 Default
13.2 Remedies
13.3 Default by Lessor
13.4 Late Charges
14. Condemnation; Retroactive Building Code Changes
14.1 Condemnation
14.2 Condemnation Award
15. Brokers
16. Estoppel Certificate
17. Lessor's Liability
18. Severability
19. Interest on Past-due Obligations
20. Time of Essence
21. Additional Rent 19
22. Incorporation of Prior Agreements; Modification of Agreement 19
23. Notices 19
24. Waivers 19
25. Recording 19
26. Holding Over
27. Cumulative Remedies
28. Covenants and Conditions
29. Binding Effect; Choice of Law
30. Subordination
31. Attorney's Fees
32. Lessor's Access
33. Auctions
34. Signs
35. Merger
36. Consents
37. Quite Possession
38. Security Measures
39. Easements
40. Performance Under Protest
41. Authority
42. Options
42.1 Definition
42.2 Options Personal
42.3 Multiple Options
42.4 Effect of Default on Options
43. Offer
44. Amendments
45. Exhibits
Acceptance and Signatures
CORAL TREE COMMERCE CENTER ASSOCIATES
INDUSTRIAL LEASE
1. Parties. This Lease, dated, for reference purposes only,
April 10, 1996 is made by and between Coral Tree Commerce Center
Associates (herein called "Lessor") and Quadrax Corporation, A
Delaware Corporation (herein called "Lessee").
2. Premises, Parking and Common Areas.
2.1 Premises. Lessor hereby leases to Lessee and
Lessee leases from Lessor for the term, at the rental, and upon all of
the conditions set forth herein, that certain real property situated
in the County of San Diego, State of California, commonly known as
0000 Xxxxxxx Xxx., Xxxxxx X & X, Xxxxx, Xxxxxxxxxx, 00000 containing
approximately 9,573 square feet (and as may be outlined on Exhibit "A"
attached hereto), herein referred to as the "Premises," including
right to the Common Areas as hereinafter specified, but not including
any rights to the roof of the Premises or to any Building in the
Industrial Center. The Premises are a portion of a building, herein
referred to as the "Building." The Premises, the Building., the Common
Areas, the land upon which the same are located, along with all other
buildings and improvements thereon, are herein collectively referred
to as the "Industrial Center."
2.2 Vehicle Parking. Lessee shall be entitled to
twenty (20) vehicle parking spaces, unreserved and unassigned, on
those portions of the Common Areas designated by Lessor for parking.
Lessee shall not use more parking spaces than said number. Said
parking spaces shall be used only for parking by vehicles no larger
than full size six passenger automobiles or two ton trucks.
2.2.1 Lessee shall not permit or allow any
vehicles that belong to or are controlled by Lessee or Lessee's
agents, employees, contractors, customers, suppliers, shippers,
licensees or invitees to be loaded, unloaded, or parked in areas other
that those designated by Lessor for such activities.
2.2.2 Lessee shall not permit or allow any
personal vehicles that belong to or controlled by Lessee or Lessee's
agents, employees, contractors, customers, suppliers, shippers,
licensees or invitees to be parked overnight or over weekends.
Commercial vehicles which require overnight or weekend parking must be
registered with Lessor.
2.2.3. If Lessee permits or allows any of the
prohibited activities described in Paragraph 2.2.2 of this Lease then
Lessor shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove or tow away the
vehicle involved and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.
2.3 Common Areas - Definition. The term "Common
Areas" is defined as all areas and facilities outside the Premises and
within the exterior boundary line of the Industrial Center that are
provided and designated by Lessor from time to time for the general
non-exclusive use of Lessor, Lessee, and of other lessees of the
Industrial Center and their respective employees, contractors,
customers, suppliers, shippers, customers or invitees, including
parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, driveways and landscaped areas.
2.4 Common Areas - Lessee's Rights. Lessor hereby
grants to Lessee, for the benefit of Lessee and its employees,
suppliers, shippers, customers and invitees, during the term of this
Lease, the non-exclusive right to use, in common with others entitled
to such use, the Common Areas as they exist from time to time, subject
to any rights, powers, and privileges reserved by Lessor under the
terms hereof or under the terms of any rules, regulations and
restrictions governing the use of the Industrial Center. Under no
circumstances shall the right herein granted to use the Common Areas
be, deemed to include the right to store any property, temporarily or
permanently, in the Common Areas except for Lessee's vehicles. Any
such storage shall be permitted only by the prior written consent of
Lessor shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove the property and
charge the cost to Lessee, which cost shall be immediately payable
upon Lessor's demand.
2.5 Common Areas - Rules and Regulations. Lessor or
such other person(s) as Lessor may appoint shall have the exclusive
control and management of the Common Areas and shall have the right,
from time to time, to establish, modify, amend and enforce reasonable
rules and regulations with respect thereto. Lessee agrees to abide by
and conform to all such rules and regulations, and to cause its
agents, employees, contractors, customers, suppliers, shippers,
licensees or invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and
regulations by other Lessees of the Industrial Center.
2.6 Common Areas - Changes. Lessor shall have the
right, at Lessor's sole discretion, from time to time:
(a) To make changes to the Common Areas,
including, without limitation, changes in the location, size, shape
and number of driveways, entrances, parking spaces, parking areas,
loading and unloading areas, ingress, egress, direction to traffic,
landscaped areas and walkways;
(b) To close temporarily any of the Common
Areas for maintenance purposes, so long as reasonable access to the
Premises remains available;
(c) To add additional buildings and
improvements to the Common Areas;
(d) To use the Common Area while engaged in
making additional improvements, repairs or alterations to the
Industrial Center, or any portion thereof;
(e) To do and perform such other acts and make
such other changes in, to, or with respect to the Common Areas and
Industrial Center as Lessor may, in the exercise of sound business
judgment, deem to be appropriate.
3. Term.
3.1 Term. The term of this Lease shall be for sixty (60)
months commencing June 1, 1996 or sooner(the "commencement date") and
ending on May 31, 2001 unless terminated sooner pursuant to any
provision hereof.
3.2 Delay in Possession. Notwithstanding the commencement
date, if for any reason Lessor cannot deliver possession of the
Premises to Lessee on said date, Lessor shall not be subject to any
liability therefore, nor shall such failure affect the validity of
this Lease or the obligations of Lessee hereunder, but in such a case
Lessee shall not be obligated to pay rent or Lessee's Share of
Operating Expenses (as those terms are defined hereinafter) until
possession of the Premises is tendered to Lessee; provided, however,
that if Lessor shall not have delivered possession of the Premises
within ninety (90) days from said commencement date, Lessee may at
Lessee's option, by notice in writing to Lessor within ten (10) days
following the expiration of said ninety (90) day period, cancel this
Lease, in which event the parties shall be discharged from all
obligations hereunder; provided further, however, that if such written
notice from Lessee is not received by Lessor within said ten (10) day
period, Lessee's right to cancel this Lease hereunder shall terminate
and be of no further force or effect. In the event of a delay in
possession, the Commencement Date shall be the date on which
possession of the Premises is tendered to Lessee, and the term of this
Lease shall be for sixty (60)months from such date.
3.3 Early Possession. If Lessee occupies the Premises prior
to the commencement date, such occupancy shall be subject to all
provisions of the Lease, such occupancy shall not advance the
termination date, except that Lessee shall pay no rent for such
period.
3.4 Option to Extend Lease. Subject to the provisions of
Article 42 and each and every other provision of this Lease, Lessee
shall have the right to extend this Lease by one (1) three (3) year
period. Lessee shall give Lessor written notice not less than one
hundred twenty (120) days prior to the expiration of the initial term
of this Lease of its intent to exercise this option to extend. Base
Rent during the first year of said option period shall be at the then
current market for like facilities of comparable size, location and
quality of construction, and/or a five (5%) percent increase over the
previous years base rent, whichever is greater. For each successive
year of the option period, the Base Rent shall increase by five
percent (5%) pursuant to paragraph 4.3 of this Lease. Base Rent during
the option period, prior to the determination of the then current
market rate, shall be at the Base Rent in effect during the
immediately preceding year plus ten percent (10%), but shall be
retroactively adjusted when the then current market rate has been
determined; notwithstanding the aforementioned, in no event shall the
Base Rent during the first year of the option period be less than that
of the last year of the term.
3.4.1 In the event that the parties hereto cannot, prior
to the commencement of the option terms, agree upon the current market
rate, they shall agree upon a licensed commercial real estate broker
who is familiar with the that specific industrial market, or such
other person as may be mutually acceptable, (the "Arbiter") and said
Arbiter shall determine the then current market rate. The then
current market rate so determined shall be binding upon the parties
and binding upon the parties and shall be the Base Rent for the first
year of the option period. The Arbiter's fees shall be shared equally
by-Lessor and Lessee.
3.4.2. In the event that the parties cannot agree upon an
Arbiter as hereinabove required, they shall each, within fifteen (15)
days of written demand therefore by either party, designate a licensed
commercial real estate broker or other person (the "Representatives")
to determine the then current market rate as hereinabove described.
Each of the two said Representatives shall then, within thirty (30)
days of his appointment, determine the then current market rate as
herein required, agree upon a third person who shall be a licensed
commercial real estate broker who is familiar with the that specific
industrial market (the "Arbiter") and submit in writing his said
determination of market rate to the Arbiter. Within fifteen (15) days
of his appointment, the Arbiter shall choose, without averaging or
compromising in any way, the market rate determined by one of the two
Representatives. The then current market rate so determined shall be
binding upon the parties and shall be the Base Rent for the first year
of the option period. Each party shall pay the fees of its own
representative; the Arbiter's fees shall be paid by the party who's
Representative's submitted market rate determination was rejected
by the Arbiter.
4. Rent.
4.1 Base Rent. Lessee shall pay to Lessor, as Base
Rent for the premises, without any offset or deduction, except as may
be otherwise expressly provided in this lease, on the first day of
each month of the term hereof, monthly payments, in advance, of
$4403.58. Lessee shall pay Lessor upon execution hereof $4403.58 as
Base Rent for the month of June, 1996. Base Rental shall be as -
follows:
June 1, 1996 - May 31, 1997 $4403.58
June 1, 1997 - May 31, 1998 $4595.04
June 1, 1998 - May 31, 1999 $4786.50
June 1, 1999 - May 31, 2000 $4977.96
June 1, 2000 - May 31, 2001 $5169.42
Each month shall consist of thirty (30) days and all procation
shall be based accordingly. Rent for any period during the term
hereof which is for less than one month shall be a daily pro rata
portion of the Base Rent. Rent shall be payable in lawful money of
the United States to Lessor at the address stated herein or to such
other persons or at such other places as Lessor -may designate in
writing.
4.2. Operating Expenses. Lessee shall pay to Lessor as Rent
during the term hereof, in addition to the Base Rent, Lessee's Share,
as hereinafter defined, of all Operating Expenses, as hereinafter
defined, during each calendar year of the term of this Lease, in
accordance with the following provisions:
(a) "Lessee's Share" is defined, for purposes of this
Lease, as twenty-five point zero seven percent (25.07%) of expenses
relating to the Building and seven point three two percent (7.32%) of
expenses relating to the Industrial Center and/or Common Areas.
(b) "Operating Expenses" is defined, for purposes of
this Lease, as all costs incurred by Lessor for:
(i) Any deductible portion of an insured loss
concerning any of the items or matters described in this paragraph
4.2;
(ii) The cost of the premiums for the liability and the
property insurance policies to be maintained by Lessor under Article 8
of this Lease;
(iii) The amount of "real property tax" (as defined in
paragraph 10.3) to be paid by Lessor under Article 10 hereof;
(iv) The cost of water, gas and electricity to service
the Common Areas; and
(v) The operation, repair, maintenance, and replacement
if required, (including routine inspection and service contracts) in
neat, clean, good order and condition, of the following:
(A) The Common Areas, including parking areas,
loading and unloading areas, trash areas, roadways, sidewalks,
parkways, driveways, landscaped areas, striping, bumpers, irrigation
systems, Common Area lighting facilities and fences and gates;
(B) Trash disposal services;
(C) Tenant directories;
(D) Fire detection and sprinkler systems,
including the maintenance and repair thereof;
(E) Security services;
(F) HVAC;
(G) Roof repair;
(H) Downspouts, gutters, and roof drainage
facilities; and
(I) Any other service to be provided by Lessor
that is elsewhere in this Lease stated to be
an "Operating Expense."
(J) Reserves
(vi) Any capital improvement which will conceivably
reduce prorating expenses as may be mandated by law;
(vii) All costs associated with the supervision and
administration of the Common Areas. Said costs shall include
reasonable fees for such supervision and administration, and shall
equal not more than ten percent (10%) of the total Operating Expenses
defined in subsections (i) through (vi), inclusive.
(c) The inclusion of any improvements, facilities or services in
the definition of Operating Expenses shall not be deemed to impose an
obligation upon Lessor to either have said improvements or facilities
or to provide those services unless Lessor has agreed elsewhere in
this Lease to provide the same.
(d) Lessee's Share of Operating Expenses shall be payable by
Lessee within five (5) days after a reasonably detailed statement of
actual expenses is presented to Lessee by Lessor. At Lessor's option,
however, an amount may be estimated by Lessor from time to time of
Lessee's Share of annual Operating Expenses and the same shall be
payable monthly (or otherwise, as Lessor shall designate) during each
twelve month period of the Lease term, on the same day as the Base
Rent is due hereunder. In the event that Lessee pays Lessor's
estimate of Lessee's Share of Operating Expenses as aforesaid, Lessor
shall deliver to Lessee within sixty (60) days after the expiration of
each calendar year a reasonably detailed statement showing Lessee's
share of the actual Operating Expenses incurred during the preceding
year. If Lessee's payments under this paragraph 4.2 (d) during said
preceding year exceed Lessee's Share as indicated on said statement,
Lessee shall be entitled to credit the amount of such overpayment
against Lessee's Share of Operating Expenses next falling due. If
Lessee's payments under this paragraph during said preceding year were
less than Lessee's Share as indicated on said statement, Lessee shall
pay to Lessor the amount of the deficiency within five (5) days after
delivery by Lessor to Lessee of said statement.
(e) During any period of "free rent" or other period of
occupancy during which Lessee is not required to pay Base Rent, Lessee
shall nonetheless be required to pay Lessee's Share of Operating
Expenses.
5. Security Deposit. Lessee deposit with Lessor upon execution
hereof $5472.88 as security for Lessee's faithful performance of
Lessees obligations hereunder. If Lessee fails to pay rent or other
charges due hereunder, or otherwise defaults with respect to any other
provision of this lease, Lessor may use, apply or retain all or any
portion of said deposit for the payment of any rent, change for
repair(s), cleaning, or replacement of damaged equipment, or other
charge 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. If
Lessor so uses or applies all or any portion of said deposit, Lessee
shall within ten (10) days after written demand therefore deposit cash
with Lessor in an amount sufficient to restore said deposit to the
full amount then required of Lessee. If the monthly rent shall, from
time to time, increase during the term of this Lease, Lessee shall, at
the time of such increase, deposit with Lessor additional money as a
security deposit so that the total amount of the security deposit held
by Lessor shall at all times bear the same proportion to the then
current Base Rent as the initial security deposit bears to the initial
Base Rent set forth in paragraph 4.1. Lessor shall not be required to
keep said deposit separate from its general accounts. If Lessee
performs all of Lessees obligations, said deposit or so much thereof
as has not theretofore been applied by lessor, shall be returned,
without payment of interest or other increment for its use, to Lessee
(or, at Lessor's option, to the last assignee, if any, of Lessee's
interest hereunder) at the expiration of the term hereof, and after
Lessee has vacated the premises. No trust relationship is created
herein between Lessor and Lessee with respect to said Security
Deposit.
6. Use and Uses Prohibited.
6.1 Use. The Premises shall be used and occupied for general
offices, manufacturing, warehousing, and or distribution of advanced
thermoplastic composites for sporting goods, defense and aerospace
industries, or any other use which is reasonably comparable, and for
not other purpose.
6.2 Compliance with Law.
(a) Lessor warrants to Lessee that the Premises, in the state
existing on the date that the Lease term commences, but without regard
to the use for which Lessee will occupy the Premises, does not violate
any covenants or restrictions of record or any applicable building
code, regulation or ordinance in effect on such Lease term
commencement date. In the event it is determined that this warranty
has been violated, then it shall be the obligation of the Lessor,
promptly after written notice from Lessee, to rectify any such
violation at Lessor's sole cost and expense. In the event the Lessee
does not give to Lessor written notice of the violation of this
warranty within six months from the date that the Lease term
commences, the correction of the same shall be the obligation of the
Lessee at Lessee' sole cost and expense except for those items which
are Lessor's responsibility in paragraph 7.1. The warranty contained
in this paragraph 6.2(a) shall be of no force or effect if, prior to
the date of this Lease, Lessee was an owner or occupant of the
Premises and, in such event, Lessee shall correct any such violation
at Lessee's sole cost
(b) Except as provided in paragraph 6.2(a), Lessee shall, at
Lessee's expense, promptly comply with all applicable statutes,
ordinances, rules, regulations, orders, covenants and restrictions of
record, and requirements of any fire insurance underwriters or rating
bureaus, now in effect or which may hereafter come into effect,
whether or not they reflect a change in policy from that now existing,
during the term or any part of the term hereof, relating in any manner
to the Premises and, in such event, Lessee of the Premises and of the
Common Areas.
(c) Without in any way limiting the application or generality
of any other provision of this Article 6, Lessee shall at all times
keep itself apprised of, and shall strictly comply with, each and
every condition and restriction of the sanitation district servicing
the Premises relating to the discharge of substances into the sewage
system.
6.3 Condition of Premises.
(a) Lessor shall deliver the Premises to the Lessee clean
and free of debris on the Lease commencement date (unless Lessee is
already in possession) and Lessor warrants to Lessee that the
plumbing, lighting, air conditioning, heating, and loading doors in
the Premises shall be in good operating condition on the Lease
commencement date. In the event that it is determined that this
warranty has been violated, then it shall be the obligation of Lessor,
after receipt of written notice from Lessee setting forth with
specificity the nature of the violation, to promptly, at Lessor's sole
cost, rectify such violation. Lessee's failure to give such written
notice to Lessor within thirty (30) days after the Lease commencement
date shall cause the conclusive, nonrebuttable, presumption that
Lessor has complied with all of Lessor's obligations hereunder. The
warranty contained in this paragraph 6.3(a) shall be of no effect if,
prior to the date of this lease, Lessee was an occupant of the
Premises.
(b) Except as otherwise provided in this Lease, Lessee hereby
accepts the Premises in their condition existing as of the Lease
commencement date or the date that the Lessee takes possession of the
Premises, whichever is earlier, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations governing
and regulating the Premises, and any exhibits attached hereto. Lessee
acknowledges that neither Lessor, nor any agent, representative or
employee of Lessor, has made any representation or warranty as to the
present or future suitability of the Premises for the conduct of
Lessee's business.
6.4 Uses Prohibited. Lessee shall not do or permit anything to
be done in or about the Premises or the Industrial Center nor bring or
keep anything therein which is not within the permitted use of the
Premises, or which will in any way increase the existing rate of or
affect any existing fire or other insurance upon the Industrial
Center, the building or any of its contents, or cause a cancellation
of any insurance policy covering the Industrial Center, the building
or any part thereof or any of its contents. Lessee shall not do or
permit anything to be done in or about the Premises or the Industrial
Center which will in any way obstruct or interfere with the rights of
other Lessees or occupants of the Industrial Center or the building or
injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectional purposes, nor shall Lessee
cause, maintain or permit any nuisance in, on or about the Premises.
Lessee shall not commit or allow to be committed any waste in or upon
the Premises.
6.5 Toxic, Radioactive and Hazardous Materials.
(a) Tenant shall not cause or permit any hazardous, toxic or
radioactive materials to be brought upon, kept or used in or about the
property by Tenant, its agents, employees, contractors, invitees or
subtenants, without the prior written consent of Landlord (which
Landlord shall not unreasonably withhold as long as Tenant
demonstrates to Landlord's reasonable satisfaction that such
hazardous, toxic or radioactive materials is necessary or useful to
tenant's business and will be used and stored in a manner that
complies with all Laws regulating any such hazardous, toxic or
radioactive materials so brought upon or used or kept in or about the
property).
(b) No tenant nor any agent, employee, contractor, invitee
or subtenant shall cause any hazardous, toxic or radioactive materials
to be brought upon, kept, or used in, on or about the Property, or
transported to or from the property without the prior written consent
of Landlord, except to the extent that
(i) such hazardous, toxic or radioactive materials is
necessary or useful to or a part of such tenant's business operations
and;
(ii) such hazardous, toxic, or radioactive materials are
used, kept, stored and disposed of in a manner that fully complies
with all laws, rules, statutes, ordinances, order, requirements or
policies of any governmental agency or authority or any fire insurance
underwriter applicable to any such hazardous, toxic or radioactive
materials (collectively, "Hazardous Material Laws").
To the extent that any tenant or any agent, employee, contractor,
invitee or subtenant of any Tenant shall cause any hazardous, toxic or
radioactive materials to be kept, used or be present in, on or about
the property, such Tenant shall insure that such hazardous, toxic or
radioactive materials is in full compliance with all Hazardous
Materials Laws.
(c) Except for hazardous, toxic or radioactive materials used
in connection with the operation of Tenant's business or Tenant s
intended use of the property, Tenant shall not cause any hazardous,
toxic or radioactive materials to be used, generated, stored or
disposed of on, under or about the property without Landlord's prior
written consent. Tenant shall comply with any and all federal, state
and/or local laws, ordinances or regulations relating to hazardous,
toxic or radioactive materials permitted to be used, generated or
stored on, under or about the property by Tenant.
(d) Nothing in this paragraph 6.5 shall in any way limit the
generality of paragraph 6.4.
7. Maintenance, Repairs, Alterations and Common Area Service.
7.1 Lessor's Obligations. Subject to the provisions of
paragraphs 4.2 (Operating Expenses), 6 (Use and Uses Prohibited), 7.2
(Lessee's Obligations) and 9 (Damage or Destruction), Lessor, at
Lessor's expense, subject to reimbursement pursuant to paragraph 4.2,
shall keep in good condition and repair the foundations, exterior
walls and structural condition of interior bearing walls, as well as
the parking lots, walkways, driveways, landscaping, fences, signs and
utility installations of the Common Areas and all parts thereof, as
well as providing the services for which there is an Operating Expense
pursuant to paragraph 4.2. Lessor shall not, however, be obligated to
paint the interior surface of exterior walls, nor shall Lessor be
required to maintain, repair or replace windows, doors or plate glass
of the Premises. Lessor shall have no obligation to make repairs
under this paragraph 7.1 until a reasonable time after receipt of
written notice from Lessee of the need for such repairs. Lessor shall
not be liable for damages or loss of any kind or nature by reason of
Lessor's failure to furnish any Common Area Services when such failure
is caused by accident, breakage, repairs, strikes, lockout, or other
labor disturbances or disputes of any character, or by any other cause
beyond the reasonable control of Lessor.
7.2 Lessee's Obligations.
(a) Subject to the provisions of Articles 6 (Use) and 9
(Damage or Destruction) and paragraph 7.1 (Lessor's Obligations),
Lessee, at Lessee's expense, shall keep in good order, condition and
repair the Premises and every part thereof (whether or not the damage
portion of the Premises or the means of repairing the same are
reasonably or readily accessible to Lessee) including, without
limiting the generality of the foregoing, all plumbing, electrical and
lighting facilities and equipment within the Premises, fixtures,
interior walls and interior surfaces of exterior walls, ceilings,
windows, doors, plate glass, and skylights located within the
Premises.
(b) If Lessee fails to perform Lessee's obligations under
this paragraph 7.2 or under any other provision of this Lease, Lessor
may enter upon the Premises after thirty (30) days prior written
notice to Lessee (except in the case, of an emergency, in which case
no notice shall be required), perform such obligations on Lessees
behalf and put the Premises in good order, condition and repair, and
the cost thereof, together with a ten (10%)percent service charge,
shall be due and payable as additional rent to Lessor within (30) days
of receipt of an invoice from Lessor.
(c) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same
condition as received (ordinary wear and tear excepted), clean and
free of debris. Any damage or deterioration of the Premises shall not
be deemed ordinary wear and tear if the same could have been prevented
by good maintenance practices and prudent care. Lessee shall repair
any damage to the Premises occasioned by the installation or removal
of Lessee's trade fixtures, alterations, furnishings and equipment.
Notwithstanding anything to the contrary otherwise stated in this
lease, Lessee shall leave the air lines, power panels, electrical
distribution systems, lighting fixtures, space heaters, air
conditioning, plumbing and fencing on the Premises in good operating
condition.
7.3 Alterations and Additions.
(a) Lessee shall not, without Lessor's prior written
consent, make any alterations, improvements, additions, or Utility
Installations (as hereinafter deemed) in, on, or about the Premises,
or the Industrial Center except for non-structural alterations to the
Premises not exceeding $2,500 in cumulative costs, during the term of
this Lease. In any event, whether or not in excess of $2,500 in
cumulative cost, Lessee shall make no change or alteration to the
exterior of the Premises nor the exterior of the Building or the
Industrial Center without Lessor's prior written consent. As used in
this paragraph 7.3, the term "Utility Installation" shall mean
carpeting, window coverings, air lines, power panels, electrical
distribution systems, lighting fixtures, space heaters, air
conditioning, plumbing, and fencing. Should Lessee make any
alterations, improvements, additions or Utility Installations without
the prior approval of Lessor, Lessor may at any time during the term
of this Lease, require that Lessee remove any or all of the same.
(b) Any alterations, improvements, additions or Utility
Installations in or about the Premises or the Industrial Center that
Lessee shall desire to make and which requires the consent of the
Lessor shall be presented to Lessor in written form, with detailed
proposed plans. If Lessor shall give its consent, the consent shall
be deemed conditioned upon Lessees acquiring a permit to do so from
appropriate governmental agencies, the furnishing a copy thereof to
Lessor prior to the commencement of the work and the compliance by
Lessee with all conditions of said permit in a prompt and expeditious
manner.
(c) Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee
at or for use in the Premises, which claims are or may be secured by
any mechanic's or materialmen's lien against the Premises or the
Industrial Center, or any interest therein. Lessee shall give Lessor
not less than ten (1O) days notice prior to the commencement of any
work in the Premises, and, within such ten (10) day period, Lessee
shall provide Lessor with evidence that Lessee has posted notices of
Lessor's non-responsibility in or on the Premises or the Building as
provided by law. If Lessee shall, in good faith, contest the
enforcement thereof against Lessor or the Premises, the Building or
the Industrial Center, upon the condition that if Lessor shall
require, Lessee shall furnish to Lessor a surety bond satisfactory to
Lessor in an amount equal to such contested lien claim or demand
indemnifying Lessor against liability for the same and holding the
Premises and the Industrial Center free from the effect of such lien
or claim. In addition, Lessor may require Lessee to pay Lessor's
attorneys fees and costs in participating in such action if Lessor
shall elect, in Lessor's sole discretion, to do so.
(d) All alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute
trade fixtures of Lessee), which may be made on the Premises, shall be
the property of Lessor and shall remain upon and be surrendered with
the Premises at the expiration of the Lease term. Notwithstanding the
provisions of this paragraph 7.3 (d), Lessee's machinery and
equipment, other than that which is affixed to the Premises so that it
cannot be removed without material damage to the Premises, and other
than Utility Installations, shall remain the property of Lessee and
may be removed by Lessee subject to the provisions of paragraph 7.2.
7.4 Utility Additions. Lessor reserves the right to install new
or additional utility facilities throughout the Building and the
Common Areas for the benefit of Lessor or Lessee, or any other Lessee
of the Industrial Center, including, but not by way of limitation,
such utilities as plumbing, electrical systems, gas distribution
systems, security systems, communication systems, and fire detection
systems, so long as such installations do not unreasonably interfere
with Lessee's use of the Premises.
8. Insurance; Indemnity
8.1 Liability Insurance - Lessee. Lessee shall, at Lessee's
expense, obtain and keep in force during the term of this Lease a
policy of Combined Single Limit Bodily Injury and Property Damage
insurance insuring Lessee and Lessor against any liability arising out
of the use occupancy or maintenance of the Premises and the Industrial
Center. Such insurance shall be in the amount not less than $500,000
per occurrence. The policy shall insure performance by Lessee of the
indemnity provisions of this Article 8. The limits of said insurance
shall not, however, limit the liability of Lessee hereunder.
8.2 Liability Insurance - Lessor. Lessor shall obtain and keep
in force during the term of this Lease a policy of Combined Single
Limit Bodily Injury and Property Damage insurance, insuring Lessor,
but not Lessee, against any liability arising out of the ownership,
use, occupancy or maintenance of the Industrial Center in an amount
not less than $500,000 per occurrence.
8.3 Property Insurance. Lessor shall obtain and keep in force
during the term of this Lease a policy of insurance covering loss or
damage to the Industrial Center improvements, but not Lessee's
personal property, fixtures, equipment or tenant improvements, in an
amount not to exceed the full replacement value thereof, as the same
may exist from time to time, providing protection against all perils
included within the classification of fire, extended coverage,
vandalism, malicious mischief, flood (in the event same is required by
lender having a lien on Premises) special extended perils ("all Risk,"
as such term is used in the insurance industry), plate glass insurance
and such other insurance as Lessor deems advisable. In the event that
the Premises shall suffer an insured loss as defined in paragraph
9.1(g) hereof, the deductible amounts under the casualty insurance
policies relating to the Premises shall be paid by Lessee.
8.4 Payment of Premiums and Premium Increases. Lessee shall
pay, pursuant to paragraph 4.2, Lessee's Share of all insurance
premiums, including increases thereto, relating to insurance which
Lessor is required to obtain or which Lessor. in Lessor's discretion,
believes it is prudent to obtain. Provided, however, that after the
term of this Lease has commenced, Lessee shall not be responsible for
paying Lessee's Share of any increase in any insurance premium for the
Industrial Center specified by Lessor's insurance carrier as being
caused by the use, acts or omissions of any other Lessee of the
Industrial Center, or by the nature of such the Lessee's occupancy,
which create an extraordinary or annual risk. Provided, however, that
Lessee shall, pay the entirety of any increase premium for the
Industrial Center over what it was immediately prior to the
commencement of the term of this Lease if the increase is specified by
Lessor's insurance carrier as being caused by the nature of Lessee's
occupancy or any act or omission of Lessee.
8.5 Insurance Policies. Insurance required hereunder shall be
in the companies holding a "General Policyholders Rating" of at least
B plus, or such other rating as may be required by a lender having a
lien on the Premises, as set forth in the most current issue of
"Best's Insurance Guide." Lessee shall not do or permit to be done
anything which shall invalidate the insurance policies carried by
Lessor. Lessee shall deliver to Lessor copies of liability insurance
policies required under paragraph 8.1 or certificates evidencing the
existence and amounts of such insurance within seven (7) days after
the commencement date of this Lease. No such policy shall be
cancelable or subject to reduction of coverage or other modification
except after thirty (30) days prior to written notice to Lessor.
Lessee shall, at least (30) days prior to the expiration of such
policies, furnish Lessor with proof of such insurance.
8.6 Waiver of Subrogation. Lessee and Lessor each hereby
release and relieve the other, and waive their entire right of
recovery against the other for loss and damage arising out of or
incident to the perils insured against which perils occur in, on or
about the Premises, whether due to the negligence of Lessor or Lessee,
or their agents, employees, contractors, customers, suppliers,
shippers, licensees or invitees. Lessee and Lessor shall, upon
obtaining the policies of insurance required, give notice to the
insurance carrier that the foregoing mutual waiver of subrogation is
continued in this Lease.
8. Indemnity. Lessee shall indemnify and hold harmless Lessor
from and against any and all claims arising from Lessee's use of
Lessee's use of the Industrial Center, or from the conduct of Lessee's
business or from any activity, work or things done, permitted or
suffered by Lessee in or about the Premises or elsewhere, and shall
further indemnify and hold harmless Lessor from and against any and
all claims arising from any breach or default in the performance of
any obligation on Lessee's part to be performed under the terms of
this Lease, or arising from any act or omission of Lessee, or any of
Lessee's agents, contractors, or employees, and from and against all
costs, attorney's fees, expenses and liabilities incurred in the
defense of any such claim or any action or proceeding thereon; except
to extend caused by the willful or negligent acts or omissions of the
Lessor, and in case any action or proceeding be brought against Lessor
by reason of any such claim, Lessee, upon notice from Lessor, shall
promptly and diligently defend the same at Lessee's expense by counsel
reasonably satisfactory to Lessor, and Lessor shall cooperate with
Lessee in such defense. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to property
of Lessee or injury to persons, in, upon or about the Industrial
Center arising from any cause, and Lessee hereby waives all claims in
respect thereof against Lessor.
8.8 Exemption of Lessor from Liability. Lessee hereby agrees
that Lessor shall not be liable for injury to Lessee's business or any
loss of income therefrom or for damage to the goods, wares,
merchandise or other property of Lessee, Lessee's agents, employees,
contractors, customers, suppliers, shippers, licensees or invitees, or
any other person in, upon or about the Industrial Center, nor shall
Lessor be liable for injury to the person of Lessee, Lessee's agents,
employees, contractors, customers, suppliers, shippers, licensees or
invitees, whether such damage or injury is caused by or results from
fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from
any other cause, whether said damage or injury results from conditions
arising upon the Premises or upon other portions of the Industrial
Center, or from other sources or places and regardless of whether the
cause of such damage or injury or the means of repairing the same is
inaccessible to Lessee. Lessor shall not be liable for any damages
arising from any act or neglect of any other Lessee, occupant or other
user of the Industrial Center, nor from the failure of Lessor to
enforce the provisions of any other lease of the Industrial Center.
9. Damage or Destruction.
9.1 Definitions.
(a) "Promises Partial Damage" shall mean if the Premises are
damaged or destroyed to the extent that the cost of repair is less
than fifty percent of the then replacement cost of the Premises.
(b) "Premises Total Destruction" shall mean if the Premises
are damaged or destroyed to the extent that the cost of repair is
fifty percent or more of the then replacement cost of the Premises.
(c) "Premises Building Partial Damage" shall mean if the
Building of which the Premises are a part is damaged or destroyed to
the extent that the cost to repair is less than fifty (50%) percent of
the then replacement cost of the Building.
(d) "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to
the extent that the cost of repair is fifty (50%) percent or more of
the then replacement cost of the Building.
(e) "Industrial Center Buildings" shall mean all of the
buildings on the Industrial Center site.
(f) "Industrial Center Buildings Total Destruction" shall
mean if the Industrial Center Buildings are damaged or destroyed to
the extent that the cost of repair is fifty (50%) percent or more of
the then replacement cost of the Industrial Center Buildings.
(e) "Insured Loss" shall mean damage or destruction which was
caused by an event required to be covered by the insurance described
in Article 8. The fact that such required insurance was not in fact
obtained or is not in effect, or that an insured loss has a deductible
amount shall not make the insured loss an uninsured loss.
(h) "Replacement Cost" shall mean the amount of money
necessary to be spent in order to repair or rebuild the damaged area
to the condition that existed immediately prior to the damage
occurring, excluding all improvements made by Lessees.
9.2. Premises Partial Damage.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4
and 9.5. if at any time during the term of this Lease there is damage
to the Premises which is an Insured Loss and which falls into the
classification of Premises Partial Damage, then Lessor shall, at
Lessor's expense, repair such damage to the Premises (but not Lessee's
fixtures, equipment, or tenant improvements) as soon as reasonably
practicable following Lessor's receipt from Lessee of written
notification of the occurrence of such damage, and this Lease shall
continue in full force and effect. If Lessor shall have repaired such
damage to the Premises with twenty (20) days after Lessor's receipt
from Lessee there shall be no abatement, offset or reduction of rent.
Commencing on the twenty-first (21st) day following Lessor's receipt
from Lessee of said written notification of such damage, provided that
such damage shall not be theretofore have been repaired, and
continuing until such damage is repaired, Lessee shall be entitled to
an equitable reduction in rent based upon the extent to which such
damage materially interferes with Lessee's business in the Premises.
Provided, however, that if such damage shall have been caused by any
act or omission of Lessee (or any agent, employee, contractor,
customer, supplier, shipper, licensee or invitee of Lessee), then this
Lease shall continue in full force and effect, Lessee shall
immediately upon demand reimburse Lessor for any loss, cost or expense
incurred by Lessor on an account of such damage, and there shall be no
abatement, offset or reduction of rent.
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage
to the Premises which is not an Insured Loss (or as to which the
insurance proceeds available to Lessor are less than eighty-five (85%)
percent of the cost of repair and restoration), which was not caused
by any act or omission of Lessee (or any agent, employee, contractor,
customer, supplier, shipper, licensee or invitee of Lessee), which
prevents Lessee from using the Premises and which falls within the
classification of Premises Partial Damage, Lessor may, at Lessor's
option, either:
(i) Repair such damage at Lessor's expense as soon as
reasonably practicable, in which case this Lease shall continue in
full force and effect, and in which case, if Lessor shall have
repaired such damage to the Premises within twenty (20) days after
Lessor's receipt from Lessee of written notification of such damage,
there shall be no abatement, offset or reduction of rent, but,
commencing on the twenty-first (21st) day following Lessor's receipt
from Lessee of said written damage, provided that such damage shall
not be theretofore have been repaired, Lessee shall be entitled to an
equitable reduction in rent based upon the extent to which such damage
materially interferes with Lessee's business in the Premises; or
(ii) Give written notice to Lessee within thirty (30) days
after Lessor's receipt from Lessee of written notification of such
damage of Lessor's intention to cancel and terminate this Lease as of
the date of Lessor's receipt from Lessee of said written notification.
In the event Lessor to give such notice of Lessor's intention to
cancel and terminate this Lease, Lessee shall have the right within
ten (10) days after the receipt of such notice to give written notice
to Lessor of Lessee's intention to repair such damage at Lessee's
expense, without reimbursement from Lessor, in which event this Lease
shall be canceled and terminated as of the date of the occurrence of
such damage.
Provided, however, that if such damage shall have been caused by any
act or omission of Lessee (or any agent, employee, contractor,
customer, supplier, shipper, licensee or invitee of Lessee), then this
Lease shall continue in full force and effect, Lessee shall
immediately upon demand reimburse Lessor for any loss, cost or expense
incurred by Lessor on account of such damage, and there shall be no
abatement, offset reduction of rent.
9.3 Premises Total Destruction; Premises Building Total
Destruction; Industrial Center Buildings Total Destruction.
(a) Subject to the provisions of paragraphs 9.4 and 9.5, if
at any time during the term of this Lease there is any damage, whether
or not it is an Insured Loss, and which falls into the classifications
of either;
(i) Premises Total Destruction, or
(ii) Premises Building Total Destruction, or
(iii) Industrial Center Buildings Total Destruction, then
Lessor may at Lessor's option either;
(A) repair such damage or destruction, but not
Lessee's fixtures, equipment, or tenant improvements, as soon as
reasonably practicable at Lessor's expense, and this Lease shall
continue in full force and effect, without abatement, offset or
reduction of rent, or
(B) give written notice to Lessee within thirty (30)
days after the date of occurrence of such damage of Lessor's intention
to cancel and terminate this Lease, in which case this Lease shall be
canceled and terminated as of the date of the occurrence of such
damage.
9.4 Damage Near End of Term.
(a) Subject to the provisions of paragraph 9.4(b), if at any
time during the last six (6) months of the term of this Lease there is
damage, whether or not it is an Insured Loss, which falls into the
classifications of Premises Partial Damage, Lessor may at Lessor's
option cancel and terminate this Lease as of the date of occurrence of
such damage by giving written notice to Lessee of Lessor's election to
do so within thirty (30) days after the date of occurrence of such
damage.
(b) Notwithstanding paragraph 9.4(a), in the event that
Lessee has an option to extend or renew this Lease, and the time
within which said option may be exercised has not yet expired, Lessee
shall exercise such option, if it is to be exercised at all, no later
than twenty (20) days after the occurrence of an Insured Loss falling
within the classification of Premises Partial Damage during the last
six (6) months of the term of this Lease. If Lessee duly exercises
such option during said twenty (20) day period, Lessor shall, at
Lessor's expense repair such damage, but not Lessee's fixtures,
equipment or tenant improvements, as soon as reasonably practicable
and this Lease shall continue in full force and effect, without
abatement, offset or reduction of rent. If Lessee fails to exercise
such option during said twenty (20) day period, then Lessor may, at
Lessor's option, terminate and cancel this Lease as of the expiration
date of said twenty (20) day period by giving written notice to Lessee
of Lessor's election to do so within thirty (30) days after the
expiration of said twenty (20) day period, notwithstanding any term or
provision in the grant of option to the contrary.
9.5 Lessor's Liability to Repair Timely. If Lessor is obligated
to repair or restore the Premises pursuant to the provisions of this
Article 9 and if, in Lessor's determination, the Premises cannot be
repaired or restored within ninety (90) days after the last to occur
of,
(a) receipt of insurance proceeds adequate to complete such
repair or restorations and
(b) all governmental approvals, permits and authorizations
required to perform such repair or restoration, Lessor shall notify
Lessee of such fact and Lessee may terminate this Lease by delivery of
written notice to Lessor within thirty (30) days of receipt of
Lessor's notice.
In such event this Lease shall terminate effective as of the date
Lessor receives such notice. If Lessee does not terminate this Lease
and if in Lessor's estimation the Premises can be restored within the
ninety (90) day period set forth in the first sentence of this section
9.5, then Lessor shall commence to restore the Premises in compliance
with then existing laws and shall complete such repair or restoration
with due diligence. The foregoing ninety (90) day period shall be
extended for a period equal to the period that Lessor is delayed or
prevented from the performance of its repair obligation under this
Article 9 by reasons of acts of god, strikes, lookouts, labor
troubles, inability to procure material, restrictive governmental laws
or regulations or other cause, without fault and beyond the reasonable
control of Lessor (financial inability excepted).
9.6 Termination - Advance Payments. Upon termination of this
Lease pursuant to this Article 9, an equitable adjustment shall be
made concerning advance rent and any advance payments made by Lessee
to Lessor. Lessor shall, in addition, return to Lessee so much of
Lessee's security deposit as has not theretofore been applied by
lessor.
9.7 Waiver. Lessor and Lessee waive the provisions of any
statute which relate to termination of leases when leased property is
damaged or destroyed, and agree that any such event shall be governed
by the terms of this Lease.
10. Real Property Taxes.
10.1 Payment of Taxes. Lessor shall pay the real property tax,
as defined in paragraph 10.3, applicable to the Industrial Center
subject to reimbursement by Lessee of Lessee's Share of such taxes in
accordance with the provisions of paragraph 4.2, except as otherwise
provided in paragraph 10.2.
10.2 Additional Improvements. Lessee shall not be responsible
for paying any increase in real property tax specified in the tax
assessor's records and work sheets as being caused by additional
improvements placed upon the Industrial Center by other lessees, or by
Lessor, for the exclusive enjoyment of such other lessees. Lessee
shall, however, pay to Lessor, at the time that Operating Expenses are
payable under paragraph 4.2 (c), Lessee's Share of any other increase
in real property tax caused by additional improvements placed upon the
Industrial Center, except that Lessee shall pay the entirety of any
increase in real property tax if assessed solely by reason of
additional improvements placed upon the Premises or the Industrial
Center by Lessee or at Lessee's request.
10.3 Definition of "Real Property Tax." As used herein, the
term 'real property tax" shall include any form of real estate tax or
assessment, general or special, ordinary or extraordinary, and any
license fee, commercial rental tax, improvement bond or bonds, levy or
tax (other than inheritance, personal income or estate taxes) imposed
on the Industrial Center or any portion thereof or interest therein by
any authority having the direct or indirect power to tax, including
any city, county, state, or federal government, or any school,
agriculture, sanitation, fire, street, drainage, or other improvement
district thereof. "The term 'real property tax" shall also include any
tax, fee, levy, assessment or charge;
(i) in substitution (partially or totally) of any tax, fee,
levy, assessment or charge hereinabove included within the definition
of "real property tax" or
(ii) the nature of which was hereinbefore included within the
definition of "real property tax" or
(iii) which is imposed for a service or right not charged
prior to the reference date of this Lease, or, if previously charged,
has been increased since the reference date of this Lease, or
(iv) which is imposed as a result of a transfer, either
partial or total, of Lessor's interest in the Industrial Center or
which is added to a tax or charge hereinabove included within the
definition of real property tax by reason of such transfer, or
(v) which is imposed by reason of this transaction, or any
modifications or changes hereto, or any transfers hereof.
10.4 Joint Assessment. If the Industrial Center is not
separately assessed, Lessee's Share of the real property tax liability
shall be an equitable proportion of the real property taxes for all of
the land and improvements included within the tax parcel assessed,
such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Lessor's reasonable and
good faith determination thereof shall be conclusive.
10.5 Personal Property Tax.
(a) 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
Premises or elsewhere. When possible, Lessee shall cause said trade
fixtures, furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of Lessor.
(b) If any of Lessee's said personal property shall be
assessed with Lessor's real property, Lessee shall pay to Lessor the
taxes attributable to Lessee within ten (10) days after the receipt of
a written statement setting forth the takes applicable to Lessee's
property.
11. Utilities. Lessee shall pay for all water, gas, heat, light,
power, telephone an(f other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are
not separately metered to the Premises, Lessee shall pay at Lessor's
option, either Lessee's share or a reasonable proportion, equitably
determined by Lessor, of all charges jointly metered with other
premises in the Building or the Industrial center.
12. Subletting and Assignment.
12.1 No Assignment; Consent Required To Sublet. Lessee shall
not voluntarily or by operation of law assign, hypothecate, mortgage,
or otherwise transfer or encumber all or any part of Lessee's interest
in the Lease or in the Premises, nor shall Lessee, by its action or
inaction, permit or suffer the occurrence of any such event without
prior written consent, which Lessor shall not unreasonably withhold.
Lessor shall respond to Lessee's request for consent hereunder within
ten (10) days of Lessor's receipt of all financial data and other
information respecting the proposed sublessee reasonably requested by
Lessor. Any attempted subletting without Lessor's said consent shall
be void and shall constitute a breach of this Lease under paragraph
13.1 without the need for Lessee; provided, however, that Lessor's
failure to notify Lessee within the sixty (60) days set forth in this
paragraph 12.1 that the request to sublet is disapproved shall
constitute Lessor's consent thereto.
12.2 Lessee Affiliate. Notwithstanding the provisions of
paragraph 12.1 hereof, Lessee may assign or sublet the Premises, or
any corporation which controls, is controlled by or is under common
control with Lessee, or to any corporation resulting from a merger or
consolidation with Lessee, or to any person or entity which acquires
all the assets of Lessee as a going concern of the business that is
being conducted on the Premises by Lessee, all of which are referred
to as "Lessee Affiliates," provided that before such assignment or
subletting shall be effective said assignee shall assume, in full, the
obligations of Lessee under this Lease. Such assignment by Lessee
shall be to an entity with a demonstrated net worth greater than that
of Lessee. Lessee is to provide Lessor a true financial statement of
assignee. Any such assignment or subletting shall in no way affect or
limit the liability of Lessee under the terms of this Lease even if
after such assignment or subletting the terms of this Lease are
materially changed or altered without either notice to or the consent
of Lessee, and Lessor shall have no obligation to give such notice or
to request such consent.
12.3 Terms and Conditions Applicable to Subletting. Regardless
of Lessor's consent, the following terms and conditions shall apply to
any subletting by Lessee under paragraph 12. 1, or subletting or
assignment under paragraph 12.2, of all or any part of the Premises,
and such terms shall be expressly included in each and very such
sublease:
(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interests in all rentals and income arising from any sublease
heretofore or hereafter made by Lessee, and Lessor may collect such
rent and income and apply same toward Lessee's obligations under this
Lease; provided, however, that until a default shall occur in the
performance of Lessee's obligations under this Lease, Lessee may
receive, collect and enjoy the rents accruing under each sublease.
Lessor shall not, by reason of this or any other assignment of such
sublease to Lessor, nor by reason of the collection of rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee
to perform and comply with any of Lessee's obligations to such
sublessee under each sublease. Lessee hereby irrevocably authorizes
and directs any such sublessee, upon receipt of a written notice from
Lessor stating that a default exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor the rents due and to
become due under the sublease. Lessee agrees that such sublessee
shall have the right to rely upon any such statement and request from
Lessor, and that such sublessee shall pay rents to Lessor without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary.
Lessee shall have no right to inquire as to whether such default
exists, notwithstanding any notice from or claim from Lessee to the
contrary. Lessee shall have no right or claim against such sublessee
or Lessor for any such rents so paid by said sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective
unless and until it has been approved in writing by Lessor. In
entering into any sublease, Lessee shall use only such form of
sublease as is satisfactory to Lessor and once approved by Lessor,
such sublease shall not be changed or modified without Lessor's prior
written consent. Any sublease shall, by reason of entering into a
sublease under this Lease, be deemed, for the benefit of Lessor, to
have assumed and agreed to conform to and comply with each and every
covenant, condition and restriction of this Lease (including, but not
limited to, those respecting assignment and subletting and each and
every obligation to be performed hereunder by Lessee, other than such
obligations as are clearly and necessarily contrary to or inconsistent
with provisions contained in a sublease to which Lessor has expressly
consented in writing.
(c) If Lessee's obligations under this Lease have been
guaranteed by third parties, then a sublease, and Lessor's consent
thereto, shall, at Lessor's option, be ineffective unless said
guarantors give their written consent to each sublease and the terms
thereof. However, nothing in this paragraph 12.3(c) or elsewhere in
this Lease shall be construed so as to invalidate, waive or in any way
contradict the provision of any guaranty of this Lease that said
guaranty shall remain in force and effect notwithstanding a material
change in the Lease terms without the guarantor's consent.
(d) The consent by Lessor to any subletting shall not
release Lessee from its obligations or alter the primary liability of
Lessee or to any assignment or subletting by the sublessee. However,
Lessor may consent to subsequent subletting and/or assignments or
transfers of the sublease, or to amendments or modifications thereto,
without notifying Lessee or anyone else liable on the Lease or the
sublease and without obtaining their consent, and such action shall
not relieve such persons from liability.
(e) The consent by Lessor to any subletting shall not
constitute a consent to any subsequent subletting by Lessee or to any
assignment or subletting by the sublessee. However, Lessor may
consent to subsequent sublettings and/or assignments or transfers of
the sublease, or to amendments or modifications thereto, without
notifying Lessee or anyone else liable on the Lease or sublease and
without obtaining their consent, and such action shall not relieve
such persons from liability.
(f) In the event of any default under this Lease, Lessor
may proceed directly against Lessee, any sublessee, any guarantor or
anyone else responsible for the performance of this Lease, without
first exhausting Lessor's remedies against any other person or entity
responsible therefor to Lessor, or any security held by Lessor or
Lessee.
(g) In the event of any default under this Lease, Lessor,
at its option and without any obligation to do so, may require any
sublessee to attorn to Lessor, in which event Lessor shall undertake
the obligations of Lessee under such sublease from the time of the
exorcise of said option to the termination of such sublease; provided,
however, that Lessor shall not be liable for any prepaid rents or
security deposit paid by such sublessee to Lessee or for any other
prior defaults of Lessee under such sublease.
(h) Each and every consent required of Lessee under a
sublease shall also require the consent of Lessor.
(i) Lessor's written consent to any subletting of the
Premises by Lessee shall not constitute an acknowledgment that no
default exists of Lessee's obligations under this Lease, nor shall
such consent be deemed a waiver of any then existing default, except
as may be otherwise stated by Lessor at the time.
(j) With respect to any subletting to which Lessor has
consented, Lessor agrees to deliver a copy of any notice of default by
Lessee to the sublessee. Such sublessee shall have the right to cure
a default of Lessee within ten (10) days after service of said notice
of default upon such sublessee.
12.5 Attorney's Fees. In the event Lessee shall assign or
sublet the Premises or request the consent of Lessor to any assignment
or subletting, or if Lessee shall request the consent of Lessor for
any act Lessee proposes to do, then Lessee shall pay Lessor's
reasonable attorneys fees incurred in connection therewith, which
attorneys fees shall not exceed Five Hundred Dollars ($500.00) for
each such request.
13. Default; Remedies.
13.1 Default. The occurrence of any one or more of the
following events shall constitute a material default of this Lease by
Lessee:
(a) The abandonment of the Premises by Lessee.
(b) The failure by Lessee to make any payment of rent or
any other payments required to be made by Lessee hereunder, within
fifteen (15) days of when due, where such failure shall continue for a
period of three (3) days after written notice thereof from Lessor to
Lessee. In the event that Lessor serves Lessee with a notice to Pay
Rent or Quit pursuant to applicable Unlawful Detainer statutes, such
Notice to Pay Rent or Quit shall also constitute the notice required
by this paragraph.
(c) Except as otherwise provided in this Lease, the failure
by Lessee to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Lessee, other
than as described in paragraph (b) above, where failure shall continue
for a period of thirty (30) days after written notice thereof from
Lessor to Lessee; provided, however, that if the nature of Lessee's
noncompliance is such that more than thirty (30) days are reasonably
required for its cure, then Lessee shall not be deemed to be in
default if Lessee commended such cure within said thirty (30) day
period and thereafter diligently prosecutes such cure to completion.
to the extent permitted by law, such thirty (30) day notice shall
constitute the sole and exclusive notice required to be given to
Lessee under applicable Unlawful Detainer statutes.
(d) (i) The making by Lessee of any general arrangement or
general assignment for the benefit of creditors,
(ii) Lessee becomes a "debtor" as defined in 11U.S.C.
101 or any successor thereto (unless, in n the case of a petition
filed against Lessee, the same is dismissed within sixty (60) days);
(iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee's assets Located at the
Premises or of lessee's interest in this Lease, where possession is
not restored to Lessee within thirty (30) days; or
(iv) the attachment, execution or other judicial seizure
of substantially all of Lessee's assets located at the premises or of
Lessee's interest in this Lease, where such seizure is not discharged
within thirty (30) days. In the event that any provision of this
paragraph 13.1(d) is contrary to any applicable law, such provision
shall be of no force or effect, but shall not cause the invalidity of
any other provision of, or remedy under, this Lease.
(e) The discovery By Lessor that any financial statement or
other evidence of assets, income or net worth given to Lessor to
Lessee, or to any assignee, subtenant, or successor in interest of
Lessee's obligation hereunder, or by any other person on behalf of
them, was materially false or misleading.
13.2 Remedies. In the event of any such material default by
Lessee, Lessor may at any time thereafter, with or without notice or
demand and without limiting Lessor in the exercise of any right or
remedy which Lessor may have under this Lease, at equity or by law, by
reason of such default:
(a) Terminate Lessee's right to possession of the Premises
by any lawful means, in which case this Lease and the term hereof
shall terminate and Lessee shall immediately surrender possession of
the Premises to Lessor. In such event Lessor shall be entitled to
recover from Lessee all damages incurred by Lessor by reason of
Lessee's default including, but not limited to:
(i) the cost of recovering possession of the Premises;
and
(ii) expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorney's fees,
and any real estate commission actually paid; and
(iii) the worth at the time of award by a court having
jurisdiction thereof of the rent which was due and payable at the time
of the award; and
(iv) the worth at the time of award by a court having
jurisdiction thereof of the amount by which the unpaid rent for the
balance of the term after the time of such award exceeds the amount of
such rental loss for the same period that Lessee proves could be
reasonably avoided; and
(v) any other amount necessary to compensate Lessor for
all the detriment proximately caused by Lessee's failure to perform
his obligations under the Lease, or which in the ordinary course of
things would be likely to result therefrom.
(b) Maintain Lessee's right to possession, in which case this
Lease shall continue in effect whether or not Lessee shall have
vacated or abandoned the Premises. In such event Lessor shall be
entitled to enforce all of Lessor's rights and remedies under this
Lease, including the right to recover the rent as it becomes due
hereunder.
(c) Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the State of
California. Unpaid installments of rent and other unpaid monetary
obligations of Lessee under the terms of this Lease shall bear
interest from the date due at the maximum rate then allowable by law.
13.3 Default by Lessor. Lessor shall not be in default unless
Lessor fails to perform obligations required of Lessor within a
reasonable time, but in no event later than thirty (30) days after
written notice by Lessee to Lessor and to the holder of any first
mortgage or deed of trust covering the Premises whose name and address
shall have theretofore been furnished to Lessee in writing, specifying
wherein Lessor has failed to perform such obligation; provided,
however that if nature of Lessor's obligation is such that more than
thirty (30) days are required for performance then Lessor shall not be
in default if Lessor commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
13.4 Late Charges. Lessee hereby acknowledges that late payment
by Lessee to Lessor of Base Rent, Lessee's Share of Operating Expenses
or other sums due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount which will be
impracticable or extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges,
and late charges which may imposed on Lessor by the terms of any
mortgage or trust deed covering the property. Accordingly, if any
installment of Base rent, Operating Expenses, or any other sum due
from Lessee shall not be received by Lessor or Lessor's designate
within five (5) days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay to Lessor, in
addition to the amount due, a late charge equal to ten (10%) percent
of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Lessor
will incur by reason of late payment by Lessee. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of
Lessee's default with respect to such overdue amount, nor prevent
Lessor from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, at
equity or by law, whether or not collected, for three (3) consecutive
installments of any of the aforesaid monetary obligations of Lessee,
then Base Rent shall automatically become due and payable quarterly in
advance, rather than monthly, notwithstanding paragraph 4.1 or any
other provision of this Lease to the contrary.
/s/ EAS
Lessees Initials
14. Condemnation; Retroactive Building Code Changes.
14.1 Condemnation. If the Premises or any other portion thereof
or the Industrial center are taken under the power of eminent domain,
or sold under the threat of the exercise of said power (all of which
are herein called "condemnation"), this Lease shall terminate as to
the part so taken as of the date the condemning authority takes title
or possession, whichever first occurs. If more than ten (100%)
percent of the floor area of the Premises, or more than twenty-five
percent of that portion of the Common Area designated as parking for
the Industrial Center, is taken by condemnation. Lessee may, at
Lessee's option, to be exercised in writing within ten (10) days after
Lessor shall have given Lessee written notice of such taking (or in
the absence of such notice, within ten (10) days after the condemning
authority shall have taken possession), terminate this Lease as of the
date the condemning authority takes such possession. If Lessee does
not terminate this Lease in accordance with the foregoing, this Lease
shall remain in full force and effect as to the portion of the
Premises remaining, except that the rent shall be reduced in the
proportion that the floor area of the Promises taken bears to the,
total floor area of the Premises. No reduction of rent shall occur if
the only area taken is that which does not have the Premises located
thereon.
14.2 Condemnation Award. Any award for the taking of all or
any part of the Premises under the power of eminent domain, or any
payment made under threat of the exercise of such power, shall be the
property of Lessor, whether such award shall be made as compensation
for diminution in value of the leasehold or for the taking of the fee,
or as severance damages; provided however, that Lessee shall be
entitled to any award for loss of or damage to Lessee's trade fixtures
and removable personal property. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall, to the extent
of severance damages received by Lessor in connection with such
condemnation, repair any damage to the Premises caused by such
condemnation, except to the extent that Lessee has been reimbursed
therefore by the condemning authority. Lessee shall promptly pay any
amount in excess of such severance damages required to complete such
repairs and shall diligently prosecute such repairs to completion.
15. Brokers. Lessee's warrants that it has had no dealings with any
real estate broker or agent in connection with the negotiation of this
Lease except Xxxxxx Realty, and it knows of no other real estate
broker or agent who either claims or is entitled to a commission with
its Lease.
16. Estoppel Certificate.
(a) Each party (as "responding party") shall at any time upon
not less than twenty (20) days prior written notice from the other
party ("requesting party") execute, acknowledge and deliver to the
requesting party a statement in writing;
(i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in
full force and effect) and the date to which the rent and other
charges are paid in advance, if any, and
(ii) acknowledgment that there are not, to the responding
party's knowledge, any uncured defaults on the part of the requesting
party, or specifying such defaults if any are claimed.
(b) At the requesting party's option, the failure to deliver
such statement within such time shall be a material default
of this Lease by the party who was to have responded, without any
further notice to such party, or it shall be conclusive upon such
party that;
(i) this Lease is in full force and effect without
modification except as may be represented by the requesting party, not
more than one month's rent has been paid in advance.
(c) If Lessor desires to finance, refinance, or sell the
property, or any part thereof, Lessee hereby agrees to deliver to any
lender or purchaser designated by Lessor the annual report of Lessee's
parent corporation, Quadrax Corporation.
17. Lessor's Liability. The term "Lessor" as used herein shall mean
only the owner or owners, at the time in question, of the fee title or
a Lessee's interest in a ground lease of the Industrial Center and, in
the event of any transfer of such title or interest, Lessor herein
named (and in case of any subsequent transfers then the grantor) shall
be relieved from and after the date of such transfer of all liability
as respects Lessor's obligations thereafter to be performed. The
obligations contained in this Lease to be performed by Lessor shall be
binding on Lessor's successor and assigns during their respective
periods of ownership.
18. Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect
the validity of any other provision hereof
19. Interest on Past-due Obligations. Except as otherwise expressly
herein provided, any amount due to Lessor not paid when due shall bear
interest at the maximum rate then allowable by law from the date due.
Payment of such interest shall not excuse or cure any fault by Lessee
under this Lease-, provided, however, that interest shall not be
payable on late charges incurred by Lessee nor on any amounts upon
which late charges are paid by Lessee.
20. Time of Essence. Time is of the essence with respect to the
obligations to be performed under this Lease.
21. Additional Rent. All monetary obligations of Lessee to Lessor
under the terms of this Lease, including, but not limited to, Lessee's
Share of Operating Expenses and insurance and tax expenses payable by
Lessee shall be deemed to be rent.
22. Incorporation of Prior Agreements; Modification of Agreement.
This Lease contains all agreements of the parties with respect to any
matter mentioned herein. No prior or contemporaneous agreement or
understanding pertaining to any matter shall be effective. This Lease
may be modified in writing only. Each such writing shall be dated and
signed by the parties in interest at the time of modification. Any
and all such writings shall be narrowly construed and shall alter the
provisions of this Lease only as is specifically set forth in such
writing. Except as otherwise stated in this Lease, Lessee hereby
acknowledges that neither Lessor nor any representative, agent or
employee of Lessor has made any oral or written warranties or
representations to Lessee relative to the condition or use by Lessee
of the Premises or any other part of the Industrial Center, and Lessee
acknowledges that Lessee assumes all responsibility regarding the
Occupational Safety Health Act (OSHA), the legal use and adaptability
of the Premises and the compliance thereof with all applicable laws
and regulations in effect during the term of this Lease except as
otherwise specifically stated in this Lease.
23. Notices. Any notices required or permitted to be given hereunder
shall be in writing and may be given by personal delivery or by
certified mail . and if given personally or by mail, shall be deemed
sufficiently given five (5) days after deposit in the U.S. Mail if
addressed to Lessee or to Lessor at the address immediately above the
signature of the respective parties, as the case may be. Either party
may by notice to the other specify a different address for notice
purposes. A copy of all notices required or permitted to be given to
Lessor hereunder shall be concurrently transmitted to such party or
parties at such addresses as Lessor may from time to time hereafter
designate by notice to Lessee.
24. Waivers. No waiver by Lessor of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent
breach by Lessee of the same or any other provision. Lessor's consent
to or approval of any act shall not be deemed to render unnecessary
the obtaining of Lessor's consent to or approval of any subsequent act
by Lessee. The acceptance of rent hereunder by Lessor shall not be a
waiver of any preceding breach by Lessee of any provision hereof,
other than the failure of Lessee to pay the particular rent so
accepted, regardless of lessor's knowledge of such preceding breach at
the time of acceptance of such rent.
25. Recording. Either Lessor or Lessee shall upon request of
the other, execute, acknowledge and deliver to the other a "short
form" memorandum of this Lease for recording purposes.
26. Holding Over. If Lessee, with Lessor's consent, remains in
possession of the Promises or any part thereof after the expiration of
the term hereof, such occupancy shall be a tenancy from month to month
upon all the provisions of this Lease pertaining to the obligations of
Lessee, but all Options, if any, granted under the terms of this Lease
shall be deemed terminated and be of no further effect after the
commencement of said month to month tenancy.
27. Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all
other remedies at law or in equity.
28. Covenants and Conditions. Each provision of this Lease
performable by Lessee shall be deemed both a covenant and a condition.
29. Binding Effect; Choice of Law. Subject to any provisions hereof
restricting assignment or subletting by Lessee and subject to the
provisions of Article 17, this Lease shall bind the parties, their
personal representatives, successors and assigns. This Lease and any
litigation concerning this Lease shall be governed by the laws of the
State of California.
30. Subordination.
(a) This Lease, and any option granted herein, at Lessor's
option, shall be subordinate to any ground lease, mortgage, deed of
trust, or any other hypothecation or security now or hereafter placed
upon the Industrial Center 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 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 of the
provisions of this Lease and applicable provisions of the law, unless
this Lease is otherwise terminated pursuant to its terms.
(b) Lessee agrees to execute any documents required to
effectuate an attornment a subordination or to make this Lease or any
Option granted herein prior to the lien of any mortgage, deed of trust
or ground lease, as the case may be. Lessee shall execute such
documents within twenty (20) days of written demand.
31. Attorney's Fees. If either Lessor or Lessee shall bring an
action to enforce the terms hereof or declare rights hereunder, the
prevailing party in such action, on trial or appeal, shall be entitled
to his reasonable attorney's fees to be paid by the losing party as
fixed by the court.
32. Lessor's Access. Lessor and Lessor's agents shall have the right
to enter the Promises at reasonable times upon giving reasonable
notice for the purpose if inspecting the same, showing the same to
prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to
the building of which they are part as Lessor may deem necessary or
desirable. Lessor may at any time place on or about the Premises or
the Building any ordinary "For Sale" signs and Lessor may at any time
during the last one hundred twenty (120) days of the term hereof place
on or about the Premises any ordinary "For Lease" signs. All
activities of Lessor pursuant to this Article 32 shall be without
abatement of rent, nor shall Lessor have any liability to Lessee for
the same.
33. Auctions. Lessee shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises or
the Common Areas without first having obtained Lessor's prior written
consent. Notwithstanding anything to the contrary in this Lease,
Lessor shall not be obligated to exercise any standard of
reasonableness in determining whether to grant such consent.
34. Signs. Lessee shall not place any sign upon the Premises or the
Industrial Center without Lessor's prior written consent. Under no
circumstance shall Lessee place a sign on any roof of the Industrial
Center.
35. Merger. The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, or a termination by Lessor,
shall not work a merger, and shall, at the option of Lessor, terminate
all or any existing subtenancies or may, at the option of Lessor,
terminate all or any existing subtenancies or may, at the option of
Lessor, operate as an assignment to Lessor of any or all of such
subtenancies.
36. Consents. Except as otherwise specifically stated in this Lease,
wherever the consent of one party is required to an act of the other
party such consent shall not be unreasonably withheld or delayed.
37. Quiet Possession. Upon Lessee's paying the rent for the Premises
and observing and performing all of the covenants, conditions and
provisions on Lessee's part to be observed and performed hereunder.
Lessee shall have quiet possession of the Premises for the entire term
hereof subject to all of the provisions of this Lease.
38. Security Measures. Lessee hereby acknowledges that Lessor shall
have no obligation whatsoever to provide guard service or other
security measures for the benefit of Lessee, the Premises or the
Industrial center. Lessee assumes all responsibility for the
protection of Lessee, its agents, employees, contractors, customers,
suppliers, shippers, licensees and invitees and the property of Lessee
and of Lessee's agent, employees, contractors, customers, suppliers,
shippers, licensees and invitees from acts of third parties. Nothing
herein contained shall prevent Lessor, at Lessor's sole option, from
providing security protection for the Industrial Center or any part
thereof, in which event the cost thereof shall be included within the
definition of Operating Expenses, as set forth in paragraph 4.2(b). In
the event that Lessor elects at any time to provide such security
protection, Lessor shall not as a result thereof be held to a higher
or stricter standard of care, or to greater liability, than if no such
security protection had ever been provided.
39. Easements. Lessor reserves to itself the right, from time to
time, to grant such easements, rights and dedications as Lessor deems
necessary or desirable, and to cause the recordation of Parcel Maps,
so long as such easements, rights, dedications, maps and restrictions
do not unreasonably interfere with the use of the Premises by Lessee.
Lessee shall sign any of the aforementioned documents within thirty
(30) days of Lessor's request-, Lessee's failure to execute such
documents within ten (10)days after written demand shall constitute a
material default by Lessee hereunder without further notice to Lessee
and, at Lessor's option, Lessor shall execute such documents on behalf
of Lessee as Lessee's attorney-in-fact. Lessee does hereby make,
constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact
and in Lessee's name, place and stead, to execute such documents in
accordance with this article 39, and Lessee acknowledges that said
appointment of Lessor as its attorney-in-fact is coupled with an
interest.
40. Performance Under Protest If at any time a dispute shall arise
as to any amount or sum of money to be paid by one party to the other
under the provisions hereof, the party against whom the obligation to
pay the money is asserted shall have the right to make payments "under
protest" and such payment shall not be regarded as a voluntary payment
and there shall survive the right on the part of the said party to
institute suit for recovery of each sum. If it shall be adjudged that
there was no legal obligation on the part of said party to pay such
sum or any part thereof, said party shall be entitled to recover each
sum or so much thereof as it was not legally required to pay under the
provisions of this Lease.
41. Authority. If Lessee is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of
such entity represent and warrants that he or she is duly authorized
to execute and deliver this Lease on behalf of said
entity. If Lessee is a corporation, trust or partnership, Lessee
shall, within thirty (30) days after execution of this Lease, deliver
to Lessor evidence of such authority satisfactory to Lessor.
42. Options.
42.1 Definition. As used in this Article the word "option"
means the option or right to extend this Lease according to the terms
set forth in the option.
42.2 Options Personal. Each option granted to Lessee in this
Lease is personal to the original Lessee and may be exercised only by
the original Lessee, while occupying the Premises and without the
intent of thereafter assigning this Lease or subletting the Premises
or any portion thereof, and may be exercised or be assigned
voluntarily or involuntarily, by or to any person or entity other than
Lessee. The options, if any, granted to Lessee in or in connection
with this Lease are not assignable separate and apart from this Lease,
nor may any option be separated from this Lease in any manner, either
by reservation or otherwise.
42.3 Multiple Options. In the event that Lessee has any
multiple options to extend or renew this Lease, a later option cannot
be exercised unless the prior option to extend or renew this Lease has
been so exercised.
42.4 Effect on Default on Options.
(a) Lessee shall have no right to exercise an option,
notwithstanding any provision in the grant of option to the contrary,
if Lessee is declared in default beyond any applicable grace or cure
periods provided herein.
(b) The period of time within which an option may be
exercised shall not be extended or enlarged by reason of lessee's
inability to exercise an option because of the provision of paragraph
42.4 (a).
(c) All rights of Lessee under the provisions of an option
shall terminate and be of no further force or effect, notwithstanding
Lessee's due and timely exercise of the option, if, after such
exercise and during the term of this Lease,
(i) Lessee fails to pay Lessor a monetary obligation of
Lessee for a period of thirty (30) days after such obligation becomes
due (without any necessity of Lessor to give notice thereof to
Lessee),or
(ii) Lessee fails to commence to cure a default
specified in paragraph 13.1(c) within thirty (30) days after the date
that Lessor gives notice to Lessee of such default and/or Lessee fails
thereafter to diligently prosecute said cure to completion, or
(iii) Lessee commits a default described in paragraph
13.1(a), 13.1(d) or 13.1(e) (without any necessity of Lessor to give
notice of such default to Lessee), or
(iv) Lessor gives to Lessee three or more choices of
default under paragraph 13.1 (b), or paragraph 13.1 (c), whether or
not the defaults are cured.
43. Offer. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lease.
This Lease shall become binding upon Lessor and Lessee only when fully
executed by Lessor and Lessee.
44. Amendments. Amendments to this Lease which are separately dated
and signed by both parties shall be a part of this Lease. Any and all
such Amendments shall be narrowly construed and shall alter the
provisions of this Lease only as if specifically set forth in such
Amendments.
45. Exhibits. The following Exhibits (unless lined out) are incorporated
by reference in this Lease
Exhibit "A"' - Site plan of the Industrial Center.
Exhibit "B" - Floor plan of the Premises
Exhibit "C" - Description of Tenant Improvements to be provided by Lessor.
Exhibit "D" - Not Included
Exhibit "E" - Hazardous Materials Waning and Liability Release.
Exhibit "F" - Sign Criterion & Specifications
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW
THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE
THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF
LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
LESSOR: LESSEE:
Coral Tree Commerce Center Associates Quadrax Corporation
0000 Xxxxx Xxx., Xxxxx X 000 Xxxx Xxxxx Xxxxxx
Xxxxx, XX. 00000 Portsmouth, RI.
By. /s/ Xxxxxxx P Woodlley By: /s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxx, General Partner Xxxxxx X. Xxxxxxxxxxx,
Chief Financial Officer
Executed on May 6, 1996 Executed on May 26, 1996
EXHIBIT "A"
SITE PLAN
Graphic Design
-------------------------------------------
EXHIBIT "B"
Graphic Floor Plan
------------------------------------------
EXHIBIT "C"
CORAL TREE COMMERCE CENTER
TENANT IMPROVEMENTS
The tenant improvements will consist of the following:
1. Lessor at Lessors' cost shall have all office areas painted.
2. Lessor at Lessors' cost shall have all office area carpeting
replaced.
3. Lessor shall inspect and make all minor repairs to office
areas.
4. Lessor shall provide warehouse areas in broom swept condition.
5. Lessor shall provide the following electrical upgrades:
6. Lessor shall provide a 8' x 8' opening in the demising wall
located between Suites F & G in an area designed by Lessee.
7. Lessor shall provide the following electrical upgrades:
a. Provide two (2) 200 amp, 3 phase panels
1. one to be located on the south wall of
the electrical room
2. one to be located on the nearest post opposite
of demising wall
Initials: Lessor Initials: Lessee
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EXHIBIT "E"
CORAL TREE COMMERCE CENTER ASSOCIATES
HAZARDOUS MATERIALS WARNING AND LIABILITY
Property: CORAL TREE COMMERCE CENTER
The following provisions dealing with Hazardous Materials are meant to
be in addition to and not supersede or limit any other provisions of
this Lease which may deal with the same subject matter.
(a) Definition. "Hazardous Materials" shall mean any
hazardous or toxic substance, material or waste which is or becomes
regulated by any local or governmental authority, the State of
California or the United States Government, including but not limited
to substances defined as "hazardous substances", "hazardous
materials", " toxic substances", or "hazardous wastes" in the
Comprehensive Environmental Responses, Compensation and Liability ACT
of 1980, as amended, 42 U.S.C. Section 9601, et seq; the Hazardous
Materials Transportation Materials Transportation ACT, 49 U.S.C.
Section 9601, et seq; the California Health & Safety Code; and any
law, ordinance or regulation dealing with underground storage tanks;
and in the regulations adopted, published and/or promulgated pursuant
to said laws, and in any other environmental law, regulation or
ordinance now existing or hereinafter enacted (hereinafter "Hazardous
Materials Laws").
(b) Use and Removal.
(1) LESSEE hereby agrees that LESSEE shall not use,
generate, manufacture, refine, process, store, or dispose
of on, under or about the PREMISES or transport to or from
the PREMISES any Hazardous Materials, except with the
written consent of LESSOR in LESSOR'S sole discretion and
in full compliance with applicable Hazardous Materials Laws
LESSEE further acknowledges that LESSEE does not intend to
use the PREMISES in the future for the purpose of
generating, manufacturing, refining, producing, storing,
handling, transferring, processing or transporting of
Hazardous Materials.
(2) If at any time during the term of this Lease,
Hazardous Materials are used, or placed by LESSEE on the
PREMISES or Hazardous Materials are discovered
by LESSEE on the PREMISES where no prior consent of LESSOR
was obtained or otherwise in violation of any Hazardous
Materials Laws, or if any contamination of the PREMISES
shall occur, LESSEE, at LESSEE'S sole cost and expense,
shall immediately remove such Hazardous Materials from the
PREMISES or from the ground or groundwater underlying the
premises in accordance with requirements of the appropriate
governmental entity. Furthermore, LESSEE shall at its own
expense procure, maintain in effect and comply with all
conditions of any and all permits, licenses and other
governmental and regulatory approvals required for LESSEE'S
use of the PREMISES, including without limitation,
discharge of (appropriately, treated) materials and wastes
into or through any sanitary sewer serving the Premises.
(3) Except for discharges into the sanitary sewer in
strict accordance and conformity with all applicable
Hazardous Materials Laws, LESSEE shall cause any and all
permitted Hazardous Materials removed from the PREMISES to
be removed and transported solely by duly licensed haulers
to duly licensed facilities for final disposal of such
materials and wastes. LESSEE shall in all respects handle,
treat, deal with and manage any and all Hazardous Materials
in, on, under or about the PREMISES in total conformity
with all applicable Hazardous Materials Laws and prudent
industry practices regarding management of such Hazardous
Materials. LESSEE shall not take any remedial action in
response to the presence of any Hazardous Materials in any
way connected with the PREMISES without first notifying
LESSOR of LESSEE'S intention to do so and affording LESSOR
ample opportunity to appear, intervene or otherwise
appropriately assert and protect LESSOR'S interest with
respect thereto. In addition to all other rights and
remedies of LESSOR hereunder, if such Hazardous Materials
are not removed from the PREMISES or the ground or
groundwater underlying the PREMISES by LESSEE within
fifteen (15) days after LESSOR or LESSEE discovers such
Hazardous Materials, LESSOR, at its sole discretion, may
but shall not be obligated to pay to have same removed, and
LESSEE shall
reimburse LESSOR within five (5) days of LESSOR'S demand
for payment.
(c) Notice.
(1) LESSEE shall immediately notify LESSOR in writing of
(i) any enforcement, clean-up, removal or other
governmental or regulatory action instituted completed or
threatened pursuant to any Hazardous Materials Laws; (ii)
any claim made or threatened by any person against LESSEE,
or the PREMISES relating to damage contribution, cost
recovery, compensation, loss or injury resulting from or
claimed to result from any Hazardous Materials; and (iii)
any reports made to any environmental agency arising out of
or in connection with any Hazardous Materials in or removed
from the PREMISES including any complaints, notices,
warnings, warnings or asserted violations in connection
therewith, upon LESSEE'S receipt of actual knowledge of the
above. LESSEE shall also supply to LESSOR as promptly as
possible, and in any event within five (5) business days
after LESSEE first receives or send the -same, with copies
of all claims, reports, complaints, notices, warnings or
asserted violations relating in any way to the PREMISES, or
LESSEE'S use thereof. LESSEE shall promptly deliver to
LESSOR copies of Hazardous waste manifests reflecting the
legal and proper disposal of all Hazardous Materials
removed from the PREMISES.
(2) LESSEE acknowledges the LESSEE has been informed that
Section 25359.7 of the California Health and Safety Code
provides that any LESSEE of real property who knows, or has
reasonable cause to believe, that any release of hazardous
substances has come to be located on or beneath the real
property shall, upon discovery by the LESSEE of the
presence or suspected presence of a hazardous substance
release, give notice of that condition to the owner of the
real property. Failure of the LESSEE to provide written
notice as required to the owner shall make the Lease
voidable at the discretion of the owner. The Health and
Safety Code provides that if the LESSEE has actual
knowledge of the presence of any hazardous substance
release and knowingly or willingly fails to provide written
notice as required by the owner, the LESSEE is liable for a
civil penalty not to exceed $5,000 for each violation.
(d) Indemnification. LESSEE shall indemnify, defend (by counsel
reasonably acceptable to LESSOR), protect, and hold LESSOR, and
each and any of LESSOR'S shareholders, partners, officers,
directors, employees, agents, attorneys, successors and assigns,
free and harmless from and against any and all claims,
liabilities, penalties, forfeitures, losses or expense (including
actual attorney's fees and costs) or death of or injury to any
person or damage to any property whatsoever, arising from or
caused in whole or in part, directly or indirectly, by (i) the
presences in, on, under or about the PREMISES or discharge in or
from the PREMISES of any Hazardous Material placed or discharged
in, on, or under the PREMISES by LESSEE or LESSEE'S use, analysis,
storage, transportation, disposal, release, discharge or
generation of Hazardous Materials to, in, or under about of from
the PREMISES, or (ii) LESSEE'S failure to comply with any
Hazardous Materials laws. LESSEE'S obligation hereunder shall
include, without limitation, and whether foreseeable or
enforceable, all costs of any required or necessary repair, clean-
up or detoxification or decontamination of the PREMISES and the
preparation and implementation of any closure, remedial action or
other required plans in connection therewith. For purposes of the
indemnity provisions hereof, any ACTS or omissions of LESSEE, or
by employees, agents, assignees, subtenant, concessionaire,
contractors or subcontractors of LESSEE or others acting for on
behalf of LESSEE(whether or not they are negligent, intentional,
willful or unlawful) shall be strictly attributable to LESSEE.
e) Survival. All representations, warranties, obligations, and
indemnities with respect to Hazardous Materials shall survive the
termination of this Lease.
LESSOR: LESSEE:
Coral Tree Commerce Center Associates Quadrax Corporation
0000 Xxxxx Xxx., Xxxxx X 000 Xxxx Xxxxx Xxxxxx
Xxxxx, XX. 00000 Portsmouth, RI.
By. /s/ Xxxxxxx P Woodlley By: /s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxx, General Partner Xxxxxx X. Xxxxxxxxxxx, Chief
Financial Officer
Executed on May 6, 1996 Executed on May 26, 1996
-------------------------------------------
EXHIBIT "F"
CORAL TREE COMMERCE CENTER
INDUSTRIAL LEASE
TENANT SIGN CRITERION - SPECIFICATIONS
Exhibit (1) - Exterior Wall Sip-n
Determination of size allowable is based on 1/2 sq/ft per
tenant frontage scale 1/8"=11
Signs to be minimum of 25 sq/ft and maximum of 50 sq/ft Wall
signs must be located within the specified height and width
perimeters above tenant space (see detail on Exhibit 1).
Design layout of proposed tenant signs, drawn to scale, must
be approved by owner or owner's representative prior to
fabrication and installation.
Exhibit (2) - Construction Detail
Dimensional graphics, consisting of laminated acrylic on
medium density foam, 2-1/8" thick.
Graphics must be mounted with non-damaging liquid adhesive
(note: use latex paint over foam, apply contact cement to
adhere acrylic to face of building).
No pin mounted graphics are allowed.
Faces and returns of all graphics to be same color.
Exhibit (3) - )Window Sign
Each tenant shall be allowed vinyl window graphics at their
main entrance.
Graphics may include company logo, company name and hours of
operation, and must fit specifications as shown on preceding
exhibit.
Design layout of proposed tenant signage, drawn to scale, must
be approved by owner's representative prior to fabrication and
installation.
Graphics and copy to be simple space-right, light beige vinyl
cutouts, typestyle is Times Roman.
