EXHIBIT 10.14
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Basic Provisions ("Basic Provisions").
1.1 Parties: This Lease ("Lease"), dated for reference purposes
only, April 16 , 19 99 , is made by and between Rincom Associates ("Lessor") and
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iOwn, Inc. ("Lessee"), (collectively the "Parties," or individually a "Party").
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1.2(a) Premises: That certain portion of the Building, including all
improvements therein or to be provided by Lessor under the terms of this Lease,
commonly known by the street address of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ , located in the City
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of San Francisco , County of San Francisco , State of California , with zip code
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94107 , as outlined on Exhibit A attached hereto ("Premises"). The "Building" is
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that certain building containing the Premises and generally described as
(describe briefly the nature of the Building): See attached Exhibit "A" to
Lease. In addition to Lessee's rights to use and occupy the Premises as
hereinafter specified, Lessee shall have non-exclusive rights to the Common
Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall
not have any rights to the roof, exterior walls or utility raceways of the
Building or to any other buildings in the Industrial Center. The Premises, the
Building, the Common Areas, the land upon which they are located, along with al
other buildings and improvements thereon, are herein collectively referred to as
the "Industrial Center." (also see Paragraph 2.)
1.2(b) Parking: NO unreserved vehicle parking spaces ("Unreserved
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Parking Spaces"); and Four (4) reserved vehicle parking spaces (Reserved Parking
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Spaces"). (Also see Paragraph 2.6 and Paragraph 53)
1.3 Term: as follows years and months ("Original Term") commencing
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See paragraph 52 ("Commencement Date") and ending October 31, 2004 ("Expiration
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Date"). (Also see Paragraph 3.)
1.4 Early Possession: See paragraph 52 ("Early Possession Date").
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(Also see Paragraphs 3.2 and 3.3.)
1.5 Base Rent: $ 57,000.00 per month ("Base Rent"), payable on the
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First day of each month commencing See paragraph 52 (Also see Paragraph 4.)
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[X] If this box is checked, this Lease provides for the Base Rent to be
adjusted per Addendum 52 , attached hereto.
1.6(a) Base Rent Paid Upon Execution: $57,000.00 as Base Rent for the
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period month three of the Lease as defined in Paragraph 52
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1.6(b) Lessee's Share of Common Area Operating Expenses: 22.11% percent
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(22.11) ("Lessee's Share") as determined by
[X] prorata square footage of the Premises as compared to the total square
footage of the Building or [ ] other criteria as described in
Addendum .
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1.7 Security Deposit: $100,000.00 ("Security Deposit"). (Also see
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Paragraph 5.)
1.8 Permitted Use: Internet company, software development and
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related office use. ("Permitted Use") (Also see Paragraph 6.)
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1.9 Insuring Party. Lessor is the "Insuring Party." (Also see
Paragraph 8.)
1.10(a) Real Estate Brokers. The following real estate broker(s)
(collectively, the "Brokers") and brokerage relationships exist
in this transaction and are consented to by the Parties (check
applicable boxes):
[X] Tri Commercial Real Estate Services
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represents Lessor exclusively ("Lessor's Broker")
[X] ROK Properties represents Lessees exclusively ("Lessee's
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Broker"); or
[ ] represents bot Lessor and Lessee ("Dual
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Agency"). (Also see Paragraph 15)
1.10(b) Payment to Brokers. Upon the execution of this Lease by both
Parties, Lessor shall pay to said Broker(s) jointly, or in such separate shares
as they may mutually designate in writing, a fee as set forth in a separate
written agreement between Lessor and said Broker(s) (or in the event there is no
separate written agreement between Lessor and said Broker(s), the sum of $
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for brokerage services rendered by said Broker(s) in connection with this
transaction. (See paragraph 60)
1.11 Guarantor. The obligations of the Lessees under this Lease are
to be guaranteed by ("Guarantor"). (Also see paragraph 37.)
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1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 49 through 67 , and Exhibits A through B , all of which
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constitute a part of this Lease.
2. Premises, Parking and Common Areas.
2.1 Lotting. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises, for the term, at the rental, and upon all of
the terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of square footage set forth in this Lease, or
that my have been used in calculating rental and/or Common Area Operating
Expenses, is an approximation which Lessor and Lessee agree is reasonable and
the rental and Lessee's Share (as defined in Paragraph 1.6(b)) based thereon is
not subject to revision whether or not the actual square footage is more or
less.
2.2 Condition. Lessor shall deliver the Premises to Lessee clean and
free of debris on the Commencement Date and warrants to Lessee that the existing
plumbing, electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the Commencement
Date. If a non-compliance with said warranty exists as of the commencement Date,
Lessor shall, except as otherwise provided in this Lease, promptly after receipt
of written notice from Lessee setting forth with specificity the nature and
extent of such non-compliance rectify same at Lessor's expense,. If Lessee does
not give Lessor written notice of a non-compliance with this warranty within
thirty (30) days after the Commencement Date, correction of that non-compliance
shall be the obligation of Lessee at Lessee's sole cost expense.
2.3 Compliance with Covenants, Restrictions and Building Code.
Lessor warrants that any improvements (other than those constructed by Lessee or
at Lessee's direction (on or in the Premises which have been constructed or
installed by lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement Date.
Lessor further warrants to Lessee that Lessor has no knowledge of any claim
having been made by any governmental agency that a violation or violations of
applicable building codes, regulations, or ordinances exist with regard to the
Premises as of the Commencement Date Said warranties shall not apply to an
Alterations or Utility provided in this Lease, promptly after receipt of written
notice from Lessee given within six (6) months following the commencement Date
and setting forth with specificity the nature and extent of such non-compliance,
take such action, at Lessor's expense, as my be reasonable or appropriate to
rectify the non-compliance. Lessor makes not warranty that the Permitted Use in
paragraph 1.8 is permitted for the Premises under Applicable or appropriate to
rectify the non-compliance. Lessor makes no warranty that the Permitted Use in
Paragraph 1.8 is permitted for the Premises under Applicable Laws (as defined in
Paragraph 2.4).
2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it
has bee advised by the broker(s) to satisfy itself with respect to the condition
of the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, seismic and earthquake requirements,
and compliance with the Americans with Disabilities Act and applicable zoning,
municipal, county, state and federal laws, ordinances and regulations and by
convenants or such investigation as it deems necessary with reference to such
matters, is satisfied with reference thereto, and assumes all responsibility
therefore as the same relate to Lessee's occupancy of the Premises and/or the
terms of this Lease; and (c) that neither Lessor, nor any of Lessor's agents,
has made any oral or written representations or warranties with respect to said
matters other than is set forth in this Lease.
2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in
Paragraph 2 shall be of no force of effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner of occupant of the Premises. In such
event, Lessee shall, at Lessee's sole cost and expense, correct any non-
compliance of the Premises with said warranties.
2.6 Vehicle Parking. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved parking Spaces specified in Paragraph
1.2(b) on those portions of the Common Areas designated from time to time by
Lessor for parking. Lessee shall not use more parking spaces that said number
said parking spaces shall be used for parking by vehicles no larger than full-
size passenger automobiles or pick-up trucks, herein called "Permitted Size
Vehicles." Vehicle other than Permitted Size Vehicles shall be parked and loaded
or unloaded as directed by Lessor in the Rules and Regulations (as defined in
Paragraph 40) issued by lessor. (Also see Paragraph 2.9)
(a) Lessee shall not permit or allow any vehicles that belong to
or are controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Lessor for such activities.
(b) If Lessee permits or allows any of the prohibited activities
described in this paragraph 2.6, then Lessor shall have the right, without
notice, In addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor
(c) Lessor shall at the Commencement Date of this Lease. provide
the parking facilities required by Applicable Law.
2.7 Common Areas--Definition. The term "Common Areas" is defined as
all areas and facilities outside the Premises and within the exterior boundary
of the Industrial Center and interior utility raceways within the Premises that
are provided and designated by the Lessor from time to lime for the general non-
exclusive use 04 Lessor, Lessee and other lessees of the Industrial Center and
their respective employees, suppliers, shippers, customers, contractors and
individual fees. including parking areas, loading and unloading areas, bash
areas, roadways, sidewalks, walkways, padways, driveways and landscaped areas.
(See Insert 1, Exhibit "B")
2.8 Common Areas--Lease's Rights. Lessor hereby grants to Lessee.
for the benefit of Lessee and its employees, suppliers, shippers, contractors.
customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such 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 and regulations
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.
Any such storage shall be permitted only by the prior written consent of Lessor
or Lessor's designated agent, which consent may be revoked al any lime. In the
event that any unauthorized storage shall occur then Lessee shall have the
right, without notice, In addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee. which cost shall be
immediately payable upon demand by Lessor.
2.9 Common Areas--Rules and Regulations. Lessor or such other
person(s} as Lessor may appoint shall have the exclusive control and management
of the Common Areas and shall have the right, from time to lime, to establish,
modify, amend and enforce reasonable Rules and Regulations with respect thereto
in accordance with Paragraph 40. Lessee agrees to abide by and Conform to all
such Rules and Regulations, and to cause its employees, suppliers, shippers,
customers, contractors and invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and regulations
other lessees to the Industrial Center.
2.10 Common Areas--Changes. Lessor shall have the right, in Lessor's
reasonable discretion so long as it does not cause any material interference
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 space parking areas, loading and unloading areas, ingress,
egress direction of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) to designate other land outside the boundaries of the
Industrial Center to be a part of the common Areas;
(d) To add additional buildings and improvements to the Common
Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any portion
thereof; and
(f) To do and perform such other acts and make such other
changes in, to or with respect to the Common Areas and Industrial Center as
Lessor may in the exercise of sound business judgement, deem to be appropriate.
3. Term.
3.1. Term. The Commencement Date, Expiration Date and Original Term
of this Lease are as specified in Paragraph 1.3
3.3. Delay in Possession. If for any reason Lessor cannot deliver
possession of the Premises to Lessee by the Early Possession Date, if one is
specified in Paragraph 1.4 or if no Early Possession Date is specified, by the
Commence Date, Lessor shall not be subject to any liability therefor, nor shall
such failure affect the validity of this Lease, or the obligations of Lessee
hereunder, or extend the term hereof, but in such case, Lessee shall not, except
as otherwise provided Herein, be obligated to pay rent or perform any other
obligation of Lessee under the terms of this Lease until Lessor delivers
possession of the Premises to Lessee. If possession of the Premises is not
delivered to Lessee within sixty (60) days after the Commencement Date, Lessee
may, at its option, by notice in writing to Lessor within ten (10) days after
the end of said sixty (60) 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 of 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. Except as may be otherwise
provided, and regardless of when the Original Term actually commences, if
possession is not tendered to Lessee when required by this Lease and Lessee does
not terminate this Lease, as aforesaid, the period free of the obligation to pay
Base Rent, if any, that Lessee would otherwise have enjoyed shall run from the
day of delivery of possession and continue for a period equal to the period
during which the Lessee would have otherwise enjoyed under the terms hereof, but
minus any days of delay caused by the acts, changes or omissions of Lessee. (See
paragraph 52.2)
4. Rent
4.1 Base Rent. Lessee shall pay Base Rent and other rent or charges,
as the same may be adjusted from time to time, to Lessor in lawful money of the
United States, without offset or deduction, on or before the day on which it is
due under the terms of this Lease. Base Rent and all other rent and charges for
any period during the term hereof which is for less than one full month shall be
prorated based upon the actual number of days of the months involved. Payment of
Base Rent and other changes shall be made to Lessor at its address stated herein
or to such other persons or at such other addresses as Lessor may from time to
time designate in writing to Lessee.
4.2 Common Area Operating Expenses. Lessee shall pay to Lessor
during the term hereof, In addition to the Base Rent, Lessee's Share (as
specified in Paragraph 1.6(b)) of all Common Area Operating Expenses, as
hereinafter defined of all increases over Lessee's share during the base year
during each calendar year of the term of this Lease, in accordance with the
following provisions:
(a) "Common Area Operating Expenses" are defined, for purposes
of this Lease, as all costs incurred by Lessor relating to the ownership and
operation of the Industrial Center, including, but not limited to, the
following:
(i) The operation, repair and maintenance, in neat clean,
good order and condition, of the following:
(aa) the Common Area, including parking area, loading
and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, striping, bumpers irrigation systems, Common Area
lighting facilities, fences and gates, elevators and roof.
(bb) Exterior signs and any tenant directories.
(cc) Fire detection and sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to
service the Common Areas.
(iii) Property management and security services and the
costs of any environmental inspections.
(iv) Reserves set aside for maintenance and repair of
Common Areas.
(v) Any increase above the Base Real Property Taxes (as
defined in Paragraph 102(b)) for the Building and the Common Areas. Property tax
base year 1998-1999.
(vi) Any "Insurance Coal Increase" (as defined in Paragraph
8.1).
(vii) The cost of Insurance carried by Lessor with
respect to the Common Areas.
(viii) Any deductible portion of an insured loss concerning
the Building or the Common Areas.
(ix) Any other services to be provided by Lessor that are
slated elsewhere in this Lease to be a Common Area Operating Expense.
(b) Any Common Area Operating Expenses and Real Property Taxes
that are specifically attributable to the Building or to any other building in
the Industrial Center or to the operation, repair and maintenance thereof, shall
be allocated entirely to the Building or to such other building. However, any
Common Area Operating Expenses and Real Properly Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, shall be equitably allocated by Lessor to all
buildings in the Industrial Center.
(c) The inclusion of the improvements, facilities and services
set forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation
upon Lessor to either have said improvements or facilities or to provide those
services unless the Industrial Center already has the same. Lessor already
Provides the services, or Lessor has agreed elsewhere in this Lease to provide
the same or some of them.
(d) Lessee's Share at Common Area Operating Expenses shall be
payable by Lessee within left (10) 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 Common Area Operating Expenses and the same shall be payable monthly or
quarterly, as Lessor shall designate during each 12 month period of the Lease
term, on the same day as the Base Rent is due hereunder. Lessor shall deliver to
Lessee within sixty (60) days after the expiration of each calendar year a
reasonably detailed statement showing Lessee's Share of the actual Common Area
Operating Expenses incurred during the preceding year. If Lessee's payments
under this Paragraph 4.2(d) during said preceding year exceed Lessee's Share as
indicated on said statement, Lessee shall be credited the amount of such over
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payment against Lessee's Share of Common Area Operating Expenses next becoming
due. If Lessee's payments under this Paragraph 4.2(d) 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 ten (10) days after delivery by
Lessor to Lessee of said statement. (See paragraph 67)
5. Security Deposit. Lessee shall deposit with Lessor upon Lessee's
execution hereof the Security Deposit set forth in Paragraph 1.7 as security for
Lessee's faithful performance of Lessee's obligations under this Lease. If
Lessee fails to pay Base Rent or other rent or charges due hereunder, or
otherwise Defaults under this Lease (as defined in Paragraph 13.1), Lessor may
use, apply or retain all or any portion of said Security Deposit for the payment
of any amount due Lessor or to reimburse or compensate Lessor for any liability,
cost, expense, loss or damage (including attorney' fees) which Lessor may suffer
or incur by reason thereof. If Lessor uses or applies all or any portion of said
Security Deposit, for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, cost, expense, loss or damage (including
attorneys' fees) which Lessor may suffer or incur by reason thereof. If Lessor
uses or applies all or any portion of said Security Deposit, Lessee shall within
ten (10) days after written request therefore deposit monies with Lessor
sufficient to restore said Security Deposit to the full amount required by this
Lease. Any time the Base Rent increases during the term of this Lease, Lessee
shall, upon written request from Lessor, deposit additional monies with Lessor
as an addition to the Security Deposit so that the total amount of the Security
Deposit shall at all not be required to keep all or any part of the Security
Deposit separate from its general accounts. Lessor shall, at the expiration or
earlier termination of the term hereof and after Lessee has vacated the
Premises, return to Lessee (or, at Lessor's option, to the last assignee, if
any, of Lessee's interest herein), that portion of the Security Deposit not used
or applied by Lessor. Unless otherwise expressly agreed in writing by Lessor,
no part of the Security Deposit shall be considered to be held in trust, to bear
interest or other increment for its use, or to be prepayment for any monies to
be paid by Lessee under this Lease.
6. Use.
6.1 Permitted Use.
(a) Lessee shall use and occupy the Premises only for the
Permitted Use set forth in Paragraph 1.8, or any other legal use which is
reasonably comparable thereto, and for no other purpose. Lessee shall not use
or permit the use of the Premises in a manner that is unlawful, creates waste or
a nuisance, or that disturbs owners and/or occupants of, or causes damage to the
Premises or neighboring premises or properties.
(b) Lessor hereby agrees to not unreasonably withhold or delay
its consent to any written request by Lessee, Lessee's assignees or subtenants,
and by prospective assignees and subtenants of Lessee. Its assignees and
subtenants, for a modification of said Permitted Use, so long as the same will
not impair the structural integrity of the improvements on the Premises or in
the Building or the mechanical or electrical systems therein, does not conflict
with uses by other lessees, is not significantly more burdensome to the Premises
or the Building and the Improvements thereon, and is otherwise permissible
pursuant to this Paragraph 6. If Lessor elects to withhold such consent, Lessor
shall within five (5) business days after such request give a written
notification of same, which notice shall include an explanation of Lessor's
reasonable objections to the change in use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the public health, safety or
welfare, the environment, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential liability of Lessor to
any governmental agency or third party products or by-products thereof. Lessee
shall not engage in any activity in or about the Premises which constitutes a
Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Requirements (as defined in
Paragraph 6.3). "Reportable Use" shall mean (i) the Installation or use of any
above or below ground storage tank, (ii) the generation, possession, storage,
use, transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice registration or business plan is
required to be filed with, any governmental authority, and (iii) the presence
in, on or about the Premises of a Hazardous Substance with respect to which any
Applicable Laws require that a notice be given to persons entering or occupying
the Premises or neighboring properties. Notwithstanding the foregoing, Lessee
may, without Lessor's prior consent, but upon notice to Lessor and In compliance
with all Applicable Requirements, use any ordinary and customary material
reasonably required to be used by Lessee in the normal course of the Permitted
Use, so long as such use is not a Reportable Use and does not expose the
Premises or neighboring properties to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor. In addition, Lessor my (but
without any obligation to do so) condition its consent to any Reportable Use of
any Hazardous Substance by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability thereof, including but not limited to
the installation (and, at Lessor's option, remove all on or before Lease
expiration or earlier termination) of reasonably necessary protective
modifications to the Premises (such as concrete encasements) and/or the deposit
of an additional Security Deposit under Paragraph 5 hereof.
(b) Duty to Inform Lessor. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance has come to be located in, on,
under or about the Premises or the Building, other than as previously consented
to by Lessor, Lessee shall immediately give Lessor written notice thereof,
together with a copy of any statement, report, notice, registration,
application, permit, business plan, license, claim, action, or proceeding given
to, or received from, any governmental authority or private party concerning the
presence, spill, release, discharge of, or exposure to, such Hazardous Substance
including but not limited to all such documents as may be involved in any
Reportable Use Involving the Premises. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under or about the
Premises (including, without limitation, through the plumbing or sanitary sewer
system).
(c) Indemnification. Lessee shall indemnify, protect, defend and
hold Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all damages, liabilities,
judgements, costs, claims, liens, expenses, penalties, loss of permits and
attorney' and consultants' fees arising out of or involving any Hazardous
Substance brought onto the Premises by or for Lessee or by anyone under Lessee's
control. Lessee's obligations under this Paragraph 6.2(c) shall include, but not
be limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Lessee, and the cost of investigation
(including consultants' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein involved,
and shall survive the expiration or earlier termination of this Lease. No
termination, cancellation or release agreement entered into by Lessor and Lessee
shall release Lessee from its obligations under this Lease with respect to
Hazardous Substances, unless specifically so agreed by Lessor in writing at the
time of such agreement.
6.3 Lessee's Compliance with Requirements. Lessee shall, at Lessee's
sole cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements," which term is used in this Lease to mean all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor's
engineers and/or consultants, relating in any manner to the Premises (including
but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about Premises, including soil and
ground water conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill, or release
of any Hazardous Substance), now in effect or which may hereafter come into
effect. Lessee shall, within five (5) days after receipt of Lessor's written
request, provide Lessor with copies of all documents and information, including
but not limited to permits, registrations, manifests, applications, reports and
certificates, evidencing Lessee's compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
failure by Lessee or the Premises to comply with any Applicable Requirements.
(See Insert 6, Exhibit "B")
6.4 Inspection; Compliance with Law. Lessor, Lessor's agents,
employees, contractors and designated representatives, and the holders of any
mortgages, deeds of trust or ground leases on the Premises ("Lenders") shall
have the right to enter the Premises at any time in the case of an emergency,
and otherwise at reasonable times upon prior notice and a representative of
Lessee shall be given an opportunity to accompany Lessor and /or Lessor's
Representative for the purpose of inspecting the condition of the Premises and
for verifying compliance by Lessee with this Lease and all Applicable
Requirements (as defined in Paragraph 6.3), and Lessor shall be entitled to
employ experts and/or consultants in connection therewith to advise Lessor with
respect to Lessee's activities, including but not limited to Lessee's
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance on or from the Premises. The costs and expenses of any such
inspections shall be paid by the party requesting same, unless a Default or
Breach of this Lease by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
or to be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In such case, Lessee shall upon request reimburse Lessor or
Lessor's Lender, as the case maybe, for the costs and expenses of such
inspections.
7. Maintenance, Repairs, Utility Installations, Trade Fixtures and
Alterations.
7.1 Lessee's Obligations.
(a) Subject to the provisions of Paragraphs 2.2. (Condition),
2.3 (Compliance with Covenants Restrictions and Building Code), 7.2 (Lessor's
Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at
Lessee's sole cost and expense and at all times, keep the Premises and every
part thereof in good order, condition and repair (whether or not such portion of
the Premises requiring repair, or the means of repairing the same, are
reasonably or readily accessible to Lessee, and whether or not the need for such
repairs occurs as a result of Lessee's use, any prior use, the elements or the
age of such portion of the Premises), including, without limiting the generality
of the foregoing, all equipment or facilities specifically serving the Premises,
such as plumbing, heating, air conditions, ventilating, electrical, lighting
facilities, boilers, fired or unfired pressure vessels, fire hose connections if
within the Premises, fixtures, interior walls, interior surfaces of exterior
walls, ceiling, floors, windows, doors, plate glass, and sky lights, but
excluding any items which are the responsibility of Lessor pursuant to Paragraph
7.2 below. Lessee, in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices. Lessee's obligations
shall include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair. (See Insert 2 Exhibit "B")
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain a contract, with copies to Lessor, in customary form and substance for
and with a contractor specializing and experienced in the inspection,
maintenance and service of the heating, air conditioning and ventilating system,
and if Lessor so elects, Lessee shall reimburse Lessor, upon demand, for the
actual cost thereof.
(c) If Lessee fails to perform Lessee's obligations under this
Paragraph 7.1, Lessor may enter upon the Premises after ten (10) 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 Lessee's behalf, and put
the Premises in good order, condition and repair, in accordance with Paragraph
13.2 below.
7.2 Lessor Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance with Covenants, Restrictions and Building Code),
4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9.
(Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement
pursuant to Paragraph 4.2, shall keep in good order, condition and repair the
foundations, exterior walls, structural condition of interior bearing walls,
exterior roof, fire sprinkler and/or standpipe and hose (if located in the
Common Areas) or other automatic fire extinguishing system including fire alarm
and/or smoke detection
--3--
systems and equipment, fire hydrants, parking lots, walkways, parkways,
driveways, landscaping, fences, signs and utility systems serving the Common
Areas and all parts thereof, as well as providing there services for which there
is a Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not
be obligated to maintain, repair or replace windows, doors or plate glass of the
Premises. Lessee expressly waives the benefit of any statute now or hereafter in
effect which would otherwise afford Lessee the right to make repairs at Lessor's
expense or to terminate this Lease because of Lessor's failure to keep the
Building, Industrial Center of Common Areas in good order, condition and repair.
7.3 Utility Installations, Trade Fixtures, Alterations.
(a) Definitions; Consent Required. The term "Utility
Installations" is used in this Lease to refer to all air lines, power panels,
electrical distribution, security, fire protection systems, communications
systems, lighting fixtures, heating, ventilating and air conditioning equipment,
plumbing, and fencing in, on or about the Premises. The term "Trade Fixtures"
shall mean Lessee's machinery and equipment which can be removed without doing
material damage to the Premises. The term "Alterations" shall mean any
modification of the improvements on the Premises which are provided by Lessor
under the terms of this Lease, other than Utility Installations or Trade
Fixtures. "Lessee-Owned Alterations and/or Utility Installations" are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned
by Lessor pursuant to Paragraph 7.4(a). Lessee shall not make nor cause to be
made any Alterations or Utility Installations in, on, under or about the
Premises without Lessor's prior written consent. Lessee may, however, make non-
structural Utility Installations to the interior of the Premises (excluding the
roof) without Lessor's consent but upon notice to Lessor, so long as they are
not visible from the outside of the Premises, do not involve puncturing,
relocating or removing the roof or any existing walls, or changing or
interfering with the fire sprinkler or fire detection systems and the cumulative
cost thereof during the term of this Lease as extended does not exceed $2,500.00
per incident and $10,000.00 aggregate. (See Insert 3, Exhibit "B")
(b) Consent. Any Alterations or Utility Installations that
Lessee shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. All consents given by
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific consent,
shall be deemed conditioned upon; (i) Lessee's acquiring all applicable permits
required by governmental authorities; (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work thereon; and
(iii) the compliance by Lessee with all conditions of said permits in a prompt
and expeditious manner. Any Alterations or Utility Installations by Lessee
during the term of this Lease shall be done in a good and workmanlike manner,
with good and sufficient materials, and be in compliance with all Applicable
Requirements. Lessee shall promptly upon completion thereof furnish Lessor with
as-built plans and specifications therefor. Lessor may, (but without obligation
to do so) condition its consent to any requested Alteration or Utility
Installation that costs $2,5000.00 or more upon Lessee's providing Lessor with a
lien and completion bond in an amount equal to one and one-half times the
estimated cost of such Alteration or Utility Installation.
(c) Lien Protection. Lessee shall pay when due all claims for
labor or materials furnished or alleged to have been furnished to or for Lessee
at or for use on the Premises, which claims are or may be secured by any
mechanic's or materialmen's lien against the Premises or any interest therein,
Lessee shall give Lessor not less than ten (10) days notice prior to the
commencement of any work in, on, or about the Premises, and Lessor shall have
the right to post notices of its sole expense, defend and protect itself, Lessor
and the premises against the same and shall pay and satisfy and such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises. If Lessor shall require, Lessee shall furnish to Lessor
a surety bond satisfactory required by law for the holding of the Premises free
from the effect of such lien or claim. In addition, Lessor may require in such
Lessee to pay Lessor's reasonable attorney's fees and costs in participating
action if Lessor shall decide it is to its best interest to do so.
(d) See Insert 4, Exhibit "B".
7.4 Ownership, Removal, Surrender, and Restoration.
(a) Ownership. Subject to Lessor's right to require their
removal and to cause Lessee to become the owner thereof as hereinafter provided
in this Paragraph 7.4, all Alterations and Utility Installations made to the
Premises by lessee shall be the property of and owned by Lessee, but considered
a part of the Premises. Lessor so long as timely required by Lessor or otherwise
agreed to by the parties may in connection with Lessor's consent thereto elect
in writing to Lessee to be the owner of all or any specified part of the Lessee-
Owned Alterations and Utility Installations all Lessee-Owned alterations and
Utility Installations shall, at the expiration or earlier termination of this
Lease, become the property of Lessor and remain upon the Premises and be
surrendered with the Premises by Lessee.
(b) Removal. Unless otherwise agreed in writing, Lessor may
require that any or all Lessee-Owned Alterations or Utility Installations be
removed by the expiration or earlier termination of this Lease, notwithstanding
that their installation may have been consented to by Lessor. Lessor may require
the removal at any item of all or any part of any Alterations or Utility
Installations made without the required consent of Lessor.
(c) Surrender/Restoration. Lessee shall surrender the Premises
by the end of the last day of the Lease term or any earlier termination date,
clean and free of debris and in good operating order, condition and state of
repair, ordinary wear and tear excepted. Ordinary wear and tear shall not
include any damage or deterioration that would have been prevented by good
maintenance practice or by Lessee performing all its obligations under this
Lease. Except as otherwise agreed or specified herein, the Premises, as
surrendered, shall include the Alterations and Utility Installations. The
obligation of Lessee shall include the repair of any damage occasioned by the
installation, maintenance or removal of Lessee's Trade Fixtures, furnishings,
equipment, and Lessee-Owned Alterations and Utility Installations, as well as
the removal of any storage tank installed by or for Lessee, and the removal,
replacement, or remediation of any soil, material or ground water contaminated
by Lessee, all as may then be required by Applicable Requirements and/or good
practice. Lessee's Trade Fixtures shall remain the property of Lessee and shall
be removed by Lessee subject to its obligation to repair and restore the
Premises per this Lease.
8. Insurance; Indemnity.
8.1 Payment of Premium Increases.
(a) As used herein, the term "Insurance Cost Increase" is
defined as any increase in the actual cost of the insurance applicable to the
Building and required to be carried by Lessor pursuant to Paragraphs 8.2(b),
8.3(a) and 8.3(b), ("Required Insurance"), over and above the Base Premium, as
hereinafter defined, calculated on an annual basis. "Insurance Cost Increase"
shall include, but not be limited to, requirements of the holder of a mortgage
or deed of trust covering the Premises, increased valuation of the Premises,
and/or a general premium rate increase. The term "Insurance Cost Increase" shall
not, however, include any premium increases resulting from the nature of the
occupancy of any other Lessee of the Building. If the parties insert a dollar
amount in Paragraph 1.9, such amount shall be considered the "Base Premium." If
a dollar amount has not been inserted in Paragraph 1.9 and if the Building has
been previously occupied during the twelve (12) month period immediately
preceding the Commencement Date, the "Base Premium" shall be the annual premium
applicable to such twelve (12) month period. If the "Building" was not fully
occupied during such twelve (12) month period, the "Base Premium" shall be the
lowest annual premium reasonably obtainable for the Required Insurance as of the
Commencement Date, assuming the most nominal use possible of the Building. In no
event, however, shall Lessee be responsible for any portion of the premium cost
attributable to liability insurance coverage in excess of $1,000,000 procured
under Paragraph 8.2(b)
(b) Lessee shall pay any Insurance Cost Increase to Lessor
pursuant to Paragraph 4.2. Premiums for policy periods commencing prior to, or
extending beyond, the term of this Lease shall be prorated to coincide with the
corresponding Commencement Date or Expiration Date.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force
during the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee, Lessor and any Lender(s) whose names have been provided to
Lessee in writing (as additional Insureds) against claims for bodily injury,
personal injury and property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant hereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $1,000,000 per occurrence with
an "Additional Insured-Managers or Lessors of Premises" endorsement and contain
the "Amendment of the Pollution Exclusion" endorsement for damage caused by
heat, smoke or fumes from a hostile fire. The policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall
include coverage far liability assumed under this Lease as an "Insured contract"
for the performance of Lessee's indemnity obligations under this Lease The
limits of said insurance required by this Lease or as carried by Lessee shall
not. however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder All insurance to be carried by Lessee shall be primary to and not
contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.
(b) Carried by Lessor. Lessor shall also maintain liability
insurance described in Paragraph 8.2(a) above, in addition to and not in lieu
of, the insurance required to be maintained by Lessee. Lessee shall not be named
as an additional insured therein.
8.3 Property Insurance-Building, Improvements and Rental Value.
(a) Building and Improvements. Lessor shall obtain and keep in
force during the term of this Lease a policy or policies in the name of Lessor,
with loss payable to Lessor and to any Lender(s), insuring against loss or
damage to the Premises. Such insurance shall be for full replacement cost, as
the same shall exist from time to time, or the amount required by any Lender(s),
but in no event more than the commercially reasonable and available insurable
value thereof if, by reason of the unique nature or age of the improvements
involved, such latter amount is less than full replacement cost. Lessee-Owned
Alterations end Utility Installations, Trade Fixtures and Lessee's personal
property shall be Insured by Lessee pursuant to Paragraph 8.4. If the coverage
is available and commercially appropriate, Lessor's policy or policies shall
ensure against all risks of direct physical loss or damage (except the perils of
flood and/or earthquake unless required by a Lender or included in the Base
Premium), including coverage for any additional costs resulting from debris
removal and reasonable amounts of coverage for the enforcement of any ordinance
or law regulating the reconstruction or replacement of any undamaged sections of
the Building required to be demolished or removed by reason of the enforcement
of any building, zoning, safety or land use laws as the result of a covered
loss, but not including plate glass insurance Said policy of policies shall also
contain an agreed valuation provision in lieu of any co-insurance clause, waiver
of subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted US
Department of Labor Consumer Price Index for all Urban Consumers for the city
nearest to where the Premises are located.
(b) Rental Value. Lessor shall also obtain and keep in force
during the term of this Lease a policy o(cent) policies in the name of Lessor
with loss payable to Lessor and any Lender(s), Insuring the loss of the full
rental and other charges payable by all lessees of the Building to Lessor for
one year (including all Real Property Taxes, insurance costs, all Common Area
Operating Expenses and any scheduled rental increases) Said insurance may
provide that in the even[ the Lease is terminated by reason of an insured loss,
the period of indemnity for such coverage shall be extended beyond the date of
the completion of repairs or replacement of the Premises, to provide for one
full year's loss of rental revenues from the date of any such loss said
insurance shall contain an agreed valuation provision in lieu of any co-
insurance clause, and the amount of coverage shall be adjusted annually to
reflect the projected rental income, Real Property Taxes, Insurance premium
costs and other expenses, if any, otherwise payable, for the next 12-month
period. Common Area Operating Expenses shall include any deductible amount in
the event of such loss.
(c) Adjacent Premises. Lessee shall pay for any Increase in the
premiums for the property insurance of the Building and for the Common Areas
other buildings in the Industrial Center if said Increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises.
--4--
(d) Lessee's Improvements. Since Lessor is the Insuring Party,
Lessor shall not be required to insure Lessee-Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.
8.4 Lessee's Property Insurance. Subject to the requirements of
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessor's option, by endorsement to a policy already carried, maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures and Lessee-Owned
Alterations and Utility Installations in, on, or about the Premises similar in
coverage to that carried by Lessor as the Insuring Party under Paragraph 8.3(a).
Such insurance shall be full replacement cost coverage with a deductible not to
exceed $1,000 per occurrence. The proceeds from any such insurance shall be used
by Lessee for the replacement of personal property and the restoration of Trade
Fixtures and Lessee-Owned Alterations and Utility Installations. Upon request
from Lessor, Lessee shall provide Lessor with written evidence that such
insurance is in force.
8.5 Insurance Policies. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term a "General Policyholders Rating"
of at least B+, V, or such other rating as may be required by a Lender, as set
forth in the most current issue of "Best's Insurance Guide." Lessee shall not do
or permit to be done anything which shall invalidate the insurance policies
referred to in this Paragraph 8. Lessee shall cause to be delivered to Lessor,
within seven (7) days after the earlier of the Early Possession Date or the
Commencement Date, certified copies of, or certificates evidencing the existence
and amounts of, the insurance required under Paragraph 8.2(a) and 8.4. No such
policy shall be cancelable or subject to modification except after thirty (30)
days' prior written notice to Lessor. Lessee shall at least thirty (30) days
prior to the expiration of such policies, furnish Lessor with evidence of
renewals or "insurance binders" evidencing renewal thereof, or Lessor may order
such insurance and charge the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand.
8.6 Waiver of Subrogation. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages (whether in contract or in tort) against
the other, for loss or damage to their property arising out of or incident to
the perils required to be insured against under Paragraph 8. The effect of such
releases and waivers of the right to recover damages shall not be limited by the
amount of insurance carried or required, or by any deductibles applicable
thereto. Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.
8.7 Indemnity. Except for Lessor's negligence and/or breach of
express warranties, Lessee shall indemnify, protect, defend and hold harmless
the Premises, Lessor and its agents, Lessor's master or ground lessor, partners
and Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgements, penalties, loss of permits, attorneys' and
consultants' fees, expenses and/or liabilities arising out of, involving or in
connection with, the occupancy of the Premises by Lessee, and conduct of
Lessee's business, any act, omission or neglect of Lessee, its agents,
contractors, employees or invitees, and out of any Default or Breach by Lessee
in the performance in a timely manner of any obligation on Lessee's part to be
performed under this Lease. The foregoing shall include, but not be limited to,
the defense or pursuit of any claim or any action or proceeding involved
therein, and whether or not (in the case of claims made against Lessor)
litigated and/or reduced to judgment. In case any action or proceeding be
brought against Lessor by reason of any of the foregoing matters, Lessee upon
notice from Lessor shall defend the same at Lessee's expense by counsel
reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such
defense. Lessor need not have first paid any such claim in order to be so
indemnified.
8.8 Exemption of Lessor from Liability Except for injury or damage
caused by Lessor's gross negligence or willful misconduct, Lessor shall not be
liable for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers, or any
other person in or about the Premises, whether such damage or injury is caused
by or results from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether said injury or damage results from conditions arising upon
the Premises or upon other portions of the Building of which the Premises are a
part, from other sources or places, and regardless of whether the cause of such
damage or injury or the means of repairing the same is accessible or not. Lessor
shall not be liable for any damages arising from any act or neglect of any other
lessee of Lessor nor from the failure by Lessor to enforce the provisions of any
other lease in the Industrial Center. Notwithstanding Lessor's negligence or
breach of this Lease, Lessor shall under no circumstances be liable for injury
to Lessee's business or for any loss of income or profit therefrom. (See Insert
5, Exhibit "B")
9. Damage or Destruction
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction
to the Premises, other than Lessee-Owned Alterations and Utility Installations,
the repair cost of which damage or destruction is less than fifty percent (50%)
of the then Replacement Cost (as defined in Paragraph 9.1(d)) of the Premises
(excluding Lessee-Owned alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction.
(b) "Premises Total Destruction" shall mean damage or
destruction to the Premises, other than Lessee-Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is fifty percent
(50%) or more of the then Replacement Cost of the Premises (excluding Lessee-
Owned Alterations and Utility Installations and Trade Fixtures) immediately
prior to such damage or destruction. In addition, damage or destruction to the
Building, other than Lessee-Owned Alterations and Utility Installations and
Trade Fixtures of any lessees of the Building, the cost of which damage or
destruction is fifty percent (50%) or more of the then Replacement Cost
(excluding Lessee-Owned Alterations and Utility Installations and Trade Fixtures
of any lessees of the Building) of the Building shall, at the option of Lessor
be deemed to be Premises Total Destruction.
(c) "Insured Loss" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a) irrespective of any deductible amounts
or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild
the improvements owned by Lessor at the time of the occurrence to their
condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of applicable building codes,
ordinances or laws, and without deduction for depredation.
(e) "Hazardous Substance Condition" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 Premises Partial Damage--Insured Loss. If Premises Partial
Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's expense,
repair such damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations
and Utility Installations) as soon as reasonably possible and this Lease shall
continue in full force and effect. In the event, however, that there is a
shortage of insurance proceeds and such shortage is due to the fact that, by
reason of the unique nature of the improvements in the Premises, full
replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligations to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee
provides Lessor with the funds to cover same, or adequate assurance thereof,
within ten (10) days following receipt of written notice of such shortage and
request therefor. If Lessor receives said funds or adequate assurance thereof
within said ten (10) day period, Lessor shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect. If Lessor does not receive such funds or assurance within such
ten (10) day period, and if Lessor does not so elect to restore and repair, then
this Lease shall terminate sixty (60) days following the occurrence of the
damage or destruction. Except that rent shall ▇▇▇▇▇ as of the casualty date to
the extent Lessee is unable to occupy the Premises. Unless otherwise agreed,
Lessee shall in no event have any right to reimbursement from Lessor for any
funds contributed by Lessee to repair any such damage or destruction. Premises
Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3
rather than Paragraph 9.2, notwithstanding that there may be some insurance
coverage, but the net proceeds of any such insurance shall be made available for
the repairs if made by either Party.
9.3 Partial Damage: Uninsured Loss. If Premises Partial Damage that
is not an insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect), Lessor may at Lessor's
option, either (i) repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after receipt by
Lessor of knowledge of the occurrence of such damage of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date of such
notice. In the event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessee shall have the right within ten (10) days after the
receipt of such notice to give written notice to Lessor of Lessee's commitment
to pay for the repair of such damage, except that rent shall ▇▇▇▇▇ as of the
casualty date to the extent Lessee is unable to occupy the Premises, totally at
Lessee's expense and without reimbursement from Lessor. Lessee shall provide
Lessor with the required funds or satisfactory assurance thereof within thirty
(30) days following such commitment from Lessee. In such event this Lease shall
continue in full force and effect, and Lessor shall proceed to make such repairs
as soon as reasonably possible after the required funds are available. If Lessee
does not give such notice and provide the funds or assurance thereof within the
times specified above, this Lease shall terminate as of the date specified in
Lessor's notice of termination. Except that rent shall ▇▇▇▇▇ as of the
casualty date to the extent Lessee is unable to occupy the Premises.
9.4 Total Destruction. Notwithstanding any other provision hereof,
if Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, except that rent shall
▇▇▇▇▇ as of the casualty date to the extent Lessee is unable to occupy the
Premises, whether or not the damage or destruction is an Insured Loss or was
caused by a negligent or willful act of Lessee. In the event, however, that the
damage or destruction was caused by Lessee, Lessor shall have the right to
recover Lessor's damages from Lessee except as released and waived in Paragraph
9.7.
9.5 Damage Near End Term. If at any time during the last six (6)
months of the term of this Lease there is damage for which the cost to repair
exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may, at
Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by (a) exercising such option, and (b) providing Lessor with any shortage
in insurance proceeds (or adequate assurance thereof) needed to make the repairs
on or before the earlier of (i) the date which is ten (10) days after Lessee's
receipt of Lessor's written notice purporting to terminate this Lease, or (ii)
the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's expense repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. If Lessee fails to exercise
such option and provide such funds or assurance during such period, then this
Lease shall terminate as of the date set forth in the first sentence of this
Paragraph 9.5.
9.6 Abatement of Rent; Lessee's Remedies.
(a) In the event of (i) Premises Partial Damage or (ii)
Hazardous Substance Condition for which Lessee is not legally responsible, the
Base Rent, Common Area Operating Expenses and other charges, if any, payable by
Lessee hereunder for the period during which such damage or condition, its
repair, remediation or restoration continues, shall be abated in proportion to
the degree to which Lessee's use of the Premises is impaired. Except for
abatement of Base Rent, Common Area Operating Expenses and other charges, if
any, as aforesaid, all other obligations of Lessee hereunder shall be performed
by Lessee, and Lessee shall have no claim against Lessor for any damage suffered
by reason of any such damage, destruction, repair, remediation, or restoration
unless such damage is caused by Lessor's gross negligence or willful misconduct.
--5--
(b) If Lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises within
ninety (90) days after such obligation shall accrue. Lessee may, at time prior
to the commencement of such repair or restoration, give written notice to any
Lenders of which Lessee has actual notice of Lessee's election to terminate this
Lease on a date not less than sixty (60) days following the giving of such
notice. If Lessee gives such notice to Lessor and such Lenders and such repair
or restoration is not commenced within thirty (30) days after receipt of such
notice, this Lease shall terminate as of the date specified in said notice. If
Lessor or a Lender commences the repair or restoration of the Premises within
thirty (30) after the receipt of such notice, this Lease shall continue in full
force and effect. "Commence" as used in this Paragraph 9.6 shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever occurs first.
9.7 Hazardous Substance Conditions. If a Hazardous Substance
Condition occurs, unless Lessee is legally responsible therefor (in which case
Lessee shall make the investigation and remediation thereof required by
Applicable Requirements and this Lease shall continue in full force and effect,
but subject to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor
may at Lessor's option either (i) investigate and remediate such Hazardous
Substance Condition, if required, as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or
(ii) if the estimated cost to investigate and remediate such condition exceeds
twelve (12) times the then monthly Base Rent or $100,000 whichever is greater,
give written notice to Lessee within thirty (30) days after receipt by Lessor of
knowledge of the occurrence of such Hazardous Substance Condition of Lessor's
desire to terminate this Lease as of the date sixty (60) days following the date
of such notice. In the event Lessor elects to give such a notice of Lessor's
intention to terminate this Lease, Lessee shall have the right within ten (10)
days after the receipt of such notice to give written notice to Lessor of
Lessee's commitment to pay for the excess costs of (a) investigation and
remediation of such Hazardous Substance Condition to the extent required by
Applicable Requirements, over (b) an amount equal to twelve (12) times the then
monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor
with the funds required of Lessee or satisfactory assurance thereof within
thirty (30) days following said commitment by Lessee. In such event this Lease
shall continue in full force and effect, and Lessor shall proceed to make such
investigation and remediation as soon as reasonably possible after the required
funds are available. If Lessee does not give such notice and provide the
required funds or assurance thereof within the time period specified above, this
Lease shall terminate as of the date specified in Lessor's notice of
termination.
9.8 Termination--Advance Payments. Upon termination of this Lease
pursuant to this Paragraph 9, Lessor shall return to Lessee any advance payment
made by Lessee to Lessor and so much of Lessee's Security Deposit as has not
been, or is not then required to be, used by Lessor under the terms of this
Lease.
9.9 Waiver of Statutes. Lessor and Lessee agree that the terms of
this Lease shall govern the effect of any damage to or destruction of the
Premises and the Building with respect to the termination of this Lease and
hereby waive the provisions of any present or future statute to the extent it is
inconsistent herewith.
10. Real Property Taxes
10.1 Payment of Taxes. Lessor shall pay the Real Property Taxes, as
defined in Paragraph 10.2(a) applicable to the Industrial Center, and except as
otherwise provided in Paragraph 10.3, any increases in such amounts over the
Base Real Property Taxes shall be included in the calculation of Common Area
Operating Expenses in accordance with the provisions of Paragraph 4.2.
10.2 Real Property Tax Definitions.
(a) As used herein, the term "Real Property Taxes" shall include
any form of real estate tax or assessment, general, special, ordinary or
extraordinary, and any license fee, commercial rental tax, improvement bond or
bonds, levy or tax (other than inheritance, personal income or estate taxes)
imposed upon the Industrial Center by any authority having the direct or
indirect power to tax, including any city, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage, or other improvement
district thereof, levied against any legal or equitable interest of Lessor in
the Industrial Center or any portion thereof, Lessor's right to rent or other
income therefrom, and/or Lessor's business of leasing the Premises. The term
"Real Property Taxes" shall also include any tax fee, levy, assessment or
charge, or any increase therein, imposed by reason of events occurring, or
changes in Applicable Law taking effect, during the term of this Lease,
including but not limited to a change in ownership of the Industrial Center or
in the improvements thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated by the Parties.
(See Insert 7, Exhibit "B".)
(b) As used herein, the term "Base Real Property Taxes" shall be
the amount of Real Property Taxes, which are assessed against the Premises
Building or Common Areas in the calendar year during which the Lease is
executed. In calculating Real Property Taxes for any calendar year, the Real
Property Taxes for any real estate tax year shall be included in the calculation
of Real Property Taxes for such calendar year based upon the number of days
which such calendar year and tax year have in common.
10.3 Additional Improvements. Common Area Operating Expenses shall
not include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Industrial
Center by other lessees or by Lessor for the exclusive enjoyment of such other
lessees. Notwithstanding Paragraph 10.1 hereof, Lessee shall, however, pay to
Lessor at the time Common Area Operating Expenses are payable under Paragraph
4.2, the entirety of any increase in Real Property Taxes if assessed solely by
reason of Alteration, Trade Fixtures or Utility Installations placed upon the
Premises by Lessee or at Lessee's request.
10.4 Joint Assessment. If the Building is not separately assessed,
Real Property Taxes allocated to the Building shall be an equitable proportion
of the Real Property Taxes for all of the land and improvements included within
the tax parcel assessed, such proportion to be determined by Lessor from the
respective valuation assigned in the assessor's work sheets or such other
information as may be reasonably available. Lessor's reasonable determination
thereof shall be conclusive.
10.5 Lessee's Property Taxes. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee-Owned Alterations and Utility
Installations. Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or stored within the Industrial Center. When
possible, Lessee shall cause its Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said property shall be assessed with Lessor's real property, Lessee
shall pay Lessor the taxes attributable to Lessee's property within ten (10)
days after receipt of a written statement setting forth the taxes applicable to
Lessee's property.
11. Utilities. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon. If
any such utilities or services are not separately metered to the Premises or
separately billed to the Building, in the manner and within the time periods set
forth in Paragraph 4.2(d).
12. Assignment and Subletting.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively, "assign") or
sublet all or any part of Lessee's interest in this Lease or in the Premises
without Lessor's prior written consent given under and subject to the terms of
Paragraph 36. (See Insert 8, Exhibit "B")
(c) The involvement of Lessee or its assets in any transactions
(by way of merger, sale, acquisition, financing, refinancing, transfer,
leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee, as hereinafter defined, by an
amount equal to or greater than twenty-five percent (25%) of such Net Worth of
Lessee as it was represented to Lessor at the time of full execution and
delivery of this Lease or at the time of the most recent assignment to which
Lessor has consented, or considered an assignment of this Lease by Lessee to
which Lessor may reasonably withhold its consent. "Net Worth of Lessee" for
purposes of this Lease shall be the net worth of Lessee (excluding any
Guarantors) established under generally accepted accounting principles
consistently applied.
(d) An assignment or subletting of Lessee's interest in this
Lease without Lessor's specific prior written consent shall, at Lessor's option,
be a Default curable after notice per Paragraph 13.1, or a non-curable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unconsented to assignment or subletting as a non-curable Breach, Lessor
shall have the right to either: (i) terminate this Lease, or (ii) upon thirty
(30) days' written notice ("Lessor's Note"), increase the monthly Base Rent for
the Premises to the greater of the then fair market rental value of the
Premises, as reasonably determined by Lessor, or one hundred ten percent (110%)
of the Base Rent then in effect. Pending determination of the new fair market
rental value, if disputed by Lessee, Lessee shall pay the amount set forth in
Lessor's Notice, with any overpayment credited against the next installment(s)
of Base Rent coming due, and any underpayment for the period retroactively to
the effective date of the adjustment being due and payable immediately upon the
determination thereof. Further, in the event of such Breach and rental
adjustment, (i) the purchase price of any option to purchase the Premises held
by Lessee shall be subject to similar adjustment to the then fair market value
as reasonably determined by Lessor (without the Lease being considered an
encumbrance or any deduction for depreciation or obsolescence, and considering
the Premises at its highest and best use and in good condition) or one hundred
ten percent (110%) of the price previously in effect, (ii) any index-oriented
rental or price adjustment formulas contained in this Lease shall be adjusted to
require that the base index be determined with reference to the index applicable
to the time of such adjustment, and (iii) any fixed rental adjustment scheduled
during the remainder of the Lease form shall be increased in the same ratio as
the new rental bears to the Base Rent in effect immediately prior to the
adjustment specified in Lessor's Notice.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by
Lessor shall be limited to compensatory damages and/or injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, nor (iii) alter the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any obligations to be performed by Lessee
under this Lease.
(b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending approval or disapproval of
an assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent for performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall
not constitute a consent to any subsequent assignment or subletting by Lessee or
to any subsequent or successive assignment or subletting by the assignee or
sublessee. However, Lessor may consent to subsequent subletting and assignments
of the sublease or any amendments or modifications thereto without notifying
Lessee or anyone else liable under this Lease of the sublease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease or the sublease.
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(d) In the event of any Default of any Breach of Lessee's
obligation under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or anyone else responsible for the performance of the Lessee's
obligations under this Lease, including any sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting
shall be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any,
together with a deposit of $1,000 or ten percent (10%) of the monthly Base Rent
applicable to the portion of the Premises which is the subject of the proposed
assignment or sublease, whichever is greater, as a deposit for the amounts due
under Paragraph 36. Lessee agrees to provide Lessor with such other or
additional information and/or documentation as may be reasonably requested by
Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed,
for the benefit of Lessor, to have assumed and agreed to conform and comply with
each and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.
(g) The occurrence of a transaction described in Paragraph
12.2(c) shall give Lessor the right (but not the obligation) to require that the
Security Deposit be increased by an amount equal to two (2) times the then
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the
Security Deposit increase a condition to Lessor's consent to such transaction.
(h) Except as provided in Paragraph 57.1, Lessor, as a condition
to giving its consent to any assignment or subletting, may require that the
amount and adjustment schedule of the rent payable under this Lease be adjusted
to what is then the market value and/or adjustment schedule for property similar
to the Premises as then constituted, as determined by Lessor.
12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any sublease of all or
a portion of the Premises heretofore or hereafter made by Lessee, and Lessor may
collect such rent and income and apply same toward Lessee's obligations under
this Lease; provided, however, that until a Breach (as defined in Paragraph
13.1) shall occur in the performance of Lessee's obligations under this Lease,
Lessee may, except as otherwise provided in this Lease, receive, collect and
enjoy the rents accruing under such Sublease. Lessor shall not, by reason of the
foregoing provision or any other assignment of such sublease to Lessor, nor by
reason of the collection of the rents from a sublessee, be deemed liable to the
sublessee for any failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee under such sublease. Lessee hereby irrevocably
authorizes and directs any such sublessee, upon receipt of a written notice from
Lessor stating that a Breach exists in the performance of Lessee's obligations
under this Lease, to pay to Lessor the rents and other charges due and to become
due under the sublease. Sublessee shall rely upon any such statement and request
from Lessor and shall pay such rents and other charges to Lessor without any
obligation or right to inquire as to whether such Breach exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against such sublessee, or, until the Breach has
been cured, against Lessor, for any such rents and other charges so paid by said
sublessee to Lessor.
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior
defaults or breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor
under a sublease shall also require the consent of Lessor herein.
(d) No sublessee under a sublease approved by Lessor shall
further assign or sublet all or any part of the Premises without Lessor's prior
written consent.
(e) Lessor shall deliver a copy of any notice of Default or
Breach by Lessee to the sublessee, who shall have the right to cure the Default
of Lessee within the grace period, if any, specified in such notice. The
sublessee shall have the right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said default. A "Default" by Lessee is
defined as a failure by Lessee to observe, comply with, or perform any of the
terms, covenants, conditions or rules applicable to Lessee under this Lease. A
"Breach" by Lessee is defined as the occurrence of any one or more of the
following Defaults, and, where a grace period for cure after notice is specified
herein, the failure by Lessee to cure such Default prior to the expiration of
the applicable grace period, and shall entitle Lessor to pursue the remedies set
forth in Paragraph 13.2 and/or 13.3:
(a) The vacating of the Premises without the intention to
reoccupy same, or the abandonment of the Premises.
(b) Except as expressly otherwise provided in this Lease, the
failure by Lessee to make any payment of Base Rent, Lessee's Share of Common
Area Operating Expenses, or any other monetary payment required to be made by
Lessee hereunder as and when due, the failure by Lessee to provide Lessor with
reasonable evidence of insurance or surety bond required under this Lease, or
the failure of Lessee to fulfill any obligation under this Lease which endangers
or threatens life or property, where such failure continues for a period of
three (3) days following Lessee's receipt of written notice thereof by or on
behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the
failure by Lessee to provide Lessor with reasonable written evidence (in duly
executed original form, if applicable) of (i) compliance with Applicable
Requirements per Paragraph 6.3, (ii) the inspection, maintenance and service
contracts required under Paragraph 7.1(b), (iii) the rescission of an authorized
assignment or subletting per Paragraph 12.1, (iv) a Tenancy Statement per
Paragraphs 16 or 37, (v) the subordination or non-subordination of this Lease
per Paragraph 30, (vi) the guaranty of the performance of Lessee's obligations
under this Lease if required under Paragraphs 1.11 and 37, (viii) the execution
of any document requested under Paragraph 42 (easements), or (vii) any other
documentation or information which Lessor may reasonably require of Lessee under
the terms of this lease, where any such failure continues for a period of ten
(10) days following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions
or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof
that are to be observed, complied with or performed by Lessee, other than those
described in Subparagraphs 13.1(a), (b) or (c), above, where such Default
continues for a period of thirty (30) days after written notice thereof by or on
behalf of Lessor to Lessee; provided, however, that if the nature of Lessee's
Default is such that more that thirty (30) days are reasonably required for its
cure, then it shall not be deemed to be a Breach of this Lease be Lessee if
Lessee commences such cure within said thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the
making by Lessee of any general arrangement or assignment for the benefit of
creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S. Code Section
101 or any successor statute thereto (unless, in 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 such seizure is not discharged within thirty (30) days; provided, however,
in the event that any provision of this Subparagraph 13.1(e) is contrary to any
applicable law, such provision shall be of no force or effect, and shall not
affect the validity of the remaining provisions.
(f) The discovery by Lessor that any financial statement of
Lessee or of any Guarantor, given to Lessor by Lessee or any Guarantor, was
materially false.
(g) If the performance of Lessee's obligations under this Lease
is guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor's liability with respect to this Lease other than in accordance with
the terms of such guaranty, (iii) a Guarantor's becoming insolvent or the
subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the
guaranty, or (v) a Guarantor's breach of its guaranty obligation on an
anticipatory breach basis, and Lessee's failure, within sixty (60) days
following written notice by or on behalf of Lessor to Lessee of any such event,
to provide Lessor with written alternative assurances of security, which, when
coupled with the then existing resources of Lessee, equals or exceeds the
combined financial resources of Lessee and the Guarantors that existed at the
time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
of Lessee (or in case of an emergency, without notice), Lessor may at its option
(but without obligation to do so), perform such duty or obligation on Lessee's
behalf, including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The costs
and expenses of any such performance by Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn, Lessor, at its own
option, may require all future payments to be made under this Lease by Lessee to
be made only by cashier's check. In the event of a Breach of this Lease by
Lessee (as defined in Paragraph 13.1), with or without further notice or demand,
and without limiting Lessor in the exercise of any right or remedy which Lessor
may have by reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall terminate
and Lessee shall immediately surrender possession of the Premises to Lessor. In
such event Lessor shall be entitled to recover from Lessee: (i) the worth at the
time of the award of the unpaid rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco or the Federal Reserve Bank District
in which the Premises are located at the time of award plus one percent (1%).
Efforts by Lessor to mitigate damages caused by Lessee's Default or Breach of
this Lease shall not waive Lessor's right to recover damages under this
Paragraph 13.2. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such pro-
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ceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve the right to recover all or any part thereof in a separate suit for
such rent and/or damages. If a notice and grace period required under
Subparagraph 13.1(b), (c) or (d) was not previously given, a notice to pay rent
or quit, or to perform or quit, as the case may be, given to Lessee under any
statute authorizing the forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes required by
Subparagraph 13.1(b), (c) or (d). In such case, the applicable grace period
under the unlawful detainer statute shall run concurrently after the one such
statutory notice, and the failure of Lessee to cure the Default within the
greater of the two (2) such grace periods shall constitute both an unlawful
detainer and a Breach of this Lease entitling Lessor to the remedies provided
for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in
effect (in California under California Civil Code Section 1951.4) after Lessee's
Breach and recover the rent as it becomes due, provided Lessee has the right to
sublet or assign, subject only to reasonable limitations. Lessor and Lessee
agree that the limitations on assignment and subletting in this Lease are
reasonable. Acts of maintenance or preservation, efforts to rlet the Premises,
or the appointment of a receiver to protect the Lessor's interest under this
Lease, shall not constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located.
(d) The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters occurring
or accruing prior to such expiration or termination (unless Lessee shall
holdover the Premises) or by reason of Lessee's occupancy of the Premises.
Nothing contained herein shall be construed as a consent by Lessor to any
holding over by Lessee.
13.3 Inducement Recapture in Event of Breach. Any agreement by Lessor
for free or abated rent or other charges applicable to the Premises, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "Inducement Provisions" shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of a Breach (as defined in Paragraph 13.1) of this Lease by Lessee, any such
Inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
Inducement Provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor, as additional rent due under this Lease,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
Paragraph 13.3 shall not be deemed a waiver by Lessor of the provisions of this
Paragraph 13.3 unless specifically so stated in writing by Lessor at the time of
such acceptance. (See Insert 11, Exhibit "B".)
13.4 Late Charges. Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Lessor by the terms of any ground lease, mortgage or deed of trust covering the
Premises. Accordingly, if any installment of rent or other sum due from Lessee
shall not be received by Lessor or Lessor's designee within ten (10) days after
such amount shall be due, then, without any requirement for notice to Lessee,
Lessee shall pay to Lessor a late charge equal to twelve pct (12%) of such
overdue amount. The parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Lessor will incur by reason of late payment
by Lessee. Acceptance of such late charge by Lessor shall in no event constitute
a waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of Base Rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.
13.5 Breach by Lessor. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph 13.5, a
reasonable time shall in no event be less than thirty (30) days after receipt by
Lessor, and by any Lender(s) whose name and address shall have been furnished to
Lessee in writing for such purpose, of written notice specifying wherein such
obligation of Lessor has not been performed; provided, however, that if the
nature of Lessor's obligation is such that more than thirty (30) days after such
notice are reasonably required for its performance, then Lessor shall not be in
breach of this Lease if performance is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.
14. Condemnation. If the Premises or any portion thereof are taken
under the power of eminent domain or sold under the threat of the exercise of
said power (all of which are herein called "condemnation), this Lease shall
terminate as to the part so taken as of the date condemning authority takes
title or possession whichever first occurs. If more than ten percent (10%) of
the floor area of the Premises, or more than twenty-five percent (25%) of the
portion of the Common Areas designated for Lessee's parking, is taken by
condemnation, Lessee may, at Lessee's option, to be exercised in writing within
ten (10) days after Lessor shall have given Lessee written notice of such taking
(or in the absence of such notice, within ten (10) days after the condemning
authority shall have taken possession) terminate this Lease as of the date the
condemning authority takes such possession. If Lessee does not terminate
this Lease in accordance with the foregoing, this Lease shall remain in full
force and effect as to the portion of the Premises remaining, except that the
Base Rent shall be reduced the same proportion as the rentable floor are a of
the Premises taken bears to the total rentable floor area of the Premises. No
reduction of Base Rent shall occur if the condemnation does not apply to any
portion of the Premises unless the common areas are condemned in a manner that
materially affects Lessee's access to the Premises. 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 of value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any compensation, separately awarded
to Lessee for Lessee's relocation expenses and/or loss of Lessee's Trade
Fixtures. In the event that this Lease is not terminated by reason of such
condemnation, Lessor shall to the extent of its net severance damages received,
over and above Lessee's Share of the legal and other expenses incurred by Lessor
in the condemnation matter, repair any damage to the Premises caused by such
condemnation authority.
15. Brokers' Fees.
15.4 Representations and Warranties. Lessee and Lessor each represent
and warrant to the other that it has had no dealings with any person, firm,
broker or finder other than as named in Paragraph 1.10(a) in connection with the
negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and that no broker or other person, firm or entity other
than said named Broker(s) is entitled to any commission or finder's fee in
connection with said transaction. Lessee and Lessor do each hereby agree to
indemnify, protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of
the indemnifying Party, including any costs, expenses, and/or attorneys' fees
reasonably incurred with respect thereto.
16. Tenancy and Financial Statements.
16.1 Tenancy Statement. Each Party (as "Responding Party") shall
within ten (10) days after written notice from the other Party (the "Requesting
Party") execute, acknowledge and deliver to the Requesting Party a statement in
writing in a form similar to the then most current "Tenancy Statement" form
published by the American Industrial Real Estate Association, plus such
additional information, confirmation and/or statements as may be reasonably
requested by the Requesting Party.
16.2 Financial Statement. If Lessor desires to finance, refinance, or
sell the Premises or the Building, or any part thereof, Lessee and all
Guarantors shall deliver to any potential lender or purchaser designated by
Lessor such financial statements of Lessee and such Guarantors as may be
reasonably required by such lender or purchaser, including but not limited to
Lessee's financial statements for the past three (3) years. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth. If Lessee
becomes a publicly held company, then Lessor shall only require publicly
available financial statements.
17. Lessor's Liability. The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises. In the
event of a transfer of Lessor's title or interest in the Premises or in this
Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit)
any unused Security Deposit held by Lessor at the time of such transfer or
assignment. Except as provided in Paragraph 15.3, upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the obligations and/or
covenants under this Lease thereafter to be performed by the Lessor. Subject to
the foregoing, the obligations and/or covenants in this Lease to be performed by
the Lessor shall be binding only upon the Lessor as hereinabove defined. (See
Insert 10, Exhibit "B".)
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. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within ten (10) days
following the date on which it was due, shall bear interest from the date due at
the prime rate charged by the largest state chartered bank in the state in which
the Premises are located plus four percent (4%) per annum, but not exceeding the
maximum rate allowed by law, in addition to the potential late charge provided
for in Paragraph 13.4.
20. Time of Essence. Time is of the essence with respect to the performance
of all obligations to be performed or observed by the Parties under this Lease.
21. Rent Defined. All monetary obligations of Lessee to Lessor under the
terms of this Lease are deemed to be rent.
22. No Prior or other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party of this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. Each Broker shall be an intended third party beneficiary
of the provisions of this Paragraph 22.
--8--
23. Notices.
23.1 Notice Requirements. All notices required or permitted by this
Lease shall be in writing and may be delivered in person (by hand or by
messenger or courier service) or may be sent by regular, certified or registered
mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile
transmission during normal business hours, and shall be deemed sufficiently
given if served in a manner specified in this Paragraph 23. The addresses noted
adjacent to a Party's signature on this Lease shall be that Party's address for
delivery or mailing of notice purposes. Either Party may by written notice to
the other specify a different address for notice purposes, except that upon
Lessee's taking possession of the Premises, the Premises shall constitute
Lessee's address for the purpose of mailing or delivering notices to Lessee. A
copy of all notices required or permitted to be given to Lessor hereunder shall
be concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by written notice to Lessee.
23.2 Date of Notice. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail, the notice shall be deemed given forty-eight (48) hours after
the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantees next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the United States Postal Service or courier. If any
notice is transmitted by facsimile transmission or similar means, the same shall
be deemed served or delivered upon telephone or facsimile confirmation of
receipt of the transmission thereof, provided a copy is also delivered via
delivery or mail. If notice is received on a Saturday or a Sunday or a legal
holiday, it shall be deemed received on the next business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any such act shall not be deemed to render
unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent
or similar act by Lessee, or be construed as the basis of an estoppel to enforce
the provision or provisions of this Lease requiring such consent. Regardless of
Lessor's knowledge of a Default or Breach at the time of accepting rent, the
acceptance of rent by Lessor shall not be a waiver of any Default or Breach by
Lessee of any provision hereof. Any payment given Lessor by Lessee may be
accepted by Lessor on account of moneys or damages due Lessor, notwithstanding
any qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.
25. Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. No Right To Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. In the event that Lessee holds over in violation of this Paragraph
26 then the Base Rent payable from and after the time of the expiration or
earlier termination of this Lease shall be increased one hundred and fifty
percent (150%) of the Base Rent applicable during the month immediately
preceding such expiration or earlier termination. Nothing contained herein shall
be construed as a consent by Lessor to any holding over by Lessee.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease unless and until they become the owner of the building, but that in the
event of Lessor's default with respect to any such obligation, Lessee will give
any Lender whose name and address have been furnished Lessee in writing for such
purpose notice of Lessor's default pursuant to Paragraph 13.5. If any Lender
shall elect to have this Lease and/or any Option granted hereby superior to the
lien of its Security Device and shall give written notice thereof to Lessee,
this Lease and such Options shall be deemed prior to such Security Device,
notwithstanding the relative dates of the documentation or recordation thereof.
30.2 Attornment. Subject to the non-disturbance provisions of
Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party who
acquires ownership of the Premises by reason of a foreclosure of a Security
Device, and that in the event of such foreclosure, such new owner shall not: (i)
be liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership, (ii) be subject to any offsets or
defenses which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one month's rent.
30.3 Non-Disturbance. With respect to Security Devices entered into
by Lessor after the execution of this lease, Lessee's subordination of this
Lease shall be subject to receiving assurance (a "non-disturbance agreement")
from the Lender that Lessee's possession and this Lease, including any options
to extend the term hereof, will not be disturbed so long as Lessee is not in
Breach hereof and attorns to the record owner of the Premises. (See Insert 9,
Exhibit "B".)
30.4 Self-Executing. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents; provided,
however, that upon written request from Lessor or a Lender in connection with a
sale, financing or refinancing of Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any such
subordination or non-subordination, attornment and/or non-disturbance agreement
as is provided for herein.
31. Attorneys' Fees. If any Party or Broker brings an action or proceeding
to enforce the terms hereof or declare rights hereunder, the Prevailing Party
(as hereafter defined) in any such proceeding, action, or appeal thereon, shall
be entitled to reasonable attorneys' fees. Such fees may be awarded in the same
suit or recovered in a separate suit, whether or not such action or proceeding
is pursued to decision or judgment. The term "Prevailing Party" shall include,
without limitation, a Party or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The
attorneys' fee award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorneys' fees reasonably
incurred. Lessor shall be entitled to attorneys' fees, costs and expenses
incurred in preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently commenced in
connection with such Default or resulting Breach. Broker(s) shall be intended
third party beneficiaries of this Paragraph 31.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times upon prior notice and a
representative of Lessee shall be given an opportunity to accompany Lessor
and/or Lessor's Representative for the purpose of showing the same to
prospective purchases, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the Building, as Lessor
may reasonably deem necessary. Lessor may at any time place on or about the
Premises or Building any ordinary "For Sale" signs and Lessor may at any time
during the last one hundred eighty (180) days of the term thereof place on or
about the Premises any ordinary "For Lease" signs. All such activities of Lessor
shall be without abatement of rent or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. Signs. Lessee shall not place any sign upon the exterior of the Premises
or the Building, except that Lessee may, with Lessor's prior written consent,
install (but not on the roof) such signs as are reasonably required to advertise
Lessee's own business so long as such signs are in a location designated by
Lessor and comply with Applicable Requirements and the signage criteria
established for the Industrial Center by Lessor. The installation of any sign on
the Premises by or for Lessee shall be subject to the provisions of Paragraph 7
(Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations).
Unless otherwise expressly agreed herein, Lessor reserves all rights to the use
of the roof of the Building, and the right to install advertising signs on the
Building, including the roof, which do not unreasonably interfere with the
conduct of Lessee's business; Lessor shall be entitled to all revenues from such
advertising signs.
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any
such event to make a written election to the contrary by written notice to the
holder of any such lesser interest, shall constitute Lessor's election to have
such event constitute the termination of such interest.
36. Consents.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a Party is required to an
act by or for the other Party, such consent shall not be unreasonably withheld
or delayed. Lessor's actual reasonable costs and expenses (including but not
limited to architects', attorneys', engineers' and other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment a subletting or the presence or use of a
Hazardous Substance, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor. In addition to the deposit
described in Paragraph 12.2(e), Lessor may, as a condition to considering any
such request by Lessee, require that Lessee deposit with Lessor an amount of
money (in addition to the Security Deposit held under Paragraph 5) reasonably
calculated by Lessor to represent the cost Lessor will incur in considering and
responding to Lessee's request. Any unused portion of said deposit shall be
refunded to Lessee without interest. Lessor's consent to any act, assignment of
this Lease or subletting of the Premises by Lessee shall not constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor
shall such consent be deemed a waiver of any then existing Default or Breach,
except as may be otherwise specifically stated in writing by Lessor at the time
of such consent.
(b) All conditions to Lessor's consent authorized by this Lease
are acknowledged by Lessee as being reasonable. The failure to specify herein
any particular condition to Lessor's consent shall not preclude the impositions
by Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
37. Guarantor.
37.1 Form of Guaranty. If there are to be any Guarantors of this
Lease per Paragraph 1.11, each such Guarantor shall have the same obligations as
Lessee under this lease, including but not limited to the obligation to provide
the Tenancy Statement and information required in Paragraph 16.
--9--
37.2. Additional Obligations of Guarantor. It shall constitute a
Default of the Lessee under this Lease if any such Guarantor fails or refuses,
upon reasonable request by Lessor to give: (a) evidence of the due execution of
the guaranty called for by this Lease, including the authority of the Guarantor
(and of the party signing on Guarantor's behalf) to obligate such Guarantor on
said guaranty, and resolution of its board of directors authorizing the making
of such guaranty, together with a certificate of incumbency showing the
signatures of the persons authorized to sign on its behalf, (b) current
financial statements of Guarantor as may from time to time be requested by
Lessor, (c) a Tenancy Statement, or (d) written confirmation that the guaranty
is still in effect.
38. Quiet Possession. Upon payment by Lessee of the rent for
the Premises and the performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.
39. Options.
39.1 Definition. As used in this Lease, the word "Option" has the
following meaning: (a) the right to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other property of
Lessor; (b) the right of first refusal to lease the Premises or the right of
first offer to lease the Premises or the right of first refusal to lease other
property of Lessor or the right of first offer to lease other property of
Lessor; (c) the right to purchase the Premises, or the right of first refusal to
purchase the Premises, or the right of first offer to purchase the Premises, or
the right to purchase other property of Lessor, or the right of first refusal to
purchase other property of Lessor, or the right of first offer to purchase other
property of Lessor.
39.2 Options Personal to Original Lessee. Except with respect to a
Related Entity, each Option granted to Lessee in this Lease is personal to the
original Lessee named in Paragraph 1.1 hereof, and cannot be voluntarily or
involuntarily assigned or exercised by any person or entity other than said
original Lessee while the original Lessee is in full and actual possession of
the Premises and without the intention of thereafter assigning or subletting.
The Options, if any, herein granted to Lessee are not assignable, either as a
part of an assignment of this Lease or separately or apart therefrom, and no
Option may be separated from this Lease in any manner, by reservation or
otherwise.
39.3 Multiple Options. In the event that Lessee has any multiple
Options to extend or renew this Lease, a later option cannot be exercised unless
the prior Options to extend or renew this Lease have been validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary: (i) during
the period commencing with the giving of any notice of Default under Paragraph
13.1 and continuing until the noticed Default is cured, or (ii) during the
period of time any monetary obligation due Lessor from Lessee is unpaid (without
regard to whether notice thereof is given Lessee), or (iii) during the time
Lessee is in Breach of this Lease, or (iv) in the event that Lessor has given to
Lessee three (3) or more notices of separate Defaults under Paragraph 13.1
during the twelve (12) month period immediately preceding the exercise of the
Option, whether or not the Defaults are cured.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessor gives to
Lessee three (3) or more notices of separate Defaults under Paragraph 13.1
during any twelve (12) month period, whether or not the Defaults are cured, or
(iii) if Lessee commits a Breach of this Lease.
40. Rules and Regulations. Lessee agrees that it will abide by, and keep and
observe all reasonable rules and regulations ("Rules and Regulations") which
Lessor may make from time to time for the management, safety, care, and
cleanliness of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as for the convenience of other occupants or
tenants of the Building and the Industrial Center and their invitees.
41. Security Measures. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
42. Reservations. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way, utility
raceways, and dedications that Lessor deems necessary, and to cause the
recordation of parcel maps and restrictions, so long as such easements, rights
of way, utility raceways, dedications, maps and restrictions do not reasonably
interfere with the use of the Premises by Lessee. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.
43. Performance Under Protest. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay under the
provisions of this Lease.
44. Authority. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
45. Conflict. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46. Offer. Preparation of this Lease by either Lessor or Lessee or Lessor's
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be
deemed an offer to lease. This Lease is not intended to be binding until
executed and delivered by all Parties hereto.
47. Amendments. This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification. The Parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional insurance company or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.
48. Multiple Parties. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
--10--
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR
ATTORNEY'S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO
EVALUATE THE CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF
ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCE. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL
ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKER OR THEIR CONTRACTORS,
AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE
PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO THE
LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY IS IN
A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE
PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: San Francisco, California Executed at: San Francisco, California
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on: 6/30/99 on:
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By LESSOR: By LESSEE:
▇▇▇▇▇▇ Associates iOwn, Inc.
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A California General Partnership A California Corporation
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By: /s/ A. ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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Name Printed: A. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Name Printed: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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Title: Partner Title: President and CEO
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By: By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name Printed: Name Printed: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Title: Title: CFO
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Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------- ---------------------------
Facsimile: ( ) Facsimile: ( )
--------------------------- ---------------------------
BROKER: BROKER:
Executed at: Executed at:
------------------------- -------------------------
on: on:
---------------------------------- ----------------------------------
By: By:
---------------------------------- ----------------------------------
Name Printed: Name Printed:
------------------------ ------------------------
Title: Title:
------------------------------- -------------------------------
Address: Address:
----------------------------- -----------------------------
-------------------------------------- --------------------------------------
Telephone: ( ) Telephone: ( )
--------------------------- ---------------------------
Facsimile: ( ) Facsimile: ( )
--------------------------- ---------------------------
Note: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are utilizing the
most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. (▇▇▇) ▇▇▇-▇▇▇▇.
--11--
EXHIBIT "B"
INSERTS TO STANDARD INDUSTRIAL COMMERCIAL MULTI-TENANT LEASE-GROSS
BETWEEN ▇▇▇▇▇▇ ASSOCIATES, A CALIFORNIA GENERAL PARTNERSHIP,
AS LESSOR, AND iOwn, Inc., A CALIFORNIA CORPORATION,
AS LESSEE, FOR PREMISES LOCATED AT ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
INSERT 1:
--------
Insert to Paragraph 2.7 - Common Areas - Definitions. Add the following: "Common
Areas shall not include any telecommunications facilities that service one or
more Lessees in the Industrial Center."
INSERT 2:
--------
Add the following to Paragraph 7.1(a) - Lessee's Obligations: "Lessee's
obligations hereunder shall include maintenance and repair of all
telecommunications wiring and cabling in the Premises and the connection of
Lessee's telecommunications wire and cabling with the Industrial Center's
intrabuilding network cabling."
INSERT 3:
--------
Add the following to Paragraph 7.3(a) - Utility Installations, Trade Fixtures,
Alterations - Definitions; Consent Required: "For purposes of this Lease, the
installation, repair or removal by Lessee of telecommunications lines or the
making by Lessee of connection or disconnections of telecommunications lines in
a common telecommunications closet servicing the Premises and other portions of
the Industrial Center shall be deemed an alteration, addition or improvement
requiring Lessor's consent hereunder. If the Premises does not have its own
telecommunications line closet exclusively serving the Premises, then Lessee
shall not enter the telecommunications line closet serving the Premises and
other portions of the Industrial Center for purposes of connection,
disconnection, removal, repair or installation of telecommunications lines and
cabling without obtaining Lessor's prior consent. All such connection,
disconnection, removal, repair and installation shall be performed by a
qualified contractor approved by Lessor in advance."
INSERT 4:
--------
Add the following as new Paragraph 7.3(d): "(d) Telecommunications Services. If
Lessee requires any extraordinary telecommunication services that require any
increase in the capacity of the Industrial Center's system and/or intrabuilding
network cabling, then Lessee shall notify Lessor of such and, if Lessor consents
in writing to such increase in capacity, Lessee shall pay, as additional rent,
the cost of any alterations, modifications or improvements required to be made
to the Industrial Center's telecommunications system and/or intrabuilding
network cabling to provide such extraordinary service."
INSERT 5:
--------
Insert to Paragraph 8.8 - Exemption of Lessor from Liability. Unless caused by
Lessor's gross negligence or willful misconduct, Lessor shall not be liable for,
and Lessee hereby releases Lessor from any and all losses, damages, judgements,
costs, expenses and claims incurred by Lessee as a result of any interruption of
any utilities or other services, including, without limitation, any
telecommunications services.
INSERT 6:
--------
Insert to Paragraph 6.3 - Lessee's Compliance with Requirements. Notwithstanding
anything in Paragraph 6.3 or elsewhere in this Lease to the contrary, Lessee
shall have no obligation to modify any structural elements of the Premises or
the building encompassing the Premises or to modify any portion of the
electrical, water, HVAC or other utility systems of the Premises or the building
encompassing the Premises unless such modifications are required by Lessee's use
of the Premises; provided however, in no event shall this provision be deemed to
modify, affect or amend Lessee's obligations under the Lease to repair, maintain
and replace any and all mechanical, electrical, HVAC, and plumbing systems
servicing the Premises.
INSERT 7:
--------
Insert to Paragraph 10.2(a) - Real Property Tax Definitions. The following shall
be excluded from the definition of "Real Property Taxes": all excess profits
taxes, franchise taxes, gift taxes, capital stock taxes, federal and state
income taxes, and other taxes applied or measured by Lessor's general or net
income (as opposed to rents, receipts, or income attributable to operations at
the Building).
INSERT 8:
---------
Insert to Paragraph 12.1(b) - Lessor's Consent Required. Notwithstanding
anything to the contrary contained in this Section 6, so long as Lessee delivers
to Lessor (1) at least fifteen (15) business days prior written notice of its
intention to assign or sublease the Premises to any Related Entity, which notice
shall set forth the name of the Related Entity, (2) a copy of the proposed
agreement pursuant to which such assignment or sublease shall be effectuated,
and (3) such other information concerning the Related Entity as Lessor may
reasonably require, including without limitation, information regarding any
change in the proposed use of any portion of the Premises and any financial
information with respect to such Related Entity, and so long as (i) any change
in the proposed use of the subject portion of the Premises is in conformance
with the uses permitted to be made under this Lease and do not involve the use
or storage of any Hazardous Substances (other than nominal amounts of ordinary
household cleaners, office supplies and janitorial supplies which are not
regulated by environmental laws), and (ii) at the time of the proposed
assignment or sublease, the net profits and financial condition of the Related
Entity is reasonably adequate and sufficient in relation to the then remaining
obligations of Lessee under the Lease, then Lessee may assign this Lease or
sublease any portion of the Premises (X) to any Related Entity, or (Y) in
connection with any merger, consolidation or sale of substantially all of the
assets of Lessee, without having to obtain the prior written consent of Lessor
thereto. For purposes of this Lease the term "Related Entity" shall mean and
refer to any corporation or entity which controls, is controlled by or is under
common control with Lessee as all of such terms are customarily used in the
industry.
INSERT 9:
--------
Insert to Paragraph 30.3 - Non-Disturbance. Lessor shall use Lessor's
commercially reasonable efforts to obtain from the holder of each current
Security Device, a non-disturbance agreement in recordable form, providing among
other things, that in the event of any foreclosure or deed in lieu of
foreclosure ("Foreclosure") or the exercise of any other remedy under such
Security Device that: (a) Lessee's use, possession and enjoyment of the Premises
shall not be disturbed and this Lease shall continue in full force and effect as
long as Lessee is not in Default, and (b) this Lease shall automatically become
a lease directly between any successor to Lessor's interest as a result of any
Foreclosure and Lessee; provided, however, in no event shall obtaining such non-
disturbance agreement be a condition precedent to the effectiveness of this
Lease or Lessee's obligations hereunder.
INSERT 10:
---------
Insert to Paragraph 17 - Lessor's Liability. Lessor's liability shall in no
event exceed Lessor's equity in the Building. In addition, in the event Lessor
shall change Lessor's form of ownership or organizational structure, in
consideration of Lessee's entering into this Lease on the terms and conditions
contained in this Lease, Lessee agrees and covenants with Lessor that (i) Lessee
shall look solely to the assets of such newly formed entity and under no event
or circumstance shall Lessee or any successor, assign, or subtenant of Lessee
seek recourse against any of the assets of the Individual General Partners of
▇▇▇▇▇▇ Associates and (ii) Lessee hereby consents to the assignment and transfer
of Lessor's interest in and to the Lease to such newly formed entity. Lessee
shall execute and acknowledge, if applicable, such documents, instruments and
agreements reasonably requested by Lessor to evidence Lessee's agreement to the
foregoing and Lessee agrees to cooperate with Lessor to accomplish such change
of form of ownership.
INSERT 11:
---------
Insert to Paragraph 13.3 - Inducement of Breach: For purposes of this Paragraph
13.3 only, a "Breach" shall not be deemed to have occurred under Paragraph 13.1
(b) unless and until (i) the initial three (3) day period described in Paragraph
13.1(b) shall have expired and (ii) thereafter, an additional five (5) business
days shall have expired following Lessee's receipt of a second (2nd) written
notice of a failure of Lessee to make a payment described in Paragraph 13.1(b).
SUBLEASE EXHIBIT "A"
STANDARD INDUSTRIAL LEASE -- MULTI-TENANT
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Parties. This Lease, dated, for reference purposes only, June 13, 1997, is
------- --
made by and between ▇▇▇▇▇▇ ASSOCIATES, a California general partnership with
--------------------------------------------------------
its principal offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇, ▇▇ ▇▇▇▇▇ (herein called
----------------------------------------------------------------
"Lessor") and Psygnosis, Inc., a California corporation with principal offices
----------------------------------------------------------------
at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇ ▇▇▇▇▇ (herein called "Lessor").
----------------------------------
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, real
property situated in the County of San Francisco, State of California commonly
------------- ----------
known as ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ and described as set forth on Exhibit "A",
----------------- -------------------------
approximately 25,288 rentable square feet herein referred to as the "Premises",
-----------------------------------------
including rights 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 four (4) vehicle parking
--------
spaces, 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 passenger
automobiles or pick-up trucks, herein called "Permitted Size Vehicles." Vehicles
other than Permitted Size Vehicles are herein referred to as "Oversized
Vehicles."
2.2.1 Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Lessor for such activities.
2.2.2 If Lessee permits or allows any of the prohibited activities described
in paragraph 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 the 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, suppliers,
shippers, customers and invitees, including parking areas, loading and unloading
areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and
landscaped areas.
*See Addendum Paragraph 64
2.5 Common Areas -- Rules and Regulations. Lessor or such other persons(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 which will be provided
to Lessee by Lessor in writing when such are established and/or revised, and to
cause its employees, suppliers, shippers, customers, and invitees to so abide
and conform. Lessor shall not be responsible to Lessee for the non-compliance
with said rules and regulations by other lessees of the Industrial Center.
2.6 Common Areas -- Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress, egress, direction
of 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 designate other land outside the boundaries
of the Industrial Center to be a part of the Common Areas; (d) To add additional
buildings and improvements to the Common Areas; (e) To use the Common Areas
while engaged in making additional improvements, repairs or alterations to the
Industrial Center, or any portion thereof; (f) 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.
2.6.1 Lessor shall at all times provide the parking facilities required by
applicable law and in no event shall the number of parking spaces that Lessee is
entitled to under paragraph 2.2 be reduced.
3. Term.
3.1 Term. The term of this Lease shall be as follows; commencing on
-----------
execution of the Lease and ending on October 31, 2002 unless sooner terminated
---------------------- ----------------
pursuant to any provision hereof.
* See Addendum Paragraph 65.
3.3 Early Possession. If Lessee occupies the Premises prior to said
commencement date in 3.1 above such occupancy shall be subject to all provisions
of this Lease, such occupancy shall not advance the termination date, and Lessee
shall pay rent for such period at the initial monthly rates set forth below.
4. Rent.
See Addendum, Paragraph 67.
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof
$31,083.00 as security for Lessee's faithful performance of Lessee's
----------
obligations hereunder if Lessee fails to pay rent or other charges due
hereunder, or otherwise defaults with respect to any provision of this Lease,
Lessee may use, apply or retain all or any portion of said deposit for the
payment of any rent 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 therefor 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. Lessor shall not be required to keep said security
deposit separate from its general accounts. If Lessee performs all of Lessee's
obligations hereunder, 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.
6.1 Use. The Premises shall be used and occupied only for multimedia,
-----------
software design, development, production and testing, and administration
------------------------------------------------------------------------
offices in connection therewith or any other use which is reasonably comparable
-------------------------------
and for no other purpose. Lessor represents to the best of its knowledge that
said use is permitted by current zoning laws.
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, ADA, environmental laws, 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, after written notice from Lessee, to promptly, at
Lessor's sole cost and expense, rectify any such violation in the event 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 same
shall be the obligation of the Lessee at Lessee's sole cost; provided, however,
if the violation concerns any latent defects, Lessee shall have thirty (30) days
from the discovery of such latent defects to give written notice of the
violation to Lessor and if Lessee fails to give such notice the correction of
the same shall be the obligation of Lessee 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 statues, 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 Lessee's Tenant Improvements and the occupation and use by Lessee of the
Premises and of the Common Areas. Lessee shall not use nor permit the use of
the Premises or the Common Areas in any manner that will tend to create waste or
a nuisance or shall tend to disturb other occupants of the Industrial Center.
6.2 (c) Notwithstanding anything else to the contrary contained in this Lease,
through the term hereof, Lessee shall not be responsible for any costs incurred
due to other tenants' manner and use of occupancy of their respective premises.
6.3 Condition of Premises.
(a) Lessor shall deliver the Premises to 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, hot water and chilled water for HVAC unit
on premises, and any other utilities serving the premises except telephone and
telecommunications, and HVAC air handler unit, and loading doors in the Premises
shall be in good operating condition and roof free of leaks 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 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 force or effect if prior to the date of
this Lease, Lessee was an owner or 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 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 use of the Premises, and any covenants
or restrictions of record, and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto. Lessee
acknowledges that neither Lessor nor Lessor's agent has made any representation
or warranty as to the present or future suitability of the Premises for the
conduct of Lessee's business.
7. Maintenance, Repairs, Alterations and Common Area Services.
7.1 Lessor's Obligations. Subject to the provisions of Addendum, paragraph 67
(Operating Expenses), 6 (Use), 7.2 (Lessee's Obligations) and 9 (Damage or
Destruction) and except for damage caused by any negligent or intentional act or
omission of Lessee, Lessee's employees, suppliers, shippers, customers, or
invitees, in which event Lessee shall repair the damage, Lessor, at Lessor's
expense, subject to reimbursement pursuant to Addendum, paragraph 67 shall keep
in good condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, plumbing to the Premises and main
electrical service to the Premises, and roof of the Premises, 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 or a Common Area
Maintenance charge pursuant to Addendum, paragraph 67. Lessor shall not,
however, be obligated to paint the exterior or 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. Lessee expressly waives
the benefits of any statute now or hereafter in effect which would otherwise
afford Lessee the right to make repairs at Lessor's expense or to terminate this
Lease because of Lessor's failure to keep the Premises in good order, condition
and repair. 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. Lessor shall repair at Lessor's sole expense
any damage to the premises caused by Lessor's willful misconduct or negligence
(but only to the extent of Lessor's negligence utilizing comparative negligence
standards) or default.
7.2 Lessee's Obligations.
(a) Subject to the provisions of paragraphs 6 (Use), 7.1 (Lessor's
Obligations), and 9 (Damage or Destruction), Lessee, at Lessee's expense, shall
keep in good order, condition and repair the Premises and every part thereof
(whether or not the damaged portion of the Premises or the means of repairing
the same are reasonably or readily accessable to Lessee) including, without
limiting the generality of the foregoing, all plumbing, heating, ventilating and
air conditioning systems (Lessee shall procure and maintain, at Lessee's
expense, a ventilating and air conditioning system maintenance contract),
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. Lessor reserves
the right to procure and maintain the ventilating and air conditioning system
maintenance contract and if Lessor so elects, Lessee shall reimburse Lessor,
upon demand, for the cost thereof.
(b) If Lessee fails to perform Lessee's obligations under this Paragraph 7.2
or under any other paragraph of this Lease, Lessor may enter upon the Premises
after ten (10) days' prior written notice to Lessee (except in the case of
emergency, in which no notice shall be required), perform such obligations on
Lessee's behalf and put the Premises in good order, condition and repair, and
the cost thereof together with interest thereon at the maximum rate then
allowable by law or the prime rate plus four (4%), whichever is the lesser,
shall be due and payable as additional rent to Lessor together with Lessee's
next Base Rent installment.
(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, casualty or damage due to Lessor's willful misconduct or
negligence (but only to the extent of Lessor's negligence utilizing comparative
negligence standards) or default 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. 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 on the Premises in good operating
condition.
7.3
(a) See Addendum Paragraph 66.
-2-
See Addendum Paragraph 66.
(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 proposed detailed plans. If Lessor shall give its consent, the
consent shall be deemed conditioned upon Lessee acquiring a permit to do so from
appropriate governmental agencies, the furnishing of a copy thereof to Lessor
prior to the commencement of the work and the compliance by Lessee of 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 (10) day's notice prior to the
commencement of any work in the Premises, and Lessor shall have the right to
post notices of non-responsibility in or on the Premises or the Building as
provided by law. If Lessee shall, in good faith, contest the validity of any
such lien, claim or demand, then Lessee shall, at its sole expense defend itself
and Lessor against the same and shall pay and satisfy any such adverse judgment
that may be rendered thereon before the enforcement thereof against the Lessor
or the Premises 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 decide it is to Lessor's best
interest 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, unless Lessor requires their removal pursuant to paragraph 7.3(a).
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,
security systems, communication systems, and fire protection and 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 an amount not
less than $500,000.00 per occurrence. The policy shall insure performance by
Lessee of the indemnity provisions of this Paragraph 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 $500,000.00 per occurrence.
8.3 Property Insurance. Lessor shall obtain and keep in force during the term
of this Lease a policy or policies 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 a lender having a lien on the 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 addition,
Lessor shall obtain and keep in force, during the term of this Lease, a policy
of rental value insurance covering a period of one year, with loss payable to
Lessor, which insurance shall also cover all Operating Expenses for said period.
8.4 Payment of Premium Increase.
(a) After the term of this Lease has commenced, Lessee shall not be
responsible for paying Lessee's Share of any increase in the property 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 other lessee's occupancy which create an
extraordinary or unusual risk.
(b) Lessee, however, shall pay the entirety of any increase in the property
insurance 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. Lessee shall in no event be responsible for
insurance cost increases resulting from increase in valuation arising from
improvements made by Lessor to other tenant spaces or the addition of earthquake
coverage, unless required by a third party.
(c) Lessee shall pay to Lessor, during the term hereof, in addition to the
rent, Lessee's Share (as defined n paragraph 4.2[a]) of the amount of any
increase in premiums for the insurance required under Paragraphs 8.2 and 8.3
over and above such premiums paid during the Base Period, as hereinafter
defined, whether such premium increase shall be the result of the nature of
Lessee's occupancy, any act or omission of Lessee, requirements of the holder of
a mortgage or deed of trust covering the Premises, increased valuation of the
Premises, or general rate increases. In the event that the Premises have been
occupied previously, the words "Base Period" shall mean the last twelve months
of the prior occupancy. In the event that the Premises have never been occupied
previously, the premiums during the "Base Period" shall be deemed to be the
lowest premiums reasonably obtainable for said insurance assuming the most
nominal use of the Premises. Provided, however, in lieu of the Base Period, the
parties may insert a dollar amount at the end of this sentence which figure
shall be considered as the insurance premium for the Base Period: $4,162.00
---------
property insurance and $11,041.00 liability insurance. In no event, however,
-----------------------------------------------------
shall Lessee be responsible for any portion of the premium cost increase
attributable to liability insurance coverage limit in excess of $2,000,000
procured under paragraph 8.2
(d) Lessee shall pay any such premium increases to Lessor within 30 days
after receipt by Lessee of a copy of the premium statement or other satisfactory
evidence of the amount due. If the insurance policies maintained hereunder cover
other improvements in addition to the Premises, Lessor shall also deliver to
Lessee a statement of the amount of such increase attributable to the Premises
and showing in reasonable detail, the manner in which such amount was computed.
If the term of this Lease shall not expire concurrently with the expiration of
the period covered by such insurance, Lessee's liability for premium increases
shall be prorated on an annual basis.
8.5 Insurance Policies. Insurance required hereunder shall be in 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 amount of such insurance within seven (7) days after the commencement date
of this Lease. No such policy shall be cancellable or subject to reduction of
coverage or other material modification except after thirty (30) days prior
written notice to Lessor. Lessee shall, at least (30) days prior to the
expiration of such policies, furnish Lessor with renewals, certificates or
"binders" thereof.
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
or 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 and/or invitees. Lessee and
Lessor shall, upon obtaining the policies of insurance required hereunder, give
notice to the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.
8.7 Indemnity. Except when due to Lessor's willful misconduct or negligence
(but only to the extent of Lessor's negligence utilizing comparative negligence
standards) or default under this Lease, Lessee shall indemnify and hold harmless
Lessor from and against any and all claims arising from 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 brought thereon; and in case any action or proceeding be
brought against Lessor by reason of any such claim, Lessee upon notice from
Lessor shall defend the same at Lessee's expense by counsel reasonably
satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense.
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. See Addendum, paragraph 68.
8.8 Exemption of Lessor from Liability. Except when due to Lessor's willful
misconduct or negligence (but only to the extent of Lessor's negligence
utilizing comparative negligence standards) or default under this Lease. 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 employees, invitees, customers, or any other
person in or about the Premises or the Industrial Center, nor shall Lessor be
liable for injury to the person of Lessee, Lessee's employees, agents or
contractors, 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 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) "Premises 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.
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(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 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 to repair is fifty 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 percent or more of the then replacement cost of the
Industrial Center Buildings.
(g) "Insured Loss" shall mean damage or destruction which was caused by an
event required to be covered by the insurance described in paragraph 8. The fact
that an Insured Loss has a deductible amount shall not make the 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; Premises Building 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 which is an insures Loss
and which falls into the classification of either Premises Partial Damage or
Premises Building Partial Damage, then Lessor shall at Lessor's expense, repair
such damage to the Premises to the condition which existed immediately prior to
the loss or damage, using the same quality materials and workmanship but only to
existing building and any improvements constructed by Lessee but not Lessee's
fixtures, equipment, or tenant improvements as soon as reasonably possible and
this Lease shall continue in full force and effect.
(b) Uninsured Loss. Subject to the provisions of paragraph 9.4 and 9.5, if
at any time during the term of this Lease there is damage which is not an
Insured Loss and which falls within the classification of Premises Partial
Damage or Premises Building Partial Damage unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at Lessee's
expense) which damage prevents Lessee from using the Premises. Lessor may at
Lessor's option either (i) repair such damage as soon as reasonably possible at
Lessor's expense in which event this Lease shall continue in full force and
effect, or (ii) given written notice to Lessee within thirty (30) days after the
date of the occurrence of such damage of Lessor's intention to cancel and
terminate this Lease of the date of the occurrence of such damage in the event
Lessor elects 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 five 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 continue in full force and effect and Lessee shall
proceed to make such repairs as soon as reasonably possible if Lessee does not
give such notice within such 10-day period this Lease shall be cancelled and
terminated as of the date of the occurrence of such damage.
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 damage whether or not it is an Insured
Loss, and which falls into the classifications of either (i) Premises Partial
Damage, or (ii) Premises Building Total Destruction, or (iii)Industrial Center
Buildings Total Destruction then Lessor may at Lessor's option either (i) repair
such damage or destruction, but not Lessee's fixtures, equipment or tenant
improvements, as soon as reasonably possible at Lessor's expense and this Lease
shall continue in full force and effect, or (ii) five 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
cancelled and terminated as of the date of the occurrence of such damage.
9.4 Damage Near End of Term.
(a) Subject to paragraph 9.4(b), if at any time during the last six months
of the term of this Lease there is substantial damage whether or not an insured
Less which falls within the classification 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 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 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, bit not Lessee's fixtures, equipment or tenant improvements,
as soon as reasonably possible and this Lease shall continue in full force and
elect. If Lessee fails to said twenty (20) day period by giving written notice
to Lessee of lessor's election to do so within ten (10) 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 Abatement of Rent; Lessee's Remedies.
(a) In the event Lessor repairs or restores the Premises pursuant to the
provision of this paragraph 9, the rent payable hereunder for the period during
which such damage, repair or restoration continues shall be abated in proportion
to the degree to which Lessee's use of the Premises is impaired. Except for
abatement of rent, if any. Lessee shall have no claim against Lessor for any
damage suffered by reason of any such damage destruction, repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises under the
provisions of this paragraph 9 and shall not commence such repair or restoration
within ninety (90) days after such obligation shall accrue. Lessee may at
Lessee's option cancel and terminate this Lease by giving Lessor written notice
of Lessee's election to do so at any time prior to the commencement of such
repair or restoration. In such event this Lease shall terminate as of the date
of such notice.
9.6 Termination - Advance Payments. Upon termination of this Lease pursuant to
this paragraph 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 stature which relate
to termination of leases when leased property is destroyed and agree that such
event shall be governed by the terms of this Lease.
10. Real Property Taxes.
10.1 Payment of Tax Increase. Lessor shall pay the real property tax, as
defined in paragraph 10.3 applicable to the Industrial Center provided, however,
that Lessee shall pay. In addition to rent, Lessee's Share (as defined in
Addendum, paragraph 67.1 of the amount if any by which real property taxes are
applicable to the Premises increase over the fiscal real estate tax year 1997 -
1998. Such payment shall be made by Lessee within thirty (30) days after receipt
of Lessor's written statement including a copy of the ▇▇▇▇(s) from the taxing
authority setting forth the amount of such increase and the computation thereof.
If the term of this Lease shall not expire concurrently with the expiration of
the tax fiscal year. Lessee's liability for increased taxes for the last partial
lease year shall be prorated on an annual basis.
10.2 Additional Improvements. Lessee shall not be responsible for paying
Lessee's Share of 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) the
entirely of any increase in real property tax if assessed solely by reason of
additional improvements placed upon the Premises by Lessee or at Lessee's
request. See Addendum, paragraph 70.
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,
generally, 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 by any authority having the direct or indirect power to tax, including
any city, county, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district thereof, as
against any legal or equitable interest of Lessor in the Industrial Center or in
any portion thereof as against Lessor's right to rent or other income therefrom
and as against Lessor's business of leasing the Industrial Center. The term
"real property tax" shall also include any tax, fee, levy, assessment or charge
(i) in substitution of, partially or totally, any tax, fee, levy, assessment or
charge herein above 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 June 1, 1978, or, if previously charged has been increased since June
1, 1978 or (iv) which is imposed as a result of transfer either partial or total
of Lessor's interest in the Industrial Center or which is added to a tax or
charge hereinbefore included within the definition of real property tax by
reason of such transferor (v) which is imposed by reason of this transaction,
any modification 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
determination thereof, in good faith, shall be conclusive.
10.5 personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes assessed against and
levied upon trade fixtures, furnishing, 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 attributes to
Lessee within ten (10) business days after receipt of a written statement
setting forth the taxes applicable to Lessee's property.
11. Utilities. Lessee shall pay for all water, gas, heat, light, power,
telephone and 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 a reasonable
proportion to be determined by Lessor of all charges jointly metered with other
premises in the Building, in accordance with Addendum paragraph 67.
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12. Assignment and Subletting
12.1 Lessor's Consent Required. Lessee shall not voluntarily or by operation
of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all
or any part of Lessee's interest in the Lease or in the Premises, without
Lessor's prior written consent, which Lessor shall not unreasonably withhold.
Lessor shall respond to Lessee's request for consent hereunder in a timely
manner and any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a breach of
this Lease without the need for notice to Lessee under paragraph 13.1.
12.2 See Addendum Paragraph 71
12.3 Terms and Conditions of Assignment. Regardless of Lessor's consent, no
assignment shall release Lessee of Lessee's obligations hereunder or alter the
primary liability of Lessee to pay the Base Rent and Lessee's Share of Operating
Expenses, and to perform all other obligations to be performed by Lessee
hereunder. Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of rent shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for the breach of
any of the terms or conditions of this paragraph 12 or this Lease. Consent to
one assignment shall not be deemed consent to any subsequent assignment, in the
event of default by any assignee of Lessee or any successor of Lessee, in the
performance of any of the terms of hereof. Lessor may proceed directly against
Lessee without the necessity of exhausting remedies against said assignee.
Lessor may consent to subsequent assignments of this Lease or amendments or
modifications to this Lease with assignees of Lessee, without notifying Lessee,
or any successor of Lessee, and without obtaining its or their consent thereto
and such action shall not relieve Lessee of liability under this Lease.
12.4 Terms and Conditions Applicable to Subletting. Regardless of Lessor's
consent, the following terms and conditions shall apply to any subletting by
Lessee of all or any part of the Premises and shall be included in subleases:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest
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 such sublease. Lessor
shall not, by reason of this or any other assignment of such sublease to Lessor
nor by reason of the collection of the rents from a sublessee, be deemed liable
to the sublessee for any failure of Lessee to perform and comply with any of
Lessee's obligations to such sublessee under such 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 such 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 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 sublessee 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 and comply with each and every obligation herein
to be performed by Lessee other than such obligations as are 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 not be effective
unless said guarantors give their written consent to such sublease and the terms
thereof.
(d) The consent by Lessor to any subletting shall not release Lessee from
its obligations or alter the primary liability of Lessee to pay the rent and
perform and comply with all of the obligations of Lessee to be performed under
this Lease.
(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 assignments
of the sublease or any amendments or modifications thereto without notifying
Lessee or anyone else liable on the Lease or sublease and without obtaining
their consent and such action shall not relieve such persons from liability.
(f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantors or any one else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(g) In the event Lessee shall default in the performance of its obligations
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 exercise of
said option to the termination of such sublease; provided, however, 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) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(j) Lessor's written consent to any subletting of the Premises by Lessee
shall not constitute an acknowledgement that no default then exists under this
Lease of the obligations to be performed by Lessee nor shall such consent be
deemed a waiver of any then existing default, except as may be otherwise stated
by Lessor at the time.
(k) 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, and the
sublessee shall have a right of reimbursement and offset from and against Lessee
for any such default cured by the 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.
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 payment
required to be made by Lessee hereunder as and when due where such failure shall
continue for a period of three (3) business days after receipt of 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 subparagraph.
(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 described in paragraph (b)
above, where such failure shall continue for a period of thirty (30) days after
receipt of 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 in default if
Lessee commenced such cure within said thirty (30) day period and thereafter
diligently pursues such cure to completion, provided, however, under no
circumstances shall the cure period exceed one hundred and twenty (120) days. 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 11 U.S.C. (S) 101 or any successor statute thereto (unless, in 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.
(e) The discovery by Lessor that any financial statement given to Lessor by
Lessee, any assignee of Lessee, any subtenant of Lessee, any successor in
interest of Lessee or any guarantor of Lessee's obligation hereunder, was
materially false.
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 without limiting Lessor
in the exercise of any right or remedy which Lessor may have 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, the cost of
recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorney's fees,
and any real estate commission actually paid; the worth at the time of award by
the 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,
that portion of the leasing commission paid by Lessor pursuant to paragraph 15
applicable to the unexpired term of this Lease.
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(b) Maintain Lessee's right to possession in which case this Lease shall
continue in effect whether or not Lessee shall have vacates 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 wherein the Premises are located. 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 the 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 of which will be extremely difficult to ascertain. Such costs
include, but are not limited to processing and accounting charges, and late
charges which may be imposed on Lessor by the terms of any mortgage or trust
deed covering the Industrial Center. 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 designee within five (5) business days after such amount
shall be due, then five (5) business days after Lessee receives written notice
of such amount being past due, Lessee shall pay to Lessor a late charge equal to
12% 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, 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. Notwithstanding the
foregoing, Lessee, during the term of this Lease shall be granted.
14. Condemnation. If the Premises or any 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 part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than ten
percent of the floor area of the Premises or more than twenty-five percent of
that portion of the Common Areas designated as parking for the Industrial Center
is taken by condemnation, Lessee may at Lessee's option, to be exercised in
writing only 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 Premises 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. 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 damages to
the Premises caused by such condemnation except to the extent that Lessee has
been reimbursed therefor by the condemning authority. Lessee shall pay any
amount in excess of such severance damages required to complete such repair.
Notwithstanding the foregoing, Lessee shall be entitled to any condemnation
award or payment made under threat of condemnation for the moving costs,
unamortized portion of any tenant improvements made at the expense of Lessee,
loss of Lessee's personal property and Lessee's trade fixtures.
15. See Addendum Paragraph 58.
16. Estoppel Certificate.
(a) Each party (as "responding party") shall at any time upon not less than
fifteen (15) 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) acknowledging 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.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Premises or of the business of the requesting party.
(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 is
to respond, 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, (ii) there
are no uncured defaults in the requesting party's performance, and (iii) if
Lessor is the requesting party, not more than one month's rent has been paid
in advance.
(c) If Lessor desires to finance, refinance, or sell the Industrial Center,
or any part thereof, Lessee hereby agrees to deliver to any lender or purchaser
designated by Lessor only such publicly available financial statements of Lessee
as may be reasonably required by, such lender or purchaser. Such statements
shall include the past three (3) years financial statements of Lessee if
publicly available. All such financial statements shall be received by Lessor
and such lender or purchaser in confidence and shall be used only for the
purposes herein set forth.
17. 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 except as expressly
provided in paragraph 15, 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, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest shall be delivered to the grantee. The
obligations contained in this Lease to be performed by Lessor shall, subject as
aforesaid, be binding on Lessor's successors and assigns only 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 expressly herein provided, any
amount due to Lessor not paid when due shall bear interest at the maximum rate
then allowable by law or the prime rate plus four (4%), whichever is the lesser
from the date due. Payment of such interest shall not excuse or cure any default
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 shall be deemed to be rent.
22. Incorporation of Prior Agreements; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction nor
the Lessor or any employee or agents of any of said persons has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of the Premises or the Industrial Center and Lessee acknowledges that
Lessee assumes all responsibility regarding the Occupational Safety Health Act,
the legal use and adaptability of the Premises and the compliance thereof with
all applicable laws and regulations in effect during the term of this Lease
except as otherwise specifically stated in this Lease.
23. Notices. Any notice required or permitted to be given hereunder shall be in
writing and may be given by overnight delivery service (e.g. Federal Express,
UPS, etc.) or by personal delivery or by certified mail and if given personally
or by mail, shall be deemed sufficiently given if addressed to Lessee at the
premises with a copy to Sony Corporation of America Real Estate Department, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: VP Real Estate or to Lessor
at the address noted below 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 except that upon Lessee's taking possession of the Premises,
the Premises shall constitute Lessee's 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.
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24. Waivers. No waiver by either Party or any provision hereof shall be deemed
a waiver of any other provision hereof or of any subsequent breach by the other
Party 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 Premises 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 during 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 paragraph
17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State
where the Industrial Center is located and any litigation concerning this Lease
between the parties hereto shall be initiated in the county in which the
Industrial Center is located.
30. Subordination
(a) This Lease, and any Option granted hereby, 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, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee or ground lessor shall elect to have this Lease and any
Options granted hereby prior to the lien of its mortgage, deed of trust or
ground lease, and shall give written notice thereof to Lessee, this Lease and
such Options shall be deemed prior to such mortgage, deed of trust or ground
lease, whether this Lease or such Options are dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of recording
thereof.
(b) Lessee agrees to execute any documents reasonably 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's failure to execute such documents within fifteen (15) days
after written demand shall constitute a material default by Lessee hereunder
without further notice to Lessee.
31. Attorney's Fees. If either party or the broker(s) named herein bring an
action to enforce the terms hereof or declare rights hereunder, the prevailing
party in any 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.
The provisions of this paragraph shall inure to the benefit of the broker named
herein who seeks to enforce a right hereunder.
32. Lessor's Access. Lessor and Lessor's agents shall have the right to enter
the Premises at reasonable times upon prior reasonable notice for the purpose of
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 Industrial Center 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 120 days of
the term hereof place on or about the Premises any ordinary "For Lease" signs.
All activities of Lessor pursuant to this paragraph 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 circumstances shall
Lessee place a sign on any roof of the Industrial Center. See Addendum paragraph
61.3.
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, operate as an assignment to Lessor
of any or all of such subtenancies.
36. Consents. Except for paragraph 33 hereof, wherever in this Lease the
consent of one party is required to an act of the other party such consent shall
not be unreasonably withheld or delayed.
37. Guarantor. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.
38. Quiet Possession. Upon Lessee 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. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership interest in the
Industrial Center.
39. Options.
39.1 Definition. As used in this paragraph the word "Option" has the following
meaning (1) the right or option to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other property of
Lessor. (2) the option or right of first refusal to lease the Premises or the
right of first offer to lease the Premises or the right of first refusal to
lease other space within the Industrial Center or other property of Lessor or
the right of first offer to lease other space within the Industrial Center or
other property of Lessor. (3) the right or option to purchase the Premises or
the Industrial Center, or the right of first refusal to purchase the Premises or
the Industrial Center, or the right of first offer to purchase the Premises or
the Industrial Center, or the right or option to purchase other property of
Lessor, or the right of first refusal to purchase other property of Lessor or
the right of first offer to purchase other property of Lessor.
39.2 Options Personal. 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 who does so without the intent of thereafter assigning
this Lease or subletting the Premises or any portion thereof, and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any person or
entity other than Lessee, provided, however, that an Option may be exercised by
or assigned to any Lessee Affiliate as defined in paragraph 12.2 of this Lease.
The Options if any, herein granted to Lessee 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.
39.3 Multiple Options. In the event that Lessee has any multiple options to
extend or renew this Lease a later option cannot be exercised unless the prior
option to extend to renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option, notwithstanding any
provision in the grant of Option to the contrary, (i) during the time commencing
from the date Lessor gives to Lessee a notice of default pursuant to paragraph
13.1(b) or 13.1(c) and continuing until the noncompliance alleged in said notice
of default is cured, or (ii) during the period of time commencing on the date
after a monetary obligation to Lessor is due from Lessee and unpaid (without any
necessity for notice thereof to Lessee) and continuing until the obligation is
paid or (iii) at any time after an event of default described in paragraphs
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) in the event that Lessor has given to Lessee
three or more notices of default under paragraph 13.1(b), or paragraph 13.1(c),
whether or not the defaults are cured, during the 12 month period of time
immediately prior to the time that Lessee attempts to exercise the subject
Option.
(b) The period of time within which an Option may be exercised shall not be
extended or enlarged by reason of Lessee's inability to exercise an Option
because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall terminate
and be of no further force or effect, notwithstanding Lessee's due and timely
exercise of the Option, if, after such exercise and during the term of this
Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee for a
period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) 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 notices of default under
paragraph 13.1(b), or paragraph 13.1(c), whether or not the defaults are cured.
40. Security Measures. Lessee hereby acknowledges that Lessor shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Industrial Center. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents 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).
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41. Easements. Lessor reserves to itself the right, from time to time, to grant
such easements, rights and dedications that Lessor deems necessary or desirable,
and to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights , dedications, Maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material default of this Lease by Lessee without the need for
further notice to Lessee.
42. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the part
of said party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said party to pay
such sum or any part thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
43. Authority. If Lessee is a corporation, trust or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on 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.
44. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions, if any, shall be controlled by the
typewritten or handwritten provisions.
45. 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.
46. Addendum. Attached hereto is an addendum or addenda containing paragraphs
47 through 74 which constitute a part of this Lease.
-- --
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.
THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR
APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS
AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO: THE
PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL
AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
LESSOR LESSEE
▇▇▇▇▇▇ Associates Psygnosis, Inc.
A California General Partnership /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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By /s/ A. ▇▇▇▇▇▇ ▇▇▇▇▇▇ By
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By A. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Partner By ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, President
------------------------- ---------------------------
Executed on 6/30/97 Executed on 19/6/97
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(Corporate Seal) (Corporate Seal)
ADDRESS FOR NOTICES AND RENT ADDRESS
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
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▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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American Industrial Real Estate Association, Los Angeles, CA (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ASSOCIATES (LESSOR) AND PSYGNOSIS, INC. (LESSEE)
ADDENDUM TO LEASE
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47. Parking Spaces
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47.1 During the term of the Lease, Lessor shall provide Lessee with four
(4) parking spaces in the garage; two (2) standard-size spaces, and
two (2) compact-size spaces.
47.2 The parking rental rate for this Lease for the first year of the
lease shall be in the amount of $140.00 per space per month in
addition to the Base Rent, as set forth in paragraph 4.1 of the
Lease. Said parking rental rate shall be increased by eight percent
(8.00%) per year.
47.3 All parking space locations shall be assigned to Lessee by Lessor and
the assignments may be reassigned from time to time during the term
of the Lease. Lessor may establish and issue parking regulations
which regulations from time to time may be amended by Lessor. All
such regulations shall be observed by Lessee.
47.4 Upon execution of this Lease, Lessee shall deliver to Lessor the sum
of one hundred and twenty dollars ($120.00) as a Security Deposit for
four (4) garage door openers to be provided to Lessee by Lessor.
47.5 Lessee will be put on a waiting list for up to two (2) additional
parking spaces, under the following conditions: Parking excluded from
this would be parking space that is currently being held for any
existing unleased space which will be included in the lease for that
space when leased. Short term parking, subject to parking priorities
included in lease agreements with other present tenants would be
parking space that becomes available at the termination of a present
tenant's lease vacating the premises until such space is re-leased.
Other parking spaces that may become available are those due to a
tenant relinquishing a space currently leased which is not included
in its lease agreement, subject to parking priorities included in
lease agreements with other present tenants. The initial rental rate
for such space shall be the then current rate set for such space by
Lessor subject to the terms and conditions of Lessor's standard
parking lease agreement. Lessee will be given priority on said
waiting list.
48. Improvements
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48.1 Lessor-Provided Improvements
48.1.1 Lessor shall provide the following improvements to Lessee's
Premises, as further described in Paragraph 48.1.1 a - d
below. The costs of said improvements shall be borne by
Lessor and shall be included in the Base Rent, and such
costs shall be excluded from the Lessee's Tenant Improvement
Allowance as defined in paragraph 49.1.
a) Mens' and women's toilets within the premises, using
Lessor's standards, as shown on Exhibit "B" attached
hereto.
b) Fill and feather all floors to provide a smooth surface
which will accept a "normal" carpet floor covering
installation. It is acknowledged that the floors in the
premises are not plane, flat or level. There are
variations in slope overall and there are local
variations between column bays. No leveling will be
done by Lessor.
c) Levelor blinds on the windows.
d) Perimeter windows shall be sealed and welded closed.
e) Install an override switch to operate the Building HVAC
system and a meter for purposes of monitoring
after-hours usage pursuant to paragraph 51.
ADDENDUM TO PSYGNOSIS, INC. LEASE Page 1 of 17
48.1.2 See attached Work Letter, marked Exhibit "C", for provisions
relating to the construction of Lessor-Provided
Improvements.
48.2 Lessee's Tenant Improvements
48.2.1 The Lessee Tenant Improvement Allowance, as outlined in
paragraph 49, may be used for construction of all other
Lessee Tenant Improvements, with the exception of those
listed in paragraph 48.1.1.
48.2.2 Lessee shall pay for all costs, costs of changes, additions
or increases in the scope, quantity, or quality of any
components of the Lessee Tenant Improvements that:
a) Exceed the Lessee Tenant Improvement Allowance as
outlined in paragraph 49.
b) Exceed the Lessor-Provided Improvements as outlined in
paragraph 48.
48.2.3 Lessor has provided at no cost to Lessee a preliminary space
plan for tenant space layouts only. All interior design,
furnishing and decorating shall be supplied by Lessee. All
drawings and permits, with the exception of those for
Lessor-Provided Improvements as outlined in paragraph 48
will be provided by Lessee.
48.2.4 In the event that Lessee elects to hire Lessor's architects
and engineers to provide the services set forth in paragraph
48.2.3, then the costs of these services, as agreed upon by
Lessor and Lessee under separate contract, shall be charged
against the Lessee Tenant Improvement Allowance as set forth
in paragraph 49.1.
48.2.5 Lessee shall select and provide and maintain at its own
expense exclusive of the Lessee Tenant Improvement
Allowance, the following, all of which shall be installed by
Lessee in accordance with applicable codes:
a) furniture, fixtures and equipment, including work
stations and all electrical or other installation
hookups.
b) select, install and pay for Lessee's telephone system,
networking or other communication systems, including
service to the building for such systems; however,
Lessor shall provide conduit into the building.
c) specialty light fixtures and all track lighting
fixtures.
49. Lessee's Tenant Improvement Allowance
-------------------------------------
49.1 Lessor agrees to advance an allowance of $10.00 per sq. ft. of
rentable area plus $20,000.00 for Lessee's Tenant Improvements
("Lessee's Tenant Improvement Allowance").
49.2 Lessee shall be responsible for the cost of detailed planning and for
all interior design services as well as for layout and placement of
machines and equipment, over and above what Lessor is providing as
set forth in paragraph 48.2.3.
49.3 Lessee's Tenant Improvement Allowance Payment Procedure
-------------------------------------------------------
49.3.1 Lessor shall make payments of the Lessee's Tenant
Improvement Allowance toward the Construction of Lessee's
Tenant Improvements as provided in this Agreement.
49.3.2 Based on each Application for Payment submitted to Lessee's
Architect by the Contractor under the Contract for
Construction and based on Architect's issuance of a
Certificate for Payment (which is acceptable and approved by
Lessee's Construction Representative as defined in the
Construction Work Letter, Exhibit "C"), the Lessor shall
make its pro-rata share (Lessor's Percentage Share, as
hereinafter defined) of undisputed amounts of each Request
for Payment to Lessee and Lessee shall make full progress
payments to the Contractor in accordance with the Contract
for Construction.
49.3.3 The Construction Contract Amount for Lessee's Tenant
Improvements shall be the construction cost of Lessee's
Tenant improvements as set forth in the Construction
Contract executed by and between Lessee and ▇▇▇▇▇▇▇ Aire
Corporation and in paragraph 48.2, excluding items in
paragraph 48.2.5.
49.3.4 Lessor's and Lessee's pro-rata share of payments shall be
determined as follows:
49.3.4.1 Lessor's Percentage Share shall equal the total
Lessee's Tenant Improvement Allowance divided by
the total Construction Contract Amount.
49.3.4.2 Lessee's Percentage Share shall equal the total
Construction Contract Amount less the total Lessee
Tenant Improvement Allowance divided by the total
Construction Contract Amount.
49.3.5 Lessor shall make Payment of Lessor's Percentage Share to
Lessee no later than fifteen (15) days after issuance of
Certificate for Payment by Architect.
49.3.6 Lessor shall be under no obligation to make a payment to
Lessee on account of the Lessee Tenant Improvement Allowance
unless and until Lessee has made the previous approved
progress payment to Contractor.
49.3.7 Final payment shall not be made under the provisions of this
paragraph 49 until Contractor has delivered a complete
release of all liens arising out of the Contract for
Construction and receipts in full covering all labor,
materials and equipment for which a lien could be filed, or
a bond indemnifying Lessee and Lessor against any lien.
Final payment shall be defined as the last payment due the
Contractor, including retention.
49.3.8 If Lessee fails to make any timely payment of amounts due
the Contractor, then Lessor at its sole option may recover
any of its costs incurred to date in connection with the
Lessee's failure to make such payments, including without
limitation Lessor's Percentage Share by drawing down the
Letter-of-Credit or by any other legal means.
49.4 Lessee and Lessor hereby acknowledge that Lessor-Provided and
Lessee's Tenant Improve- ments to the Premises shall not commence
until this Lease is executed.
50. Rentable Area
-------------
For purposes of this lease, the Rentable Area is defined as 25,288 square
feet.
51. HVAC and Freight Elevator
-------------------------
51.1 Notwithstanding the definition of Lessee's Share of Operating
Expenses and Common Area Maintenance (CAM) Charges contained in
paragraph 67, Lessee shall pay the full cost of operation, repair and
maintenance of the HVAC system actually, within the Premises. Lessor
shall maintain the HVAC system located within Lessee's premises in
accordance with the manufacturer's recommended maintenance procedures
and Lessee will reimburse Lessor, upon demand, for the cost thereof,
subject to Lessee's consent to Lessor's access to its premises as
provided for in paragraph 73.
51.2 Lessee agrees and acknowledges that the building HVAC system is shut
down after normal building hours, as stipulated in paragraph 63, and
on weekends and holidays. As an accommodation to allow after-hours
operations of systems on weekdays after normal building hours and on
weekends and holidays, Lessor will install an override switch to
allow operation of the HVAC air-handling unit in the Premises (which
also can be controlled at Lessee's option by a time-clock in the
Mechanical room). Lessor will also install an override switch to
operate the building HVAC system (the cooling tower and chillers,
boilers and pumps, etc.) and a
meter for purposes of monitoring such usage. Lessee agrees to pay to
Lessor, in addition to other rental payments, the cost of such after-
hours operation based upon an initial hourly rate in the amount of
$8.75 per hour ("After-hours Rate)". The After-hours Rate shall be
increased annually by five percent (5.0%) or, in the case of
substantial increases in utility or other costs associated with the
operation of the system that would not be covered by the rate, an
amount to be established and mutually agreed by the parties that is
additional to the then current After-hours Rate and is equal to such
substantial increased costs.
51.3 Notwithstanding the definition of Lessee's Share of Operating
Expenses and Common Area Maintenance (CAM) Charges contained in
paragraph 67, Lessee shall pay its pro-rata share in the proportion
of one third (1/3) of the expense for operation, repair and
maintenance of the freight elevator.
52. Electrical Service
------------------
The Premises and the HVAC unit on the Lower Level is separately metered for
electrical service and Lessee shall contract with PG&E and pay for all such
electrical service direct to PG&E.
53. Telephone and Telecommunications Service and Computer Networks
--------------------------------------------------------------
Lessee shall contract for and pay for all costs for, involved with or in
connection with telephone and telecommunications and computer networks,
including operation, maintenance, installation of equipment, wiring and
service within and to the Premises and to the building, if necessary.
54. Janitorial Services and Garbage
-------------------------------
Lessee shall provide and pay for the cost of janitorial services to
Lessee's Premises. A dumpster or other trash receptacle or system shall be
provided for building tenant's use in the garage level of the building.
Lessee shall be responsible for placing its own garbage in the dumpster or
other receptacle and commencing on occupancy or partial occupancy.
55. Hazardous Materials
-------------------
Lessee shall not be responsible in any way for any claim, damage, violation
of law or injury based upon or arising out of the actual or threatened
discharge, disbursal, release or escape of smoke, vapors, soot fumes,
acids, alkalis, toxic chemicals, liquids or gases, lead paint, radon, waste
materials, hazardous materials or other irritants, pollutants or
contaminants into or upon the land, the atmosphere or any course or body of
water, whether above or below ground which event is not related to Lessee's
use of its premises. Lessee shall have no liability in any way for any
loss, cost or expense arising out of or relating to any governmental
direction or request that the Lessor or any of its Lessees' test for,
monitor, clean-up, repair or take any other corrective measures which in
any way arise out of the actual or threatened discharge, disbursal, release
of escape, whether such activity results from the Lessors conduct or the
conduct of others (not including Lessee), and whether or not such a conduct
is sudden or gradual, and whether or not such is accidental, intended,
foreseeable, expected, fortuitous or inevitable, and wherever such occurs.
However Lessee will be one hundred percent (100%) liable and responsible
for any and all "clean-up" of said toxic waste and/or hazardous materials
contamination which Lessee, its agents, or future sublessee's, if any does
store, dispose, or transport in, use or cause to be on the premises in
violation of applicable law or governing agency(s), and will indemnify
Lessor and hold Lessor harmless from any liabilities, demands costs,
expenses and damages, including attorney fees incurred as a result of any
claims resulting from such contamination. It is agreed that the Lessee's
responsibilities related to toxic waste and hazardous materials will
survive the termination date of this Lease. Lessee also agrees not to use
or dispose of any toxic waste and hazardous materials on the premises
without first obtaining Lessor's prior written consent. In the event
written consent is granted by Lessor, Lessee agrees to complete compliance
with governmental regulations, and Lessee also agrees to install such toxic
waste and/or hazardous materials monitoring devices as Lessor deems
necessary.
56. Loading Dock Use
----------------
Lessee shall cooperate with Lessor and other tenants to insure that the
freight elevator and the loading dock common area is maintained in a neat
and orderly condition and is accessible and usable by all tenants in the
Building. Lessee shall be entitled to continuing and shared access to
freight elevator and the loading dock area. No materials, supplies,
merchandise, or other items are to be stored in the garage area by Lessee.
57. Increases in Rent
-----------------
The monthly rental rate to be paid during months thirteen (13) through
sixty (60) shall be based upon the following schedule (Month 13 commences
November 1, 1998 (subject to Lessor-caused delays and force majeure and
subject to adjustment based on Lessee's payment of Rent and other payments
commencing before November 1, 1997)):
Months 13 through 24 $32,664.00
Months 25 through 36 $34,244.00
Months 37 through 48 $35,825.00
Months 49 through 60 $37,405.00
58. Brokers
-------
Lessor and Lessee each represent that it has not engaged any brokers who
would be entitled to any commission or fee based on the execution of this
lease, other than Tri Commercial Real Estate Services, Inc. and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Company of California.
58.1 Lessor shall pay a brokerage fee for services rendered in the amount
of $61,639.56 to Tri Commercial Real Estate Services Inc.. In
addition to this Lessor shall pay a brokerage fee in the amount of
$82,186.08 to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Company of California.
58.2 One half of these brokerage fees shall be paid upon execution of the
Lease and receipt by Lessor of Security Deposit, First Month's rent
and Letter-of-Credit. The balance of the brokerage fees shall be paid
upon the occupancy of the space by Lessee.
58.3 Lessor and Lessee hereby indemnify each other against and from any
claims for any brokerage commissions and all costs, expenses and
liabilities in connection therewith, including, without limitation,
reasonable attorneys' fees and expenses, for any breach of the
foregoing. The foregoing shall survive the termination of the lease
for any reason.
59. Additional Security
-------------------
59.1 Purpose of Additional Security.
In addition to the provisions of paragraph 5, the purpose of this
additional Security is to recognize the risk assumed by Lessor in
Leasing the Premises, including but not limited to, cost of
commissions, cost of improvements, contributions to the cost of
Lessee's Tenant Improvements and all other costs in connection with
this lease and with the leasing of the Premises and in order to
insure Lessee's timely and faithful performance of each of Lessee's
obligations under this Lease, whether monetary or non-monetary in
nature.
59.2 Form and Timing of Additional Security.
Upon execution of this Lease by both parties, Lessee shall deposit
with Lessor an Irrevocable Letter-of-Credit in the initial amount of
Three-Hundred Seventy-Five Thousand Dollars ($375,000.00) as
described more fully in paragraph below.
59.3 Letter-of-Credit.
The Letter-of-Credit referred to in the paragraph above, shall be
issued by an Issuer acceptable to Lessor and on terms and conditions
acceptable to Lessor, including, but not limited to, the following:
59.3.1 The Letter-of-Credit shall be guaranteed irrevocable;
59.3.2 The terms, conditions and Instructions of the
Letter-of-Credit shall be reviewed in advance of Lease
execution and approved by Lessor and shall not be
subsequently changed except by written agreement executed by
both Lessee and Lessor;
59.3.3 In the event that Issuer of the Letter-of-Credit issues the
Letter-of-Credit on a yearly term basis, Lessee guarantees
to maintain the Letter-of-Credit continuously effective,
with the same terms and conditions, throughout the term of
this Lease, including any extensions or option periods.
59.3.4 In addition Lessee shall maintain the effectiveness of the
Letter-of-Credit for a period not to exceed forty-five (45)
days after the later of (i) expiration of this Lease; (ii)
earlier termination of this Lease; or (iii) the complete
vacation of the Premises by Lessee ("45-Day Period") so that
Lessor, during the 45-Day Period, may confirm that all of
Lessee's obligations under this Lease have been fulfilled.
In order to permit Lessor a reasonable period of time within
which to obtain such confirmation, Lessee hereby waives the
thirty (30)-day notice from Lessor otherwise required by
Paragraph 13.1(c) of this Lease. If Lessor reasonably
determines that Lessee has not fulfilled all of its
obligations under this Lease, Lessor shall promptly notify
Lessee in writing of the basis for its determination, and
Lessee promptly shall remedy the stated problem. Lessor
shall use the 45-Day Period to obtain such information,
including bids and estimates, as Lessor will need to
document a draw-down against the Letter-of-Credit if Lessee
does not remedy the items described in Lessor's written
notice. If Lessor confirms to its reasonable satisfaction
that Lessee has complied with all of its obligations under
this Lease prior to the end of the forty-five (45) day
period, Lessor immediately shall so notify Lessee, and
Lessor and Lessee promptly shall instruct the issuer in
writing to terminate the Letter-of-Credit; in any event,
Lessor and Lessee shall so notify the issuer not later than
the last day of the 45-Day Period. Lessor and Lessee
acknowledge and agree that Lessee has waived its right to
any notice that would be required during the 45-Day Period
pursuant to Paragraph 13.1(c) of this Lease, and Lessee does
not waive any other notice to which it is entitled under
this Lease at any other time during the term hereof, as the
term may be extended; under the Lease and were entitled to a
thirty (day) notice to Cure, and Lessee does not waive any
other notice to which it is entitled under this Lease at any
other time during the term, as the term may be extended;
59.3.5 If, for any reason, the Letter-of-Credit will not be renewed
by the Issuer, then at least thirty (30) days prior to the
expiration date, the Issuer shall notify Lessor in writing
that the Letter-of-Credit shall not be renewed and on the
expiration date the entire proceeds of the Letter-of-Credit
shall be delivered to the Lessor by the Issuer to be held as
additional Security Deposit, without necessity of a demand;
59.3.6 If Lessee fails to meet any of the obligations under this
Lease, subject to all applicable notice and cure periods,
Lessor shall, upon demand to the Issuer of the
Letter-of-Credit in writing by a partner or authorized agent
of Lessor, have the right to receive payment, to be drawn
down against the Letter-of-Credit, sufficient to cover the
amount in default including all costs incurred by Lessor as
a result of such default or failure to meet Lessee's
obligations, within ten (10) days of the date of the demand;
59.3.7 Lessee agrees and acknowledges that said Letter-of-Credit
will not relieve Lessee of any of its obligations under the
Terms of the Lease not satisfied by the draw-down against
the Letter-of-Credit; and
59.3.8 If Lessor rightfully draws down against the Letter-of-Credit
pursuant to the instructions therefor and this paragraph,
Lessee shall, for Lessor's benefit, increase the
Letter-of-Credit to the full amount required during the
period in question as set forth in paragraph 63.3.9 or
provide a replacement Letter-of-Credit in the same amount
with the same terms and conditions as the original
Letter-of-Credit.
59.3.9 Such replenishment or replacement of the Letter-of-Credit
shall be accomplished by Lessee within 10 days of Lessor's
transmittal of demand for a draw-down against the Letter-of-
Credit to the Bank. Lessor shall deliver a copy of the
demand for draw-down to Lessee at the time such is
transmitted to the bank that issued the Letter-of-Credit.
59.3.10 Subject to there being no default under the terms of this
Lease pending, the Letter-of-Credit amount may be reduced to
the amounts set forth in the following schedule:
Month 13 of Lease $300,000.00
Month 25 of Lease $225,000.00
Month 37 of Lease $150,000.00
Month 49 of Lease $ 75,000.00
59.3.11 The Letter-of-Credit shall be maintained during any option
period in the amount of Seventy-Five Thousand Dollars
($75,000.00). All other provisions of this Lease shall apply
to the Letter-of-Credit in such option period.
59.3.12 In the event that Lessee fails to either replenish the
Letter-of-Credit or provide a replacement Letter-of-Credit
in the full amount as set forth above and in the time also
set forth above, then Lessee shall be in material Default of
this Lease if such obligations are not completely fulfilled
within five (5) days after written notice thereof from
Lessor to Lessee.
59.3.13 Lessee agrees that at least thirty (30) days prior to the
expiration of the above-referenced current Letter-of-Credit,
Lessee will either make arrangements for its renewal or for
a substitute Letter-of-Credit. In the event of a renewal or
substitute Letter-of-Credit, the same terms and conditions
set forth in this amendment shall continue to apply. In the
event of a substitute Letter-of-Credit, Lessee shall,
however, make every effort to obtain terms and conditions in
said instrument the same as in the Initial Letter-of-Credit
and consistent with the terms and conditions of the Lease.
The wording of said Letter-of-Credit shall be subject to
Lessor's approval prior to the 30-day period.
59.3.14 In the event that a satisfactory renewal or substitute
Letter-of-Credit has not been arranged and guaranteed prior
to the above specified 30 day period, Lessee agrees that
Lessor shall have the right to demand and receive the entire
amount of the Letter-of-Credit upon its expiration as is
provided in paragraph 59.3.5 of the Lease upon notification
to the issuer in writing, with a copy of this Amendment,
stating the fact that no satisfactory renewal or substitute
Letter-of-Credit has been arranged as of the thirty (30) day
period and that Lessor shall be entitled to payment of the
entire amount of the Letter-of-Credit upon expiration of
same as if notice had been given by the issuer to Lessor of
its expiration as is provided in paragraph 59.3.5 of the
Lease.
60. Bankruptcy
----------
60.1 Supplemental to and in addition to the provisions of paragraph 31
herein, in the event that Lessee shall become a debtor under any
chapter of any proceeding under the United States Bankruptcy Code,
Lessee agrees to pay to Lessor any and all attorney's fees and costs
incurred by Lessor in examining into and preserving and protecting
the rights of Lessor in connection with such bankruptcy case. Such
matters shall include, but are not limited to, (a) motions for relief
from the automatic stay; (b) matters pertaining to the assumption or
rejection of this Lease; (c) matters pertaining to any and all
administrative claims of Lessor in such proceedings; (d) reviewing
and examining any and all Chapter 11 plans and disclosure statements,
and the filing of any objections to same; (e) attendance at any and
all heading in said bankruptcy proceeding as are reasonably necessary
to investigate and protect Lessor's interests.
61. Tenant Identification
---------------------
61.1 Tenant identification signs shall be provided at Lessor's sole cost
and in Lessor's standard design without logo and shall be in the same
form as other tenants in the building as follows:
a) Building Standard tenant suite sign on wall adjacent to front
entry door of tenant space or on wall opposite elevator.
b) Building Standard directory signage in building lobby and garage
elevator lobby.
61.2 Lessee shall have the right to install additional signage (design of
which does not require Lessor's approval) and logo anywhere within
Lessee's premises.
61.3 Lessee may install a flag with its logo on one of the existing flag
poles on the building front. Location, design, and size of flag (not
to exceed that of existing flags) shall be subject to Lessor's prior
written approval, not to be unreasonably withheld or delayed.
61.4 All signage listed in paragraphs 61.2 through 61.3 above will be
provided at Lessee's sole cost and expense. In no event will a sign
be allowed on the exterior of the building or anywhere else on the
building.
62. Option for Two Additional Thirty-Six Month Terms
------------------------------------------------
62.1 Lessee shall have the option of extending the term of this Lease for
two consecutive (2) thirty-six (36) month periods to be determined as
follows and subject to all of the terms and conditions of the Lease;
provided 1) Lessee has not been in substantial default beyond any
applicable cure period at any time during the Lease term or option
period nor is in default in the performance of any of the terms and
conditions of the Lease upon commencement of said additional term,
and 2) Lessee has given to Lessor, six (6) months prior to the
expiration of the initial lease term, written notice of its intention
to exercise said option.
62.2 In the event that Lessee chooses to exercise its option to lease the
premises for either of the additional thirty-six (36) month terms,
the Initial Monthly Rental Rate for months one (1) through twelve
(12) of either of the thirty-six (36) month extension terms shall be
based on ninety five percent (95%) of the then "market rate" for
comparable space as improved, but shall not be less than the "Minimum
Initial Rental Rate", as defined hereinafter in paragraph 62.4. If
the parties are able to agree upon a mutually satisfactory rental
rate, then such agreement shall be placed in writing and shall be
signed by the parties hereto and shall become a part of this Lease.
62.3 In the event that the parties are unable to agree upon the amount of
the Initial Monthly Rental Rate for months one (1) through twelve
(12) of either additional period ninety (90) days prior to the
commencement date of such period, then the disagreement shall be
promptly submitted to and decided by three (3) real estate brokers,
one to be appointed by Lessor, one by Lessee, and the third by the
two so appointed. Said real estate brokers shall be brokers active in
San Francisco familiar with the area in question and shall have a
minimum of five (5) years experience as a broker. Each party shall
pay its own broker and the cost of the third broker shall be divided
equally between Lessor and Lessee. If either Lessor or Lessee shall
fail or refuse to appoint a broker with thirty (30) days after
notice has been given to it by the other party, the party giving
such notice may and shall appoint a broker for and on behalf of the
party in default. The derision of a majority of the brokers shall be
binding upon Lessor and Lessee. The Initial Monthly Rental Rate
shall constitute the Base Rent and in no event shall the rate set by
the brokers be less than the "Minimum Initial Rental Rate" as
defined above. The brokers shall take into account all improvements
to the premises in determining the Initial Monthly Rental Rate for
the option period.
62.4 For the first year of either option period, the "Minimum Initial
Rental Rate" will be an amount equal to the amount of the last
month's rent of the prior lease period increased by five percent
(5%). The Rental Rate for subsequent years of either option period
shall be an amount equal to the Previous year's rental rate increased
by five percent (5%).
62.4.1 The Minimum Initial Rental Rate" for each option period is
agreed to be as follows:
Year One of Option Period One $39,275.00
Year One of Option Period Two To be determined as per above
provisions.
62.5 If Lessee exercises said Option for either of the Two Additional
Thirty-Six Month Terms, as defined in paragraph 62 of this Lease,
then Lessee represents and Warrants that it will deal with no broker,
agent or other person in connection with this Option transaction, and
that no broker, agent or other person brought about this Option
transaction, and Lessee agrees to hold harmless, indemnify, and
defend Lessor from and against any and all claims, demands, and
costs, including reasonable attorney's fees, arising from or relating
to any effort or demand of any broker, agent or other person who may
assert a right to a fee for brokerage services in connection with
this Option leasing transaction. The provisions of this section shall
survive the termination of this Lease.
62.6 All other terms and conditions of this Lease, except for the Option
to Extend as set forth in paragraph 62, would remain in full force
and effect during the Lease option period.
63. Building Hours
--------------
63.1 It is agreed and understood that the building hours are 7:45 am to
6:00 pm Monday through Friday, except for holidays and except for
unusual circumstances beyond reasonable control of landlord that may
alter the hours somewhat on occasion. Access to the premises can be
made before or after these hours by way of the garage elevator which
is keyed to the Lower Level by the Suite key or by the front stairway
entrance to the East of the main entrance and thence by First Floor
elevator, also keyed, to the Lower Level or the rear entrance at ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇. Lessor reserves the right to change the building
hours at any time.
64. 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 and regulations or restrictions
governing the use of the Building. Under no circumstances shall the right
herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Any
such storage shall be permitted only by the prior written consent of Lessor
or Lessor's designated agent, which consent may be revoked at any time on
not less than 30 days prior written notice. In the event that any
unauthorized storage shall occur then lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have to
remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor. Notwithstanding the forgoing, no
such notice shall be required if the written permission contains a specific
term and or a termination date, and Lessor shall not be permitted to revoke
such permitted storage during said term.
65. Delay in Possession
-------------------
If Lessor is unable to deliver possession of the Premises to Lessee for
commencement of Lessee's Tenant Improvements within 30 days of the full
execution of this Lease by both parties, for any reason except Tenant
caused delays, Lessee shall have the option to terminate this Lease with no
further obligation to Lessor.
66. Alterations and Additions
-------------------------
Except as set forth below Lessee shall not, without Lessor's prior written
consent, not to be unreasonably withheld or delayed, make any alterations,
improvements, additions, or Utility installations in, on or about the
Premises, or the Industrial Center, except for nonstructural alterations to
the Premises not exceeding $2,500.00 per incident and $10,000.00 in the
aggregate during the term of this Lease. Lessor's consent may be refused,
however, if in Lessor's sole opinion such alterations reduce the value of
the building or remove improvements that were already made that are of
value to Lessor that would normally be left in the premises at the end of
the Lease. As used in this paragraph and in 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. Lessor may require that Lessee
remove any or all of said alterations, improvements, additions or Utility
Installations at the expiration of the term, provided Lessor's prior
written consent was conditioned upon removal, and restore the Premises and
the Industrial Center to their prior condition. Notwithstanding the
foregoing, for improvements approved by Lessor and conditioned with the
requirement for removal and for those improvements falling within the
$10,000.00 aggregate, Lessor will require Lessee to remove any or all of
said alterations, additions or Utility installations, unless Lessor shall
have notified Lessee in writing not less than ninety (90) days prior to
expiration of the term that removal and restoration is not required. Lessor
may require Lessee to provide Lessor, at Lessee's sole cost and expense, a
lien and completion bond in an amount equal to one and one-half times the
estimated cost of such improvements, to insure Lessor against any liability
for mechanic's and materialmen's liens and to insure completion of the
work. Should Lessee make any alterations, improvements, additions or
Utility installations in breach of this paragraph, Lessor may, at any time
during the term of this Lease, require that Lessee remove any or all of the
same. In any event, whether or not in excess of $2,500.00 per incident and
$10,000.00 in the aggregate, Lessee shall make no change or alteration to
the exterior of the Building nor the Industrial Center.
67. Operating Expense and Common Area Maintenance (CAM) Expense
-----------------------------------------------------------
Lessee shall pay to Lessor during the term hereof, in addition to the Base
Rent, Lessee's Share, as hereinafter defined, of all increases over the
Base Year 1997 commencing January 1, 1998, of all Operating Expenses for
the Building or the Industrial Center, as hereinafter defined, during each
calendar year of the term of this Lease, and Lessee shall pay to Lessor
during the term hereof, in addition to the Base Rent and Operating
Expenses, Lessee's Share, as hereinafter defined, of all Common Area
Maintenance (CAM) Charges, in accordance with the following provisions:
67.1 "Lessee's Share" is defined, for purposes of this Lease, as 26.1
percent, which is based on the Net Rentable Area of the Premises
being 25,288 and the Net Rentable Area of the Building being 96,715.
Should the net rentable area of the Building be increased or
decreased by greater than or less than five (5) % as the case may be,
then Lessor shall provide a recalculation of the net rentable area of
the premises and Lessee's share.
67.2 "Operating Expenses" is defined, for purposes of this Lease, as all
costs incurred by Lessor, if any, for:
(i) The operation, repair and maintenance, in neat, clean, good
order and condition, of the following:
(a) Alarm, security and fire detection systems and related
services.
(b) Management expenses or fees not to exceed 5% of gross
income.
(c) Building office not in excess of 2,000 square feet in area.
(d) Tenant and Building Directories and signage.
(e) Building HVAC system.
(f) Any other services or expenses not mentioned in Sections
67.2 (a) through (d) herein or elsewhere in the Lease that
is provided or incurred by Lessor in the operation of the
Building or the Industrial Center, subject to paragraph
67.8.
(ii) The cost of water, gas, electricity and other utilities to
service the Common Areas and Building HVAC System.
67.3 "Common Area Maintenance (CAM) Charges" is defined, for purposes of
this Lease, as all costs incurred by Lessor, if any, for:
(i) The operation, repair and maintenance, in neat, clean, good
order and condition, of the following common areas:
(aa) Building Exterior, Main Lobby, Courtyard, Elevator Lobbies,
Corridors and Stairs.
(bb) Passenger Elevator.
(cc) Loading and Unloading Areas.
(dd) Garage and Parking Areas, Striping and Bumpers.
(ee) Trash Disposal Services and Area.
(ff) Roadways, Driveways, Sidewalks and Walkways.
(gg) Landscaped Areas and Irrigation Systems.
(hh) Common Area Lighting Systems.
(ii) Fences and gates.
(jj) Any other services or expenses not mentioned in Sections
67.3 (aa) through (jj) herein or elsewhere in the Lease
that is provided or incurred by Lessor in the operation,
repair and maintenance of the Common Areas of the Building
or the Industrial Center.
67.4 The inclusion of the improvements, facilities and services set forth
in paragraph 67.2 and 67.3 of the definition of Operating Expenses
and Common Area Maintenance (CAM) Charges shall not be deemed to
impose an obligation upon Lessor to either have said improvements or
facilities or to provide those services unless the Industrial Center
has the same as of the date of this Lease, Lessor already provides,
the services as of the date of this Lease, or Lessor has agreed
elsewhere in this Lease to provide the same or a portion thereof.
ADDENDUM TO PSYGNOSIS, INC. LEASE Page 11 of 17
67.5 Lessee's Share of Operating Expenses and Common Area Maintenance
(CAM) Charges shall be payable by Lessee within thirty (30) 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 Common Area Maintenance (CAM) Charges and the
same shall be payable monthly or quarterly, 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 and
Common Area Maintenance (CAM) Charges as aforesaid, Lessor shall
deliver to Lessee within sixty (60) days after the expiration of each
calendar year a reasonably detailed written statement showing
Lessee's Share of the actual Operating Expenses and Common Area
Maintenance (CAM) Charges incurred during the preceding year. If
Lessee's payments under this paragraph 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 and Common Area Maintenance (CAM) Charges
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 thirty (30) days after delivery by Lessor to Lessee
of said statement.
67.6 Pursuant to paragraph 67.5, Lessor shall keep complete and accurate
records in accordance with good bookkeeping and accounting practices
regarding all Operating Expenses and Common Area Maintenance (CAM)
Charges. Lessee shall have the right to audit such records for each
calendar year during the term of this Lease notifying Lessor within
120 days following receipt of Lessor's reasonably detailed written
statement for each calendar year. If an audit (performed by a
certified public accountant or other qualified real estate consultant
on behalf of Lessee and at Lessee's expense) reveals that Lessor has
overcharged Lessee for Operating Expenses and Common Area Maintenance
(CAM) Charges, Lessor shall refund the amount overcharged within
thirty (30) days after such determination has been made. In the event
that the building is no longer owned by ▇▇▇▇▇▇ Associates and the
audit reveals that Lessor's overcharge to Lessee exceeds five (5)
percent, successor Lessor shall also pay to Tenant the reasonable
costs associated with such audit.
67.7 Notwithstanding any other provisions in the Lease, the terms and
conditions outlined in paragraph 67.5 and 67.6 shall also apply to
payment of insurance premium increases as outlined in paragraph
8.4 (d), payment of property tax increases as outlined in paragraph
10.1, and payment of HVAC and Freight Elevator charges as outlined in
paragraph 51.
67.8 Exclusions From Operating Expense and Common Area Maintenance (CAM)
Expense
Notwithstanding anything to the contrary, for the purposes of
calculating Lessee's share, Operating Expense and Common Area
Maintenance (CAM) Expense shall not include, or there shall be
deducted therefrom if included therein, the following:
a) Rental payments under a ground lease or master lease relating to
the Building or Industrial Center;
b) Capital costs related to noncompliance with laws existing as of
the date of the Lease;
c) Capital expenditures, except for a capital expenditure that
actually reduces Operating Expense or Common Area Maintenance
(CAM) Expense, and except for capital expenditures required or
due to changes in any applicable statutes, ordinances,
regulations or rules, provided that the cost of a capital
expenditure that reduces Operating Expense or Common Area
Maintenance (CAM) Expense shall be included in Operating Expense
and Common Area Maintenance (CAM) Expense only to the lesser of
(a) the extent of the reduction in Operating Expense or Common
Area Maintenance (CAM) Expense actually achieved, without regard
to the "useful life" of such capital expenditure, or b) the
amortization of the capital expenditure over its useful life. As
used herein, the term "useful life" shall be determined in
accordance with generally accepted real estate accounting
principles, consistently applied;
ADDENDUM TO PSYGNOSIS, INC. LEASE Page 12 of 17
d) Costs of any item for which Lessor receives reimbursement from
insurance or condemnation proceeds or under warranty;
e) Costs, including permit, license and inspection costs, incurred
with respect to the installation of improvements for other
tenants or other occupants in the Building, or incurred in
renovating or otherwise improving, decorating, painting or
redecorating space for other tenants or other occupants of the
Building (other than such costs incurred in connection with a
Building management office);
f) Marketing or promotional costs, including but not limited to
leasing commissions, real estate brokerage commissions and
attorneys' fees in connection with the negotiation and preparing
of letters, deal memos, letters of intent, leases, subleases
and/or assignments, space planning costs, and other costs and
expenses incurred in connection with lease, sublease and/or
assignment negotiations and transactions with present or
prospective tenants or other occupants of the Building;
g) Interest, principal, attorneys' fees, environmental
investigations or reports, points, fees and other lender costs
and closing costs on debts or amortization on any mortgage or
mortgages or any other debt instrument encumbering the Building
or the Industrial Center;
h) Salaries of officers, executive or other employees of Lessor, any
Lessor Affiliate other than any personnel engaged in the
management, operation, maintenance, and repair of the Building,
and working in the Building management office.
i) Costs for which Lessee or any other tenant in the Building
reimburses Lessor (other than through such tenant's Proportionate
Share);
j) Advertising and promotional expenditures, including but not
limited to tenant newsletters, other than Building's tenant
newsletter received by the tenants of the Building and Industrial
Center, or Building promotional gifts, events or parties for
existing or future occupants, and the costs of signs (other than
the Building directory) in or on the Industrial Center
identifying the owner of the Building or other tenants' signs and
any costs related to the celebration or acknowledgement of
holidays, other than reasonable costs for gifts, refreshments
and/or food made available to all tenants of the Building for
such holiday celebrations or acknowledgements;
k) Electrical power or other utility costs for which any tenant
directly contracts with the local public service company;
l) Costs, penalties, fines, or awards and interest which it is
determined by a court of competent jurisdiction were incurred as
a result of Lessor's negligence in Lessor's operation of the
Industrial Center, penalties or fines for failure to make
payments and/or to file any income tax, or other tax or
informational returns when due;
m) Landlord's charitable or political contributions;
n) Costs, including but not limited to attorneys' fees, associated
with operating the business of the entity which constitutes
Landlord, except for the costs of operation of the Building,
including partnership accounting and legal matters, costs of
defending any lawsuits with any mortgagee, costs of selling,
syndicating, financing, mortgaging or hypothecating any of
Lessor's interest in the Building, Industrial Center, or any part
thereof and costs of any disputes between Lessor and its
employees;
o) Costs incurred in removing and storing the property of former
tenants or occupants of the Industrial Center;
ADDENDUM TO PSYGNOSIS, INC. LEASE Page 13 of 17
p) Costs of any work or services performed for any tenant (including
Lessee) at such tenant's request which are not part of the normal
services provided to tenants of the Building without extra cost
and which are directly reimbursed to Lessor;
q) Costs of installing, operating and maintaining any specialty
service, observatory, broadcasting facilities, luncheon club,
museum, athletic or recreational club, or child care facility or
any other service operated or supplied by or normally operated or
supplied by a third party under an agreement between a third
party and a landlord, or any retail commercial concession
operated by Lessor;
r) Costs of any parties, ceremonies or other events for tenants or
third parties which are not tenants of the Building, whether
conducted in the Building, Industrial Center, or in any other
location;
s) Reserves of any kind, including but not limited to, replacement
reserves, and reserves for bad debts of lost rent or any similar
charge not involving the payment of money to third parties;
t) Costs incurred by Lessor in connection with rooftop
communications equipment of Lessor. or other persons, tenants or
occupants of the Building of the Industrial Center if such
communications equipment is not generally available to all
tenants or occupants of the Building or the Industrial Center;
u) Rent for the management office of the Building if and to the
extent that such management office is (a) in excess of 2,000
rentable square feet or (b) at a rental rate in excess of rates
then being generally charged for the Building;
v) Costs for services normally provided by a property manager where
Operating Costs already include a full management fee;
w) Entertainment and travel expenses, except industry-related
professional seminar travel of Lessor, its employees, agents,
partners and affiliates.
x) Costs and expenses recovered from third parties;
y) Costs attributable to deductible or uninsured portions of
restoration work attributable to casualty loss, provided,
however, such costs shall be part of includable operating costs
if Lessor has acquired policies of insurance with commercially
reasonable deductibles.
z) Costs attributable to restoration work following a condemnation.
68. Indemnity
---------
Add to Paragraph 8.7:
Notwithstanding anything to the contrary in this paragraph 8, Lessee shall
not be required to indemnify, defend or hold Lessor harmless from or
against claims, liability, loss, cost or expense arising out of (i) the
breach by Lessor, or Lessor's agents, employees, licensees, invitees or
independent contractors (collectively "Lessor's Agents"), of any covenant,
representation or warranty under this Lease, or (ii) the willful misconduct
of Lessor or Lessor's Agents.
Lessor shall indemnify and hold harmless Lessee and Lessee's employees,
officers, agents, directors and shareholders and the successors and assigns
of each of the foregoing (collectively "Lessee's Agents"), against and from
any and all claims, demands, losses, liabilities, damages, costs and
expenses (including without limitation attorneys' and consultants' fees and
the costs and expenses of defense) arising or resulting from (i) Lessor's
or Lessor's Agents' breach of any covenant representation or warranty under
this Lease, (ii) Lessor's or Lessor's Agents' willful misconduct or
negligence (but only to the extent of Lessor's negligence utilizing
comparative negligence standards) or default. The mutual indemnity
obligations of Lessor and Lessee under this Lease shall not release the
respective insurers of Lessor and Lessee from such insurer's obligations
under any policies.
ADDENDUM TO PSYGNOSIS, INC. LEASE Page 14 of 17
69. Damage or Destruction
---------------------
Notwithstanding anything to the contrary in paragraph 9:
(a) If Lessor is required to or elects to rebuild the Premises, Lessor
shall notify Lessee within sixty (60) days of the date of such
casualty, and such notice shall specify Lessor's architect or
engineer's reasonable estimate as to the time required to rebuild or
restore the Premises.
(b) If, in the reasonable opinion of Lessor's architect or engineer, the
Premises will take longer than one hundred and eighty (180) days to
rebuild or restore, Lessee may, notwithstanding Lessors election to
rebuild, terminate this Lease by giving written notice to Lessor
within five (5) days after Lessee's receipt of Lessor's notice. Such
termination shall be effective thirty (30) days after Lessor's
receipt of Lessee's written notice to terminate the Lease.
(c) If Lessor fails to restore the Premises (including reasonable means
of access thereto) within a period which is sixty (60) days longer
than the period stated in Lessor's notice to Lessee as the estimated
rebuilding period, Lessee, at any time thereafter until such
rebuilding is completed, may terminate this Lease by delivering
written notice to Lessor of such termination, in which event this
Lease shall terminate as of the date of the giving of such notice.
(d) Lessee's rights of termination hereunder shall be in addition to its
right of termination under paragraph 9.5(b) of the Lease.
70. Additional Improvements
-----------------------
Add to Paragraph 10.2:
Lessee shall in no event be responsible for Tax Increases resulting from
(a) any financing or refinancing of the Premises or (b) increases in
valuation arising from improvements made by Lessor to other tenant spaces.
Any assessments payable by Lessor in installments shall be included in Real
Property Taxes on an installment basis whether or not Lessor actually pays
such assessments on the installment basis. Real Property Taxes and Lessee's
liability for Tax Increases shall be adjusted as appropriate to reflect any
reduction therein arising from a contest of the assessed valuation or tax
rate applicable to the Premises to the extent that the reduction does not
decrease below the base year taxes.
71. Lessee Affiliate
----------------
Notwithstanding the provisions of paragraph 12.1 hereof, Lessee may assign
or sublet the Premises, or any portion thereof, without Lessor's consent,
provided that the use of the space, permitted under paragraph 6.1. hereof,
does not change or if it does and Lessor incurs additional assessments in
taxes, fees or incurs other costs as a result of such change of use, Lessee
shall be liable for such additional costs, to Sony Corporation of America
and any of its direct and indirect wholly owned subsidiaries or to any
corporation which controls, is controlled by or is under common control
with Lessee, or to any corporation resulting from the 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, all of which are referred to as "Lessee
Affiliate," provided that before such assignment shall be effective said
assignee shall assume, in full, the obligations of Lessee under this Lease.
Any such assignment shall not, in any way, affect or limit the ability 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 the consent of Lessee, the consent of whom shall not be necessary.
Notwithstanding the above, Lessor's consent to any assignment or subletting
of the Premises by Lessee to a Lessee Affiliate is conditioned upon
Lessor's prior receipt of an indemnification from Sony Corporation of
America, against any and all damages, costs, liabilities and expenses
arising out of such assignment or subletting.
ADDENDUM TO PSYGNOSIS, INC. LEASE Page 15 of 17
72. Default; Remedies
-----------------
Add to Paragraph 13:
Pursuant to paragraph 49.1, Lessor agrees to advance Lessee Tenant
Improvement costs of $10.00 per sq. ft of rentable area plus $20,000.00.
Partial amortization of said Lessee Tenant Improvement costs as well as of
other Lessor-Provided Improvements, leasing costs, and costs are included
in the Base Rent of this Lease. Consequently, if Lessee breaches this Lease
at any point between the execution of the Lease and prior to the end of the
term, Lessor shall suffer the loss of advanced improvement costs,
including, but not limited to, fees and reimbursable expenses for
architectural services, and funds advanced to consultants and contractors
on Lessee's behalf. Lessee recognizes the risk assumed by Lessor in
advancing the costs of improvement and agrees that, if for any reason,
Lessee fails to occupy the Premises as contemplated under this Lease, or
abandons the Premises prior to the end of the Lease term, or otherwise
materially defaults on this Lease as provided in paragraph 13.1, above,
Lessee shall immediately become obligated to pay to Lessor all unpaid
improvement costs advanced on Lessee's behalf by Lessor plus interest at
the highest rate allowed by law, as well as any loan fees paid by Lessor,
and all other damages incurred by Lessor by reason of Lessee's default,
including, but not limited to, the cost of recovering possession of the
Premises; expenses of reletting, including necessary demolition, renovation
and alteration of the Premises, reasonable attorney's fees, and any real
estate commissions actually paid, the amount by which the unpaid rent for
the balance of the term after the time of such reletting exceeds the amount
of re-rental proceeds less the above expenses and that portion of the
leasing commission paid by Lessor pursuant to paragraph 58 pro-rated to the
unexpired term of this Lease.
73. Access to Premises
------------------
73.1 Lessee acknowledges that the gas meter for the entire building,
Lessee's HVAC system, and the after-hours HVAC meter for Lessee's
premises, are located within the Lessee's premises and must be
accessed through the Lessee's premises.
73.2 Lessee agrees that Lessor and Lessor's authorized agents shall have
access to Lessee's premises upon reasonable advance notice, except
for meter readings, emergencies, and routine maintenance of the HVAC
system, for the purpose of inspecting the same, making alterations,
repairs or improvements or additions to same, that are Lessor's
obligations, and to do any necessary maintenance to same. If a major
repair is required, reasonable advance notice shall be given. Lessor
will make every attempt, but is not under any obligation to, enter
the premises during business hours to perform the alterations,
repairs, improvements, additions and maintenance. If access is not
granted on a timely basis, then Lessee shall be liable to Lessor for
any extra cost associated with having to postpone such alterations,
repairs, improvements, or additions and for any claims from other
tenants of the Building which may be affected by the postponement of
such work or any other costs incurred by Lessor due to such
postponement.
73.3 Lessor shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising out
of Lessor's entry on the premises as provided in this paragraph,
except to the extent of the willful misconduct or negligence (but
only to the extent of Lessor's negligence utilizing comparative
negligence standards) or default of Lessor or its agents, employees,
contractors or invitees.
73.4 To provide for a situation in which a mechanical or electrical
emergency occurs that requires immediate attention and Lessee is
unavailable to let Lessor or its authorized agents enter the
premises, Lessee agrees to the following:
a) Lessee will provide Lessor with a list of at least three (3)
names and telephone numbers of Lessee's employees or
representatives authorized to admit Lessor to premises, and who
shall be available at all times to let Lessor or its authorized
agents into the premises with a reasonably quick response time.
ADDENDUM TO PSYGNOSIS, INC. LEASE Page 16 of 17
b) In the event that none of Lessee's authorized employees or
representatives can be contacted or do not respond in a timely
manner, then Lessee shall be liable to Lessor for any extra cost
associated with having to postpone such alterations, repairs,
improvements, or additions and for any claims from other tenants
of the building which may be affected by the postponement of such
work, the cost of repairing, or if repair is not practical or
cost-effective, then the cost of replacement of, any equipment
damaged by delayed access or any other costs incurred by Lessor
due to such delayed access.
74. Rent
----
74.1. 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 thirty one thousand and eighty
three dollars ($31,083.00) subject to increase annually per paragraph
57 of the Addendum. Rent and other payments to commence on the
earlier of 1) Substantial Completion of Lessee's Tenant Improvements,
2) any occupancy of the Premises by Lessee, other than for
construction or installation of Lessee's furniture, fixtures and
equipment or 3) November 1, 1997 (subject to Lessor-caused delays and
force majeure).
7.4.2 Lessee shall pay Lessor upon execution hereof $31,083.00 as Base Rent
for the first month that Rent and other payments commence pursuant to
the provisions of paragraph 74.1 above. Rent for any period during
the term hereof which is for less than one month shall be a pro rata
portion of the Base Rent. Rent shall be payable in lawful money of
the United States to the Lessor at the address stated herein or to
such other persons or at such other places as Lessor may designate in
writing.
7.4.3 For purposes of this paragraph, "Substantial completion of Lessee's
Tenant Improvements" shall mean: "Substantial Completion of Lessee's
Tenant Improvements" shall be deemed to have occurred upon the first
date of occurrence of all the following conditions: (1) Construction
of the Lessee's Tenant Improvements shall have been completed in
accordance with the Construction Contract and in accordance with all
applicable laws, regulations and requirements of the applicable
governmental bodies except for minor "punch list" items, the
noncompletion of which shall not materially affect the appearance of
the Premises or the use and occupancy thereby by Lessee; (2) the
heating, plumbing, ventilating and air-conditioning systems, all
utility systems serving the Premises and all other systems of the
Premises shall have been installed and in good operating order, and
(3) all such certificates and permits, if any, evidencing the
completion of construction of the Improvements as may be required so
as to permit Tenant's occupancy of the Premises and use of the
improvements shall have been issued by the governing body requiring
the same. It is understood that where reference is hereinabove made
to the installation of utility systems, it shall mean and include the
connection of the lines, conduits and pipes thereof within the
Premises and into the Building in accordance with the final plans and
specifications. Lessee shall be responsible for contracting for and
obtaining delivery of electrical and telephone service.
ADDENDUM TO PSYGNOSIS, INC. LEASE Page 17 of 17
EXHIBIT "A"
DESCRIPTION OF PREMISES
A portion of that certain five-story concrete building situated beginning at the
point of intersection of the southeasterly line of ▇▇▇▇▇▇ Street and the
southwesterly line of ▇▇▇▇▇▇ Street; running thence southeasterly along said
line of ▇▇▇▇▇▇ Street 160 feet to the northwesterly line of Federal Street;
thence at a right angle southwesterly along said line of Federal Street (and
Federal Street extended) 160 feet; thence at a right angle southwesterly along
said line of Federal Street (and Federal Street extended) 160 feet; thence at a
right angle northwesterly 160 feet to the southeasterly line of ▇▇▇▇▇▇ Street;
thence at a right angle northeasterly along said line of ▇▇▇▇▇▇ Street 160 feet
to the point of beginning, consisting of approximately 25,288 rentable square
feet on the Lower Level as shown on the drawing on page 2 of this Exhibit A,
attached hereto. The Premises represent 26.1% of the building for pro-rata
purposes.
DESCRIPTION OF PREMISES
▇▇▇▇▇▇ ASSOCIATES (LESSOR) and PSYGNOSIS INC. (LESSEE)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
ADDENDUM TO PSYGNOSIS, INC. LEASE
Exhibit "A"
Page 1 of 2
EXHIBIT "A"
[GRAPH APPEARS HERE]
PSYGNOSIS, INC.
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇.
EXHIBIT "A", page 2 of 2
EXHIBIT "B"
[GRAPH APPEARS HERE]
PSYGNOSIS, INC.
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇.
EXHIBIT "B", page 1 of 2
EXHIBIT "B"
[GRAPH APPEARS HERE]
PSYGNOSIS, INC.
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇.
EXHIBIT "B", page 2 of 2
CONSTRUCTION WORK LETTER
------------------------
LEASE AGREEMENT BETWEEN
▇▇▇▇▇▇ ASSOCIATES (Lessor) AND PSYGNOSIS (Lessee)
1. DEFINITIONS
-----------
As used in this Construction Work Letter, the following terms shall mean:
a. Applicable Bodies - all federal, state, county and local government and
quasi-governmental agencies having jurisdiction over the work to be
performed in accordance with this Construction Work Letter and the
Demised Premises and the Building;
b. Building - the structure referred to as ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ of which the Demised Premises forms a part;
c. Demised Premises and/or Premises - the rented portion of the Building
which is the subject of the Lease Agreement and including twenty-five
thousand two-hundred eighty-eight (25,288) rentable square feet on the
Lower Level as shown in exhibits to the Lease Agreement and which is
more particularly described in the Lease Agreement;
d. Lease Agreement - that certain Lease Agreement dated April 18, 1997, by
and between Lessor and Lessee with respect to the Demised Premises;
▇. ▇▇▇▇▇▇-Provided Improvements - those improvements are defined as
Toilets, Floor Grinding and Patching and Window Blinds and other items
as set forth in paragraph 48.1 of the Lease and shall be referred to
herein as "Lessor-Provided Improvements".
2. IMPROVEMENTS
------------
a. Lessor agrees that it shall provide all of the Lessor-Provided
Improvements under this Construction Work Letter to the Demised Premises
at Lessor's sole cost and expense as provided herein.
b. The Lessor-Provided Improvements to be constructed by Lessor shall be,
completed in accordance with the Plans and Outline Specifications
attached hereto.
▇. ▇▇▇▇▇▇ shall provide, at its sole cost and expense, architectural and
engineering services necessary to complete the Lessor-Provided
Improvements, the Final Plans and Specifications (including but not
limited to construction drawings, engineering drawings and
specifications) and design/build services.
Exhibit "C" to Lease
Page 1 of 6
3. TIME AND MANNER OF PERFORMANCE:
-------------------------------
a. Lessor agrees that the Lessor-Provided Improvements shall be completed
in a good, workmanlike manner in compliance with all laws, rules and
regulations of all Applicable Bodies according to the custom and usage
of the local building trade. Lessor shall obtain, and pay for the cost
of all necessary governmental permits and approvals.
b. Lessee shall cooperate with Lessor in Lessor's construction of the
Lessor-Provided Improvements since Lessee will concurrently be
constructing Lessee's Tenant Improvements in the Demised Premises.
Lessor shall use best efforts to reach Substantial Completion of
Lessor-Provided Improvements prior to or upon completion of Lessee's
Tenant Improvements and installation of its furniture, fixtures and
equipment. However, if Substantial Completion is not achieved by
November 1, 1997 (subject to the limitations in subparagraph 3.c below)
through no fault of Lessee, Lessee shall not be required to commence
with payment of Rent until Substantial Completion of Lessor-Provided
Improvements (subject to the limitations in subparagraph 3.c below) has
occurred. Additionally, if the Lessor-Provided Improvements have not
been substantially completed within one hundred and eighty (180) days of
the date of this Lease through no fault of Lessee, then Lessee shall
have the option to terminate this Lease.
c. "Substantial Completion of Lessor-Provided Improvements" shall be deemed
to have occurred upon the first date of occurrence of all of the
following conditions: (1) Construction of the Lessor-Provided
Improvements shall have been completed in accordance with the Lease
Agreement and this Construction Work Letter and in accordance with all
applicable regulations and requirements of the Applicable Bodies except
for minor "punch list" items. Lessor shall cooperate in allowing the
electrical service to the toilet improvements to be connected to by
Lessor's contractor to Lessee's electrical distribution system during
the construction of Lessee's Tenant Improvements. In the event that the
toilet improvements are completed in advance of the electrical
distribution installation, any delay in Substantial Completion or in
obtaining the necessary permits or approvals for use or occupancy shall
be the responsibility of Lessee and Lessor shall be deemed to have
fulfilled all of its obligations under this Article 3. Lessee agrees
that the installation of window blinds may be accomplished during the
period that Lessee is installing its furniture, fixtures and equipment
and after substantial Completion of all other Lessor-Provided
Improvements.
d. Occupancy of the Premises, either before or after the date of
Substantial Completion of Lessor-Provided Improvements, shall not be
deemed a waiver of any rights of Lessee to the full completion of the
Lessor-Provided Improvements including each and every unfinished item
thereof nor shall it affect the obligation of the Lessor, upon and after
occupancy by Lessee of the Demised Premises, to diligently and duly
complete the work of finishing each and every unfinished item of
construction in accordance with the applicable provisions of this
Construction Work Letter.
Exhibit "C" to Lease
Page 2 of 6
e. It shall be Lessee's responsibility to provide Lessor with a "punch
list" of those items of the Lessor-Provided Improvements which have not
been completed in accordance with this Construction Work Letter within
twenty (20) days from Substantial Completion of Lessor-Provided
Improvements, Lessor agrees to complete all unfinished "punch list"
items within (30) days after the receipt of said "punch list", to
Lessee's reasonable satisfaction and shall notify Lessee in writing as
soon as it deems such corrective action has been completed.
f. Lessee, at its sole risk, may at any time following receipt of Lessor's
notice pursuant to Section 3(d) enter upon the Premises during the
course of construction and install such furniture, furnishings, trade
and other fixtures, interior decorations, machinery and equipment as it
may elect and to begin the storing of Lessee's products. Entry at any
other time shall not be made without Lessor's prior consent. Such entry,
installation and storage shall not unreasonably interfere with the
construction by Lessor that, is then taking place both as to the Demised
Premises or the Lessor-Provided Improvements or with any labor employed
by Lessor or by any contractor or subcontractor in performing such
construction work. Lessee shall have no obligation to make any payment
to Lessor, whether in the form of Rent or otherwise, on account of any
such entry, installation and storage made by Lessee other than that set
forth in the Lease. Such entry, installation and/or storage shall not be
deemed to be an acceptance by Lessee of the Lessor-Provided
Improvements, or as an occupation by Lessee of the Demised Premises nor
shall the same constitute a waiver of any Rights that Lessee may have
under this Construction Work Letter or the Lease Agreement.
4. CHANGES IN THE WORK:
--------------------
a. Lessee shall have the right to changes in the Lessor-Provided
Improvements during the course of construction, provided that:
(1) Lessor shall approve all such changes and the time for Substantial
Completion of Lessor-Provided Improvements shall be extended for
such time as Lessor needs to complete changes including any delays
caused by (i) subcontractors who are unable to immediately
accommodate the delays or, (ii) any other "force majeure" reason.
Lessor shall not unreasonably withhold, delay or condition its
approval to any changes.
(2) All changes made pursuant to this Subsection "a" above which cause
an increase in cost of Lessor-Provided Improvements shall be borne
solely by the Lessee.
b. Upon final completion of the Lessor-Provided Improvements, Lessor shall
▇▇▇▇ Lessee for the cost of the changes or additions as provided herein
which ▇▇▇▇ shall be paid by Lessee within thirty (30) days of receipt
thereof.
Exhibit "C" to Lease
Page 3 of 6
c. Each and every change in the Lessor-Provided Improvements requested by
Lessee shall be evidenced by a specific written authorization which
shall specify (i) the cost of such change, and (ii) the anticipated time
of delay in Substantial Completion of Lessor-Provided Improvements
resulting from the change, if any, and signed by Lessor's and Lessee's
respective construction representatives. In no event shall any change or
changes be permitted without such authorizations.
d. Each and every authorization shall be prepared and executed by the
construction representative at the earliest possible opportunity and
shall indicate any change in the construction costs.
e. Any delay in the date of Substantial Completion of Lessor-Provided
Improvements resulting from such changes shall not delay the
commencement of the payment of Rent under the Lease.
f. With respect to the construction work being conducted in or about the
Premises, each party agrees to be bound by and authorize the other party
to rely upon the approval and actions of their respective construction
representatives. Unless changed by written notification, the parties
hereby designate the following individuals as their respective
construction representatives:
For Lessor:
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
For Lessee:
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
5. GUARANTEE:
---------
In lieu of any other warranties, expressed or implied, Lessor agrees that
whatever warranties or guarantees and rights thereunder provided by the
Contractor performing the construction of Lessor-Provided Improvements will
be passed on to Lessee. Lessor will require a one year guarantee against
defects in workmanship and/or materials for a period of twelve (12) months
from date of Substantial Completion. Notwithstanding the foregoing, Lessee
shall repair and maintain in good working order all Lessor-Provided
Improvements excepting those repairs necessitated by defects in workmanship
and/or materials that are covered under this guarantee.
6. CONDITIONS OF PREMISES ON TERMINATION:
-------------------------------------
It is expressly understood and agreed between the parties that the Lessor-
Provided Improvements shall be excluded from Lessee's obligations to remove
alterations at the termination of the Lease.
7. ALTERATIONS OR CHANGES BY LESSEE:
--------------------------------
No changes or alterations to Lessor-Provided Improvements shall be made by
Lessee except with Lessor's prior written approval.
Exhibit "C" to Lease
Page 4 of 6
8. MISCELLANEOUS:
--------------
There shall be no subsequent alteration, amendment, change or addition to
this Construction Work Letter binding upon the Lessor and/or Lessee unless
it shall be reduced to a writing and signed by each of the parties.
9. SUCCESSORS AND ASSIGNS:
----------------------
The covenants and agreements herein contained shall bind, and the benefits
and advantages shall inure, to the respective successors and assigns of each
of the parties hereto.
10. INVALIDITY:
----------
The invalidity or enforceability of any provision of this Construction Work
Letter in any instance shall have no effect upon the validity or
enforceability of the remainder of this Construction Work Letter or the
validity or enforceability of such provision in any other instance.
11. WAIVER:
-------
Either party's waiver of any breach or Failure to enforce any of the terms
and conditions of this Construction Work Letter at anytime shall not in any
way effect, limit or waive such party's right thereafter to enforce and
compel strict compliance with every term and condition thereof.
12. COMPLETE AGREEMENT:
------------------
This Construction Work Letter, together with the Lease Agreement,
constitutes the complete agreement between parties with respect to the
Lessor-Provided Improvements and supersedes all prior communications and
agreements between the parties with respect to the Lessor Provided
Improvements.
Exhibit "C" to Lease
Page 5 of 6
13. NOTICE:
-------
Notice to be given by the parties hereunder shall be in accordance with the
notice provision of the Lease Agreement.
Lessor:
By: /s/ A. ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name/Title: Partner
---------------------------
Date: 6/30/97
---------------------------
Lessee:
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name/Title: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, President
---------------------------
Date: 19/6/97
---------------------------
Exhibit "C" to Lease
Page 6 of 6
SUBLEASE
EXHIBIT "B"
[GRAPH APPEARS HERE]
PSYGNOSIS, INC.
LOWER ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇.