EXHIBIT 10.24
[LOGO] CALIFORNIA CHAPTERS OF THE
SOCIETY OF INDUSTRIAL AND OFFICE REALTORS-REGISTERED TRADEMARK-, INC.
INDUSTRIAL REAL ESTATE LEASE
(MULTI-TENANT FACILITY)
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of
the Lease referred to in this Article One explain and define the Basic Terms
and are to be read in conjunction with the Basic Terms.
Section 1.01. DATE OF LEASE: August 5, 1996
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Section 1.02. LANDLORD (INCLUDE LEGAL ENTITY): ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇
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Address of Landlord: P.O. Box 2125 Napa, CA 94558
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Section 1.03. TENANT (INCLUDE LEGAL ENTITY): Arterial Vascular
Engineering, Inc., a
Delaware Corporation
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Address of Tenant: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. Santa Rosa, California
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Section 1.04. PROPERTY: The Property is part of ▇▇▇▇▇▇▇▇'s multi-tenant
real property development known as 5341-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. Santa Rosa,
California (Building B on Exhibit A)
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and described or depicted in Exhibit "A" (the "Project"). The Project
includes the land, the buildings and all other improvements located on the
land, and the common areas described in Paragraph 4.05(a). The Property is
(include street address, approximate square footage and description)
5341, 5343, 5345 & ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. Consisting of approximately 26,129 square
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feet as shown on Exhibit A attached hereto.
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(See (1) below)
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Section 1.05. LEASE TERM: -1- years -1- months BEGINNING ON
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December 1, 1996 or such other date as is specified in this Lease, and
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ENDING ON November 30, 1997
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Section 1.06. PERMITTED USES: (See Article Five) Design, engineering,
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and production of medical equipment and supplies
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Section 1.07. TENANT'S GUARANTOR: (If none, so state) None
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Section 1.08. BROKERS: (See Article Fourteen) (If none, so state)
Landlord's Broker: Airport Properties
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Tenant's Broker:
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Section 1.09. COMMISSION PAYABLE TO LANDLORD'S BROKER: (See Article
Fourteen) $ By separate agreement
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Section 1.10. INITIAL SECURITY DEPOSIT: (See Section 3.03) $ 19,113.00
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Section 1.11. VEHICLE PARKING SPACES ALLOCATED TO TENANT: (See Section
4.05) Fifty (50)
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Section 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT:
(a) BASE RENT: Nineteen Thousand One Hundred Thirteen and 00/00
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Dollars ($ 19,113.00) per month for the first 12th months, as provided in
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Section 3.01, and shall be increased on the first day of the 13th month(s)
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after the Commencement Date, either (i) as provided in Section 3.02, or (ii)
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---------------------------------------------. (If (ii) is completed, then (i)
and Section 3.02 are inapplicable.)
(b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See Section
4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See
Section 4.04); (iv) Tenant's Initial Pro Rata Share of Common Area Expenses
100% (See Section 4.05); (v) Impounds for Insurance Premiums and Property
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Taxes (See Section 4.08); (vi) Maintenance, Repairs and Alterations (See
Article Six)(Expenses shall be $4,847.00 monthly)
Section 1.13. LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR SUBLEASE:
(See Section 9.05) Fifty percent (50%) of the Profit (the "Landlord's Share").
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Section 1.14. RIDERS: The following Riders are attached to and made a
part of this Lease: (If none, so state)
Addendum One
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Exhibit A - Site Plan & Parking Plan
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Exhibit B - Hazardous Materials Disclosure
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Exhibit C - Agency Disclosure
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(1) It is mutually understood that the premises at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. is
currently occupied by another tenant who's lease expires on November 30,
1996. Should Landlord be able to terminate that existing earlier than
November 30, 1996, then Tenant shall have the right to immediate occupancy of
said premises ("Early Occupancy"). Rent for the premises at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇. for the Early Occupancy period, shall be Four Thousand Seventy Six and
00/100 ($4,076.00) Dollars per month. Said rent shall include all common
area operating expenses for the building.
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ARTICLE TWO: LEASE TERM
Section 2.01. LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is for the period stated in Section 1.05 above and shall
begin and end on the dates specified in Section 1.05 above, unless the
beginning or end of the Lease Term is changed under any provision of this
Lease. The "Commencement Date" shall be the date specified in Section 1.05
above for the beginning of the Lease Term, unless advanced or delayed under
any provision of this Lease.
Section 2.02. DELAY IN COMMENCEMENT. Landlord shall not be liable to
Tenant if Landlord does not deliver possession of the Property to Tenant on
the Commencement Date. Landlord's non-delivery of the Property to Tenant on
that date shall not affect this Lease or the obligations of Tenant under this
Lease except that the Commencement Date shall be delayed until Landlord
delivers possession of the Property to Tenant and the Lease Term shall be
extended for a period equal to the delay in delivery of possession of the
Property to Tenant, plus the number of days necessary to end the Lease Term on
the last day of a month. If Landlord does not deliver possession of the
Property to Tenant within sixty (60) days after the Commencement Date, Tenant
may elect to cancel this Lease by giving written notice to Landlord within
ten (10) days after the sixty (60) day period ends. If Tenant gives such
notice, the Lease shall be cancelled and neither Landlord nor Tenant shall
have any further obligations to the other. If Tenant does not give such
notice, ▇▇▇▇▇▇'s right to cancel the Lease shall expire and the Lease Term
shall commence upon the delivery of possession of the Property to Tenant. If
delivery of possession of the Property to Tenant is delayed, Landlord and
Tenant shall, upon such delivery, execute an amendment to this Lease setting
forth the actual Commencement Date and expiration date of the Lease. Failure
to execute such amendment shall not affect the actual Commencement Date and
expiration date of the Lease.
Section 2.03. EARLY OCCUPANCY. If Tenant occupies the Property prior
to the Commencement Date, ▇▇▇▇▇▇'s occupancy of the Property shall be
subject to all of the provisions of this Lease. Early occupancy of the
Property shall not advance the expiration date of this Lease. Tenant shall
pay Base Rent and all other charges specified in this Lease for the early
occupancy period.
Section 2.04. HOLDING OVER. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. Tenant shall reimburse
Landlord for and indemnify Landlord against all damages which Landlord incurs
from ▇▇▇▇▇▇'s delay in vacating the Property. If Tenant does not vacate the
Property upon the expiration or earlier termination of the Lease and Landlord
thereafter accepts rent from Tenant, ▇▇▇▇▇▇'s occupancy of the Property shall
be a "month-to-month" tenancy, subject to all of the terms of this Lease
applicable to a month-to-month tenancy, except that the Base Rent then in
effect shall be increased by twenty-five percent (25%).
ARTICLE THREE: BASE RENT
Section 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this
Lease, Tenant shall pay Landlord the Base Rent in the amount stated in
Paragraph 1.12(a) above for the first month of the Lease Term. On the first
day of the second month of the Lease Term and each month thereafter, Tenant
shall pay Landlord the Base Rent, in advance, without offset, deduction or
prior demand. The Base Rent shall be payable at Landlord's address or at such
other place as Landlord may designate in writing.
Section 3.02. COST OF LIVING INCREASES. The Base Rent shall be
increased on each date (the "Rental Adjustment Date") stated in Paragraph
1.12(a) above in accordance with the increase in the United States Department
of Labor, Bureau of Labor Statistics, Consumer Price Index for All Urban
Consumers (all items for the geographical Statistical Area in which the
Property is located on the basis of 1982-1984 = 100) (the "Index") as follows:
(a) The Base Rent (the "Comparison Base Rent") in effect immediately
before each Rental Adjustment Date shall be increased by the percentage that
the Index has increased from the date (the "Comparison Date") on which
payment of the Comparison Base Rent began through the month in which the
applicable Rental Adjustment Date occurs. The Base Rent shall not be reduced
by reason of such computation. Landlord shall notify Tenant of each increase
by a written statement which shall include the Index for applicable
Comparison Date, the Index for the applicable Rental Adjustment Date, the
percentage increase between those two Indices, and the new Base Rent. Any
increase in the Base Rent provided for in this Section 3.02 shall be subject
to any minimum or maximum increase, if provided for in Paragraph 1.12(a).
(b) Tenant shall pay the new Base Rent from the applicable Rental
Adjustment Date until the next Rental Adjustment Date. Landlord's notice may
be given after the applicable Rental Adjustment Date of the increase, and
Tenant shall pay Landlord the accrued rental adjustment for the months
elapsed between the effective date of the increase and Landlord's notice of
such increase within ten (10) days after Landlord's notice. If the format or
components of the Index are materially changed after the Commencement Date,
Landlord shall substitute an index which is published by the Bureau of Labor
Statistics or similar agency and which is most nearly equivalent to the Index
in effect on the Commencement Date. The substitute index shall be used to
calculate the increase in the Base Rent unless Tenant objects to such index
in writing within fifteen (15) days after receipt of Landlord's notice. If
Tenant objects, Landlord and Tenant shall submit the selection of the
substitute index for binding arbitration in accordance with the rules and
regulations of the American Arbitration Association at its office closest to
the Property. The cost of arbitration shall be borne equally by Landlord and
Tenant.
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Section 3.03. SECURITY DEPOSIT; INCREASES.
(a) Upon the execution of this Lease, Tenant shall deposit with Landlord
a cash Security Deposit in the amount set forth in Section 1.10 above.
Landlord may apply all or part of the Security Deposit to any unpaid rent or
other charges due from Tenant or to cure any other defaults of Tenant. If
Landlord uses any part of the Security Deposit, Tenant shall restore the
Security Deposit to its full amount within ten (10) days after Landlord's
written request. Tenant's failure to do so shall be a material default under
this Lease. No interest shall be paid on the Security Deposit. Landlord shall
not be required to keep the Security Deposit separate from its other accounts
and no trust relationship is created with respect to the Security Deposit.
(See (1) below)
(b) Each time the Base Rent is increased, Tenant shall deposit
additional funds with Landlord sufficient to increase the Security Deposit to
an amount which bears the same relationship to the adjusted Base Rent as the
initial Security Deposit bore to the initial Base Rent.
Section 3.04. TERMINATION; ADVANCE PAYMENTS. Upon termination of this
Lease under Article Seven (Damage or Destruction), Article Eight
(Condemnation) or any other termination not resulting from ▇▇▇▇▇▇'s default,
and after Tenant has vacated the Property in the manner required by this
Lease, Landlord shall refund or credit to Tenant (or ▇▇▇▇▇▇'s successor) the
unused portion of the Security Deposit, any advance rent or other advance
payments made by Tenant to Landlord, and any amounts paid for real property
taxes and other reserves which apply to any time periods after termination of
the Lease.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
Section 4.01. ADDITIONAL RENT. All charges payable by Tenant other
than Base Rent are called "Additional Rent." Unless this Lease provides
otherwise, Tenant shall pay all Additional Rent then due with the next
monthly installment of Base Rent. The term "rent" shall mean Base Rent and
Additional Rent.
Section 4.02. PROPERTY TAXES.
(a) REAL PROPERTY TAXES. Tenant shall pay all real property taxes on the
Property (including any fees, taxes or assessment against, or as a result of,
any tenant improvements installed on the Property by or for the benefit of
Tenant) during the Lease Term. Subject to Paragraph 4.02(c) and Section 4.08
below, such payment shall be made at least ten (10) days prior to the
delinquency date of the taxes. Within such ten (10) day period, Tenant shall
furnish Landlord with satisfactory evidence that the real property taxes have
been paid. Landlord shall reimburse Tenant for any real property taxes paid
by Tenant covering any period of time prior to or after the Lease Term. If
Tenant fails to pay the real property taxes when due, Landlord may pay the
taxes and Tenant shall reimburse Landlord for the amount of such tax payment
as Additional Rent.
(b) DEFINITION OF "REAL PROPERTY TAX." "Real property tax" means: (i)
any fee, license tax, business license fee, commercial rental tax, levy,
charge, assessment, penalty or tex imposed by any taxing authority against
the Property; (ii) any tax on the Landlord's right to receive, or the receipt
of, rent or income from the Property or against Landlord's business of
leasing the Property; (iii) any tax or charge for fire protection, streets,
sidewalks, road maintenance, refuse or other services provided to the
Property by any governmental agency; (iv) any tax imposed upon this
transaction or based upon a re-assessment of the Property due to a change of
ownership, as defined by applicable law, or other transfer of all or part of
▇▇▇▇▇▇▇▇'s interest in the Property; and (v) any charge or fee replacing any
tax previously included within the definition of real property tax. "Real
property tax" does not, however, include Landlord's federal or state income,
franchise, inheritance or estate taxes.
(c) JOINT ASSESSMENT. If the Property is not separately assessed,
Landlord shall reasonably determine Tenant's share of the real property tax
payable by Tenant under Paragraph 4.02(a) from the assessor's worksheets or
other reasonably available information. Tenant shall pay such share to
Landlord within fifteen (15) days after receipt of Landlord's written
statement.
(d) PERSONAL PROPERTY TAXES.
(i) Tenant shall pay all taxes charged against trade fixtures,
furnishings, equipment or any other personal property belonging to ▇▇▇▇▇▇.
Tenant shall try to have personal property taxed separately from the Property.
(ii) If any of Tenant's personal property is taxed with the
Property, Tenant shall pay Landlord the taxes for the personal property
within fifteen (15) days after ▇▇▇▇▇▇ receives a written statement from
Landlord for such personal property taxes.
Section 4.03. UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied
to the Property. However, if any services or utilities are jointly metered
with other property, Landlord shall make a reasonable determination of
Tenant's proportionate share of the cost of such utilities and services and
Tenant shall pay such share to Landlord within fifteen (15) days after
receipt of Landlord's written statement.
(1) Currently Landlord is holding a security deposit in the amount
of $4,338.91 for the premises at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. and an
additional security deposit of $4,760.00 for the premises at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. Therefore, Upon execution hereof, Tenant
shall pay to Landlord the amount of Ten Thousand Fourteen and
09/100 ($10,014.09) Dollars as an increased security deposit.
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Section 4.04. INSURANCE POLICIES.
(a) LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain a
policy of commercial general liability insurance (sometimes known as broad
form comprehensive general liability insurance) insuring Tenant against
liability for bodily injury, property damage (including loss of use of
property) and personal injury arising out of the operation, use or occupancy
of the Property. Tenant shall name Landlord as an additional insured under
such policy. The initial amount of such insurance shall be One Million
Dollars ($1,000,000) per occurrence and shall be subject to periodic increase
based upon inflation, increased liability awards, recommendation of
Landlord's professional insurance advisers and other relevant factors. The
liability insurance obtained by Tenant under this Paragraph 4.04(a) shall (i)
be primary and non-contributing; (ii) contain cross-liability endorsements;
and (iii) insure Landlord against Tenant's performance under Section 5.05, if
the matters giving rise to the indemnity under Section 5.05 result from the
negligence of Tenant. The amount and coverage of such insurance shall not
limit Tenant's liability nor relieve Tenant of any other obligation under
this Lease. Landlord may also obtain comprehensive public liability insurance
in an amount and with coverage determined by Landlord insuring Landlord
against liability arising out of ownership, operation, use or occupancy of
the Property. The policy obtained by Landlord shall not be contributory and
shall not provide primary insurance.
(b) PROPERTY AND RENTAL INCOME INSURANCE. During the Lease Term,
Landlord shall maintain policies of insurance covering loss of or damage to
the Property in the full amount of its replacement value. Such policy shall
contain an Inflation Guard Endorsement and shall provide protection against
all perils included within the classification of fire, extended coverage,
vandalism, malicious mischief, special extended perils (all risk), sprinkler
leakage and any other perils which Landlord deems reasonably necessary.
Landlord shall have the right to obtain flood and earthquake insurance if
required by any lender holding a security interest in the Property. Landlord
shall not obtain insurance for Tenant's fixtures or equipment or building
improvements installed by Tenant on the Property. During the Lease Term,
Landlord shall maintain a rental income insurance policy, with loss payable
to Landlord, in an amount equal to one year's Base Rent, plus estimated real
property taxes and insurance premiums. Tenant shall be liable for the payment
of any deductible amount under ▇▇▇▇▇▇▇▇'s or Tenant's insurance policies
maintained pursuant to this Section 4.04, in an amount not to exceed Ten
Thousand Dollars ($10,000). Tenant shall not do or permit anything to be done
which invalidates any such insurance policies.
(c) PAYMENT OF PREMIUMS. Subject to Section 4.08, Tenant shall pay all
premiums for the insurance policies described in Paragraphs 4.04(a) and (b)
(whether obtained by Landlord or Tenant) within fifteen (15) days after
▇▇▇▇▇▇'s receipt of a copy of the premium statement or other evidence of the
amount due, except Landlord shall pay all premiums for non-primary
comprehensive public liability insurance which Landlord elects to obtain as
provided in Paragraph 4.04(a). For insurance policies maintained by Landlord
which cover improvements on the entire Project, Tenant shall pay Tenant's
prorated share of the premiums, in accordance with the formula in Paragraph
4.05(e) for determining Tenant's share of Common Area costs. If insurance
policies maintained by Landlord cover improvements on real property other
than the Project, Landlord shall deliver to Tenant a statement of the premium
applicable to the Property showing in reasonable detail how Tenant's share of
the premium was computed. If the Lease Term expires before the expiration of
an insurance policy maintained by Landlord, Tenant shall be liable for
Tenant's prorated share of the insurance premiums. Before the Commencement
Date, Tenant shall deliver to Landlord a copy of any policy of insurance
which Tenant is required to maintain under this Section 4.04. At least thirty
(30) days prior to the expiration of any such policy, Tenant shall deliver to
Landlord a renewal of such policy. As an alternative to providing a policy of
insurance, Tenant shall have the right to provide Landlord a certificate of
insurance, executed by an authorized officer of the insurance company,
showing that the insurance which Tenant is required to maintain under this
Section 4.04 is in full force and effect and containing such other
information which Landlord reasonably requires.
(d) GENERAL INSURANCE PROVISIONS.
(i) Any insurance which Tenant is required to maintain under this
Lease shall include a provision which requires the insurance carrier to give
Landlord not less than thirty (30) days' written notice prior to any
cancellation or modification of such coverage.
(ii) If Tenant fails to deliver any policy, certificate or renewal
to Landlord required under this Lease within the prescribed time period or if
any such policy is cancelled or modified during the Lease Term without
Landlord's consent, Landlord may obtain such insurance, in which case Tenant
shall reimburse Landlord for the cost of such insurance within fifteen (15)
days after receipt of a statement that indicates the cost of such insurance.
(iii) Tenant shall maintain all insurance required under this Lease
with companies holding a "General Policy Rating" of A-12 or better, as set
forth in the most current issue of "Best Key Rating Guide". Landlord and
Tenant acknowledge the insurance markets are rapidly changing and that
insurance in the form and amounts described in this Section 4.04 may not be
available in the future. Tenant acknowledges that the insurance described in
this Section 4.04 is for the primary benefit of Landlord. If at any time
during the Lease Term, Tenant is unable to maintain the insurance required
under the Lease, Tenant shall nevertheless maintain insurance coverage which
is customary and commercially reasonable in the insurance industry for
Tenant's type of business, as that coverage may change from time to time.
▇▇▇▇▇▇▇▇ makes no representation as to the adequacy of such insurance to
protect ▇▇▇▇▇▇▇▇'s or ▇▇▇▇▇▇'s interests. Therefore, Tenant shall obtain any
such additional property or liability insurance which Tenant deems necessary
to protect Landlord and Tenant.
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(iv) Unless prohibited under any applicable insurance policies
maintained, Landlord and Tenant each hereby waive any and all rights of
recovery against the other, or against the officers, employees, agents or
representatives of the other, for loss of or damage to its property or the
property of others under its control, if such loss or damage is covered by
any insurance policy in force (whether or not described in this Lease) at the
time of such loss or damage. Upon obtaining the required policies of
insurance, Landlord and Tenant shall give notice to the insurance carriers of
this mutual waiver of subrogation.
Section 4.05. COMMON AREAS; USE, MAINTENANCE AND COSTS.
(a) COMMON AREAS. As used in this Lease, "Common Areas" shall mean all
areas within the Project which are available for the common use of tenants of
the Project and which are not leased or held for the exclusive use of Tenant
or other tenants, including, but not limited to, parking areas, driveways,
sidewalks, loading areas, access roads, corridors, landscaping and planted
areas. Landlord, from time to time, may change the size, location, nature and
use of any of the Common Areas, convert Common Areas into leasable areas,
construct additional parking facilities (including parking structures) in the
Common Areas, and increase or decrease Common Area land and/or facilities.
Tenant acknowledges that such activities may result in inconvenience to
Tenant. Such activities and changes are permitted if they do not materially
affect ▇▇▇▇▇▇'s use of the Property.
(b) USE OF COMMON AREAS. Tenant shall have the nonexclusive right (in
common with other tenants and all others to whom Landlord has granted or may
grant such rights) to use the Common Areas for the purposes intended subject
to such reasonable rules and regulations as Landlord may establish from time
to time. Tenant shall abide by such rules and regulations and shall use its
best effort to cause others who use the Common Areas with ▇▇▇▇▇▇'s express or
implied permission to abide by Landlord's rules and regulations. At any time,
Landlord may close any Common Areas to perform any acts in the Common Areas
as, in Landlord's judgment, are desirable to improve the Project. Tenant
shall not interfere with the rights of Landlord, other tenants or any other
person entitled to use the Common Areas.
(c) SPECIFIC PROVISION RE: VEHICLE PARKING. Tenant shall be entitled
to use the number of vehicle parking spaces in the Project allocated to
Tenant in Section 1.11 of the Lease without paying any additional rent.
Tenant's parking shall be those spaces designated with the letter "T" on
Exhibit A attached hereto, and shall be limited to vehicles no
larger than standard size automobiles or pickup utility vehicles. Tenant
shall not cause large trucks or other large vehicles to be parked within the
Project or on the adjacent public streets. Temporary parking of large
delivery vehicles in the Project may be permitted by the rules and
regulations established by Landlord. Vehicles shall be parked only in striped
parking spaces and not in driveways, loading areas or other locations not
specifically designated for parking. Handicapped spaces shall only be used by
those legally permitted to use them. If Tenant parks more vehicles in the
parking area than the number set forth in Section 1.11 of this Lease, such
conduct shall be a material breach of this Lease. In addition to Landlord's
other remedies under the Lease, Tenant shall pay a daily charge determined by
Landlord for each such additional vehicle.
(d) MAINTENANCE OF COMMON AREAS. Landlord shall maintain the Common
Areas in good order, condition and repair and shall operate the Project, in
Landlord's sole discretion, as a first-class industrial/commercial real
property development. Tenant shall pay Tenant's pro rata share (as determined
below) of all costs incurred by Landlord for the operation and maintenance of
the Common Areas. Common Area costs include, but are not limited to, costs
and expenses for the following: gardening and landscaping; utilities, water
and sewage charges; maintenance of signs (other than tenants' signs); premiums
for liability, property damage, fire and other types of casualty insurance on
the Common Areas and worker's compensation insurance; all property taxes and
assessments levied on or attributable to the Common Areas and all Common Area
improvements; all personal taxes levied on or attributable to personal
property used in connection with the Common Areas; straight-line
depreciation on personal property owned by Landlord which is consumed in the
operation or maintenance of the Common Areas; rental or lease payments paid
by Landlord for rented or leased personal property used in the operation or
maintenance of the Common Areas; fees for required licenses and permits;
repairing, resurfacing, repaving, maintaining, painting, lighting,
cleaning, refuse removal, security and similar items; reserves for roof
replacement and exterior painting and other appropriate reserves; and a
reasonable allowance to Landlord for Landlord's supervision of the Common
Areas (not to exceed five percent (5%) of the gross rents of the Project
for the calendar year). Landlord may cause any or all of such services to
be provided by third parties and the cost of such services shall be included
in Common Area costs. Common Area costs shall not include depreciation
of real property which forms part of the Common Areas.
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[e] TENANT'S SHARE AND PAYMENT. Tenant shall pay Tenant's annual pro
rata share of all Common Area costs (prorated for any fractional month) upon
written notice from Landlord that such costs are due and payable, and in any
event prior to delinquency. Tenant's pro rata share shall be calculated by
dividing the square foot area of the Property, as set forth in Section 1.04
of the Lease, by the aggregate square foot area of the Project which is
leased or held for lease by tenants, as of the date on which the computation
is made. Tenant's initial pro rata share is set out in Paragraph 1.13(b). Any
changes in the Common Area costs and/or the aggregate area of the Project
leased or held for lease during the Lease Term shall be effective on the
first day of the month after such change occurs. Landlord may, at Landlord's
election, estimate in advance and charge to Tenant as Common Area costs, all
real property taxes for which Tenant is liable under Section 4.02 of the
Lease, all insurance premiums for which Tenant is liable under Section 4.04
of the Lease, all maintenance and repair costs for which Tenant is liable
under Section 6.04 of the Lease, and all other Common Area costs payable by
Tenant hereunder. At Landlord's election, such statements of estimated Common
Area costs shall be delivered monthly, quarterly or at any other periodic
intervals to be designated by Landlord. Landlord may adjust such estimates at
any time based upon ▇▇▇▇▇▇▇▇'s experience and reasonable anticipation of
costs. Such adjustments shall be effective as of the next rent payment date
after notice to Tenant. Within sixty (60) days after the end of each calendar
year of the Lease Term, Landlord shall deliver to Tenant a statement prepared
in accordance with generally accepted accounting principles setting forth, in
reasonable detail, the Common Area costs paid or incurred by Landlord during
the preceding calendar year and ▇▇▇▇▇▇'s pro rata share. Upon receipt of such
statement, there shall be an adjustment between Landlord and Tenant, with
payment to or credit given by Landlord (as the case may be) so that Landlord
shall receive the entire amount of Tenant's share of such costs and expenses
for such period. Tenants share of expenses hereunder shall be fixed at
$3,827.00.
Section 4.06. LATE CHARGES. ▇▇▇▇▇▇'s failure to pay rent promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs
are impractical or extremely difficult to ascertain. Such costs may include,
but are not limited to, processing and accounting charges and late charges
which may be imposed on Landlord by any ground lease, mortgage or trust deed
encumbering the Property. Therefore, if Landlord does not receive any rent
payment within ten (10) days after it becomes due, Tenant shall pay Landlord
a late charge equal to ten percent (10%) of the overdue amount. The parties
agree that such late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of such late payment.
Section 4.07. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by
Tenant to Landlord which is not paid when due shall bear interest at the rate
of fifteen percent (15%) per annum from the due date of such amount. However,
interest shall not be payable on late charges to be paid by Tenant under
this Lease. The payment of interest on such amounts shall not excuse or cure
any default by Tenant under this Lease. If the interest rate specified in
this Lease is higher than the rate permitted by law, the interest rate is
hereby decreased to the maximum legal interest rate permitted by law.
Section 4.08. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES.
If requested by any ground lessor or lender to whom Landlord has granted a
security interest in the Property, or if Tenant is more than ten (10) days
late in the payment of rent more than once in any consecutive twelve
(12)-month period, Tenant shall pay Landlord a sum equal to one-twelfth
(1/12) of the annual real property taxes and insurance premiums payable by
Tenant under this Lease, together with each payment of Base Rent. Landlord
shall hold such payments in a non-interest bearing impound account. If
unknown, Landlord shall reasonably estimate the amount of real property taxes
and insurance premiums when due. Tenant shall pay any deficiency of funds in
the impound account to Landlord upon written request. If Tenant defaults
under this Lease, Landlord may apply any funds in the impound account to any
obligation then due under this Lease.
ARTICLE FIVE: USE OF PROPERTY
Section 5.01. PERMITTED USES. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.
Section 5.02. MANNER OF USE. Tenant shall not cause or permit the
Property to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which annoys or interferes
with the rights of tenants of the Project, or which constitutes a nuisance or
waste. Tenant shall obtain and pay for all permits, including a Certificate
of Occupancy, required for Tenant's occupancy of the Property and shall
promptly take all actions necessary to comply with all applicable statutes,
ordinances, rules, regulations, orders and requirements regulating the use by
Tenant of the Property, including the Occupational Safety and Health Act.
Section 5.03. HAZARDOUS MATERIALS. As used in this Lease, the term
"Hazardous Material" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition
of "hazardous substances", "hazardous wastes", "hazardous materials" or
"toxic substances" now or subsequently regulated under any applicable
federal, state or local laws or regulations, including without limitation
petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks,
acids, pesticides, ammonia compounds and other chemical products, asbestos,
PCBs and similar compounds, and including any different products and
materials which are subsequently found to have adverse effects on the
environment or the health and safety of persons. Tenant shall not cause or
permit any Hazardous Material to be generated, produced, brought upon, used,
stored, treated or disposed of in or about the Property by Tenant, its
agents, employees, contractors, sublessees or invitees without the prior
written consent of Landlord. Landlord shall be entitled to take into account
such other factors or facts as Landlord may reasonably determine to be
relevant in determining whether to grant or withhold consent to Tenant's
proposed activity with respect to Hazardous Material. In no event, however,
shall Landlord be required to consent to the installation or use of any
storage tanks on the Property.
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Section 5.04. SIGNS AND AUCTIONS. Tenant shall not place any signs on
the Property without Landlord's prior written consent. Tenant shall not
conduct or permit any auctions or sheriff's sales at the Property.
Section 5.05. INDEMNITY. Tenant shall indemnify Landlord against and
hold Landlord harmless from any and all costs, claims or liability arising
from: (a) Tenant's use of the Property; (b) the conduct of Tenant's business
or anything else done or permitted by Tenant to be done in or about the
Property, including any contamination of the Property or any other property
resulting from the presence or use of Hazardous Material caused or permitted
by Tenant; (c) any breach or default in the performance of Tenant's
obligations under this Lease; (d) any misrepresentation or breach of warranty
by Tenant under this Lease; or (e) other acts or omissions of Tenant. Tenant
shall defend Landlord against any such cost, claim or liability at ▇▇▇▇▇▇'s
expense with counsel reasonably acceptable to Landlord or, at Landlord's
election, Tenant shall reimburse Landlord for any legal fees or costs
incurred by Landlord in connection with any such claim. As a material part of
the consideration to Landlord, ▇▇▇▇▇▇ assumes all risk of damage to property
or injury to persons in or about the Property arising from any cause, and
Tenant hereby waives all claims in respect thereof against Landlord, except
for any claim arising out of Landlord's gross negligence or willful
misconduct. As used in this Section, the term "Tenant" shall include Tenant's
employees, agents, contractors and invitees, if applicable.
Section 5.06. LANDLORD'S ACCESS. Landlord or its agents may enter the
Property at all reasonable times to show the Property to potential buyers,
investors or tenants or other parties; to do any other act or to inspect and
conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Landlord deems necessary. Landlord shall
give Tenant prior notice of such entry, except in the case of an emergency.
Landlord may place customary "For Sale" or "For Lease" signs on the Property.
Section 5.07. QUIET POSSESSION. If Tenant pays the rent and complies
with all other terms of this Lease, Tenant may occupy and enjoy the Property
for the full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
Section 6.01. EXISTING CONDITIONS. Tenant accepts the Property in its
condition as of the execution of the Lease, subject to all recorded matters,
laws, ordinances, and governmental regulations and orders. Except as provided
herein, ▇▇▇▇▇▇ acknowledges that neither ▇▇▇▇▇▇▇▇ nor any agent of Landlord
has made any representation as to the condition of the Property or the
suitability of the Property for ▇▇▇▇▇▇'s intended use. Tenant represents and
warrants that Tenant has made its own inspection of and inquiry regarding the
condition of the Property and is not relying on any representations of
Landlord or any Broker with respect thereto. If Landlord or Landlord's Broker
has provided a Property Information Sheet or other Disclosure Statement
regarding the Property, a copy is attached as an exhibit to the Lease.
Section 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not
be liable for any damage or injury to the person, business (or any loss of
income therefrom), goods, wares, merchandise or other property of Tenant,
Tenant's employees, invitees, customers or any other person in or about the
Property, whether such damage or injury is caused by or results from: (a)
fire, steam, electricity, water, gas or rain; (b) the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures or any other cause; (c)
conditions arising in or about the Property or upon other portions of the
Project, or from other sources or places; or (d) any act or omission of any
other tenant of the Project. Landlord shall not be liable for any such damage
or injury even though the cause of or the means of repairing such damage or
injury are not accessible to Tenant. The provisions of this Section 6.02
shall not, however, exempt Landlord from liability for Landlord's gross
negligence or willful misconduct.
Section 6.03. LANDLORD'S OBLIGATIONS.
(a) Except as provided in Article Seven (Damage or Destruction) and
Article Eight (Condemnation), Landlord shall keep the following in good
order, condition and repair; the foundations, exterior walls and roof of the
Property (including painting the exterior surface of the exterior walls of
the Property not more often than once every five (5) years, if necessary) and
all components of electrical, mechanical, plumbing, heating and air
conditioning systems and facilities located in the Property which are
concealed or used in common by tenants of the Project. However, Landlord
shall not be obligated to maintain or repair windows, doors, plate glass or
the interior surfaces of exterior walls. Landlord shall make repairs under
this Section 6.03 within a reasonable time after receipt of written notice
from Tenant of the need for such repairs.
(b) Tenant shall pay or reimburse Landlord for all costs Landlord incurs
under Paragraph 6.03(a) above as Common Area costs as provided for in Section
4.05 of the Lease. Tenant waives the benefit of any statute in effect now or
in the future which might give Tenant the right to make repairs at Landlord's
expense or to terminate this Lease due to Landlord's failure to keep the
Property in good order, condition and repair.
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Section 6.04. TENANT'S OBLIGATIONS.
(a) Except as provided in Section 6.03, Article Seven (Damage or
Destruction) and Article Eight (Condemnation), Tenant shall keep all portions
of the Property (including structural, nonstructural, interior, systems and
equipment) in good order, condition and repair (including interior repainting
and refinishing, as needed). If any portion of the Property or any system or
equipment in the Property which Tenant is obligated to repair cannot be fully
repaired or restored, Tenant shall promptly replace such portion of the
Property or system or equipment in the Property, regardless of whether the
benefit of such replacement extends beyond the Lease Term; but if the benefit
or useful life of such replacement extends beyond the Lease Term (as such
term may be extended by exercise of any options), the useful life of such
replacement shall be prorated over the remaining portion of the Lease Term
(as extended). Tenant shall maintain a preventive maintenance contract
providing for the regular inspection and maintenance of the heating and air
conditioning system by a licensed heating and air conditioning contractor,
unless Landlord maintains such equipment under Section 6.03 above. If any
part of the Property or the Project is damaged by any act or omission of
Tenant, Tenant shall pay Landlord the cost of repairing or replacing such
damaged property, whether or not Landlord would otherwise be obligated to pay
the cost of maintaining or repairing such property. It is the intention of
Landlord and Tenant that at all times Tenant shall maintain the portions of
the Property which Tenant is obligated to maintain in an attractive,
first-class and fully operative condition.
(b) Tenant shall fulfill all of Tenant's obligations under this Section
6.04 at Tenant's sole expense. If Tenant fails to maintain, repair or replace
the Property as required by this Section 6.04, Landlord may, upon ten (10)
days' prior notice to Tenant (except that no notice shall be required in the
case of an emergency), enter the Property and perform such maintenance or
repair (including replacement, as needed) on behalf of Tenant. In such case,
Tenant shall reimburse Landlord for all costs incurred in performing such
maintenance or repair immediately upon demand.
Section 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.
(a) Tenant shall not make any alterations, additions, or improvements to
the Property without Landlord's prior written consent, except for
non-structural alterations which do not exceed Ten Thousand Dollars ($10,000)
in cost cumulatively over the Lease Term and which are not visible from the
outside of any building of which the Property is part. Landlord may require
Tenant to provide demolition and/or lien and completion bonds in form and
amount satisfactory to Landlord. Tenant shall promptly remove any
alterations, additions, or improvements constructed in violation of this
Paragraph 6.05(a) upon Landlord's written request. All alterations,
additions, and improvements shall be done in a good and workmanlike manner,
in conformity with all applicable laws and regulations, and by a contractor
approved by Landlord. Upon completion of any such work, Tenant shall provide
Landlord with "as built" plans, copies of all construction contracts, and
proof of payment for all labor and materials.
(b) Tenant shall pay when due all claims for labor and material
furnished to the Property. Tenant shall give Landlord at least twenty (20)
days' prior written notice of the commencement of any work on the Property,
regardless of whether ▇▇▇▇▇▇▇▇'s consent to such work is required. Landlord
may elect to record and post notices of non-responsibility on the Property.
Section 6.06. CONDITION UPON TERMINATION. Upon the termination of the
Lease, ▇▇▇▇▇▇ shall surrender the Property to Landlord, broom clean and in
the same condition as received except for ordinary wear and tear which Tenant
was not otherwise obligated to remedy under any provision of this Lease.
However, Tenant shall not be obligated to repair any damage which Landlord is
required to repair under Article Seven (Damage or Destruction). In addition,
Landlord may require Tenant to remove any alterations, additions or
improvements (whether or not made with ▇▇▇▇▇▇▇▇'s consent) prior to the
expiration of the Lease and to restore the Property to its prior condition,
all at Tenant's expense. All alterations, additions and improvements which
Landlord has not required Tenant to remove shall become Landlord's property
and shall be surrendered to Landlord upon the expiration or earlier
termination of the Lease, except that Tenant may remove any of Tenant's
machinery or equipment which can be removed without material damage to the
Property. Tenant shall repair, at Tenant's expense, any damage to the
Property caused by the removal of any such machinery or equipment. In no
event, however, shall Tenant remove any of the following materials or
equipment (which shall be deemed Landlord's property) without Landlord's
prior written consent; any power wiring or power panels; lighting or lighting
fixtures; wall coverings; drapes, blinds or other window coverings; carpets
or other floor coverings; heaters, air conditioners or any other heating or
air conditioning equipment; fencing or security gates; or other similar
building operating equipment and decorations.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
Section 7.01 PARTIAL DAMAGE TO PROPERTY.
(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property is only partially
damaged (i.e., less than fifty percent (50%) of the Property is untenantable
as a result of such damage or less than fifty percent (50%) of Tenant's
operations are materially impaired) and if the proceeds received by Landlord
from the insurance policies described in Paragraph 4.04(b) are sufficient to
pay for the necessary repairs, this Lease shall remain in effect and Landlord
shall repair the damage as soon as reasonably possible. Landlord may elect
(but is not required) to repair any damage to Tenant's fixtures, equipment,
or improvements.
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(b) If the insurance proceeds received by Landlord are not sufficient to
pay the entire cost of repair, or if the cause of the damage is not covered
by the insurance policies which Landlord maintains under Paragraph 4.04(b),
Landlord may elect either to (i) repair the damage as soon as reasonably
possible, in which case this Lease shall remain in full force and effect, or
(ii) terminate this Lease as of the date the damage occurred. Landlord shall
notify Tenant within thirty (30) days after receipt of notice of the
occurrence of the damage whether Landlord elects to repair the damage or
terminate the Lease. If Landlord elects to repair the damage, Tenant shall
pay Landlord the "deductible amount" (if any) under Landlord's insurance
policies and, if the damage was due to an act or omission of Tenant, or
Tenant's employees, agents, contractors or invitees, the difference between
the actual cost of repair and any insurance proceeds received by Landlord. If
Landlord elects to terminate this Lease, Tenant may elect to continue this
Lease in full force and effect, in which case Tenant shall repair any damage
to the Property and any building in which the Property is located. Tenant
shall pay the cost of such repairs, except that upon satisfactory completion
of such repairs, Landlord shall deliver to Tenant any insurance proceeds
received by Landlord for the damage repaired by Tenant. Tenant shall give
Landlord written notice of such election within ten (10) days after receiving
Landlord's termination notice.
(c) If the damage to the Property occurs during the last six (6) months
of the Lease Term and such damage will require more than thirty (30) days to
repair, either Landlord or Tenant may elect to terminate this Lease as of the
date the damage occurred, regardless of the sufficiency of any insurance
proceeds. The party electing to terminate this Lease shall give written
notification to the other party of such election within thirty (30) days
after ▇▇▇▇▇▇'s notice to Landlord of the occurrence of the damage.
Section 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is
substantially or totally destroyed by any cause whatsoever (i.e., the damage
to the Property is greater than partial damage as described in Section 7.01),
and regardless of whether Landlord receives any insurance proceeds, this
Lease shall terminate as of the date the destruction occurred.
Notwithstanding the preceding sentence, if the Property can be rebuilt within
six (6) months after the date of destruction, Landlord may elect to rebuild
the Property at Landlord's own expense, in which case this Lease shall remain
in full force and effect. Landlord shall notify Tenant of such election
within thirty (30) days after ▇▇▇▇▇▇'s notice of the occurrence of total or
substantial destruction. If Landlord so elects, Landlord shall rebuild the
Property at Landlord's sole expense, except that if the destruction was
caused by an act or omission of Tenant, Tenant shall pay Landlord the
difference between the actual cost of rebuilding and any insurance proceeds
received by Landlord.
Section 7.03. TEMPORARY REDUCTION OF RENT. If the Property is destroyed
or damaged and Landlord or Tenant repairs or restores the Property pursuant
to the provisions of this Article Seven, any rent payable during the period
of such damage, repair and/or restoration shall be reduced according to the
degree, if any, to which ▇▇▇▇▇▇'s use of the Property is impaired. However,
the reduction shall not exceed the sum of one year's payment of Base Rent,
insurance premiums and real property taxes. Except for such possible
reduction in Base Rent, insurance premiums and real property taxes, Tenant
shall not be entitled to any compensation, reduction, or reimbursement from
Landlord as a result of any damage, destruction, repair, or restoration of or
to the Property.
Section 7.04. WAIVER. Tenant waives the protection of any statute,
code or judicial decision which grants a tenant the right to terminate a
lease in the event of the substantial or total destruction of the leased
property. Tenant agrees that the provisions of Section 7.02 above shall
govern the rights and obligations of Landlord and Tenant in the event of any
substantial or total destruction to the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of
eminent domain or sold under the threat of that power (all of which are
called "Condemnation"), this Lease shall terminate as to the part taken or
sold on the date the condemning authority takes title or possession, whichever
occurs first. If more than twenty percent (20%) of the floor area of the
building in which the Property is located, or which is located on the
Property, is taken, either Landlord or Tenant may terminate this Lease as of
the date the condemning authority takes title or possession, by delivering
written notice to the other within ten (10) days after receipt of written
notice of such taking (or in the absence of such notice, within ten (10) days
after the condemning authority takes title or possession). If neither
Landlord nor Tenant terminates this Lease, this Lease shall remain in effect
as to the portion of the Property not taken, except that the Base Rent and
Additional Rent shall be reduced in proportion to the reduction in the floor
area of the Property. Any Condemnation award or payment shall be distributed
in the following order: (a) first, to any ground lessor, mortgagee or
beneficiary under a deed of trust encumbering the Property, the amount of its
interest in the Property; (b) second, to Tenant, only the amount of any award
specifically designated for loss of or damage to Tenant's trade fixtures or
removable personal property; and (c) third, to Landlord, the remainder of
such award, whether as compensation for reduction in the value of the
leasehold, the taking of the fee, or otherwise. If this Lease is not
terminated, Landlord shall repair any damage to the Property caused by the
Condemnation, except that Landlord shall not be obligated to repair any
damage for which Tenant has been reimbursed by the condemning authority. If
the severance damages received by Landlord are not sufficient to pay for such
repair, Landlord shall have the right to either terminate this Lease or make
such repair at Landlord's expense.
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ARTICLE NINE: ASSIGNMENT AND SUBLETTING
Section 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the Property
or of Tenant's interest in this Lease may be acquired by any other person or
entity, whether by sale, assignment, mortgage, sublease, transfer, operation
of law, or act of Tenant, without ▇▇▇▇▇▇▇▇'s prior written consent, except as
provided in Section 9.02 below. Landlord has the right to grant or withhold
its consent as provided in Section 9.05 below. Any attempted transfer without
consent shall be void and shall constitute a non-curable breach of this
Lease. If Tenant is a partnership, any cumulative transfer of more than
twenty percent (20%) of the partnership interests shall require Landlord's
consent. If Tenant is a corporation, any change in the ownership of a
controlling interest of the voting stock of the corporation shall require
Landlord's consent.
Section 9.02. TENANT AFFILIATE. Tenant may assign this Lease or
sublease the Property, without Landlord's consent, to any corporation which
controls, is controlled by or is under common control with Tenant, or to any
corporation resulting from the merger of or consolidation with Tenant
("Tenant's Affiliate"). In such case, any Tenant's Affiliate shall assume in
writing all of Tenant's obligations under this Lease.
Section 9.03. NO RELEASE OF TENANT. No transfer permitted by this
Article Nine, whether with or without Landlord's consent, shall release
Tenant or change Tenant's primary liability to pay the rent and to perform
all other obligations of Tenant under this Lease. ▇▇▇▇▇▇▇▇'s acceptance of
rent from any other person is not a waiver of any provision of this Article
Nine. Consent to one transfer is not a consent to any subsequent transfer. If
▇▇▇▇▇▇'s transferee defaults under this Lease, Landlord may proceed directly
against Tenant without pursuing remedies against the transferee. Landlord may
consent to subsequent assignments or modifications of this Lease by ▇▇▇▇▇▇'s
transferee, without notifying Tenant or obtaining its consent. Such action
shall not relieve ▇▇▇▇▇▇'s liability under this Lease.
Section 9.04. OFFER TO TERMINATE. If Tenant desires to assign the
Lease or sublease the Property, Tenant shall have the right to offer, in
writing, to terminate the Lease as of a date specified in the offer. If
Landlord elects in writing to accept the offer to terminate within twenty
(20) days after notice of the offer, the Lease shall terminate as of the date
specified and all the terms and provisions of the Lease governing termination
shall apply. If Landlord does not so elect, the Lease shall continue in
effect until otherwise terminated and the provisions of Section 9.05 with
respect to any proposed transfer shall continue to apply.
Section 9.05 LANDLORD'S CONSENT.
(a) ▇▇▇▇▇▇'s request for consent to any transfer described in Section
9.01 shall set forth in writing the details of the proposed transfer,
including the name, business and financial condition of the prospective
transferee, financial details of the proposed transfer (e.g., the term of the
rent and security deposit payable under any proposed assignment or sublease),
and any other information Landlord deems relevant. Landlord shall have the
right to withhold consent, if reasonable, or to grant consent, based on the
following factors: (i) the business of the proposed assignee or subtenant and
the proposed use of the Property; (ii) the net worth and financial reputation
of the proposed assignee or subtenant; (iii) Tenant's compliance with all of
its obligations under the Lease; and (iv) such other factors as Landlord may
reasonable deem relevant. If Landlord objects to a proposed assignment solely
because of the net worth and/or financial reputation of the proposed
assignee, Tenant may nonetheless sublease (but not assign), all or a portion
of the Property to the proposed transferee, but only on the other terms of
the proposed transfer.
(b) If Tenant assigns or subleases, the following shall apply:
(i) Tenant shall pay to Landlord as Additional Rent under the
Lease the Landlord's Share (stated in Section 1.13) of the Profit (defined
below) on such transaction as and when received by ▇▇▇▇▇▇, unless ▇▇▇▇▇▇▇▇
gives written notice to Tenant and the assignee or subtenant that ▇▇▇▇▇▇▇▇'s
share shall be paid by the assignee or subtenant to Landlord directly. The
"Profit" means (A) all amounts paid to Tenant for such assignment or
sublease, including "key" money, monthly rent in excess of the monthly rent
payable under the Lease, and all fees and other consideration paid for the
assignment or sublease, including fees under any collateral agreements, less
(B) costs and expenses directly incurred by Tenant in connection with the
execution and performance of such assignment or sublease for real estate
broker's commissions and costs of renovation or construction of tenant
improvements required under such assignment or sublease. Tenant is entitled
to recover such costs and expenses before Tenant is obligated to pay the
Landlord's Share to Landlord. The Profit in the case of a sublease of less
than all the Property is the rent allocable to the subleased space as a
percentage on a square footage basis.
(ii) Tenant shall provide Landlord a written statement certifying
all amounts to be paid from any assignment or sublease of the Property within
thirty (30) days after the transaction documentation is signed, and Landlord
may inspect Tenant's books and records to verify the accuracy of such
statement. On written request, Tenant shall promptly furnish to Landlord
copies of all the transaction documentation, all of which shall be certified
by Tenant to be complete, true and correct. ▇▇▇▇▇▇▇▇'s receipt of Landlord's
Share shall not be a consent to any further assignment or subletting. The
breach of Tenant's obligation under this Paragraph 9.05(b) shall be a
material default of the Lease.
Section 9.06. NO MERGER. No merger shall result from ▇▇▇▇▇▇'s sublease
of the Property under this Article Nine, ▇▇▇▇▇▇'s surrender of this Lease or
the termination of this Lease in any other manner. In any such event,
Landlord may terminate any or all subtenancies or succeed to the interest of
▇▇▇▇▇▇ as sublandlord under any or all subtenancies.
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ARTICLE TEN: DEFAULTS; REMEDIES
Section 10.01. COVENANTS AND CONDITIONS. ▇▇▇▇▇▇'s performance of each
of Tenant's obligations under this Lease is a condition as well as a
covenant. ▇▇▇▇▇▇'s right to continue in possession of the Property is
conditioned upon such performance. Time is of the essence in the performance
of all covenants and conditions.
Section 10.02. DEFAULTS. Tenant shall be in material default under this
Lease:
(a) If ▇▇▇▇▇▇ abandons the Property or if ▇▇▇▇▇▇'s vacation of the
Property results in the cancellation of any insurance described in Section
4.04;
(b) If Tenant fails to pay rent or any other charge when due;
(c) If Tenant fails to perform any of Tenant's non-monetary obligations
under this lease for a period of thirty (30) days after written notice from
Landlord; provided that if more than thirty (30) days are required to
complete such performance, Tenant shall not be in default if Tenant commences
such performance within the thirty (30)-day period and thereafter diligently
pursues its completion. However, Landlord shall not be required to give such
notice if ▇▇▇▇▇▇'s failure to perform constitutes a non-curable breach of
this Lease. The notice required by this Paragraph is intended to satisfy any
and all notice requirements imposed by law on Landlord and is not in addition
to any such requirement.
(d) (i) If Tenant makes a general assignment or general arrangement for
the benefit of creditors; (ii) if a petition for adjudication of bankruptcy
or for reorganization or rearrangement is filed by or against Tenant and is
not dismissed within thirty (30) days; (iii) if a trustee or receiver is
appointed to take possession of substantially all of Tenant's assets located
at the Property or of Tenant's interest in this Lease and possession is not
restored to Tenant within thirty (30) days; or (iv) if substantially all of
Tenant's assets located at the Property or of Tenant's interest in this Lease
is subjected to attachment, execution or other judicial seizure which is not
discharged within thirty (30) days. If a court of competent jurisdiction
determines that any of the acts described in this subparagraph (d) is not
default under this lease, and a trustee is appointed to take possession (or
if Tenant remains a debtor in possession) and such trustee or Tenant
transfers ▇▇▇▇▇▇'s interest hereunder, then Landlord shall receive, as
Additional Rent, the excess, if any, of the rent (or any other consideration)
paid in connection with such assignment or sublease over the rent payable by
Tenant under this lease.
(e) If any guarantor of the Lease revokes or otherwise terminates, or
purports to revoke or otherwise terminate, any guaranty of all or any portion
of Tenant's obligations under the Lease. Unless otherwise expressly provided,
no guaranty of the Lease is revocable.
Section 10.03. REMEDIES. On the occurrence of any material default by
Tenant, Landlord may, at any time thereafter, with or without notice or
demand and without limiting Landlord in the exercise of any right or remedy
which Landlord may have:
(a) Terminate ▇▇▇▇▇▇'s right to possession of the Property by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Property to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including (i) the worth at the time
of the award of the unpaid Base Rent, Additional Rent and other charges which
Landlord had earned at the time of the termination; (ii) the worth at the
time of the award of the amount by which the unpaid Base Rent, Additional
Rent and other charges which ▇▇▇▇▇▇▇▇ would have earned after termination
until the time of the award exceeds the amount of such rental loss that
Tenant proves Landlord could have reasonably avoided; (iii) the worth at the
time of the award of the amount by which the unpaid Base Rent, Additional
Rent and other charges which ▇▇▇▇▇▇ would have paid for the balance of the
Lease term after the time of award exceeds the amount of such rental loss
that Tenant proves Landlord could have reasonable avoided; and (iv) any other
amount necessary to compensate Landlord for all the detriment proximately
caused by ▇▇▇▇▇▇'s failure to perform its obligations under the Lease or
which in the ordinary course of things would be likely to result therefrom,
including, but not limited to, any costs or expenses Landlord incurs in
maintaining or preserving the Property after such default, the cost of
recovering possession of the Property, expenses of reletting, including
necessary renovation or alteration of Property, Landlord's reasonable
attorney's fees incurred in connection therewith, and any real estate
commission paid or payable. As used in subparts (i) and (ii) above, the
"worth at the time of the award" is computed by allowing interest on unpaid
amounts at the rate of fifteen percent (15%) per annum, or such lesser amount
as may then be the maximum lawful rate. As used in subpart (iii) above, the
"worth at the time of the award" is computed by discounting such amount at
the discount rate of the Federal Reserve Bank of San Francisco at the time of
the award, plus one percent (1%). If Tenant has abandoned the Property,
Landlord shall have the option of (i) retaking possession of the Property and
recovering from Tenant the amount specified in this Paragraph 10.03(a), or
(ii) proceeding under Paragraph 10.03(b);
(b) Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant has abandoned the Property. In
such event, Landlord shall be entitled to enforce all of Landlord's rights
and remedies under this Lease, including the right to recover the rent as it
becomes due;
(c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decision of the state in which the Property is
located.
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Section 10.04. REPAYMENT OF "FREE" RENT. If this Lease provides for
a postponement of any monthly rental payments, a period of "free" rent or
other rent concession, such postponed rent or "free" rent is called the
"Abated Rent". Tenant shall be credited with having paid all of the Abated
Rent on the expiration of the Lease Term only of Tenant has fully,
faithfully, and punctually performed all of Tenant's obligations hereunder,
including the payment of all rent (other than the Abated Rent) and other
monetary obligations and the surrender of the Property in physical condition
required by this Lease. Tenant acknowledges that its right to receive credit
for the Abated Rent is absolutely conditioned upon Tenant's full, faithful
and punctual performance of its obligations under this Lease. If Tenant
defaults and does not cure within any applicable grace period, the Abated
Rent shall immediately become due and payable in full and this Lease shall be
enforced as if there were no such rent abatement or other rent concession. In
such case Abated Rent shall be calculated based on the full initial rent
payable under this Lease.
Section 10.05. AUTOMATIC TERMINATION. Notwithstanding any other term
or provision hereof to the contrary, the Lease shall terminate on the
occurrence of any act which affirms the Landlord's intention to terminate the
Lease as provided in Section 10.03 hereof, including the filing of an
unlawful detainer action against Tenant. On such termination, ▇▇▇▇▇▇▇▇'s
damages for default shall include all costs and fees, including reasonable
attorneys' fees that Landlord incurs in connection with the filing,
commencement, pursuing and/or defending of any action in any bankruptcy court
or other court with respect to the Lease; the obtaining of relief from any
stay in bankruptcy restraining any action to evict Tenant; or the pursuing of
any action with respect to the lease; the obtaining of relief from any stay
in bankruptcy restraining any action to evict Tenant; or the pursuing of any
action with respect to ▇▇▇▇▇▇▇▇'s right to possession of the Property. All
such damages suffered (apart from Base Rent and other rent payable hereunder)
shall constitute pecuniary damages which must be reimbursed to Landlord prior
to assumption of the Lease by Tenant or any successor to ▇▇▇▇▇▇ in any
bankruptcy or other proceeding.
Section 10.06. CUMULATIVE REMEDIES. ▇▇▇▇▇▇▇▇'s exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.
ARTICLE ELEVEN: PROTECTION OF LENDERS
Section 11.01. SUBORDINATION. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust or mortgage
encumbering the Property, any advances made on the security thereof and any
renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Tenant shall cooperate with Landlord and any
lender which is acquiring a security interest in the Property or the Lease.
Tenant shall execute such further documents and assurances as such lender may
require, provided that Tenant's obligations under this lease shall not be
increased in any material way (the performance of ministerial acts shall not
be deemed material),and Tenant shall not be deprived of its rights under this
Lease. ▇▇▇▇▇▇'s right to quiet possession of the Property during the Lease
Term shall not be disturbed if Tenant pays the rent and performs all of
Tenant's obligations under this lease and is not otherwise in default. If any
ground lessor, beneficiary or mortgagee elects to have this lease prior to
the lien of its ground lease, deed of trust or mortgage and gives written
notice thereof to Tenant, this Lease shall be deemed prior to such ground
lease, deed of trust or mortgage whether this Lease is dated prior or
subsequent to the date of said ground lease, deed of trust or mortgage or the
date of recording thereof.
Section 11.02. ATTORNMENT. if ▇▇▇▇▇▇▇▇'s interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee,
or purchaser at a foreclosure sale, Tenant shall attorn to the transferee of
or successor to ▇▇▇▇▇▇▇▇'s interest in the Property and recognize such
transferee or successor as Landlord under this ▇▇▇▇▇. Tenant waives the
protection of any statute or rule of law which gives or purports to give
Tenant any right to terminate this Lease or surrender possession of the
Property upon the transfer of Landlord's interest.
Section 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any such
attornment or subordination or agreement to do so. If Tenant fails to do so
within ten (10) days after written request, Tenant hereby makes, constitutes
and irrevocably appoints Landlord, or any transferee or successor of
Landlord, the attorney-in-fact of Tenant to execute and deliver any such
instrument or document.
Section 11.04. ESTOPPEL CERTIFICATES.
(a) Upon Landlord's written request, Tenant shall execute, acknowledge
and deliver to Landlord a written statement certifying: (i) that none of the
terms or provisions of this Lease have been changed (or if they have been
changed, stating how they have been changed); (ii) that this Lease has not
been cancelled or terminated; (iii) the last date of payment of the Base Rent
and other charges and the time period covered by such payment; (iv) that
Landlord is not in default under this Lease (or, if Landlord is claimed to be
in default, stating why); and (v) such other representations or information
with respect to Tenant or the lease as landlord may reasonably request or
which any prospective purchaser or encumbrancer of the Property may require.
Tenant shall deliver such statement to Landlord within ten (10) days after
▇▇▇▇▇▇▇▇'s request. Landlord may give any such statement by Tenant to any
prospective purchaser or encumbrancer of the Property. Such purchaser or
encumbrancer may rely conclusively upon such statement as true and correct.
(b) If Tenant does not deliver such statement to Landlord within such
ten (10) -day period, Landlord, and any prospective purchaser or
encumbrancer, may conclusively presume and rely upon the following facts: (i)
that the terms and provisions of this Lease have not been changed except as
otherwise represented by landlord; (ii) that this Lease has not been
cancelled or terminated except as otherwise represented by Landlord; (iii)
that not more than one month's Base Rent or other charges have been paid in
advance; and (iv) that landlord is not in default under the Lease. In such
event, Tenant shall be estopped from denying the truth of such facts.
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Section 11.05. TENANT'S FINANCIAL CONDITION. Within ten (10) days after
written request from Landlord, Tenant shall deliver to Landlord such financial
statements as Landlord reasonably requires to verify the net worth of Tenant
or any assignee, subtenant, or guarantor of Tenant. In addition, Tenant shall
deliver to any lender designated by Landlord any financial statements required
by such lender to facilitate the financing or refinancing of the Property.
Tenant represents and warrants to Landlord that each such financial statement
is a true and accurate statement as of the date of such statement. All
financial statements shall be confidential and shall be used only for the
purposes set forth in this Lease.
ARTICLE TWELVE: LEGAL COSTS
Section 12.01 LEGAL PROCEEDINGS. If Tenant or Landlord shall be in
breach or default under this Lease, such party (the "Defaulting Party") shall
reimburse the other party (the "Nondefaulting Party") upon demand for any
costs or expenses that the Nondefaulting Party incurs in connection with any
breach or default of the Defaulting Party under this Lease, whether or not
suit is commenced or judgment entered. Such costs shall include legal fees
and costs incurred for the negotiation of a settlement, enforcement of rights
or otherwise. Furthermore, if any action for breach of or to enforce the
provisions of this Lease is commenced, the court in such action shall award
to the party in whose favor a judgment is entered, a reasonable sum as
attorneys' fees and costs. The losing party in such action shall pay such
attorneys' fees and costs. Tenant shall also indemnify Landlord against and
hold Landlord harmless from all costs, expenses, demands and liability
Landlord may incur if Landlord becomes or is made a party to any claim or
action (a) instituted by Tenant against any third party, or by any third
party against Tenant, or by or against any person holding any interest under
or using the Property by license of or agreement with Tenant; (b) for
foreclosure of any lien for labor or material furnished to or for Tenant or
such other person; (c) otherwise arising out of or resulting from any act or
transaction of Tenant or such other person; or (d) necessary to protect
Landlord's interest under this Lease in a bankruptcy proceeding, or other
proceeding under Title 11 of the United States Code, as amended. Tenant shall
defend Landlord against any such claim or action at Tenant's expense with
counsel reasonably acceptable to Landlord or, at Landlord's election, Tenant
shall reimburse Landlord for any legal fees or costs Landlord incurs in any
such claim or action.
Section 12.02. LANDLORD'S CONSENT. Tenant shall pay Landlord's reasonable
attorneys' fees incurred in connection with ▇▇▇▇▇▇'s request for ▇▇▇▇▇▇▇▇'s
consent under Article Nine (Assignment and Subletting), or in connection with
any other act which ▇▇▇▇▇▇ proposes to do and which requires ▇▇▇▇▇▇▇▇'s
consent.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
Section 13.01. NON-DISCRIMINATION. Tenant promises, and it is a
condition to the continuance of this Lease, that there will be no
discrimination against, or segregation of, any person or group of persons on
the basis of race, color, sex, creed, national origin or ancestry in the
leasing, subleasing, transferring, occupancy, tenure or use of the Property
or any portion thereof.
Section 13.02. LANDLORD'S LIABILITY; CERTAIN DUTIES.
(a) As used in this Lease, the term "Landlord" means only the current
owner or owners of the fee title to the Property or Project or the leasehold
estate under a ground lease of the Property or Project at the time in
question. Each Landlord is obligated to perform the obligations of Landlord
under this Lease only during the time such Landlord owns such interest or
title. Any Landlord who transfers its title or interest is relieved of all
liability with respect to the obligations of Landlord under this Lease to be
performed on or after the date of transfer. However, each Landlord shall
deliver to its transferee all funds that Tenant previously paid if such funds
have not yet been applied under the terms of this Lease.
(b) Tenant shall give written notice of any failure by Landlord to
perform any of its obligations under this Lease to Landlord and to any ground
lessor, mortgagee or beneficiary under any deed of trust encumbering the
Property whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of Tenant's notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure,
Landlord shall not be in default if such cure is commenced within such thirty
(30) -day period and thereafter diligently pursued to completion.
(c) Notwithstanding any term or provision herein to the contrary, the
liability of Landlord for the performance of its duties and obligations under
this Lease is limited to Landlord's interest in the Property and the Project,
and neither the Landlord nor its partners, shareholders, officers or other
principals shall have any personal liability under this Lease.
Section 13.03. SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal
or unenforceable shall not cancel or invalidate the remainder of such
provision or this Lease, which shall remain in full force and effect.
Section 13.04. INTERPRETATION. The captions of the Articles or Sections
of this Lease are to assist the parties in reading this Lease and are not a
part of the terms or provisions of this Lease. Whenever required by the
context of this Lease, the singular shall include the plural and the plural
shall include the singular. The masculine, feminine and neuter genders shall
each include the other. In any provision relating to the conduct, acts or
omissions of Tenant, the term "Tenant" shall include Tenant's agents,
employees, contractors, invitees, successors or others using the Property
with ▇▇▇▇▇▇'s expressed or implied permission.
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Section 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This
Lease is the only agreement between the parties pertaining to the lease of
the Property and no other agreements are effective. All amendments to this
Lease shall be in writing and signed by all parties. Any other attempted
amendment shall be void.
Section 13.06. NOTICES. All notices required or permitted under this
Lease shall be in writing and shall be personally delivered or sent by
certified mail, return receipt requested, postage prepaid. Notices to Tenant
shall be delivered to the address specified in Section 1.03 above, except
that upon ▇▇▇▇▇▇'s taking possession of the Property, the Property shall be
Tenant's address for notice purposes. Notices to Landlord shall be delivered
to the address specified in Section 1.02 above. All notices shall be
effective upon delivery. Either party may change its notice address upon
written notice to the other party.
Section 13.07. WAIVERS. All waivers must be in writing and signed by the
waiving party. Landlord's failure to enforce any provision of this Lease or
its acceptance of rent shall not be a waiver and shall not prevent Landlord
from enforcing that provision or any other provision of this Lease in the
future. No statement on a payment check from Tenant or in a letter
accompanying a payment check shall be binding on Landlord. Landlord may, with
or without notice to Tenant, negotiate such check without being bound to the
conditions of such statement.
Section 13.08. NO RECORDATION. Tenant shall not record this Lease
without prior written consent from Landlord. However, either Landlord or
Tenant may require that a "Short Form" memorandum of this Lease executed by
both parties be recorded. The party requiring such recording shall pay all
transfer taxes and recording fees.
Section 13.09. BINDING EFFECT; CHOICE OF LAW. This Lease binds any party
who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to ▇▇▇▇▇▇'s successor
unless the rights or interests of ▇▇▇▇▇▇'s successor are acquired in
accordance with the terms of this Lease. The laws of the state in which the
Property is located shall govern this Lease.
Section 13.10. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant is
a corporation, each person signing this Lease on behalf of Tenant represents
and warrants that he has full authority to do so and that this Lease binds
the corporation. Within thirty (30) days after this Lease is signed, Tenant
shall deliver to Landlord a certified copy of a resolution of Tenant's Board
of Directors authorizing the execution of this Lease or other evidence of
such authority reasonably acceptable to Landlord. If Tenant is a partnership,
each person or entity signing this Lease for Tenant represents and warrants
that he or it is a general partner of the partnership, that he or it has full
authority to sign for the partnership and that this Lease binds the
partnership and all general partners of the partnership. Tenant shall give
written notice to Landlord of any general partner's withdrawal or addition.
Within thirty (30) after this Lease is signed, ▇▇▇▇▇▇ shall deliver to
Landlord a copy of ▇▇▇▇▇▇'s recorded statement of partnership or certificate
of limited partnership.
Section 13.11. JOINT AND SEVERAL LIABILITY. All parties signing this
Lease as Tenant shall be jointly and severally liable for all obligations of
Tenant.
Section 13.12. FORCE MAJEURE. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to
the duration of such events. Events beyond ▇▇▇▇▇▇▇▇'s control include, but
are not limited to, acts of God, war, civil commotion, labor disputes,
strikes, fire, flood or other casualty, shortages of labor or material,
government regulation or restriction and weather conditions.
Section 13.13. EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the
counterparts shall constitute a single binding instrument. ▇▇▇▇▇▇▇▇'s
delivery of this Lease to Tenant shall not be deemed to be an offer to lease
and shall not be binding upon either party until executed and delivered by
both parties.
Section 13.14. SURVIVAL. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease.
ARTICLE FOURTEEN: BROKERS
Section 14.01. BROKER'S FEE. When this Lease is signed by and delivered
to both Landlord and Tenant, Landlord shall pay a real estate commission to
Landlord's Broker named in Section 1.08 above, if any, as provided in the
written agreement between Landlord and ▇▇▇▇▇▇▇▇'s Broker, or the sum stated
in Section 1.09 above for services rendered to Landlord by Landlord's Broker
in this transaction. Landlord shall pay Landlord's Broker a commission if
Tenant exercises any option to extend the Lease Term or to buy the Property,
or any similar option or right which Landlord may grant to Tenant, or if
Landlord's Broker is the procuring cause of any other lease or sale entered
into between Landlord and Tenant covering the Property. Such commission shall
be the amount set forth in Landlord's Broker's commission schedule in effect
as of the execution of this Lease. If a Tenant's Broker is named in Section
1.08 above, ▇▇▇▇▇▇▇▇'s Broker shall pay an appropriate portion of its
commission to Tenant's Broker if so provided in any agreement between
▇▇▇▇▇▇▇▇'s Broker and ▇▇▇▇▇▇'s Broker. Nothing contained in this Lease shall
impose any obligation on Landlord to pay a commission or fee to any party
other than ▇▇▇▇▇▇▇▇'s Broker.
Section 14.02. PROTECTION OF BROKERS. If Landlord sells the Property, or
assigns Landlord's interest in this Lease, the buyer or assignee shall, by
accepting such conveyance of the Property or assignment of the Lease, be
conclusively deemed to have agreed to make all payments to Landlord's Broker
thereafter required of Landlord under this Article Fourteen. ▇▇▇▇▇▇▇▇'s Broker
shall have the right to bring a legal action to enforce or declare rights
under this provision. The prevailing party in such action shall be entitled
to reasonable attorneys' fees to be paid by the losing party. Such attorneys'
fees shall be fixed by the court in such action. This Paragraph is included
in this Lease for the benefit of Landlord's Broker.
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Section 14.03. BROKER'S DISCLOSURE OF AGENCY. ▇▇▇▇▇▇▇▇'s Broker hereby
discloses to Landlord and Tenant and Landlord and Tenant hereby consent to
▇▇▇▇▇▇▇▇'s Broker acting in this transaction as the agent of (check one):
/x/ Landlord exclusively; or
/ / both Landlord and Tenant.
Section 14.04. NO OTHER BROKERS. Tenant represents and warrants to
Landlord that the brokers named in Section 1.08 above are the only agents,
brokers, finders or other parties with whom ▇▇▇▇▇▇ has dealt who are or may
be entitled to any commission or fee with respect to this Lease or the
Property.
ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED
HERETO OR IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISIONS ARE INSERTED,
PLEASE DRAW A LINE THROUGH THE SPACE BELOW.
Landlord and ▇▇▇▇▇▇ have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialled all Riders
which are attached to or incorporated by reference in this Lease.
"LANDLORD"
Signed on Aug 15 , 19 96 /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------- ---- ----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
at . /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- ----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
By:________________________________
Its:_______________________________
By:________________________________
Its:_______________________________
"TENANT"
Signed on August 7 , 19 96 Arterial Vascular Engineering, Inc.
------------------------ ---- -----------------------------------
11:00 AM /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
at -----------------------------------. -----------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Its: President, CEO
-------------------------------
By:________________________________
Its:_______________________________
IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH A
PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR OTHER PERSON
WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING THE
POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS.
THIS PRINTED FORM LEASE HAS BEEN DRAFTED BY LEGAL COUNSEL AT THE
DIRECTION OF THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND
OFFICE REALTORS,-REGISTERED TRADEMARK-INC. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF
INDUSTRIAL AND OFFICE REALTORS,-REGISTERED TRADEMARK-INC., ITS LEGAL COUNSEL,
THE REAL ESTATE BROKERS NAMED HEREIN, OR THEIR EMPLOYEES OR AGENTS, AS TO THE
LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS LEASE OR OF THIS
TRANSACTION. LANDLORD AND TENANT SHOULD RETAIN LEGAL COUNSEL TO ADVISE THEM
ON SUCH MATTERS AND SHOULD RELY UPON THE ADVICE OF SUCH LEGAL COUNSEL.
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FIRST
AMENDMENT TO LEASE
This First Amendment ("Amendment") to the Industrial Real Estate Lease
is entered into this 5th day of August 1996, by and between ▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (herein called "Landlord") and Arterial Vascular Engineering
Inc., a Delaware corporation (herein called "Tenant") covering approximately
26,129 square feet, more or less, ("Premises") of Building B location on lot
2 as numbered on the map of Airport Oaks Parcel Map #86-386 filed in the
office of the county recorder on 1/26/87 book 394 of maps pages 11 & 12,
Sonoma County Records, as described on Exhibit A and made a part hereof by
reference, by and between Landlord and ▇▇▇▇▇▇. All terms used herein with
their initial letter capitalized shall have the same meaning as ascribed to
such terms in the Lease.
WITNESSETH
NOW THEREFORE, Landlord and Tenant hereby agree as follows:
1. RIGHT OF FIRST REFUSAL - During the term of the Lease, and providing
Tenant is not in default, ▇▇▇▇▇▇▇▇ agrees that prior to leasing the
premises currently occupied by ▇▇▇▇▇▇ (the "Premises") to a third party,
Landlord shall submit to Tenant a copy of the proposed lease terms which
have submitted by the third party and which ▇▇▇▇▇▇▇▇ is prepared to enter
into with the third party (the "Offered Lease"). On or before the fifth
(5th) day after the date of such submission, Tenant shall have the right
(the "First Right of Refusal") to send Landlord a notice stating that
Tenant elects to rent the Premises upon the identical terms and
conditions set forth in the Offered Lease (the "Offered Lease Terms").
Such notice must be postmarked within the fifth (5th) day period and sent
by registered or certified mail, return receipt requested.
Tenant shall have only a two (2) day period to respond to such submission
if less than 120 days remain on term of lease.
If Tenant duly and timely exercises the First Right of Refusal, Landlord
and Tenant shall promptly enter into a lease for the Premises (the "New
Lease") under the terms of the Offered Lease. If for any reason Tenant
fails to duly and timely exercise the First Right of Refusal, or if
Tenant properly exercises such right but thereafter for any reason (other
than the fault of Landlord) does not timely enter into the New Lease,
Landlord shall be free to lease the Premises to another tenant on the
Offered Lease Terms and Right of First Refusal and Landlord's obligation
under this paragraph shall be null and void and without further force
and effect.
2. LANDLORD'S RIGHT TO SHOW: During the term of the Lease, Landlord shall
have the right to show the Premises to prospective tenants by giving
Tenant reasonable notice during normal business hours.
All other terms and conditions of the Lease shall remain the same.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
specified adjacent to their signatures below and have initialed all Exhibits
attached hereto or incorporated by reference.
"LANDLORD"
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ Date: 8-15-96
--------------------------------- -------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Date: 8-16-96
--------------------------------- -------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
"TENANT"
Arterial Vascular Engineering, Inc.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Date: 8-7-96
--------------------------------- -------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President & CEO
EXHIBIT - A
SITE PLAN & PARKING PLAN
5441-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
SANTA ROSA, CA
[ M A P ]
Initials /s/ BJ
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/s/ DW /s/ RRW
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EXHIBIT - B
-----------
NOTICE TO OWNERS, BUYERS AND TENANTS REGARDING HAZARDOUS
WASTES OR SUBSTANCES AND UNDERGROUND STORAGE TANKS
Comprehensive federal and state laws and regulations have been enacted in the
last few years in an effort to develop controls over the use, storage,
handling, cleanup, removal and disposal of hazardous wastes or substances.
Some of these laws and regulations, such as, for example, the so-called
"Super Fund Act", provide for broad liability schemes wherein an owner,
tenant or other uses of the property may be liable for cleanup costs and
damages regardless of fault. Other laws and regulations set standards for the
handling of asbestos or establish requirements for the use, modification,
abandonment, or closing or underground storage tanks.
It is not practical or possible to list all such laws and regulations in this
Notice. Therefore, owners, buyers and tenants are urged to consult legal
counsel to determine their respective rights and liabilities with respect to
the issues described in this Notice as well as other aspects of the proposed
transaction. If various materials that have been or may be in the future
determined to be toxic, hazardous or undesirable, or are going to be used,
stored, handled or disposed of on the property, or if the property has or may
have underground storage tanks for storage of such hazardous materials, or
that such materials may be in the equipment, improvements or soil, it is
essential that legal and technical advice be obtained to determine, among
other things, what permits and approvals have been or may be required, if
any, the estimated costs and expenses associated with the use, storage,
handling, cleanup, removal or disposal of the hazardous wastes or substances
and what contractual provisions and protections are necessary or desirable.
It may also be important to obtain expert assistance for site investigations
and building inspections. The past uses of the property may provide valuable
information as to the likelihood of hazardous wastes or substances, or
underground storage tanks being on the property.
The term "hazardous wastes or substances" is used in this Notice in this very
broadest sense and includes, but is not limited to, all those listed under
Proposition 65, petroleum base products, paint and solvents, lead, cyanide,
DDT, printing inks, acids, pesticides, ammonium compounds, asbestos, PCBs and
other chemical products. Hazardous wastes or substances and underground
storage tanks may be present on all types of real property. This Notice is,
therefore, meant to apply to any transaction involving any type of real
property whether improved or unimproved.
AIRPORT PROPERTIES, or its salespeople, will disclose any knowledge it
actually possesses with respect to the existence of hazardous wastes or
substances, or underground storage tanks on the property, AIRPORT PROPERTIES
have not made investigations or obtain reports regarding the subject matter
of this Notice, except as may be described in a separate written document,
studies or investigation by experts. Therefore, unless there is an
additional document or studies attached to this notice, lease or contract,
this will serve as notification that AIRPORT PROPERTIES or its salespeople
make no representation regarding the existence or non-existence of hazardous
wastes or substances, or underground storage tanks on the property. You
should contact a professional, such as a civil engineer, geologist,
industrial hygienist or other persons with experience in these matters to
advise you concerning the property.
AGREED: /s/ BJ 8-7-96
----------------------------------- ----------
Tenant Date
AGREED: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ 8-15-96
----------------------------------- ----------
Landlord Date
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 6-16-96
----------------------------------- ----------
Date
Initials /s/ BJ
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/s/ DW /s/ RRW
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EXHIBIT C
---------
AGENT REPRESENTING BOTH LANDLORD AND TENANT
A real estate agent, either acting directly or through one or more associate
licensees, can legally be the agent of both the Landlord and the Tenant in a
transaction, but only with the knowledge and consent of both the Landlord and
the Tenant.
In a dual agency situation, the agent has the following affirmative
obligations to both the Landlord and the Tenant.
(a) A fiduciary duty of utmost care, integrity, honest and loyalty in the
dealings with either Landlord or Tenant.
(b) Other duties to the Landlord and the Tenant as states above in their
respective sections.
In representing both Landlord and ▇▇▇▇▇▇, the agent may not, without the
express permission of the respective party, disclose to the other party that
the Landlord will accept a rent less than the listed rent or that the Tenant
will pay a rent greater than the rent offered.
The above duties of the agent in a real estate transaction do not relieve a
Landlord or Tenant from the responsibility to protect their own interests.
You should carefully read all agreements to assure that they adequately
express your understanding of the transaction. A real estate agent is a
person qualified to advise about real estate. If legal or tax advice is
desired, consult a competent professional.
You should read its contents each time it is presented to you, considering
the relationship between you and the real estate agent in your specific
transaction.
I/We acknowledge receipt of a copy of this disclosure.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ Date: 8/15/96
----------------------- ---------
(Landlord) ▇▇▇▇▇ ▇▇▇▇▇▇
Date:
----------------------- ---------
(Tenant) Arterial Vascular Engineering
DECLARATION REGARDING
REAL ESTATE AGENCY RELATIONSHIP
Airport Properties
-------------------------- is the agent of (check one).
(Name of Listing Agent)
X
------ The Landlord exclusively; or
------ Both the Tenant and Landlord
CONFIRMED AND ACKNOWLEDGED:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ 8/15/96
----------------------------- -------------
(Landlord) ▇▇▇▇▇ ▇▇▇▇▇▇ (Date)
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 8-16-96
----------------------------- -------------
(Landlord) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (Date)
Airport Properties By: Date:
---------------------------- ----------- ---------
(Agent)
--------------------------------------------------------------------
Airport Properties
------------------------------- is the agent of (check one):
(Name of Tenant agent if not
the same as listing agent)
----- The Tenant exclusively; or
X
----- The Landlord exclusively; or
----- Both the Tenant and Landlord
CONFIRMED AND ACKNOWLEDGED:
Arterial Vascular Engineering
----------------------------------------- -----------------
(Tenant) (Date)
/s/ BJ 8-7-96
----------------------------------------- -----------------
(Tenant) (Date)
Agent ----------------------------------- By: --------- Date: --------
Initials /s/ BJ
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/s/ DW /s/ RRW
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