EXHIBIT 10.3
STANDARD COMMERCIAL LEASE
ARTICLE 1.00 BASIC LEASE TERMS
1.01 PARTIES. This lease agreement ("Lease") is entered into by and between the
following Lessor and Lessee:
▇▇▇▇▇▇▇▇ PLACE ONE JOINT VENTURE ("Lessor")
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DNA ENTERPRISES, INC., ("Lessee")
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1.02 LEASED PREMISES. In consideration of the rents, terms, provisions and
covenants of this Lease, Lessor hereby leases, lets and demises to Lessee the
following described premises ("leased premises"):
20,679 (Approximate square feet)
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▇▇▇▇▇▇▇▇ PLACE (Name of building or project)
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇▇▇▇ address/suite number)
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (City, State, and Zip Code)
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1.03 TERM. Subject to and upon the conditions set forth herein, the term of this
Lease shall commence on (FEBRUARY 1, 1997 the "commencement date") (the
"completion date", which Lessor shall use its best efforts to establish as
FEBRUARY 1, 1997), and shall terminate 84 months thereafter.
1.04 BASE RENT AND SECURITY DEPOSIT. Base rent is $16,371.00 per month.
Security deposit is $16,371.00.
1.05 ADDRESSES.
LESSOR'S ADDRESS: LESSEE'S ADDRESS
▇▇▇▇▇▇▇▇ PLACE ONE JOINT VENTURE DNA ENTERPRISES, INC.
▇.▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.06 PERMITTED USE. GENERAL OFFICE AND STORAGE FOR TELECOMMUNICATIONS; HARDWARE
AND SOFTWARE TECHNOLOGY, SYSTEM ARCHITECTURE, AND SIGNAL PROCESSING AND ANY
OTHER GENERAL OFFICE AND STORAGE USE PERMISSIBLE BY LAW.
ARTICLE 2.00 RENT
2.01 BASE RENT. Lessee agrees to pay monthly as base rent during the term of
this Lease the sum of money set forth in section 1.04 of this Lease which amount
shall be payable to Lessor at the address shown above or to such other party or
address as Lessor may from time to time designate. One monthly installment of
rent shall be due and payable on the date of execution of this Lease by Lessee
for the first month's rent and a like monthly installment shall be due and
payable on or before the first day of each calendar month succeeding the
commencement date or completion date during the term of this Lease; provided, if
the commencement date or the completion date should be a date other than the
first day of a calendar month, the monthly rental set forth above shall be
prorated to the end of that calendar month, and all succeeding installments of
rent shall be payable on or before the first day of each succeeding calendar
month during the term of this Lease. Lessee shall pay, as additional rent, all
other sums due under this Lease.
2.02 OPERATING EXPENSES. In the event Lessor's operating expenses for the
building and/or project of which the leased premises are a part shall, in any
calendar year during the term of this Lease, exceed the sum of 1997 BASE YEAR
per square foot, Lessee agrees to pay as additional rent Lessee's pro rata
share of such excess operating expenses. However, notwithstanding any provision
to the contrary in this Lease, Lessee's prorata share of such operating expenses
other than taxes, insurance and utilities shall not increase by more than seven
percent (7%) per year over the base year during the term of the Lease or any
renewal thereof. Lessor may invoice Lessee monthly for Lessee's pro rata share
of the estimated operating expenses for each calendar year, which amount shall
be adjusted each year based upon anticipated
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operating expense. Within three months following the close of each calendar
year, Lessor shall provide Lessee an accounting showing in reasonable detail all
computations of additional rent due under this section. In the event the
accounting show that the total of the monthly payments made by Lessee exceeds
the amount of additional rent due by Lessee under this section, the accounting
shall be accompanied by a refund. In the event the accounting shows that the
total of the monthly payments made by Lessee is less than the amount of
additional rent due by Lessee under this section, the account shall be
accompanied by an invoice for the additional rent. Notwithstanding any other
provision in this Lease, during the year in which the Lease terminates, Lessor,
prior to the termination date, shall have the option to invoice Lessee for
Lessee's pro rata share of the excess operating expenses based upon the previous
year's operating expenses. If this Lease shall terminate on a day other than the
last day of a calendar year, the amount of any additional rent payable by Lessee
applicable to the year in which such termination shall occur shall be prorated
on the ratio that the number of days from the commencement of the calendar year
to and including their termination date bears to 365. Lessee shall have the
right at its own expense and during normal business hours, to audit and
photocopy Lessor's books relevant to the additional rent payable under this
section. Lessee agrees to pay any additional rent due under this section within
ten days following receipt of the invoice or accounting showing additional rent
due.
2.03 DEFINITION OF OPERATING EXPENSES. The term "operating expenses" includes
all expenses incurred by Lessor with respect to the maintenance and operation of
the building of which the leased premises are a part, including, but not limited
to, the following: maintenance, repair and replacement costs; security;
management fees, wages and benefits payable to employees of Lessor whose duties
are directly connected with the operation and maintenance of the building; all
services, utilities, supplies, repairs, replacements, or other expenses for
maintaining and operating the common parking and plaza areas; the cost,
including interest, amortized over its useful life, of any capital improvement
made to the building by Lessor after the date of this Lease which is required
under any governmental law or regulation that was not applicable to the building
at the time it was constructed; the cost, including interest, amortized over its
useful life, of installation of any device or other equipment which improves the
operating efficiency of any system within the leased premises and thereby
reduces operating expenses; all other expenses which would generally be regarded
as operating and maintenance expenses which would reasonably be amortized over a
period not to exceed five years; all real property taxes and installments of
special assessments, including dues and assessments by means of deed
restrictions and/or owners' associations which accrue against the building of
which the leased premises are a part during the term of this Lease; and all
insurance premiums Lessor is required to pay or deems necessary to pay,
including public liability insurance, with respect to the building. The term
operating expenses does not include the following: repairs, restoration or other
work occasioned by fire, wind, the elements of other casualty; income and
franchise taxes of Lessor; expenses incurred in leasing to or procuring of
lessees, leasing commissions, advertising expenses and expenses for the
renovating of space for new, leasing commissions, advertising expenses and
expenses for the renovating of space for new lessees; interest or principal
payments on any mortgage or other indebtedness of Lessor; compensation paid to
any employee or Lessor above the grade of property manager; any depreciation
allowance or expense; or operating expenses assumed hereunder by Lessee.
2.04 LATE PAYMENT CHARGE. Other remedies for nonpayment of rent notwithstanding,
if the monthly rental payment is not received by Lessor on or before the tenth
day of the month for which the rent is due, or if any other payment due Lessor
by Lessee is not received by Lessor on or before the tenth day of the month next
following the month in which Lessee was invoiced, a late payment charge of ten
percent of such past due amount shall become due and payable in addition to such
amounts owed under this Lease.
2.05 INCREASE IN INSURANCE PREMIUMS. If an increase in any insurance premiums
paid by Lessor for the building is caused by Lessee's use of the leased premises
in a manner other than as set forth in section 1.06, or if Lessee vacates the
leased premises and causes an increase in such premiums, then Lessee shall pay
as additional rent the amount of such increase to Lessor.
2.06 SECURITY DEPOSIT. The security deposit set forth above shall be held by
Lessor for the performance of Lessee's covenants an obligations under this
Lease, it being expressly understood that the deposit shall not be considered an
advance payment of rental or a measure of Lessor's damage in case of default by
Lessee. Upon the occurrence of any event of default by Lessee or breach by
Lessee of Lessee's covenants under this Lease, Lessor may, from time to time,
without prejudice to any other remedy, use the security deposit to the extent
necessary to make good any arrears of rent, or to repair any damage or injury,
or pay any expense or liability incurred by Lessor as a result of the event of
default or breach of covenant, and any remaining balance of the security deposit
shall be returned by Lessor to Lessee upon termination of this Lease. If any
portion of the security deposit is so used or applied, Lessee shall upon ten
days written notice from Lessor, deposit with Lessor by cash or cashier's check
an amount sufficient to restore the security deposit separate from its other
accounts and no trust relationship is created with respect to the security
deposit. No interest shall be paid on the security deposit. Provided Lessee is
not then in default, the security deposit held by Lessor, if any, will be
applied to the thirty-sixth (36th) month of the lease term.
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2.07 HOLDING OVER. Lessee shall vacate the leased premises upon the expiration
of the Lease Term or earlier termination of this Lease. Lessee shall reimburse
Lessor for and indemnify Lessor against all reasonable damages incurred by
Lessor as a result of any delay by Lessee in vacating the leased premises. If
Lessee does not vacate the leased premises upon the expiration of the Lease Term
or earlier termination of the Lease, Lessee's occupancy of the leased premises
shall be a "month to month" tenancy, subject to all the terms of Lease
applicable to a month to month tenancy, except that Lessee shall pay Lessor as a
Base Rent for the period of such holdover an amount equal to one an one half
times; the Base Rent which would have been payable by Lessee had the holdover
period been a part of the original term of this Lease. No holding over by
Lessee, whether with, or without the consent of Lessor shall operate to extend
the term of this Lease.
2.08 GOOD FUNDS PAYMENTS. If, for any reason whatsoever, any two or more
payments by check from Lessee to Lessor for rent are dishonored and returned
unpaid, thereafter, Lessor may, at Lessor's sole option, upon written notice to
Lessee, require that all future payments of rent for the remaining term of the
Lease shall be made by cash, cashier's check, or money order and that the
delivery of Lessee's personal or corporate check will no longer constitute
payment of rent as provided in this Lease. Any acceptance by Lessor of a payment
for rent by Lessee's personal check thereafter shall not be construed as a
waiver of Lessor's right to insist upon payment by good funds as set forth in
this section 2.08. Furthermore, it three consecutive monthly rental payments or
any five monthly rental payments during the Lease Term (or any renewal or
extension thereof) are not received By Lessor on or before the tenth day of the
month for which such rent was due, the Base Rent hereunder shall automatically
become due and payable by Lessee in advance in quarterly installments equal to
three months' Base Rent each. The first of such quarterly Base Rent payments
shall be due an payable on the first day of the next succeeding calendar month
and on the first day of every third calendar month thereafter. This remedy shall
be cumulative of any other remedies of Lessor under this Lease for non payment
of Rent.
ARTICLE 3.00 OCCUPANCY AND USE
3.01 USE. Lessee warrants and represent to Lessor that the leased premises shall
be used and occupied only for the purpose as set forth in section 1.06. Lessee
shall occupy the leased premises, conduct its business and control its agents,
employees, invitees and visitors in such a manner as is lawful, reputable and
will not create a nuisance. Lessee shall not permit any operation which emits
any odor or matter which intrudes into other portions of the building, use any
apparatus or machine which makes undue noise or causes vibration in any portion
of the building or otherwise interfere with, annoy or disturb any other lessee
in its normal business operations or Lessor in its management of the building.
Lessee shall neither permit any waste on leased premises nor allow the leased
premises to be used in any way which would, in the reasonable opinion of Lessor,
be extra hazardous on account of fire or which would in any way increase or
render void the fire insurance on the building. If at any time during the term
of this Lease the State Board of Insurance or other insurance authority
disallows any of Lessor's sprinkler credits or imposes an additional penalty or
surcharge in Lessor's insurance premiums because of Lessee's original or
subsequent placement or use of storage racks or bins, method of storage or
nature of Lessee's inventory or any other act of Lessee, Lessee agrees to pay as
additional rent the increase (between fire walls) in Lessor's insurance
premiums.
3.02 SIGNS. (A) Lessee shall not, without Lessor's prior written consent (a)
make any changes to or paint the store front; or (b) install any exterior
lighting, decorations or paintings; or (c) erect or install any signs, window or
door lettering, placards, decorations or advertising media of any type which can
be viewed from the exterior of the Demised Premises. All signs, decorations and
advertising media shall conform in all material respects to the sign criteria
established by Lessor for the Building from time to time in the exercise of its
sole discretion, and shall be subject to the prior written approval of Lessor as
to construction, method of attachment, size, shape, height, color and general
appearance, which approval shall not be unreasonably withheld or delayed. All
signs shall be kept in good condition at all times. Lessor reserves the right to
designate a uniform type of sign for the Building to be installed and paid for
by Lessee. Notwithstanding this provision or any provision to the contrary
contained in this paragraph or elsewhere in this Lease, (i) all signs installed
by Lessee may be the maximum size permitted by local law or ordinance, (ii) any
changes to the sign initially approved by Lessor and that Lessor may require
thereafter shall be at Lessor's expense and shall not require that Lessee sign
be smaller than the maximum size permitted by local law or ordinance.
(B) Lessee agrees to have erected and/or installed within sixty (60)
days of the Commencement Date of this Lease all signs in accordance with
Lessor's sign criteria. The Lessee, upon vacation of the Demised Premises, or
the removal or alteration of its sign for any reason, shall be responsible for
the repair, painting, and/or replacement of the building fascia surface where
signs are attached.
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3.03 COMPLIANCE WITH LAWS, RULES, AND REGULATIONS. Lessee, at Lessee's sole cost
and expense, shall comply with all laws, ordinances, orders, rules, and
regulations of state, federal, municipal or other agencies or bodies having
jurisdiction over use, condition and occupancy of the leased premises.
Notwithstanding this provision or any provision to the contrary contained in
this paragraph or elsewhere in this Lease, Lessee shall not be responsible for
modifying the exterior of the premises to comply with the American with
Disabilities Act of 1990 ("ADA"). Lessee will comply with the rules and
regulations of the building adopted by Lessor which are set forth on a schedule
attached to this Lease, Lessor shall have the right at all times to change and
amend the rules and regulations in any reasonable manner as may be deemed
advisable for the safety, care, cleanliness, preservation of good order and
operation or use of the building or the leased premises but not in contravention
of Lessor's agreements under this Lease. All changes and amendments to the rules
and regulations of the building will be sent by Lessor to Lessee in writing and
shall thereafter be carried out and observed by Lessee.
3.04 WARRANTY OF PEACEFUL POSSESSION. Lessor warrants that it has the right and
authority to execute this Lease, and Lessee, upon payment of the required rents
and subject to the terms, conditions, covenants and agreements contained in this
Lease, shall have peaceful possession of the leased premises during the full
term of this Lease as well as any extension or renewal thereof. Lessor shall not
be responsible for the acts or omissions of any other lessee that may interfere
with Lessee's use and enjoyment of the leased premises.
3.05 INSPECTION. Lessor or its authorized agents shall with prior notice, except
in the case of an emergency, have the right to enter the leased premises to
inspect the same while accompanied by a representative of the Lessee, to supply
janitorial service or any other service to be provided by Lessor, to show the
leased premises to prospective purchasers or lessees during the last one hundred
eighty (180) days of the term of the Lease or any renewal term, and to alter,
improve or repair the leased premises or any other portion of the building.
Lessee hereby waives any claim for damages for injury or inconvenience to or
interference with Lessee's business, any loss of occupancy or use of the leased
premises, and any other loss occasioned thereby. Lessor shall at all times have
and retain a key with which to unlock all of the doors in, upon and about the
leased premises. Leases shall not change Lessor's lock system without providing
to Lessor a key or in any other manner prohibit Lessor from entering the leased
premises. Lessor shall have the right to use any and all means which Lessor may
deem proper to open any door in an emergency without liability therefor.
3.06 EXEMPTIONS FROM LIABILITY. Except for Lessor's gross negligence or wilful
misconduct, Lessor 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 Lessee, Lessee's employees, invitees, customers or any other person
in or about the leased premises, whether such damage or injury is caused by
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 on or about the leased premises or upon other portions of
any building of which the leased premises is a part, or from other sources or
places; or (d) any act or omission of any other tenant of any building of which
the leased premises is a part. Lessor 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 Lessee. Notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to Lessee's
business or for any loss of income or profit therefrom.
ARTICLES 4.00 UTILITIES AND SERVICE
4.01 BUILDING SERVICES. Lessor shall provide the normal utility service
connections to the building. Lessee shall pay the cost of all utility services,
including, but not limited to, initial connection charges, all charges for gas,
electricity, water, sanitary and storm sewer service, and for all electric
lights. However, in a multi-occupancy building, Lessor may provide water to the
leased premises, in which case Lessee agrees to pay to Lessor its pro rate share
of the actual cost of such water. Lessee shall pay all costs caused by Lessee
introducing excessive pollutants or solids other than ordinary human waste into
the sanitary sewer system, including permits, fees and charges levied by any
governmental subdivision for any such pollutants or solids. Lessee shall be
responsible for the installation and maintenance of any dilution tanks, holding
tanks, settling tanks, sewer sampling devices, sand traps, grease traps or
similar devices as may be required by any governmental subdivision for Lessee's
use of the sanitary sewer system. If the leased premises are in a
multi-occupancy building, Lessee shall pay all surcharges levied due to
Lessee's use of sanitary sewer or waste removal services insofar as such
surcharges affect Lessor or other lessees in the building. Lessor shall not be
required to pay for any utility services, supplies or upkeep in connection with
the leased premises.
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4.02 THEFT OR BURGLARY. Except for Lessor's gross negligence or wilful
misconduct, Lessor shall not be liable to Lessee for losses to Lessee's property
or personal injury caused by criminal acts or entry by unauthorized persons into
the leased premises or the building.
ARTICLE 5.00 REPAIRS AND MAINTENANCE
5.01 PROPERTY CONDITION. Except as otherwise provided in this Lease, Lessee
acknowledges that it has carefully inspected the Premises and that each portion
thereof is in good condition and Lessee hereby accepts the premises in their
condition existing as of the Lease commencement date or the date that Lessee
takes possession of the Premises, whichever is earlier, subject to all
applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and any covenants or
restrictions of record and accepts this Lease subject thereto and to all matters
disclosed thereby and by any exhibits attached hereto. Lessee acknowledges that
neither Lessor nor Lessor's agent has made any representation or warranty as to
the present or future suitability of the Premises for the conduct of Lessee's
business.
5.02 LESSOR REPAIRS. Lessor shall not be required to make any improvements,
replacements or repairs of any kind or character to the leased premises or the
project during the term of this Lease except as are set forth in this section or
elsewhere in this Lease. Lessor shall maintain only the roof, foundation,
parking and common areas, and the structural soundness of the exterior walls
(excluding windows, windowglass, plate glass and doors). Lessor's costs of
maintaining the items set forth in this section are subject to the additional
rent provisions in section 2.02. Lessor shall not be liable to Lessee, except as
expressly provided in this Lease, for any damage or inconvenience, and Lessee
shall not be entitled to any abatement or reduction of rent by reason of any
repairs, alterations or additions made by Lessor under this Lease.
5.03 LESSEE REPAIRS. Except for the Hvac systems, which are the responsibility
of Lessor to the extent set out in Paragraph 17.07 hereof, Lessee shall, at its
sole cost and expense, maintain, repair and replace all other parts of the
leased premises in good repair and condition, including, but not limited to,
heating, ventilating and air conditioning systems, down spouts, fire sprinkler
system, dock bumpers, lawn maintenance, pest control and extermination, trash
pick-up and removal, and painting the building and exterior doors. Lessee shall
repair and pay for any damage caused by any act or omission of Lessee or
Lessee's agents, employees, invitees, licensees or visitors. If the leased
premises are in a multi-occupancy building or project, Lessor reserves the right
to perform, on behalf of Lessee, lawn maintenance, painting, trash pick-up and
removal; Lessee agrees to pay Lessor, as additional rent, Lessee's pro rata
share of the actual cost of such services within ten days from receipt of
Lessor's invoice, or Lessor may by monthly invoice direct Lessee to prepay the
estimated costs for the current calendar year, and such amount shall be adjusted
annually. If the leased premises are served by rail, Lessee agrees, if requested
by the railroad, to enter into a joint maintenance agreement with the railroad
and bear its pro rata share of the cost of maintaining the railroad spur. If
Lessee fails to make the repairs or replacements promptly as required herein,
Lessor may, at its option, make the repairs and replacements and the actual cost
of such repairs and replacements shall be charged to Lessee as additional rent
and shall become due and payable by Lessee within ten days from receipt of
Lessor's invoice. Costs incurred under this section are the total responsibility
of Lessee and do not constitute operating expenses under section 2.02.
5.04 REQUEST FOR REPAIRS. All requests for repairs or maintenance that are the
responsibility of Lessor pursuant to any provision to this Lease must be made in
writing to Lessor at the address in section 1.05. Lessor shall undertake such
repairs or maintenance promptly, diligently, and in good faith. If Lessor falls
to complete such repairs or maintenance within a reasonable time for doing so,
Lessee may as its sole option make such repairs and be entitled to reimbursement
for the actual reasonable cost thereof within ten (10) days of receipt of the
invoice and all lien waivers.
5.05 LESSEE DAMAGES. Lessee shall not allow any waste to be committed on any
portion of the leased premises or building, and at the termination of this
Lease, by lapse of time or otherwise, Lessee shall deliver the leased premises
to Lessor in as good condition as existed at the commencement date of this
Lease, ordinary wear and tear excepted. The reasonable cost and expense of any
repairs necessary to restore the condition of the leased premises (ordinary wear
and tear excepted) shall be borne by Lessee.
5.06. MAINTENANCE CONTRACT. Lessee shall, at its sole cost and expense, during
the term of this Lease maintain a regularly scheduled preventative
maintenance/service contract with a maintenance contractor for the servicing of
all hot water, heating and air conditioning systems and equipment within the
leased premises. The maintenance contractor and contract must be approved by
Lessor, which approval shall not be
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unreasonably withheld and must include monthly servicing, replacement of
filters, replacement or adjustment of drive belts, periodic lubrication and oil
change and any other services suggested by the equipment manufacturer.
ARTICLE 6.00 ALTERATIONS AND IMPROVEMENTS
6.01 LESSOR IMPROVEMENTS. INTENTIONALLY DELETED
6.02 LESSEE IMPROVEMENTS. Lessee shall not make or allow to be made any
substantial alterations or physical additions in or to the leased premises and,
effecting the structure or exterior appearance of the building without first
obtaining the written consent of Lessor, which consent shall not be
unreasonably withheld or delayed. Any alterations, physical additions or
improvements of the leased premises made by Lessee shall at once become the
property of Lessor and shall be surrendered to Lessor upon the termination of
this Lease; provided, however, Lessor, at its option, may require Lessee to
remove any physical additions and/or repair any alterations in order to restore
the leased premises to the condition existing at the time Lessee took possession
other than the initial alterations agreed to by Lessor, all costs of removal
and/or alterations to be borne by Lessee. This clause shall not apply to
moveable equipment or furniture owned by Lessee, which may be removed by Lessee
at the end of the term of this Lease if Lessee is not then in default and if
such equipment and furniture are not then subject to any other rights, liens,
and interest of Lessor.
6.03 MECHANICS LIEN. Lessee will not permit any mechanic's or materialman's
lien(s) or other lien to be placed upon the leased premises or the building
without bonding around name during the pendency of any good faith attempt by
Lessee to contest the lien's validity and nothing in this Lease shall be deemed
or construed in any way as constituting the consent or request of Lessor,
express or implied, by inference or otherwise, to any person for the performance
of any labor or the furnishing of any materials to the leased premises, or any
part thereof, nor as giving Lessee any right, power, or authority to contract
for or permit the rendering of any services or the furnishing of any materials
that would give rise to any mechanic's, materialman's or other lien against the
leased premises. In the event any such lien in attached to the leased premises,
then, in addition to any other right or remedy of Lessor, Lessor may, in the
event that Lessee does not either bond around much lien or remove it within
sixty (60) days after its date of filing, but shall not be obligated to, obtain
the release of or otherwise discharge the same. Any amount paid by Lessor for
any of the aforesaid purposes shall be paid by Lessee to Lessor on demand as
additional rent.
ARTICLE 7.00 CASUALTY MD INSURANCE
7.01 SUBSTANTIAL DESTRUCTION. If the leased premises should be totally destroyed
by fire or other casualty, or if the leased premises should be damaged so that
rebuilding cannot reasonably be completed within one hundred twenty days after
the date of written notification by Lessee to Lessor of the destruction, this
Lease shall terminate and the rent shall be abated for the unexpired portion of
the Lease, effective as of the date of the casualty.
7.02 PARTIAL DESTRUCTION. If the leased premises should be partially damaged by
fire or other casualty, and rebuilding or repairs can reasonably be completed
within one hundred twenty days from the date of written notification by Lessee
to Lessor of the destruction, this Lease shall not terminate, and Lessor shall
at its sole risk and expense proceed with reasonable diligence to rebuild or
repair the building or other improvements to substantially the same condition in
which they existed prior to the damage. If the leased premises are to be rebuild
or repaired and are untenantable in whole or in part following the damage, and
the damage or destruction was not caused or contributed to by act or negligence
of Lessee, its agents, employees, invitees, the rent payable under this Lease
during the period for which the leased premises are untenantable shall be
adjusted to such an extent as may be fair and reasonable under the
circumstances. In the event that Lessor fails to complete the necessary repairs
or rebuilding within one hundred twenty days from the date of written
notification by Lessee to Lessor of the destruction, Lessee may at its option
terminate this Lease by delivering written notice of termination to Lessor,
whereupon all rights and obligations under this Lease shall cease to exist.
7.03 PROPERTY INSURANCE. Lessor shall at all times during the term of this Lease
maintain a policy or policies of insurance, issued by and binding upon some
insurance company, insuring the building against all perils included within the
classification of fire and extended coverage and any other perils which Lessor
deems necessary in such amount as Lessor deems reasonable in relation to the
age, location, type of construction and physical condition of the building and
the availability of such insurance at reasonable rates; provided, Lessor shall
not be obligated in any way or manner to insure any personal property
(including, but not limited to, any furniture, machinery, goods or supplies) of
Lessee upon or within the leased premises, any
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fixtures installed or paid for by Lessee upon or within the leased premises, or
any improvements which Lessee may construct on the leased premises. Lessee
shall, have no right in or claim to the proceeds of any policy of insurance
maintained by Lessor even though the cost of such Insurance is borne by Lessee
as set forth in Article 2.00. Lessee shall, at Lessee's expense, maintain such
primary or additional insurance on its inventory, fixtures, equipment, and
building improvements as Lessee deems necessary to protect its interest. Lessee
shall not do or permit to be done anything which invalidates any such insurance
policies.
7.04 LIABILITY INSURANCE. Lessee, at its own expense, shall maintain during the
term of this Lease a policy or policies of comprehensive general liability
insurance, including personal injury and property damage, with contractual
liability endorsement, in the amount of One Million Dollars ($1,000,000.00) for
property damage and One Million Dollars ($1,000,000.00) per occurrence for
bodily injuries, personal injuries or death of person occurring in or about the
Premises. Said policies shall (i) name Lessor as an additional insured and
insure Lessor's contingent liability under this Lease, (ii) be issued by an
insurance company which is acceptable to Lessor, and (iii) provide that said
insurance shall not be cancelled unless thirty (30) days prior written notice
shall have been given to Lessor. Said policy or policies or certificates thereof
shall be delivered to Lessor by Lessee upon commencement of the term of the
Lease and upon each renewal of said insurance.
7.05 WAIVER OF SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Lessor and Lessee hereby waive and release each other of and
from any and all right of recovery, claim, action or cause of action, against
each other, their agents, officers, and employees, for any loss or damage that
may occur to the leased premises, improvements to the building of which the
leased premises are a part, or personal property within the building, by reason
of fire or the elements, regardless of cause or origin, including negligence of
Lessor or Lessee and their agents, officers and employees. Lessor and Lessee
agree immediately to give their respective insurance companies which have issued
policies of insurance covering all risk of direct physical loss, written notice
of the terms of the mutual waivers contained in this section, and to have the
insurance policies properly endorsed, if necessary, to prevent the invalidation
of the insurance coverages by reason of the mutual waivers.
7.06 HOLD HARMLESS. Except for Lessor's gross negligence or wilful misconduct,
Lessor shall not be liable to Lessee or to Lessee's employees, agents, invitees,
licensees or visitors, or to any other person, for an injury to person or damage
to property on or about the leased premises caused by any act or omission of
Lessee, its agents, servants or employees, or of any other person entering upon
the leased premises under express or implied invitation by Lessee, or caused by
the improvements located on the leased premises becoming out of repair, the
failure or cessation of any service provided by Lessor (including security
service and devices), or caused by leakage of gas, oil, water or steam or by
electricity emanating from the leased premises. Lessee agrees to indemnify and
hold harmless Lessor of and from any loss, attorney's fees, expenses or claims
arising out of any such damage or injury except and to the extent that such
loss, attorney's fees, expenses, claims, damages or injury arise in whole or in
part from the gross negligence or wilful misconduct of Lessor.
ARTICLE 8.00 CONDEMNATION
8.01 SUBSTANTIAL TAKING. If all or substantial part of the leased premises are
taken for any public or quasi-public use under any governmental law, ordinance
or regulation, or by right of eminent domain or by purchase in lieu thereof, and
the taking would prevent or materially interfere with the use of the leased
premises for the purpose for which it is then being used, thin Lease shall
terminate and the rent shall be abated during the unexpired portion of this
Lease effective on the date physical possession is taken by the condemning
authority. Lessee shall have no claim to the condemnation award or proceeds in
lieu thereof other than that portion of the condemnation award or proceeds
applicable to Lessee's trade fixtures.
8.02 PARTIAL TAKING. If a portion of the leased premises shall be taken for any
public or quasi-public use under any governmental law, ordinance or regulation,
or by right of eminent domain or by purchase in lieu thereof, and this Lease is
not terminated as provided in section 8.01 above, Lessor shall at Lessor's sole
risk and expense, restore and reconstruct the building and other improvements on
the leased premises to the extent necessary to make it reasonably tenantable.
The rent payable under this Lease during the unexpired portion of the term shall
be adjusted to such an extent as may be fair and reasonable under the
circumstances. Lessee shall have no claim to the condemnation award or proceeds
in lieu thereof other than that portion of the condemnation award or proceeds
applicable to Lessee's trade fixtures.
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ARTICLE 9.00 ASSIGNMENT OR SUBLEASE
9.01 LESSOR ASSIGNMENT. Lessor shall have the right to sell, transfer or assign,
in whole or in part, its rights and obligations under this Lease and in the
building provided that such purchaser, transferee, or assignee agrees to assume
all duties and obligations of Lessor to Lessee under the terms, covenants and
conditions of Lease. Any such sale, transfer or assignment shall operate to
release Lessor from any and all liabilities under this Lease arising after the
date of such sale, assignment or transfer.
9.02 LESSEE ASSIGNMENT. Lessee shall not assign, in whole or in part, this
Lease, or allow it to be assigned, in whole or in part, by operation of law or
otherwise (including without limitation by transfer of a majority interest of
stock, merger, or dissolution, which transfer of majority interest of stock,
merger or dissolution shall be deemed an assignment) or mortgage or pledge the
same except to a bona fide third party lender providing financing of Lessee's
business or Lessee's inventory or personalty located on the premises, or sublet
the leased premises, in whole or in part, without the prior written consent of
Lessor which consent shall not be unreasonably withheld, and in no event shall
any such assignment or subleasee ever release Lessee from any obligation or
liability hereunder. No assignee or sublessee of the leased premises or any
portion thereof may assign or sublet the leased premises or any portion thereof.
Notwithstanding this provision, Lessee shall have the right to assign or
sublease to any parent, affiliate, subsidiary, or successor of Lessee, whether
by merger, consolidation, or otherwise, or to any person or entity that
purchases all of the assets of Lessee provided the net worth of the person or
entity to whom the Lease is assigned is equal to or greater than Lessee.
9.03 CONDITIONS OF ASSIGNMENT. Except for an assignment or sublease not
requiring Lessor's prior approval as described in Paragraph 9.02 above, if
Lessee desires to assign or sublet all or any part of the leased premises, it
shall so notify Lessor at least thirty days in advance of the date on which
Lessee desires to make such assignment or sublease. Lessee shall provide Lessor
with a copy of the proposed assignment or sublease and such information as
Lessor might reasonably request concerning the proposed sublessee or assignee to
allow Lessor to make informed judgments as to the financial condition,
reputation, operations and general desirability of the proposed sublessee or
assignee. Within fifteen (15) days after Lessor's receipt of Lessee's proposed
assignment of sublease and all required information concerning the proposed
sublessee or assignee, Lessor shall have the following options: (1) consent to
the proposed assignment or sublease, and, if the rent due and payable by any
assignee or sublessee under any such permitted assignment or sublease (or a
combination of the rent payable under such assignment or sublease plus any bonus
or any other consideration or any payment incident thereto) exceeds the rent
payable under this Lease for such space, Lessee shall pay to Lessor all such
excess rent and other excess consideration within ten days following receipt
thereof by Lessee: or (2) refuse, in its sole and absolute discretion and
judgment, to consent to the proposed assignment or sublease, which refusal shall
be deemed to have been exercised unless Lessor gives Lessee written notice
providing otherwise. Upon the occurrence of an event of default, if all or any
part of the leased premises are then assigned or sublet, Lessor in addition to
any other remedies provided by this Lease or provided by law, may, at its
option, collect directly from the assignee or sublessee all rents becoming due
to Lessee by reason of the assignment or sublease, and Lessor shall have a
security interest in all properties on the leased premises to secure payment of
such sums. Any collection directly by Lessor from the assignee or sublessee
shall not be construed to constitute a novation or a release of Lessee or any
guarantor from the further performance of its obligations under this Lease.
9.04 SUBORDINATION. Lessee accepts this Lease subject and subordinate to any
recorded mortgage or deed of trust lien presently existing or hereafter created
upon the building or project and to all existing recorded restrictions,
covenants, easements and agreements with respect to the building or project.
Lessee agrees upon ten (10) days following written demand to execute additional
instruments subordinating this Lease as Lessor may require. If the interests of
Lessor under this Lease shall be transferred by reason of foreclosure or other
proceedings for enforcement of any first mortgage or deed of trust lien on the
leased premises, Lessee shall be bound to the transferee (sometimes called the
"Purchaser") at the option of the Purchaser, under the terms, covenants and
conditions of this Lease for the balance of the term remaining, including any
extensions or renewals, with the same force and effect as if the Purchaser were
Lessor under this Lease, and, if requested by the Purchaser, Lessee agrees to
attorn to the Purchaser, including the first mortgage under any such mortgage if
it be the Purchaser, as its Lessor. Notwithstanding the foregoing, Lessor agrees
to provide Lessee with a non-disturbance agreement from mortgagee substantially
in the form of Exhibit B attached hereto and made a part hereof.
9.05 ESTOPPEL CERTIFICATES. Lessee agrees to furnish, from time to time, within
ten days after receipt of a written request from Lessor or Lessor's mortgagee, a
statement certifying, it true and applicable, the following: Lessee is in
possession of the leased premises; the Lease is in full force and effect; the
Lease in unmodified; Lessee claims no present charge, lien, or claim of offset
against rent; the rent is
8
paid for the current month, but is not prepaid for more than one month and will
not be prepaid for more than one month in advance; there is no existing default
by reason of some act or omission by Lessor; and such other matters as may be
reasonably required by Lessor or Lessor's mortgagee. Lessee's failure to deliver
such statement, shall be an event of default under this Lease. Lessor agrees,
within ten (10) days after receipt of a written request therefor, to provide a
statement certifying, if true and applicable, the name and address of the
Building, the location of the Premises, that the Lease is in full force and
effect and unmodified, that Lessee is not in default under the Lease, the term
remaining in the Lease and existence and term of any renewal options, and such
other matters as may reasonably be required by Lessee or Lessee's mortgagee.
Lessor's failure to deliver such statement shall be an event of default
hereunder.
9.06 LESSEE'S FINANCIAL CONDITION. Within ten (10) days after written request
from Lessor, Lessee shall deliver to Lessor such financial statements as are
reasonably required by Lessor to verify the net worth of Lessee, or any
assignee, or guarantor of Lessee. In addition Lessor shall deliver to any lender
designated by Lessor any financial statements required by such lender to
facilitate the financing or refinancing of the leased premises. Lessee
represents and warrants to Lessor that each such financial statement is a true,
complete, 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 herein. Notwithstanding the foregoing, Lessee shall not be required to
deliver financial statements to Lessor more than one time in any calendar year.
ARTICLE 10.00 LIENS
10.01 LANDLORD'S LIEN. As security for payment of rent, damages and all other
payments required to be made by this Lease, Lessee hereby grants to Lessor a
lien upon all property of Lessee now or subsequently located upon the leased
premises. If Lessee abandons or vacates any substantial portion of the leased
premises or is in default in the payment of any rentals, damages or other
payments required to be made by this Lease or is in material default of any
other provision of this Lease, taking into account any notice and cure
provisions in this Lease, Lessor may enter upon the leased premises, by picking
or changing locks if necessary, and take possession of all or any part of the
personal property, and may sell all or any part of the personal property at a
public or private sale, in one or successive sales, with notice, to the highest
bidder for cash, and, on behalf of Lessee, sell and convey all or part of the
personal property to the highest bidder, delivering to the highest bidder all of
Lessee's title and interest in the personal property sold. The proceeds of the
sale of the personal property shall be applied by Lessor toward the reasonable
costs and expenses of the sale, including reasonable attorney's fees, and then
toward the payment of all sums then due by Lessee to Lessor under the terms of
this Lease. Any excess remaining shall be paid to Lessee or any other person
entitled thereto by law.
10.02 UNIFORM COMMERCIAL CODE. This Lease is intended as and constitutes a
security agreement within the meaning of the Uniform Commercial Code of the
state in which the leased premises are situated. Lessor, in addition to the
rights prescribed in this Lease, shall have all of the rights, titles, liens and
interests in and to Lessee's property, now or hereafter located upon the leased
premises, which may be granted a secured party, as that term is defined, under
the Uniform Commercial Code to secure to Lessor payment of all sums due and the
full performance of all Lessee's covenants under this Lease. Lessee will on
request execute and deliver to Lessor a financing statement for the purpose of
perfecting Lessor's security interest under this Lease or Lessor may file this
Lease a memorandum of as a financing statement. Unless otherwise provided by law
and for the purpose of exercising any right pursuant to this section, Lessor and
Lessee agree that reasonable notice shall be met if such notice is given by ten
days written notice, certified mail, return receipt requested, to Lessor or
Lessee at the addresses specified herein.
ARTICLE 11.00 DEFAULT AND REMEDIES
11.01 DEFAULT BY LESSEE. The following shall be deemed to be events of default
by Lessee under this Lease; (1) Lessee shall fail to pay more than ten (10) days
after due any installment of rent or any other payment required pursuant to this
Lease; (2) Lessee shall fail to comply with any term, provision or covenant of
this Lease, other than the payment of rent, and the failure is not cured within
thirty (30) days after written notice to Lessee; (3) Lessee shall file a
petition or be adjudged bankrupt or insolvent under any applicable federal or
state bankruptcy or insolvency law or admit that it cannot meet its financial
obligations as they become due; or a receiver or trustee shall be appointed for
all or substantially all of the assets of Lessee; or Lessee shall make a
transfer in fraud of creditors or shall make an assignment for the benefit of
creditors; or (4) Lessee shall do or permit to be done any act which results in
a lien being filed against the leased premises or the building and/or project of
which the leased premises are a part and such lien shall remain uncured or
unbonded for a period of sixty (60) days after the date of filing of such lien.
9
11.02 REMEDIES FOR LESSEE'S DEFAULT. Upon the occurrence of any event of default
set forth in this Lease, Lessor shall have the option to pursue any one or more
of the following remedies without any notice or demand whatsoever:
(a) Lessor may terminate this Lease. If Lessor elects to terminate this
Lease, then Lessee shall immediately surrender the leased premises to Lessor and
shall be liable for and shall pay to Lessor the sum of all rent and other
indebtedness accrued to the date of such termination plus, as damages, an amount
equal to the total of (i) the reasonable cost of recovering the leased
premises, (ii) the reasonable cost of removing and storing Lessee's and other
occupants' property located therein, (iii) the reasonable cost of reletting the
leased premises, or a portion thereof, whether or not accomplished in one or
more phases (including, without limitation, brokerage commissions), (iv) the
reasonable cost of repairs to the leased premises, (v) the reasonable cost of
collecting such amounts from Lessee hereunder, and (vi) any other reasonable
sums of money or damages that may be owed to Lessor as the result of a default
by Lessee or the exercise of Lessor's rights at law or in equity.
(b) Lessor may terminate Lessee's rights to occupy the leased premises
without terminating this Lease. If Lessor elects to terminate Lessee's right to
occupy the leased premises, Lessee shall remain liable for the payment of the
total rent due under this Lease for the remainder of the term of this Lease. In
addition, Lessee shall be liable for and shall pay to Lessor, on demand, an
amount equal to the costs described in subsection 11.02(a) above. Lessor may
file suit to recover any sums falling due under the terms hereof from time to
time, and unless otherwise agreed no delivery to or recovery by Lessor of any
portion of the sums due Lessor hereunder shall be a defense in any action to
recover any amount not theretofore reduced to judgment and/or collected by
Lessor. Lessor shall not be obligated to relet the leased premises before
leasing other portions of the building, it being the intent of the parties that
Lessee shall not be placed in a preferential position by reason of Lessee's own
default. Any sums received by Lessor through reletting shall reduce the sums
owing by Lessee hereunder, but in no event shall Lessee be entitled to any
excess of any sums obtained by reletting over and above the rent to be paid by
Lessee under this Lease. In the alternative, Lessor may elect to immediately
recover, as damages, a sum equal to the difference between (i) the total rent
due under this Lease for the remainder of the Lease term and (ii) the then fair
market rental value of the leased premises during such period, discounted to
present value at a commercially reasonable rate ("Discounted Future Rent"). In
such event, Lessor shall have no responsibility whatsoever to attempt to relet
the leased premises or to apply any rentals received by Lessor as a result of
any such reletting to Lessee's obligations hereunder; and the aggregate amount
of all damages due to Lessor, including the Discounted Future Rent, shall be
immediately due and payable to Lessor upon demand.
(c) Lessor may enter upon the leased premises and do whatever Lessee is
obligated to do under the terms of this Lease without terminating this Lease or
terminating Lessee's right to occupy the leased premises. In such event, Lessee
shall reimburse Lessor within ten (10) days after receipt of written demand for
any expenses which Lessor may incur in affecting compliance with Lessee's
obligations under this Lease, and Lessor shall not be liable for any damages
resulting to Lessee from such action other than and to the extent of damages
caused by the gross negligence or wilful misconduct of Lessor.
(d) Lessor may exercise all of the remedies available to Lessor at law
or in equity, including, without limitation, injunctive relief of all varieties.
The provisions of this Section 11.02 shall be enforceable to the maximum extent
not prohibited by applicable law, and the unenforceability of any portion
thereof shall not thereby render unenforceable any other portion. No act or
thing done by Lessor or its agents during the Lease term shall be deemed to be
an acceptance of an attempted surrender of the leased premises, and no agreement
to accept the surrender of the leased premises shall be valid unless made in
writing and signed by Lessor. No re-entry or taking possession of the leased
premises by Lessor (including a termination of Lessee's right to occupy the
leased premises or a reletting subsequent to such election) shall be construed
as an election on Lessor's part to terminate this Lease unless a written notice
of such termination is given to Lessee. The failure of Lessor to insist at any
time upon the strict performance of any covenant or agreement herein or to
exercise any option, right, power, or remedy contained in this Lease shall not
be construed as a waiver or a relinquishment thereof for the future. No payment
by Lessee or receipt by Lessor of a lesser amount than the amount then due under
this Lease shall be deemed to be other than on account of the earliest
obligation of Lessee due hereunder, nor shall endorsement or statement on any
check or any letter accompanying any check or payment be deemed an accord and
satisfaction. Lessor may accept any such check or payment without prejudice to
Lessor's right to recover the balance of such obligation of Lessee or pursue any
other remedy provided in this Lease. All rights, privileges, and remedies
afforded Lessor by this Lease or by law shall be deemed cumulative, and the
exercise of any one of such rights, privileges, or remedies shall not be deemed
to be a waiver of any other right, privilege, or remedy provided for herein or
granted by law or in equity, except as may otherwise be expressly provided
pursuant to the terms of this Lease. In the event Lessor elects to terminate
this Lease or terminate Lessee's right to occupy the leased premises after a
default by Lessee, Lessor may, without prejudice to any other remedy which
Lessor may have, expel or remove Lessee and any other person who may be
occupying the leased premises or any part thereof. In addition, Lessor may
change or alter the locks and other security devices on the doors to the leased
premises; and Lessee hereby waives, to the
10
fullest extent allowed by law, any requirement that notice be posted on the
leased premises as to the location of a key to such new locks and any right to
obtain such a key. In addition, to all of the remedies set forth herein, Lessor
shall, if applicable, be entitled to receive a cash payment from Lessee on
demand in an amount equal to all "Reimbursable Costs" (as defined below) which
have not yet vested in Lessee and to terminate any remaining Lease concessions
which have not yet accrued under this Lease. As used herein, the term
"Reimbursable Costs" shall mean the total of (i) the difference between the
average rent payable by Lessee over the entire term of this Lease and the rate
of rent payable by Lessee from the commencement date to the date of default and
(ii) the aggregate dollar amount which had been paid by Lessor in connection
with this Lease, including, without limitation, amounts reimbursed to Lessee or
paid on behalf of Lessee under this Lease and any brokerage commission paid or
payable by Lessor in connection with the execution of this Lease. Because the
Reimbursable Costs were incurred by Lessor in reliance upon Lessee's fully
performing Lessee's obligations under this Lease, Lessee hereby acknowledges
that Lessor will be damaged, upon a default by Lessee, in an amount equal to the
aggregate dollar value of the Reimbursable Costs which have not yet vested in
Lessee. Lessee shall vest as to Reimbursable Costs on a pro rata basis for each
calendar month during the Lease term for which Lessee has paid rent and is not
otherwise in default hereunder. No vesting shall occur with respect to any month
for which Lessee has not paid rent or for which Lessee is otherwise in default
hereunder.
11.03 NOTICE OF DEFAULT. Lessee shall give written notice of any failure by
Lessor to perform any of its obligations under this Lease to Lessor and to any
ground lessor, mortgagee or beneficiary under any deed of trust encumbering the
Leased Premises whose name and address have been furnished to Lessee in writing.
Lessor shall not be in default under this Lease unless Lessor (or such ground
lessor, mortgagee or beneficiary) fails to cure such nonperformance within
thirty (30) days after receipt of Lessee's notice. However, if such
nonperformance reasonably requires more than thirty (30) days to cure, Lessor
shall not be in default if such cure is commenced within such 30-day period and
thereafter diligently pursued to completion.
ARTICLE 12.00 RELOCATION
INTENTIONALLY DELETED
ARTICLE 13.00 DEFINITIONS
13.01 ACT OF GOD OR FORCE MAJEURE. An "act of God" or "force majeure" is defined
for purposes of this Lease as strikes, lockouts, sitdowns, material or labor
restrictions by any governmental authority, unusual transportation delays,
riots, floods, washouts, explosions, earthquakes, fire, storms, weather
(including wet grounds or inclement weather which prevents construction), acts
of public enemy, wars, insurrections and any other cause not reasonably within
the control of Lessor and which by the exercise of due diligence Lessor is
unable, wholly or in part, to prevent or overcome.
13.02 BUILDING OR PROJECT. "Building" or "project" as used in this Lease means
the building and/or project described in section 1.02, including the leased
premises and the land upon which the building or project is situated.
13.03 COMMENCEMENT DATE. "Commencement date" shall be the date set forth in
section 1.03. The commencement date shall constitute the commencement of the
term of this Lease for all purposes, whether or not Lessee has actually taken
possession.
13.04 SQUARE FEET. "Square feet" or "square foot" as used in this Lease includes
the area contained within the leased premises together with a common area
percentage factor of the leased premises proportionate to the total building
area. Lessee hereby acknowledges that it has carefully inspected the leased
premises in the building forming the subject of the Lease and agrees that said
leased premises comprise approximately the square footage in section 1.02.
Should it ever be determined that the building is larger or smaller than said
square footage, neither party shall have any right, claim or action against the
other by reason of that fact.
ARTICLE 14.00 ENVIRONMENTAL REPRESENTATIONS AND INDEMNITY
14.01 HAZARDOUS MATERIALS.
A. Hazardous Material Upon Premises Prohibited.
Lessee shall not cause or permit any Hazardous Material (as defined in
Paragraph 14.01) to be released, brought upon, stored, produced, disposed or
used upon, about or beneath the Premises by Lessee, its agents, employees,
contractors or invitees.
11
B. Indemnification of Lessor for Environmental Damages.
Lessee shall indemnify, defend and hold Lessor harmless from and
against any and all Environmental Damages which arise from (1) the presence
upon, about or beneath the Premises of any "Hazardous Materials" (as defined in
this Lease) or of any chemical substance requiring remediation under any
federal, state or local statute, regulation, ordinance or policy to the extent,
and only to the extent, that such hazardous materials are placed upon the
Premises by Lessee or its employees, agents, or invitees; or (2) the breach of
any of the provisions of this Lease. For the purpose of this Lease,
"Environmental Damages" shall mean (a) All, claims, judgments, damages,
penalties, fines, costs, liabilities and losses (including, without limitation,
diminutive in the value of the Premises, damages for the loss of or restriction
on use of rentable space or any amenity of the Premises and from any service
rentable or usable space or of any amenity of the Premises and from any adverse
impact on Lessor's marketing of space); (b) All sums paid for settlement of
claims, reasonable attorney's fees, reasonable consultant's fees and reasonable
expert's fees; and (c) All costs incurred by Lessor in connection with
investigation of Hazardous Material (as defined in this Lease) upon, about or
beneath the Premises, the preparation of any feasibility studies or reports and
the performance of any clean-up, remediation, removal or governmental agency or
political subdivision necessary for Lessor to make full economic use of the
Premises, or otherwise required under this Lease. Lessee's obligation under this
Section shall survive the expiration of this Lease. Lessor shall indemnify and
hold harmless Lessee from and against any and all environmental damages to
Lessee arising due to and only to the extent of the activities of Lessor.
C. Obligation of Lessee to Remediate Premises.
Notwithstanding the obligation of Lessee to indemnify Lessor pursuant
to this Lease, Lessee shall, at its sole cost and expense, promptly take all
actions required by any federal, state or local governmental agency or political
subdivision or necessary for Lessor to make full economic use of the Premises,
which requirements or necessity arise from the presence upon, about or beneath
the Premises of any Hazardous Materials (as defined in this Lease), provided
that the introduction of such Hazardous Materials shall have originated during
the term of this Lease due to and only to the extent of the activities of Lessee
or its employees, agents, or invitees. Such actions shall include, but not be
limited to, the investigation of the environmental condition of the Premises,
the preparation of any feasibility studies or reports and the performance of any
clean-up, remedial, removal or restoration work. Lessee shall take all actions
necessary to restore the Premises to the condition existing prior to the
introduction of the Hazardous Material upon, about or beneath the Premises,
notwithstanding any lesser standard of remediation allowable under applicable
law or governmental policies. Lessee shall nevertheless obtain Lessor's approval
prior to undertaking any activities required by this Section, which approval
shall not be unreasonably withheld so long as such actions would not potentially
have a material adverse long-term or short-term effect on the Premises. The
obligations of Lessee pursuant to this Section shall not apply to situations
where Hazardous Materials are released, brought upon, stored, produced, emitted,
disposed of or used upon, about or beneath the Premises at a time or times other
than during the term of this Lease or by persons other than Lessee or its
employees, agents, or invitees except where its agents, employees, contractors
or invitees or as a result of the acts or omissions of any agent, employee,
contractor or invitee of any permitted sublessee or assignee of Lessee, Lessee's
obligations under this Section shall survive the expiration of this Lease.
D. "Hazardous Material" Defined.
"Hazardous Material" means any material or substance (1) defined as a
hazardous substance pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and amendments
thereto; (2) the Hazardous Materials Transportation Act (42 U.S.C. Section 1801
et seq.); (3) defined as a "hazardous waste" pursuant to the Federal Resource
Conservation and Recovery Act (42 U.S.C. Section 9601 et seq.)
ARTICLE 15.00 MISCELLANEOUS
15.01 WAIVER. Failure of Lessor to declare an event of default immediately upon
its occurrence, or delay in taking any action in connection with an event of
default, shall not constitute a waiver of the default, but Lessor shall have the
right to declare the default at any time and take such action as is lawful or
authorized under this Lease. Pursuit of any one or more of the remedies set
forth in Article 11.00 above shall not preclude pursuit of any one or more of
the other remedies provided elsewhere in this Lease or provided by law, nor
shall pursuit of any remedy constitute forfeiture or waiver of any rent damages
accruing to Lessor by reason of the violation of any of the terms, provisions or
covenants of this Lease. Failure by Lessor to enforce one or more of the
remedies provided upon an event of default shall not be deemed or construed to
constitute a waiver of the default or of any other violation or breach of any of
the terms, provisions and covenants contained in this Lease.
12
15.02 ACT OF GOD. Lessor shall not be required to perform any covenant or
obligation in this Lease, or be liable in damages to Lessee, so long as the
performance or non-performance of the covenant or obligation is delayed,
caused or prevented by an act of God, force majeure or by Lessee.
15.03 ATTORNEY'S FEES. In the event that either party defaults in the
performance of any of the terms, covenants, agreements or conditions contained
in this Lease and the other party places in the hands of an attorney the
enforcement of all or any part of this Lease, the collection of any rent due or
to become due or recovery of the possession of the leased premises, the
non-prevailing party agrees to pay the prevailing party's reasonable costs of
collection, including reasonable attorney's fees for the services of the
attorney, whether suit is actually filed or not.
15.04 SUCCESSORS. This Lease shall be binding upon and inure to the benefit of
Lessor and Lessee and their respective heirs, personal representatives,
successors and assigns to the extent that assignment is permitted hereunder. It
is hereby covenanted and agreed that should Lessor's interest in the leased
premises cease to exist for any reason during the term of this Lease, then
notwithstanding the happening of such event this Lease nevertheless shall remain
unimpaired and in full force and effect, and Lessee hereunder agrees to attorn
to the then owner of the leased premises contingent upon delivery to Lessee of a
non-disturbance agreement substantially in the form of Exhibit B attached hereto
and made a part hereof.
15.05 RENT TAX. If applicable in the jurisdiction where the leased premises are
situated, Lessee shall pay and be liable for all rental, sales and use taxes or
other similar taxes, if any, levied or imposed by any city, state, county, or
other governmental body having authority, such payments to be in addition to all
other payments required to be paid to Lessor by Lessee under the terms of this
Lease. Any such payment shall be paid concurrently with the payment of the rent,
additional rent, operating expenses or other charge upon which the tax is based
as set forth above.
15.06 CAPTIONS. The captions appearing in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe or describe the
scope or intent of any section.
15.07 NOTICE. All rent and other payments required to be made by Lessee shall be
payable to Lessor at the address set forth in section 1.05. All payments
required to be made by Lessor to Lessee shall be payable to Lessee at the
address set forth in section 1.05, or at any other address within the United
States as Lessee may specify from time to time by written notice. Any notice or
document required or permitted under this Lease shall be in writing and shall be
personally delivered or shall be deemed to be delivered (whether or not actually
received) when deposited in the United States Mail, postage prepaid, certified
mail, return receipt requested, addressed to the parties at the respective
addresses set forth in section 1.05.
15.08 SUBMISSION OF LEASE. Submission of this Lease to Lessee for signature does
not constitute a reservation of space or an option to lease. This Lease is not
effective until execution by and delivery to both Lessor and Lessee.
15.09 CORPORATE AUTHORITY. Lessee hereby represents and warrants that Lessee is
a duly authorized and existing corporation, that Lessee is qualified to do
business in the state in which the leased premises are located, that the
corporation has full right and authority to enter into this Lease, and that each
person signing on behalf of the corporation is authorized to do so. Lessor
hereby represents and warrants that it is a duly authorized and existing joint
venture and that the person signing for Lessor have all due authority to execute
and deliver the Lease.
15.10 SEVERABILITY. If any provision of this Lease or the application thereof to
any person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Lease and the application of such provisions to other persons
or circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
15.11 LESSOR'S LIABILITY. If Lessor shall be in default under this Lease and, if
as a consequence of such default, Lessee shall recover a money judgment against
Lessor, such judgment shall be satisfied only out of the right, title and
interest of Lessor in the building as the same may then be encumbered and
neither Lessor nor any person or entity comprising Lessor shall be liable for
any deficiency. In no event shall Lessee have the right to levy execution
against any property of Lessor nor any person or entity comprising Lessor other
than its interest in the building as herein expressly provided.
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15.12 INDEMNITY. Lessor agrees to indemnify and hold harmless Lessee from and
against any liability or claim, whether meritorious or not, arising with respect
to any broker whose claim arises by, through or on behalf of Lessor. Lessee
agrees to indemnify and hold harmless Lessor from and against any liability or
claim, whether meritorious or not, arising with respect to any broker whose
claim arises by, through or on behalf of Lessee.
15.13 THE LAWS OF THE STATE OF TEXAS SHALL GOVERN THIS LEASE.
ARTICLE 16.00 AMENDMENT AND LIMITATION OF WARRANTIES
16.01 ENTIRE AGREEMENT. IT IS EXPRESSLY AGREED BY LESSEE, AS A MATERIAL
CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH THE
SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF
THE PARTIES; THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THIS LEASE OR
TO THE EXPRESSLY MENTIONED WRITTEN EXTRINSIC DOCUMENTS NOT INCORPORATED IN
WRITING IN THIS LEASE.
16.02 AMENDMENT. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR EXTENDED
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LESSOR AND LESSEE.
16.03 LIMITATION OF WARRANTIES. LESSOR AND LESSEE EXPRESSLY AGREE THAT THERE ARE
AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE NO
WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE.
ARTICLE 17.00 OTHER PROVISIONS
17.01 Lessee shall be entitled to possession of the property on January 1, 1997
subject to all the terms and conditions in this lease other than the payment of
Base Rent for the period January 1, 1997 until January 31, 1997. In addition,
and notwithstanding any other provision in this Lease, in the event that
possession of all of the Premises is not delivered to Lessee on or before
February 28, 1997, Lessee shall have the right to terminate the Lease by
delivery of notice to Lessor within ten (10) days of such date, and the Lease
shall terminate as of the date that such notice is deposited in the manner for
notice provided for hereunder.
17.02 OPTION TO EXTEND TERM: Lessor hereby grants to Lessee and the assignees of
Lessee permitted in Paragraph 9.02 hereof two (2) options ("Options") to extend
the Lease term for additional terms of five years (5) each ("Extensions"), on
the same terms, conditions and covenants set forth in the Lease Agreement,
except as provided below. Each option shall be exercised only by written notice
delivered to the Lessor at least one hundred eighty (180) days before the
expiration of the Lease Term or the preceding Extension of the Lease Term. If
Lessee fails to deliver Lessor written notice of the exercise of an Option
within the prescribed time period, such Option and any succeeding Options shall
lapse, and there shall be no further right to extend the Lease Term. Each Option
shall be exercisable by Lessee on the express condition that at the time of the
exercise, and at all times prior to the commencement of such Extensions, Lessee
shall not be in default under any of the provisions of this Lease. The foregoing
Options are personal to Lessee and may not be exercised by any assignee or
subtenant.
A. Lessee shall have no further renewal options unless granted by Lessor in
writing: and
B. The rental for the first renewal term shall be $10.50 per square foot. The
rental for the second renewal term shall be based on the then prevailing rental
rates for properties of equivalent quality, size, utility and location, with the
length of the lease term, and credit standing of the Lessee herein, to be taken
into account. In no event shall the rental rate be less than the rental rate
payable for the month immediately preceding the date of any rent adjustments.
17.03 Lessee will be permitted to post six (6) parking spaces at the front
entrance of its space for its exclusive use. All other parking spaces are
unreserved. Lessor will not enforce the exclusivity and Lessee cannot have
violator's cars towed or molested in any way. In addition to its reserved
parking spaces, Lessee shall provide 100 unreserved parking spaces, which shall
be available for Lessee's intended mixed office/storage use and sufficient to
comply with zoning law.
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17.04 LEASEHOLD IMPROVEMENTS.
(A) Notwithstanding anything to the contrary in the Lease, except for the HVAC
systems, which are the responsibility of Lessor to the extent set out in
Paragraph 17.07 hereof, Lessee accepts the Leased Premises in their "AS IS"
condition. Lessee shall cause plans and specifications for the tenant
improvements to be prepared and submitted to Lessor for Lessor's approval,
which approval shall not be unreasonably withheld. All work shall be performed
in conformance with such approved plans and specifications and in a good and
workmanlike manner and in compliance with the American with Disabilities Act of
1990 ("ADA"). However, Lessee shall not be required to make any exterior
alterations in order to bring the Premises into compliance with the ADA. Any
changes or modifications to the approved plans and specifications shall be
signed by Lessor and Lessee constitute an amendment to this Lease. Lessor
agrees not to unreasonably withhold or delay its consent or approval to any
such requested change or modification to the approved plans specifications.
(B) Lessor agrees to provide Lessee with a leasehold improvements allowance of
$62,037.00 which amount is intended to include all costs associated with such
construction such as, permit fees, construction manager fees, architectural
fees, and all utility connections to the Leased Premises, (the "Allowance"). The
Allowance shall be paid to Lessee upon substantial completion of such
construction, as evidenced by a certification from Lessee's architect and upon
delivery of releases of liens from the contractor to Lessor. If any portion of
the allowance is unused, Lessee may use the remaining allowance towards moving
expenses or the unused amount will be applied towards rent.
(C) Lessee shall enter into a construction contract with a reputable general
contractor having at least five (5) years experience in tenant improvement
construction to perform the leasehold construction in accordance with the
approved plans and specifications.
17.05 EARLY TERMINATION ELECTION
Lessee may at Lessee's election terminate this Lease prior to the expiration of
the lease term set forth in Section 1.03, on January 31, 2002 ("Early
Termination Date") upon the terms and conditions set forth herein.
(i) Lessee shall give Lessor written notice of its election to terminate this
lease at least One Hundred Eighty (180) days prior to the Early Termination
Date upon which termination shall become effective.
(ii) No material and uncured event of default by Lessee or no event that with
notice or the passage of time, or both, would constitute a material event of
default by Lessee shall have occurred on or before the Early Termination Date.
(iii) Concurrent with the giving of notice under Paragraph 17.05(i), Lessee
shall pay to Lessor in cash the sum of $98,226.00 (Ninety-eight thousand two
hundred twenty-six Dollars); and
(iv) Concurrent with the giving of notice under Paragraph 17.05(i), Lessee shall
pay to Lessor in cash the amount of the unamortized tenant improvements and
commissions using an interest factor of twelve percent (12%) per annum. By way
of example if the tenant improvements and commissions were $80,000 the
unamortized amount at January 31, 2002, would be $30,000.
17.06 RIGHT OF FIRST REFUSAL.
I. Lessor and Lessee acknowledge that ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ containing 20,679
square feet is immediately adjacent to the Premises (hereinafter referred to as
"Adjacent Premises").
II. In the event that Lessor received a proposal from a third party to lease the
Adjacent Premises then Lessor shall, prior to preceding with negotiations or
concluding any lease, with such third party, will notify Lessee of the rent
which Lessor is willing to lease the Adjacent Premises which shall be the rent
being offered at the time ("Adjacent Premises Rent").
III. If Lessee within five (5) business days after receipt of Lessor's notice as
set forth in Paragraph 17.06 II above, indicates, in writing, its agreement to
lease the Adjacent Premises, then the Adjacent Premises shall be included within
the Premises and leased to Lessee at the Adjacent Premises Rent and otherwise
pursuant to the provisions of this lease without any obligations on the part of
the Lessor to make any alterations or repairs, and to afford any rent abatement
and without any contingency provisions. However, the rent attributable to the
Adjacent Premises shall be added to the rent payable under this Lease. The
parties shall immediately execute an amendment to this lease stating the
addition of the Adjacent Premises.
IV. If the Lessee does not deliver a notice, in writing, within five (5)
business days of receipt of Lessor's said notice, as set forth in Paragraph
17.06 II above, indicating its agreement to lease the Adjacent Premises, Lessor
thereafter shall have the right to lease the Adjacent Premises to any third
party or parties and there shall be no further obligation in the future to give
Lessee any notice to lease or Right of
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First Refusal.
17.07 Provided Lessee enters into a maintenance contract for the HVAC unit(s)
with a qualified HVAC contractor acceptable to Lessor, Lessor will warrant the
HVAC unit(s) for the first twelve (12) months of the Lease Agreement.
ARTICLE 18.00 SIGNATURES
Signed at DALLAS, this 12th day of NOVEMBER, 1996,
LESSOR LESSEE
▇▇▇▇▇▇▇▇ PLACE ONE JOINT VENTURE DNA ENTERPRISES, INC.
-------------------------------- --------------------------------
-------------------------------- --------------------------------
BY: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ BY: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇, CEO
----------------------------- -----------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ R. ▇▇▇▇▇▇ ▇▇▇▇▇, CEO
-------------------------------- --------------------------------
(TYPED NAME AND TITLE) (TYPED NAME AND TITLE)
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