EXHIBIT 10-1
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
1. Basic Provisions ("Basic Provisions"):
1.1 Parties: This Lease ("Lease"), dated for reference purposes only, March
31, 2003 is made by and between SUNBELT ENTERPRISE ("Lessor") and CALIFORNIA
AMPLIFIER, A DELAWARE CORPORATION ("Lessee"), (collectively the "Parties,"
or individually a "Party").
1.2 Premises: That certain real property, including all improvements therein
or to be provided by Lessor under the terms of this Lease, and commonly
known as ▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, located in the County of Ventura,
State of California and generally described as an approximately 98,005
square foot concrete tilt-up building, situated on an ML zoned (City of
Oxnard) lot. ("Premises") (See also Paragraph 2)
1.3 Term: Seven (7) years and zero (0) months ("Original Term") commencing
July 1, 2004 ("Commencement Date") and ending June 30, 2011 ("Expiration
Date"). (See also Paragraph 3.)
1.4 Early Possession: December 1, 2003 ("Early Possession Date"). (See also
Paragraphs 3.2 and 3.3)
1.5 Base Rent: Fifty Three Thousand Three Hundred Fifteen and 70/100
($53,315.70) Dollars per month ("Base Rent"), payable on the 1st day of each
month commencing July 1, 2004 (See also Paragraph 4.)
[X] If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted. (See Paragraph #51)
1.6 Base Rent Paid Upon Execution: Fifty Three Thousand Three Hundred
Fifteen and 70/100 ($53,315.70) Dollars as Base Rent for the period July 1,
2004 through July 31, 2004
1.7 NNN Charges: The initial estimated NNN Charges are Nine Thousand Eight
Hundred and 50/100 ($9,800.50) per month (capped at $0.10 per sq. ft. per
month for the first year) payable on the first day of each month. NNN
charges for the period of July 1, 2004 through July 31, 2004 shall be paid
upon execution of this Lease. (See also Paragraph 4)
1.8 Security Deposit: Fifty Three Thousand Three Hundred Fifteen and 70/100
($53,315.70) Dollars ("Security Deposit"). (See also Paragraph 5.)
1.9 Agreed Use: Sales, administration and manufacturing of microwave
components for satellite television, cable and wireless cable (See also
Paragraph 6.)
1.10 Insuring Party: Lessor is the "Insuring Party" unless otherwise stated
herein. (See also Paragraph 8.)
1.11 Real Estate Brokers: (See also Paragraph 15)
(a) Representation: The following real estate brokers (collectively, the
"Brokers") and brokerage relationships exist in this transaction (check
applicable boxes):
[X] Colliers ▇▇▇▇▇▇ represents Lessor exclusively ("Lessor's Broker"):
[X] CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ represents Lessee exclusively ("Lessee's Broker"), or
[ ] represents both Lessor and Lessee ("Dual Agency"),
(b) Payment to Brokers. Upon execution of this Lease by both Parties,
Lessor shall pay to the Broker, the fee agreed to in their separate written
agreement. No commissions will be paid for options, lease renewals nor for
additions to Lessee's Premises after commencement of the Lease.
1.12 Guarantor: of the Lessee under this Lease are to be guaranteed by N/A
("Guarantor").
(See also Paragraph 37.)
1.13 Addendum and Exhibits: Attached hereto is the Addendum to Lease and
Exhibits A, B, C,, D, F and G all of which constitute a part of this Lease.
2. Premises: (See Paragraph #57)
2.1 Letting: Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth is this Lease. Unless otherwise
provided herein, any statement of size set forth in this Lease, or that may
have been used in calculating rental, is an approximation which the Parties
agree is reasonable.
2.2 Condition: (See Exhibit B) Lessor shall deliver the Premises to Lessee
broom clean and free of debris on the Commencement Date or the Early
Possession Date, whichever first occurs ("Start Date"), and, so long as the
required service contracts described in Paragraph 7.1(b) below are obtained
by Lessee within thirty (30) days following the Start Date, warrants that
the existing electrical, plumbing, fire sprinkler, lighting, heating,
ventilating and air conditioning systems ("HVAC"), loading doors, if any,
and all other such elements in the Premises, other than those constructed by
Lessee, shall be in good operating condition on said date and that the
structural elements of the roof, bearing walls and foundation of any
buildings on the Premises (the "Building") shall be free of material
defects. If a non-compliance with said warranty exists as of the Start
Date, Lessor shall, as Lessor's sole obligation with respect to such matter,
except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify same at Lessor's expense. If, after
the Start Date, Lessee does not give Lessor written notice of any non-
compliance with this warranty within: (i) one year as to the surface of the
roof and the structural portions of the roof, foundations and bearing walls,
(ii) six (6) months as to the HVAC systems, (iii) sixty (60) days as to the
remaining systems and other elements of the Building, correction of such
non-compliance shall be the obligation of Lessee at Lessees sole cost and
expense.
2.3 Compliance: Lessor warrants that the improvements on the Premises
comply with all applicable laws, covenants or restrictions of record,
building codes, regulations and ordinances ("Applicable Requirements") in
effect on the Start Date. Said warranty does not apply to the use to which
Lessee will put the Premises or to any Alterations or Utility Installations
(as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee
is responsible for determining whether or not the zoning is appropriate for
Lessee's intended use, and acknowledges that past uses of the Premises may
no longer be allowed. If the Premises do not comply with said warranty,
Lessor shall, except as otherwise provided, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify the same at Lessor's expense. If
Lessee does not give Lessor written notice of a non-compliance with this
warranty within six (6) months following the Start Date, correction of that
non-compliance shall be the obligation of Lessee at Lessee's sole cost and
expense. If the Applicable Requirements are hereafter changed (as opposed
to being in existence at the Start Date, which is addressed in Paragraph
6.2(e) below) so as to require during the term of this Lease the
construction of an addition to or an alteration of the Building, the
remediation of any Hazardous Substance, or the reinforcement or other
physical modification of the Building ("Capital Expenditure"), Lessor and
Lessee shall allocate the cost of such work as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are
required as a result of the specific and unique use of the Premises by
Lessee as compared with uses by tenants in general, Lessee shall be fully
responsible for the cost thereof, provided, however that if such Capital
Expenditure is required during the last two (2) years of this Lease or the
cost thereof exceeds six (6) months' Base Rent, Lessee may instead terminate
this Lease unless Lessor notifies Lessee, in writing, within ten (10) days
after receipt of Lessee's termination notice that Lessor has elected to pay
the difference between the actual cost thereof and the amount equal to six
(6) months' Base Rent. If Lessee elects termination, Lessee shall
immediately cease the use of the Premises which requires such Capital
Expenditure and deliver to Lessor written notice specifying a termination
date at least ninety (90) days thereafter. Such termination date shall,
however, in no event be earlier than the last day that Lessee could legally
utilize the Premises without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the specific and unique
use of the Premises by Lessee (such as, governmentally mandated seismic
modifications), then Lessor and Lessee shall allocate the obligation to pay
for such costs pursuant to the provisions of Paragraph 7.1(a); provided,
however, that if such Capital Expenditure is required during the last two
years of this Lease or if Lessor reasonably determines that it is not
economically feasible to pay its share thereof, Lessor shall have the option
to terminate this Lease upon ninety (90) days prior written notice to Lessee
unless Lessee notifies Lessor in writing, within ten (10) days after receipt
of Lessor's termination notice that Lessee will pay for such Capital
Expenditure. If Lessor does not elect to terminate, and fails to tender its
share of any such Capital Expenditure, Lessee may advance such funds and
deduct same, with interest, from Rent until Lessor's share of such costs
have been fully paid. If Lessee is unable to finance Lessor's share, or if
the balance of the Rent due and payable for the remainder of this Lease is
not sufficient to fully reimburse Lessee on an offset basis, Lessee shall
have the right to terminate this Lease upon thirty (30) days written notice
to Lessor.
(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and
new Applicable Requirements. If the Capital Expenditures are instead
triggered by Lessee as a result of an actual or proposed change in use,
change in intensity of use or modification to the Premises then, and in that
event, Lessee shall be fully responsible for the cost thereof, and Lessee
shall not have any right to terminate this Lease.
2.4 Acknowledgements: Lessee acknowledges that: (a) that is has been
advised by Lessor and/or Brokers to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical, HVAC
and fire sprinkler systems, security, environmental aspects, and compliance
with the Applicable Requirements), and their suitability for Lessee's
intended use; (b) that Lessee has made such investigation as it deems
necessary with reference to such matters and assumes all responsibility
therefore as the same relate to its occupancy of the Premises and; (c)
neither Lessor, Lessor's agents, nor any Broker has made any oral or written
representations or warranties with respect to said matters other than as set
forth in this Lease. In addition, Lessor acknowledges that; (a) Broker has
made no representations, promises or warranties concerning Lessee's ability
to honor the Lease or suitability to occupy the Premises, and (b) it is
Lessor's sole responsibility to investigate the financial capability and/or
suitability of all proposed tenants.
3. Term:
3.1 Term: The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 Early Possession: If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be
abated for the period of such early possession. All other terms of this
Lease (including but not limited to the obligations to pay Real Property
Taxes and Insurance premiums and to maintain the Premises) shall, however,
be in effect during such period. Any such early possession shall not affect
the Expiration Date.
3.3 Delay in Possession: Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability
therefore, nor shall such failure affect the validity of this Lease. Lessee
shall not, however, be obligated to pay Rent or perform its other
obligations until it receives possession of the Premises. If possession is
not delivered within sixty (60) days after the Commencement Date Lessee may,
at its option, by notice in writing within ten (10) days after the end of
such sixty (60) day period, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder. If such written notice
is not received by Lessor within said ten (10) day period, Lessee's right to
cancel shall terminate. Except as otherwise provided, if possession is not
tendered to Lessee when required and Lessee does not terminate this Lease,
as aforesaid, any period of rent abatement that Lessee would otherwise have
enjoyed shall run from the date of delivery of possession and continue for a
period equal to what Lessee would otherwise have enjoyed under the terms
hereof, but minus any days of delay caused by the acts or omissions of
Lessee. If possession of the Premises is not delivered within four (4)
months after the Commencement Date, this Lease shall terminate unless other
agreements are reached between Lessor and Lessee, in writing.
3.4 Lessee Compliance: Lessor shall not be required to tender possession of
the Premises to Lessee until Lessee complies with its obligation to provide
evidence of insurance (Paragraph 8.5). Pending delivery of such evidence,
Lessee shall be required to perform all of its obligations under this Lease
from and after the Start Date, including the payment of Rent,
notwithstanding Lessor's election to withhold possession pending receipt of
such evidence of insurance. Further, if Lessee is required to perform any
other conditions prior to or concurrent with the Start Date, the Start Date
shall occur but Lessor may elect to withhold possession until such
conditions are satisfied.
4. Rent/NNN Charges:
4.1 Rent Defined: All monetary obligations of Lessee to Lessor under the
terms of this Lease, including NNN Charges, defined below, (except for the
Security Deposit) are deemed to be rent ("Rent").
4.2 Payment: Lessee shall cause payment of Rent to be received by Lessor in
lawful money of the United States, without offset or deduction, on or before
the day on which it is due. Rent for any period during the term hereof
which is for less than one (1) full calendar month shall be prorated based
upon the actual number of days of said month. Payment of Rent shall be made
to Lessor at its address stated herein or to such other persons or place as
Lessor may from time to time designate in writing. Acceptance of a payment
which is less than the amount then due shall not be a waiver of Lessor's
rights to the balance of such Rent, regardless of Lessor's endorsement of
any check so stating.
4.3 NNN Charges: Lessee shall pay to Lessor during the term hereof, in
addition to the Base Rent, any and all costs incurred by Lessor relating to
the Premises including, but not limited to maintenance and repairs per
Paragraph 7, insurance per Paragraph 8, taxes per Paragraph 10, property
management costs, association dues and assessments. Lessor shall provide
Lessee with a statement at the end of each calendar year setting forth all
expenses actually incurred and shall make any appropriate adjustments with
respect thereto.
5. Security Deposit: Lessee shall deposit with Lessor upon Lessee's
execution hereof the Security Deposit as security for Lessee's faithful
performance of obligations under this Lease. If Lessee fails to pay Rent,
or otherwise Defaults under this Lease, Lessor may use, apply or retain all
or any portion of said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for any liability, expense, loss
or damage which Lessor may suffer or incur by reason thereof. If Lessor
uses or applies all or any portion of said Security Deposit, Lessee shall
within ten (10) days after written request therefor deposit monies with
Lessor sufficient to restore said Security Deposit to the full amount
required by this Lease. If the Base Rent increases during the term of this
Lease, Lessee shall, upon written request from Lessor, deposit additional
monies with Lessor so that the total amount of the Security Deposit shall at
all times bear the same proportion to the increased Base Rent as the initial
Security Deposit bore to the initial Base Rent. Should the Agreed Use be
amended to accommodate a material change in the business of Lessee or to
accommodate a sublessee or assignee, Lessor shall have the right to increase
the Security Deposit to the extent necessary, in Lessor's reasonable
judgment, to account for any increased wear and tear that the Premises may
suffer as a result thereof. If a change in control of Lessee occurs during
this Lease and following such change the financial condition of Lessee is,
in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit
such additional monies with Lessor as shall be sufficient to cause the
Security Deposit to be at a commercially reasonable level based on said
change in financial condition. Lessor shall not be required to keep the
Security Deposit separate from its general accounts. Within fourteen (14)
days after the expiration or termination of this Lease, if Lessor elects to
apply the Security Deposit only to unpaid Rent, and otherwise within thirty
(30) days after the Premises have been vacated pursuant to Paragraph 7.4(c)
below, Lessor shall return that portion of the Security Deposit not used or
applied by Lessor. No part of the Security Deposit shall be considered to
be held in trust, to bear interest or to be prepayment for any monies to be
paid by Lessee under this Lease.
6. Use:
6.1 Use: Lessee shall use and occupy the Premises only for the Agreed Use,
or any other legal use which is reasonably comparable thereto, and for no
other purpose. Lessee shall not use or permit the use of the Premises in a
manner that is unlawful, creates damage, waste or a nuisance, or that
disturbs owners and/or occupants of, or causes damage to the neighboring
properties. Lessor shall not unreasonably withhold or delay its consent to
any written request for a modification of the Agreed Use, so long as the
same will not impair the structural integrity of the improvements on the
Premises or the mechanical or electrical systems therein, is not
significantly more burdensome to the Premises. If Lessor elects to withhold
consent, Lessor shall within five (5) business days after such request give
written notification of same, which notice shall include an explanation of
Lessor's objections to the change in use.
6.2 Hazardous Substances:
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as used
in this Lease shall mean any product, substance, or waste whose presence,
use, manufacture, disposal, transportation, or release either by itself or
in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare,
the environment, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential liability of Lessor
to any governmental agency or third party under any applicable statute or
common law theory. Hazardous Substances shall include, but not be limited
to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-
products or fractions thereof. Lessee shall not engage in any activity in
or on the Premises which constitutes a Reportable Use of Hazardous
Substances without the express prior written consent of Lessor and timely
compliance (at Lessee's expense) with all Applicable Requirements.
"Reportable Use" shall mean (i) the installation or use of any above or
below ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business
plan is required to be filed with, any governmental authority, and/or (iii)
the presence at the Premises of a Hazardous Substance with respect to which
any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may use any ordinary and customary
material reasonably required to be used in the normal course of the Agreed
Use, so long as such use is in compliance with all Applicable Requirements,
is not a Reportable Use, and does not expose the Premises or neighboring
property to any meaningful risk of contamination or damage or expose Lessor
to any liability therefor. In addition, Lessor may condition its consent to
any Reportable Use upon receiving such additional assurances as Lessor
reasonably deems necessary to protect itself, the public, the Premises
and/or the environment against damage, contamination, injury and/or
liability, including, but not limited to, the installation (and removal on
or before Lease expiration or termination) of protective modifications (such
as concrete encasements) and/or increasing the Security Deposit.
(b) Duty to Inform Lessor: If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, other than as previously consented to by Lessor, Lessee
shall immediately give Lessor written notice of such fact to Lessor, and
provide Lessor with a copy of any report, notice, claim or other
documentation which it has concerning the presence of such Hazardous
Substance.
(c) Lessee Remediation: Lessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under, or about the Premises
(including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee's expense, take all investigatory and/or remedial action
reasonably recommended, whether or not formally ordered or required, for the
cleanup of any contamination of, and or the maintenance, security and/or
monitoring of the Premises or neighboring properties, that was caused or
materially contributed to by Lessee, or pertaining to or involving any
Hazardous Substance brought onto the Premises during the term of this Lease,
by or for Lessee, or any third party.
(d) Lessee Indemnification: Lessee shall indemnify, defend and hold Lessor,
its agents, employees, lenders and ground lessor, if any, harmless from and
against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising
out of or involving any Hazardous Substance brought onto the Premises by or
for Lessee, or any third party (provided, however, that Lessee shall have no
liability under this Lease with respect to underground migration of any
Hazardous Substance under the Premises from adjacent properties). Lessee's
obligations shall include, but not be limited to, the effects of any
contamination or injury to person, property or the environment created or
suffered by Lessee, and the cost of investigation, removal remediation,
restoration and/or abatement, and shall survive the expiration or
termination of this Lease. No termination, cancellation or release
agreement entered into by Lessor and Lessee shall release Lessee from its
obligations under this Lease with respect to Hazardous Substance, unless
specifically so agreed by Lessor in writing at the time of such agreement.
(e) Lessor Indemnification: Lessor and its successors and assigns shall
indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages which existed as
a result of Hazardous Substances on the Premises prior to the Start Date or
which are caused by the gross negligence, or intentional acts of Lessor, its
agents or employees. Lessor's obligations, as and when required by the
Applicable Requirements, shall include, but not be limited to, the cost of
investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease.
(f) Investigations and Remediations: Lessor shall retain the responsibility
and pay for any investigations or remediation measures required by
governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior to the Start Date. Lessee shall
cooperate fully in any such activities at the request of Lessor, including
allowing Lessor and Lessor's agents to have reasonable access to the
Premises at reasonable times in order to carry out Lessor's investigative
and remedial responsibilities.
(g) Lessor Termination Option: If a Hazardous Substance Condition occurs
during the term of this Lease, unless Lessee is legally responsible therefor
(in which case Lessee shall make the investigation and remediation thereof
required by the Applicable Requirements and this Lease shall continue in
full force and effect, but subject to Lessor's rights under Paragraph 6.2(d)
and Paragraph 13), Lessor may at Lessor's option, either (i) investigate and
remediate such Hazardous Substance Condition, if required, as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to
remediate such condition exceeds twelve (12) times the then monthly Base
Rent or $100,000, whichever is greater, give written notice to Lessee,
within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such Hazardous Substance Condition, of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date of
such notice. In the event Lessor elects to give a termination notice,
Lessee may, within ten (10) days thereafter, give written notice to Lessor
of Lessee's commitment to pay the amount by which the cost of the
remediation of such Hazardous Substance Condition exceeds an amount equal to
twelve (12) times the then monthly Base Rent or $100,000, whichever is
greater. Lessee shall provide Lessor with said funds or satisfactory
assurance thereof within thirty (30) days following such commitment. In
such event, this Lease shall continue in full force and effect, and Lessor
shall proceed to make such remediation as soon as reasonably possible after
the required funds are available. If Lessee does not give such notice and
provide the required funds or assurance thereof within the time provided,
this Lease shall terminate as of the date specified in Lessor's notice of
termination.
6.3 Lessee's Compliance with Requirements: Except as otherwise provided in
this Lease, Lessee shall, at Lessee's sole expense, fully, diligently and in
a timely manner, materially comply with all "Applicable Requirements," the
requirements of any applicable fire insurance underwriter or rating bureau,
and the recommendations of Lessor's engineers and/or consultants which
relate in any manner to the Premises, without regard to whether said
requirements are now in effect or become effective after the Start Date.
Lessee shall, within ten (10) days after receipt of Lessor's written
request, provide Lessor with copies of all permits and other documents, and
other information evidencing Lessee's compliance with any Applicable
Requirements specified by Lessor, and shall immediately upon receipt, notify
Lessor in writing (with copies of any documents involved) of any threatened
or actual claim, notice, citation, warning, complaint or report pertaining
to or involving the failure of Lessee or the Premises to comply with any
Applicable Requirements.
6.4 Inspection; Compliance: Lessor, Lessor's Lender and consultants shall
have the right to enter the Premises at any time in the case of an
emergency, and otherwise at reasonable times, for the purpose of inspecting
the condition of the Premises and for verifying compliance by Lessee with
this Lease. The cost of any such inspections shall be paid by Lessor,
unless a violation of Applicable Requirements or a contamination is found to
exist or be imminent, or the inspection is requested by a governmental
authority. In such case, Lessee shall upon request reimburse Lessor for the
cost of such inspections, so long as such inspection is reasonably related
to the violation or contamination.
7. Maintenance, Repairs, Utility Installations, Trade Fixtures and
Alterations:
7.1 Lessee's Obligations:
(a) In General: Subject to the provisions of Paragraphs 2.2 (Condition),
2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements),
7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises,
Utility Installations, and Alterations in good order, condition and repair
(whether or not such portion of the Premises requiring repairs, or the means
of repairing the same, are reasonably or readily accessible to Lessee, and
whether or not the need for such repairs occurs as a result of Lessee's
use, any prior use, the elements or the age of such portion of the
Premises), including, but not limited to, all equipment or facilities, such
as plumbing , HVAC, electrical, lighting facilities, boilers, pressure
vessels, fire protection system, fixtures, walls, (interior and exterior),
foundations, ceilings, roofs, floors, windows, doors, plate glass,
skylights, landscaping, driveways, parking lots, fences, retaining walls,
signs, sidewalks and parkways located in, on, or adjacent to the Premises.
Lessee, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices, specifically including the
procurement and maintenance of the service contracts required by Paragraph
7.1(b) below. Lessee's obligation shall include restorations, replacements
or renewals when necessary from the result of Lessee's occupancy or failure
to notify Lessor of a failure or problem and to keep all improvements
thereon or a part thereof in good order, condition and state of repair.
Lessee shall, during the term of this Lease, keep the exterior appearance of
the Building in a first-class condition consistent with the exterior
appearance of other similar facilities of comparable age and size in the
vicinity, including, when necessary, the exterior repainting of the
Building.
(b) Service Contracts: Lessee shall, at Lessee's sole expense, procure and
maintain contracts, with copies to Lessor, in customary form and substance
for, and with contractors specializing and experienced in the maintenance
of the following equipment and improvements, ("Basic Elements"), if any, as
and when installed in the Premises: (i) HVAC equipment, (ii) boiler, and
pressure vessels, (iii) fire protection systems, (iv) clarifiers and (v) any
other equipment, if reasonably required by Lessor.
7.2 Lessor's Obligations: Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 9 (Damage or Destruction), and 14
(Condemnation), it is intended by the Parties hereto that Lessor have no
obligation, in any manner whatsoever, to repair and maintain the Premises,
or the equipment therein, all of which obligations are intended to be that
of the Lessee. It is the intention of the Parties that the terms of this
Lease govern the respective obligations of the Parties as to maintenance and
repair of the Premises, and they expressly waive the benefit of any statue
now or hereafter in effect to the extent it is inconsistent with the terms
of this Lease. Lessor shall, at its option, maintain the landscaping and
irrigation systems, roof covering and drains and asphalt and parking lot and
Lessee shall reimburse Lessor for these costs and any other costs incurred
by Lessor in the maintenance of the Premises in monthly payments as part of
the NNN costs.
7.3 Utility Installations, Trade Fixtures, Alterations:
(a) Definitions; Consent Required: The term "Utility Installations" refers
to all floor and window coverings, air lines, power panels, electrical
distribution, security and fire protection systems, communications systems,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the
Premises. The term "Trade Fixtures" shall mean Lessee's machinery and
equipment that can be removed without doing material damage to the Premises.
The term "Alterations" shall mean any modification of the improvements,
other than Utility Installations or Trade Fixtures, whether by addition or
deletion. "Lessee-Owned Alterations and/or Utility Installations" are
defined as Alterations and/or Utility Installations made by Lessee that are
not yet owned by Lessor pursuant to Paragraph 7.4(a). Lessee shall not make
any Alterations or Utility Installations to the Premises without Lessor's
prior written consent. Lessee may, however, make non-structural Utility
Installations to the interior of the Premises (excluding the roof) without
such consent but upon notice to Lessor, as long as they are not visible from
the outside, do not involve puncturing, relocating or removing the roof or
any existing walls, and the cumulative cost thereof during this Lease as
extended does not exceed $50,000 in the aggregate or $10,000 in any one
year.
(b) Consent: Any Alterations or Utility Installations that Lessee shall
desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. Consent shall be
deemed conditioned upon Lessee's: (i) acquiring all applicable governmental
permits; (ii) furnishing Lessor with copies of both the permits and the
plans and specifications prior to commencement of the work; and (iii)
compliance with all conditions of said permits and other Applicable
Requirements in a prompt and expeditious manner. Any Alterations or Utility
Installations shall be performed in a workmanlike manner with good and
sufficient materials. Lessee shall promptly upon completion furnish Lessor
with as-built plans and specifications. For work which costs an amount
equal to the greater of one month's Base Rent, or $10,000, Lessor may
condition its consent upon Lessee providing a lien and a completion bond in
an amount equal to one and one-half times the estimated cost of such
Alteration or Utility Installation and/or upon Lessee's posting an
additional Security Deposit with Lessor.
(c) Indemnification: Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any
mechanic's or materialmen's lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (10) days' notice prior
to the commencement of any work in, or about the Premises, and Lessor shall
have the right to post notices of non-responsibility. If Lessee shall
contest the validity of any such lien, claim or demand, then Lessee shall,
at its sole expense defend and protect itself, Lessor and the Premises
against the same and shall pay and satisfy any such adverse judgment that
may be rendered thereon before the enforcement thereof. If Lessor shall
require, Lessee shall furnish to Lessor a surety bond in an amount equal to
one and one-half times the amount of such contested lien claim or demand,
indemnifying Lessor against liability for the same. If Lessor elects to
participate in any such action, Lessee shall pay Lessor's attorneys' fees
and costs.
7.4 Ownership, Removal, Surrender, and Restoration:
(a) Ownership: Subject to Lessor's right to require their removal or elect
ownership as hereinafter provided, all Alterations and Utility Installations
made by Lessee shall be the property of Lessee, but considered a part of the
Premises. Lessor may, at any time, elect in writing to be the owner of all
or any specified part of the Lessee-Owned Alterations and Utility
Installations. Unless otherwise instructed per Subparagraph 7.4(b) hereof,
all Lessee-Owned Alterations and Utility Installations shall, at the
expiration or termination of this Lease, become the property of Lessor and
be surrendered by Lessee with the Premises.
(b) Removal: By delivery to Lessee of written notice from Lessor not later
than ninety (90) days prior to the end of the term of this Lease, Lessor may
require that any or all Lessee Owned Alterations or Utility Installations be
removed by the expiration or termination of this Lease. Lessor may require
the removal at any time of all or any part of any Lessee Owned Alterations
or Utility Installations made without the required consent.
(c) Surrender/Restoration: Lessee shall surrender the Premises by the
Expiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof broom clean and free of debris, and
in good operating order, condition and state of repair, ordinary wear and
tear excepted. "Ordinary wear and tear "shall not include any damage or
deterioration that would have been prevented by good maintenance practice.
Lessee shall repair any damage occasioned by the installation, maintenance
or removal of Trade Fixtures, furnishings and equipment, as well as the
removal of any storage tank installed by or for Lessee, and the removal,
replacement, or remediation of any soil, material or groundwater
contaminated by Lessee. Trade Fixtures shall remain the property of Lessee
and shall be removed by Lessee. The failure by Lessee to timely vacate the
Premises pursuant to this Paragraph 7.4(c) without the express written
consent of Lessor shall constitute a holdover under the provisions of
Paragraph 26 below.
8. Insurance; Indemnity:
8.1 Payment of Insurance: Lessee shall pay for all insurance required under
Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor under Paragraph 8.2(b) in excess of $5,000,000
per occurrence. Premiums for policy periods commencing prior to, or
extending beyond, the Lease term shall be prorated to correspond to the
Lease term. Payment shall be made by Lessee to Lessor in monthly
installments as part of the NNN charges.
8.2 Liability Insurance:
(a) Carried by Lessee: Lessee shall obtain and keep in force a Commercial
General Liability Policy of Insurance protecting Lessee and Lessor against
claims for bodily injury, personal injury and property damage based upon or
arising out of the ownership, use, occupancy or maintenance of the Premises
and all areas appurtenant thereto. Such insurance shall be on an occurrence
basis providing single limit coverage in an amount not less than $2,000,000
per occurrence with an "Additional Insured-Managers or Lessors of Premises
Endorsement" and contain the "Amendment of the Pollution Exclusion
Endorsement" for damage caused by heat, smoke or fumes from a hostile fire.
The policy shall not contain any intra-insured exclusions as between insured
persons or organizations, but shall include coverage for liability assumed
under this Lease as an "insured contract" for the performance of Lessee's
indemnity obligations under this Lease. The limits of said insurance shall
not, however, limit the liability of Lessee nor relieve Lessee of any
obligation hereunder. All insurance carried by Lessee shall be primary to
and not contributory with any similar insurance carried by Lessor, whose
insurance shall be considered excess insurance only.
(b) Carried by Lessor: Lessor shall also maintain liability insurance
described in Paragraph 8.2(a) above, in addition to and not in lieu of, the
insurance required to be maintained by Lessee. Lessee shall not be named as
an additional insured therein.
8.3 Property Insurance-Building, Improvements and Rental Value:
(a) Building and Improvements: The Insuring Party shall obtain and keep in
force a policy or policies in the name of Lessor, with loss payable to
Lessor and to any Lender, insuring against loss or damage to the Premises.
The amount of such insurance shall be equal to the full replacement cost of
the Premises, as the same shall exist from time to time, or the amount
required by any Lender, but in no event more than the commercially
reasonable and available insurable value thereof. If Lessor is the Insuring
Party, however, Lessee Owned Alterations and Utility Installations, Trade
Fixtures, and Lessee's personal property shall be insured by Lessee under
Paragraph 8.4 rather than by Lessor. If the coverage is available and
commercially appropriate, such policy or policies shall insure against all
risks of direct physical loss or damage including earthquake, coverage for
debris removal and the enforcement of any Applicable Requirements requiring
the upgrading, demolition, reconstruction or replacement of any portion of
the Premises as the result of a covered loss. Said policy or policies shall
also contain an agreed valuation provision in lieu of any co-insurance
clause, waiver of subrogation, and inflation guard protection causing an
increase in the annual property insurance coverage amount by a factor of not
less than the adjusted U.S. Department of Labor Consumer Price Index for All
Urban Consumers for the city nearest to where the Premises are located. If
such insurance coverage has a deductible clause, the deductible amount shall
not exceed $1,000 per occurrence, and Lessee shall be liable for such
deductible amount in the event of an Insured Loss.
(b) Rental Value: The Insuring Party shall obtain and keep in force a
policy or policies in the name of Lessor, with loss payable to Lessor and
any Lender, insuring the loss of the full Rent for (1) one year. Said
insurance shall provide that in the event the Lease is terminated by reason
of an insured loss, the period of indemnity for such coverage shall be
extended beyond the date of the completion of repairs or replacement of the
Premises, to provide for one full year's loss of Rent from the date of any
such loss. Said insurance shall contain an agreed valuation provision in
lieu of any co-insurance clause, and the amount of coverage shall be
adjusted annually to reflect the projected Rent, otherwise payable by
Lessee, for the next twelve (12) month period. Lessee shall be liable for
any deductible amount in the event of such loss.
(c) Adjacent Premises: If the Premises are part of a larger building, or
of a group of buildings owned by Lessor which are adjacent to the Premises,
the Lessee shall pay for any increase in the premiums for the property
insurance of such building or buildings if said increase is caused by
Lessee's acts, omissions, use or occupancy of the Premises.
8.4 Lessee's Property/Business Interruption Insurance:
(a) Property Damage: Lessee shall obtain and maintain insurance coverage on
all of Lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such insurance shall be full
replacement cost coverage with a deductible of not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee
for the replacement of personal property, Trade Fixtures and Lessee Owned
Alterations and Utility Installations. Lessee shall provide Lessor with
written evidence that such insurance is in force.
(b) Business Interruption: If reasonably available, and if Lessor requests
Lessee to do so in writing, Lessee shall obtain and maintain loss of income
and extra expense insurance in amounts as will reimburse Lessee for direct
or indirect loss of earnings attributable to all perils commonly insured
against by prudent lessees in the business of Lessee or attributable to
prevention of access to the Premises as a result of such perils.
(c) No Representation of Adequate Coverage: Lessor makes no representation
that the limits or forms of coverage of insurance specified herein are
adequate to cover Lessee's property, business operations or obligations
under this Lease.
8.5 Insurance Policies: Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the
Premises are located, and maintaining during the policy term a "General
Policyholders Rating" of at least B+, V, as set forth in the most current
issue of "Best's Insurance Guide", or such other rating as may be required
by a Lender. Lessee shall not do or permit to be done anything which
invalidates the required insurance policies. Lessee shall, prior to the
Start Date, deliver to Lessor certified copies of policies of such insurance
or certificates evidencing the existence and amounts of the required
insurance. No such policy shall be cancelable or subject to modification
except after thirty (30) days' prior written notice to Lessor. Lessee shall
at least thirty (30) days prior to the expiration of such policies, furnish
Lessor with evidence of renewals or "insurance binders" evidencing renewal
thereof, or Lessor may order such insurance and charge the cost thereof to
Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such
policies shall be for a term of at least one year, or the length of the
remaining term of this Lease, whichever is less. If either Party shall fail
to procure and maintain the insurance required to be carried by it, the
other Party may, but shall not be required to, procure and maintain the
same. Insurance Policies and Certificates of Insurance required of Lessee
shall name ▇▇▇▇ ▇▇▇▇▇, dba Sunbelt Enterprises as an additional insured.
Lessor may satisfy its insurance requirements with blanket policies insuring
multiple properties.
8.6 Waiver of Subrogation: Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages against the other, for loss of or damage to
their property arising out of or incident to the perils required to be
insured against herein. The effect of such releases and waivers is not
limited by the amount of insurance carried or required, or by any
deductibles applicable thereto. The Parties agree to have their respective
property damage insurance carriers waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as
the insurance is not invalidated thereby.
8.7 Indemnity: Except for Lessor's sole negligence, Lessee shall indemnify,
protect, defend and hold harmless the Premises, Lessor and its agents,
Lessor's master or ground lessor, partners and Lenders, from and against any
and all claims, loss of rents and/or damages, liens, judgments, penalties,
attorneys' and consultants' fees, expenses and/or liabilities arising out
of, involving, or in connection with the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor
by reason of any of the foregoing matters, Lessee shall upon notice defend
the same at Lessee's expense by counsel reasonably satisfactory to Lessor
and Lessor shall cooperate with Lessee in such defense. Lessor need not
have first paid any such claim in order to be defended or indemnified.
8.8 Exemption of Lessor from Liability: Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandize or other
property of Lessee, Lessee's employees, contractors, invitees, customers, or
any other person in or about the Premises, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or rain, or
from the breakage, leakage, obstruction or other defects of pipes, fire
sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from
any other cause, whether the said injury or damage results from conditions
arising upon the Premises or upon other portions of the Building of which
the Premises are a part, or from other sources or places. Lessor shall not
be liable for any damages arising from any act or neglect of any other
tenant of Lessor. 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.
8.9 Lessor may satisfy its insurance requirements with blanket policies
covering multiple properties.
9. Damage or Destruction:
9.1 Definitions:
(a) "Premises Partial Damage": shall mean damage or destruction to the
improvements on the Premises, other than Lessee-Owned Alterations and
Utility Installations, which can reasonably be repaired in six (6) months or
less from the date of the damage or destruction. Lessor shall notify Lessee
in writing within thirty (30) days from the date of the damage or
destruction as to whether or not the damage is partial or total.
(b) Premises Total Destruction": shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations,
which cannot reasonably be repaired in six (6) months or less from the date
of the damage or destruction. Lessor shall notify Lessee in writing within
thirty (30) days from the date of the damage or destruction as to whether or
not the damage is partial or total.
(c) "Insured Loss": shall mean damage or destruction to improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a) irrespective of any deductible
amounts or coverage limits involved.
(d) "Replacement Cost" : shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their
condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of Applicable Requirements,
and without deduction for depreciation.
(e) "Hazardous Substance Condition" : shall mean the occurrence or discovery
of a condition involving the presence of, or a contamination by, a Hazardous
Substance as defined in Paragraph 6.2(a), in, on, or under the Premises.
9.2 Premises Partial Damage - Insured Loss: If Premises Partial Damage that
is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair
such damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and
Utility Installations) as soon as reasonably possible and this Lease shall
continue in full force and effect; provided, however, that Lessee shall, at
Lessor's election, make the repair of any damage or destruction the total
cost to repair of which is $10,000 or less, and in such event, Lessor shall
make any applicable insurance proceeds available to Lessee on a reasonable
basis for that purpose. Notwithstanding the foregoing, if the required
insurance was not in force or the insurance proceeds are not sufficient to
effect such repair, the Insuring Party shall promptly contribute the
shortage in proceeds (except as to the deductible which is Lessee's
responsibility) as and when required to complete said repairs. In the
event, however, such shortage was due to the fact that, by reason of the
unique nature of the improvements, full replacement cost insurance coverage
was not commercially reasonable and available, Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore
the unique aspects of the Premises unless Lessee provides Lessor with the
funds to cover same, or adequate assurance thereof, within ten (10) days
following receipt of written notice of such shortage and request therefore.
If Lessor receives said funds or adequate assurance thereof within said ten
(10) day period, the party responsible for making the repairs shall complete
them as soon as reasonably possible and this Lease shall remain in full
force and effect. If such funds or assurance are not received, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days
thereafter to: (i) make such restoration and repair as is commercially
reasonable with Lessor paying any shortage in proceeds, in which case this
Lease shall remain in full force and effect, or have this Lease terminate
thirty (30) days thereafter. Lessee shall not be entitled to reimbursement
of any funds contributed by Lessee to repair any such damage or destruction.
Premises Partial Damage due to flood or earthquake shall be subject to
Paragraph 9.3, notwithstanding that there may be some insurance coverage,
but the net proceeds of any such insurance shall be made available for the
repairs if made by either Party.
9.3 Partial Damage - Uninsured Loss: If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either: (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lessee by giving written notice to Lessee
within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage. Such termination shall be effective sixty (60)
days following the date of such notice. In the event Lessor elects to
terminate this Lease, Lessee shall have the right within ten (10) days after
receipt of the termination notice to give written notice to Lessor of
Lessee's commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within thirty (30) days after making such
commitment. In such event this Lease shall continue in full force and
effect, and Lessor shall proceed to make such repairs as soon as reasonably
possible after the required funds are available. If Lessee does not make
the required commitment, this Lease shall terminate as of the date specified
in the termination notice.
9.4 Total Destruction: Notwithstanding any other provision hereof, if
Premises Total Destruction occurs, this Lease shall terminate sixty (60)
days following such Destruction. If the damage or destruction was caused by
the gross negligence or willful misconduct of Lessee, Lessor shall have the
right to recover Lessor's damages from Lessee except as provided in
Paragraph 8.6.
9.5 Damage Near End of Term: If at any time during the last six (6) months
of the term of this Lease there is damage for which the cost to repair
exceeds one (1) month's Base Rent, whether or not an Insured Loss, Lessor
may terminate this Lease effective sixty (60) days following the date of
occurrence of such damage by giving written termination notice to Lessee
within thirty (30) days after the date of occurrence of such damage.
Notwithstanding the foregoing, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by (a) exercising such option, and (b) providing Lessor
with any shortage in insurance proceeds (or adequate assurance thereof)
needed to make the repairs on or before the earlier of (i) the date which is
ten (10) days after Lessee's receipt of Lessor's written notice purporting
to terminate this Lease, or (ii) the day prior to the date upon which such
option expires. If Lessee duly exercises such option during such period and
provides Lessor with funds (or adequate assurance thereof) to cover any
shortage in insurance proceeds, Lessor shall, at Lessor's commercially
reasonable expense, repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. If Lessee fails to
exercise such option and provide such funds or assurance during such period,
then this Lease shall terminate on the date specified in the termination
notice and Lessee's option shall be extinguished.
9.6 Abatement of Rent; Lessee's Remedies:
(a) Abatement: In the event of Premises Partial Damage or Premises Total
Destruction or Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent, payable by Lessee for the period
required for the repair, remediation or restoration of such damage shall be
abated in proportion to the degree to which Lessee's use of the Premises is
impaired, but not to exceed the proceeds from the Rental Value insurance.
All other obligations of Lessee hereunder shall be performed by Lessee, and
Lessor shall have no liability for any such damage, destruction,
remediation, repair, or restoration except as provided herein.
(b) Remedies: If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such
repair or restoration within ninety (90) days after such obligation shall
accrue, Lessee may, at any time prior to the commencement of such repair or
restoration, give written notice to Lessor and to any Lenders of which
Lessee has actual notice, of Lessee's election to terminate this Lease on a
date not less than sixty (60) days following the giving of such notice. If
Lessee gives such notice and such repair or restoration is not commenced
within thirty (30) days thereafter, this Lease shall terminate as of the
date specified in said notice. If the repair or restoration is commenced
within said thirty (30) days, this Lease shall continue in full force and
effect. "Commence" shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on
the Premises, whichever first occurs.
9.7 Termination - Advance Payments: Upon termination of this Lease pursuant
to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payment made by Lessee to
Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's
Security Deposit as has not been, or is not then required to be, used by
Lessor.
9.8 Waiver of Statutes: Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the
Premises with respect to the termination of this Lease and hereby waive the
provisions of any present or future statute to the extent inconsistent
herewith.
10. Real Property Taxes:
10.1 Definition of "Real Property Taxes" : As used herein, the term "Real
Property Taxes" shall include any form of assessment; real estate, general,
special, ordinary or extraordinary, or rental levy or tax (other than
inheritance, personal income or estate taxes); improvement bond; and/or
license fee imposed upon or levied against any legal or equitable interest
of Lessor in the Premises, Lessor's right to other income therefrom, and/or
Lessor's business of leasing, by any authority having the direct or indirect
power to tax and where the funds are generated with reference to the
Building address and where the proceeds so generated are to be applied by
the city, county or other local taxing authority of a jurisdiction within
which the Premises are located. The term "Real Property Taxes" shall also
include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring during the term of this Lease,
including but not limited to, a change in the ownership of the Premises.
10.2 Property Tax Payments:
(a) Payment of Taxes: Lessee shall pay the Real Property Taxes applicable
to the Premises during the term of this Lease. If any such taxes shall
cover any period of time prior to or after the expiration or termination of
this Lease,
Lessee's share of such taxes shall be prorated to cover only that portion of
the tax ▇▇▇▇ applicable to the period that this Lease is in effect, and
Lessor shall reimburse Lessee for any overpayment.
(b) Advance Payment: Lessor shall estimate the current Real Property Taxes,
and require that such taxes be paid monthly in advance as part of the NNN
costs with the payment of the Base Rent. The monthly payment shall be an
amount equal to the amount of the estimated installment of taxes divided by
the number of months remaining before the month in which said installment
becomes delinquent. When the actual amount of the applicable tax ▇▇▇▇ is
known, the amount of such equal monthly advance payments shall be adjusted
as required to provide the funds needed to pay the applicable taxes. If the
amount collected by Lessor is insufficient to pay such Real Property Taxes
when due, Lessee shall pay Lessor, upon demand, such additional sums as are
necessary to pay such obligations. All moneys paid to Lessor under this
Paragraph may be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a Breach by Lessee in the performance of its
obligations under this Lease, then any balance of funds paid to Lessor under
the provisions of this Paragraph may at the option of Lessor, be treated as
an additional Security Deposit.
10.3 Joint Assessment: If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax parcel
assessed, such proportion to be conclusively determined by Lessor from the
respective valuations assigned in the assessor's work sheets or such other
information as may be reasonably available.
10.4 Personal Property Taxes: Lessee shall pay, prior to delinquency, all
taxes assessed against and levied upon Lessee-Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal
property of Lessee. When possible, Lessee shall cause such property to be
assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee's
property within ten (10) days after receipt of a written statement.
11. Utilities: Lessee shall pay for all water, gas, heat, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion to be
determined by Lessor, of all charges jointly metered.
12. Assignment and Subletting:
12.1 Lessor's Consent Required:
(a) Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage or encumber (collectively, "assign or assignment") or sublet all or
any part of Lessee's interest in this Lease or in the Premises without
Lessor's prior written consent.
(b) A change in the control of Lessee shall constitute an assignment
requiring consent. The transfer, on a cumulative basis, of fifty one
percent (51%) or more of the voting control of Lessee shall constitute a
change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or series of
transactions (by way of merger, sale, acquisition, financing, transfer,
leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee by an amount greater than
fifty one percent (51%) of such Net Worth of Lessee as it was represented at
the time of the execution of this Lease or at the time of the most recent
assignment to which Lessor has consented, or as it exists immediately prior
to said transaction or transactions constituting such reduction, whichever
was or is greater, shall be considered an assignment of this Lease to which
Lessor may withhold its consent. "Net Worth of Lessee" shall mean the net
worth of Lessee (excluding any Guarantors) established under generally
accepted accounting principles.
(d) An assignment or subletting without consent shall, at Lessor's option,
be a Default curable after notice per Paragraph 13.1(c), or a non-curable
Breach without the necessity of any notice and grace period. If Lessor
elects to treat such unapproved assignment or subletting as a non-curable
Breach, Lessor may either: (i) terminate this Lease, or (ii) upon thirty
(30) days written notice, increase the monthly Base Rent to one hundred ten
percent (110%) of the Base Rent then in effect Further, in the event of
such Breach and rental adjustment, (i) the purchase price of any option to
purchase the Premises held by Lessee shall be subject to similar adjustment
to one hundred ten percent (110%) of the price previously in effect, and
(ii) all fixed and non-fixed rental adjustments scheduled during the
remainder of the Lease term shall be increased to One Hundred Ten Percent
(110%) of the scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be
limited to compensatory damages and/or injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and Subletting:
(a) Regardless of Lessor's consent, any assignment or subletting shall not:
(i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release Lessee
of any obligations hereunder, or (iii) alter the primary liability of Lessee
for the payment of Rent or for the performance of any other obligations to
be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations from any
person other than Lessee pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the
acceptance of Rent or performance shall constitute a waiver or estoppel of
Lessor's right to exercise its remedies for Lessee's Default or Breach.
(c) Lessor's consent to any assignment or subletting shall not constitute a
consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may proceed
directly against Lessee, any Guarantors or anyone else responsible for the
performance of the Lessee's obligations under this Lease, including any
assignee or
sublessee, without first exhausting Lessor's remedies against any other
person or entity responsible therefor to Lessor, or any security held by
Lessor.
(e) Each request for consent to an assignment or subletting shall be in
writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the
proposed assignee or sublessee, including but not limited to the intended
use and/or required modification of the Premises, if any, together with a
fee of $500 as consideration for Lessor's considering and processing said
request Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested.
(f) Any assignee of, or sublessee under, this Lease shall, by reason of
accepting such assignment or entering into such sublease, be deemed to have
assumed and agreed to conform and comply with each and every term, covenant,
condition and obligation herein to be observed or performed by Lessee during
the term of said assignment or sublease, other than such obligations as are
contrary to or inconsistent with provisions of an assignment or sublease to
which Lessor has specifically consented to in writing.
12.3 Additional Terms and Conditions Applicable to Subletting: The
following terms and conditions shall apply to any subletting by Lessee of
all or any part of the Premises and shall be deemed included in all
subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest
in all Rent payable on any sublease, and Lessor may collect such Rent and
apply same toward Lessee's obligations under this Lease; provided, however,
that until a Breach shall occur in the performance of Lessee's obligations,
Lessee may collect said Rent. Lessor shall not, by reason of the foregoing
or any assignment of such sublease, nor by reason of the collection of Rent,
be deemed liable to the sublessee for any failure of Lessee to perform and
comply with any of Lessee's obligations to such sublessee. Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a
written notice from Lessor stating that a Breach exists in the performance
of Lessee's obligations under this Lease, to pay to Lessor all rent due and
to become due under the sublease. Sublessee shall rely upon any such notice
from Lessor and shall pay all Rents to Lessor without any obligation or
right to inquire as to whether such Breach exists, notwithstanding any claim
from Lessee to the contrary.
(b) In the event of a Breach by Lessee, Lessor may, at its option require
sublessee to attorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the
exercise of said option to the expiration of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any prior defaults
or breaches of such sublessor or for any prior defaults or breaches of such
sublessor.
(c) Any matter requiring the consent of the sublessor under a sublease shall
also require the consent of Lessor.
(d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee
to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee
shall have a right of reimbursement and offset from and against Lessee for
any such Defaults cured by the sublessee.
13. Default; Breach; Remedies:
13.1 Default; Breach: A "Default" is defined as a failure by the Lessee to
comply with or perform any of the terms, covenants, conditions or rules
under this Lease. A "Breach" is defined as the occurrence of one or more of
the following Defaults, and the failure of Lessee to cure such Default
within the applicable grace period.
(a) The abandonment of the Premises; or the vacating of the Premises without
providing a commercially reasonable level of security, or where the coverage
of the property insurance described in Paragraph 8.3 is jeopardized as a
result thereof, or without providing reasonable assurances to minimize
potential vandalism.
(b) The failure of Lessee to make any payment of Rent, or any other monetary
payment required to be made by Lessee hereunder whether to Lessor or to a
third party, when due, to provide reasonable evidence of insurance or surety
bond, or to fulfill any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of
three (3) business days following written notice to Lessee.
(c) The failure by Lessee to provide (i) reasonable written evidence of
compliance with Applicable Requirements,(ii) the service contracts, (iii)
the rescission of an unauthorized assignment or subletting , (iv) a Tenancy
Statement, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 42
(easements), or (viii) any other documentation or information which Lessor
may reasonably require of Lessee under the terms of this Lease, where any
such failure continues for a period of ten (10) days following written
notice to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or provisions
of this Lease, or of the rules adopted under Paragraph 40 hereof, other than
those described in Subparagraphs 13.1(a), (b) or (c), above, where such
Default continues for a period of thirty (30) days after written notice;
provided, however, that if the nature of Lessee's Default is such that more
than thirty (30) days are reasonably required for its cure, then it shall
not be deemed to be a Breach if Lessee commences such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
(e) The occurrence of any of the following events: (i) the making of any
general arrangement or assignment for the benefit of creditors; (ii)
becoming a "debtor" as defined in 11 U.S. Code Section 101 or any successor
statute thereto (unless, in the case of a petition filed against Lessee, the
same is dismissed within sixty (60) days; (iii) the appointment of a trustee
or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where
possession is not restored to Lessee within thirty (30) days; or (iv) the
attachment, execution or other judicial seizure of substantially all of
Lessee's assets located at the Premises or of Lessee's interest in this
Lease, where such seizure is not discharged within thirty (30) days;
provided, however, in the event that any provision of this subparagraph (e)
is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of Lessee or of any
Guarantor, given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor's liability with respect to this Lease other than in accordance
with the terms of such guaranty, (iii) a Guarantor's becoming insolvent or
the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the
guaranty, or (v) a Guarantor's breach of its guaranty obligation on an
anticipatory basis, and Lessee's failure, within sixty (60) days following
written notice of any such event, to provide written alternative assurance
or security, which, when coupled with the then existing resources of Lessee,
equals or exceeds the combined financial resources of Lessee and the
Guarantors that existed at the time of execution of this Lease.
13.2 Remedies: If Lessee fails to perform any of its affirmative duty or
obligations within ten (10) days after written notice (or in case of an
emergency, without notice), Lessor may, at its option, perform such duty or
obligation on Lessee's behalf, including but not limited to the obtaining of
reasonably required bonds, insurance policies, or governmental licenses,
permits or approvals. The costs and expenses of any such performance by
Lessor shall be due and payable by Lessee upon receipt of invoice therefore.
If any check given to Lessor by Lessee shall not be honored by the bank upon
which it is drawn, Lessor, at its own option, may require all future
payments to be made by Lessee to be by cashier's check. In the event of a
Breach, Lessor may, with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy which Lessor may have
by reason of such Breach:
(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Lessee shall immediately
surrender possession to Lessor. In such event Lessor shall be entitled to
recover from Lessee: (i) the unpaid Rent which had been earned at the time
of termination; (ii) the worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; (iii) the worth at the time of award of
the amount by which the unpaid rent for the balance of the term after the
time of award exceeds the amount of such rental loss that the Lessee proves
could be reasonably avoided; and (iv) any other amount necessary to
compensate Lessor for all the detriment proximately caused by the Lessee's
failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not
limited to the cost of recovering possession of the Premises, expenses of
reletting, including necessary renovation and alteration of the Premises,
reasonable attorneys' fees, and that portion of any leasing commission paid
by Lessor in connection with this Lease applicable to the unexpired term of
this Lease. The worth at the time of award of the amount referred to in
provision (iii) of the immediately preceding sentence shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of
the District within which the Premises are located at the time of award plus
one percent (1%). Efforts by Lessor to mitigate damages caused by Lessee's
Breach of this Lease shall not waive Lessor's right to recover damages under
this Paragraph 12. If termination of this Lease is obtained through the
provisional remedy of unlawful detainer, Lessor shall have the right to
recover in such proceeding the unpaid rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof
in a separate suit. If a notice and grace period required under Paragraph
13.1 was not previously given, a notice to pay rent or quit given to Lessee
under the unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period
required by Paragraph 13.1 and the unlawful detainer statute shall run
concurrently, and the failure of Lessee to cure the Default within the
greater of the two such grace periods shall constitute both an unlawful
detainer and a Breach of this Lease entitling Lessor to the remedies
provided for in this Lease and/or by said statue.
(b) Continue the Lease and Lessee's right to possession and recover the Rent
as it becomes due, in which event Lessee may sublet or assign, subject only
to reasonable limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Lessor's interest, shall not
constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the laws or
judicial decisions of the state wherein the Premises are located. The
expiration or termination of this Lease and/or the termination of Lessee's
right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing
during the term hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture: Any agreement for free or abated rent or other
charges, or for the giving or paying by Lessor to or for Lessee of any cash
or other bonus, inducement or consideration for Lessee's entering into this
Lease, all of which concessions are hereinafter referred to as "Inducement
Provisions" shall be deemed conditioned upon Lessee's full and faithful
performance of all of the terms, covenants and conditions of this Lease .
Upon Breach of this Lease by Lessee, any such Inducement Provision shall
automatically be deemed deleted from this Lease and of no further force or
effect, and any rent, other charge, bonus, inducement or consideration
theretofore abated, given or paid by Lessor under such an Inducement
Provision shall be immediately due and payable by Lessee to Lessor,
notwithstanding any subsequent cure of said Breach by Lessee. The
acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated in writing by
Lessor at the time of such acceptance.
13.4 Late Charges: Lessee hereby acknowledges that late payment by Lessee
of Rent will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any
Rent shall not be received by Lessor within five (5) days after such amount
shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a one time late charge equal to ten percent (10%) of
each such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of such late payment. Acceptance of such late charge by Lessor shall
in no event constitute a waiver of Lessee's Default or Breach with respect
to such overdue amount, nor prevent the exercise of any of the other rights
and remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive installments
of Base Rent, then notwithstanding any provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable
quarterly in advance.
13.5 Interest: Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor within thirty (30) days following the date
on which it was due shall bear interest from the thirty-first (31st) day
after it was due. The interest ("Interest") charged shall be equal to the
prime rate charged by the largest state chartered bank in the state in which
the Premises are located plus 4%, but shall not exceed the maximum rate
allowed by law. Interest is payable in addition to the potential late
charge provided for in Paragraph 13.4.
13.6 Breach by Lessor:
(a) Notice of Breach: Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph, a
reasonable time shall in no event be less than thirty (30) days after
receipt by Lessor, and any Lender whose name and address shall have been
furnished Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however,
that if the nature of Lessor's obligation is such that more than thirty (30)
days are reasonably required for its performance, then Lessor shall not be
in breach of this Lease if performance is commenced within such thirty (30)
day period and thereafter diligently pursued to completion.
(b) Performance by Lessee on Behalf of Lessor: In the event that neither
Lessor nor Lender cures said breach within thirty (30) days after receipt of
said notice, or if having commenced said cure they do not diligently pursue
it to completion, then Lessee may elect to cure said breach at Lessee's
expense and offset from Rent an amount equal to the greater of one month's
Base Rent or the Security Deposit, and to pay an excess of such expense
under protest, reserving Lessee's right to reimbursement from Lessor.
Lessee shall document the cost of said cure and supply said documentation to
Lessor.
14. Condemnation: If the Premises or any portion thereof are taken under
the power of eminent domain or sold under the threat of the exercise of said
power (collectively "Condemnation"), this Lease shall terminate as to the
part taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of any
building, or more than twenty-five percent (25%) of the land area not
occupied by any building, is taken by Condemnation, Lessee may, at Lessee's
option, to be exercised in writing within ten (10) days after Lessor shall
have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority
takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and
effect as to the portion of the Premises remaining, except that the Base
Rent shall be reduced in proportion to the reduction in utility of the
Premises caused by such Condemnation. Condemnation awards and/or payments
shall be the property of Lessor, whether such award shall be made as
compensation for diminution in value of the leasehold, the value of the part
taken, or for severance damages; provided, however, that Lessee shall be
entitled to any compensation for Lessee's relocation expenses, loss of
business goodwill and/or Trade Fixtures, without regard to whether or not
this Lease is terminated pursuant to the provisions of this Paragraph. All
Alterations and Utility Installations made to the Premises by Lessee, for
purpose of Condemnation only, shall be considered the property of the Lessee
and Lessee shall be entitled to any and all compensation which is payable
therefore. In the event that this Lease is not terminated by reason of the
Condemnation, Lessor shall repair any damage to the Premises caused by such
Condemnation.
15. Brokers' Fees:
15.1 Representations and Indemnities of Broker Relationships. Lessee and
Lessor each represent and warrant to the other that it has had no dealings
with any person, firm, broker (other than the Brokers, if any) in connection
with this Lease, and that no one other than said named Brokers is entitled
to any commission or finder's fee in connection herewith. Lessee and Lessor
do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason
of any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees incurred with respect thereto.
16. Tenancy Statements/Estoppel Certificate:
16.1 Each Party (as "Responding Party") shall within ten (10) days after
written notice from the other Party (the "Requesting Party") execute,
acknowledge and deliver to the Requesting Party an estoppel certificate in
writing, in form similar to the then most current "Tenancy Statement" form
published by the American Industrial Real Estate Association, plus such
additional information, confirmation and/or statements as may be reasonably
requested by the Requesting Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises, or any
part thereof, Lessee and all Guarantors shall deliver to any potential
lender or purchaser designated by Lessor such financial statements as may be
reasonably required by such lender or purchaser, including but not limited
to Lessee's financial statements for the past three (3) years. All such
financial statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the purposes herein set
forth.
17. Definition of Lessor: The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises,
or, if this is a sublease, of the Lessee's interest in the prior lease. In
the event of a transfer of Lessor's title or interest in the Premises or
this Lease, Lessor shall deliver to the transferee or assignee (in cash or
by credit) any unused Security Deposit held by Lessor. Except as provided
in Paragraph 15, upon such transfer or assignment and delivery of the
Security Deposit, as aforesaid, the prior Lessor shall be relieved of all
liability with respect to the obligations and/or covenants under this Lease
thereafter to be performed by the Lessor. Subject to the foregoing, the
obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.
Notwithstanding the above, the original Lessor under this Lease, and all
subsequent holders of the Lessor's interest in this Lease shall remain
liable and responsible with regard to the potential duties and liabilities
of Lessor pertaining to Hazardous Substances as outlined in Paragraph 6
above.
18. Severability: The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. Days: Unless otherwise specifically indicated to the contrary, the
word "days" as used in this Lease shall mean and refer to calendar days.
20. Limitation on Liability: Except with respect to Lessor's fraud, gross
negligence or willful misconduct, the obligations of Lessor under this Lease
shall not constitute personal obligations of Lessor, the individual partners
of Lessor or its or their individual partners, directors, officers,
shareholders, employees or agents, and Lessee shall look to the Premises,
and to no other assets of Lessor, for the satisfaction of any liability of
Lessor with respect to this Lease, and shall not seek recourse against the
individual partners of Lessor, or its or their individual partners,
directors, officers shareholders, employees or agents, or any of their
personal assets for such satisfaction.
21. Time of Essence: Time is of the essence with respect to the performance
of all obligations to be performed or observed by the Parties under this
Lease.
22. No Prior or other Agreements/Broker Disclaimer: This Lease contains all
agreements between the Parties with respect to any matter mentioned herein,
and no other prior or contemporaneous agreement or understanding shall be
effective. Lessor and Lessee each represents and warrants to the Brokers
that it has made, and is relying solely upon, its own investigation as to
the nature, quality, character and financial responsibility of the other
Party to this Lease and as to the nature, quality and character of the
Premises. Brokers have no responsibility with respect thereto or with
respect to any default or breach hereof by either Party. The liability
(including court costs and Attorneys' fees), of any Broker with respect to
negotiation, execution, delivery or performance by either Lessor or Lessee
under this Lease or any amendment or modification hereto shall be limited to
an amount up to the fee received by such Broker pursuant to this Lease;
provided, however, that the foregoing limitation on each Broker's liability
shall not be applicable to any gross negligence or willful misconduct of
such Broker.
23. Notices:
23.1 Notice Requirements. All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by courier)
or may be sent by regular, certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid, or by facsimile transmission,
and shall be deemed sufficiently given if served in a manner specified in
this Paragraph 23. The addresses noted adjacent to a Party's signature on
this Lease shall be that Party's address for delivery or mailing of notices.
Either Party may by written notice to the other specify a different address
for notice, except that upon Lessee's taking possession of the Premises, the
Premises shall constitute Lessee's address for notice. A copy of all
notices to Lessor shall be concurrently transmitted to such party or parties
at such addresses as Lessor may from time to time hereafter designate in
writing.
23.2 Date of Notice: Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark
thereon. If sent by regular mail, the notice shall be deemed given forty-
eight (48) hours after the same is addressed as required herein and mailed
with postage prepaid. Notices delivered by United States Express Mail or
overnight courier that guarantee next day delivery shall be deemed given
twenty-four (24) hours after delivery of the same to the United States
Postal Service or courier. Notices transmitted by facsimile transmission or
similar means shall be deemed delivered upon telephone confirmation of
receipt, provided a copy is also delivered via delivery or mail. If notice
is received on a Saturday or a Sunday or a legal holiday, it shall be deemed
received on the next business day.
24. Waivers: No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or
Breach by Lessee of the same or any other term, covenant or condition
hereof. Lessor's consent to or approval of, any such act shall not be
deemed to render unnecessary the obtaining of Lessor's consent to, or
approval of, any subsequent or similar act by Lessee, or be construed as the
basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent. The acceptance of Rent by Lessor shall not be a
waiver of any Default or Breach by Lessee. Any payment by Lessee may be
accepted by Lessor on account of moneys or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no
effect whatsoever unless specifically agreed to in writing by Lessor at or
before the time of deposit of such payment.
25. Recording: Neither Lessor or Lessee shall cause this Lease or a "short
form" memorandum of this Lease to be recorded.
26. No Right To Holdover: Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this
Lease. In the event that Lessee holds over, then the Base Rent shall be
increased to one hundred fifty percent (150%) of the Base Rent applicable
during the month immediately preceding the expiration or termination.
Nothing contained herein shall be construed as consent by Lessor to any
holding over by Lessee.
27. Cumulative Remedies: No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
28. Covenants and Conditions; Construction of Agreement: All provisions of
this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the
convenience of the parties only and shall not be considered a part of this
Lease. Whenever required by the context, the singular shall include the
plural and vice versa. This Lease shall not be construed as if prepared by
one of the parties, but rather according to its fair meaning as a whole, as
if both parties had prepared it.
29. Binding Effect; Choice of Law: This Lease shall be binding upon the
Parties, their personal representatives, successors and assignees and be
governed by the laws of the State in which the Premises are located. Any
litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance:
30.1 Subordination: This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "Security Device"),
now or hereafter placed upon the Premises, to any and all advances made on
the security thereof, and to all renewals, modifications, and extensions
thereof. Lessee agrees that the holders of any such Security Device shall
have no liability or obligation to perform any of the obligations of Lessor
under this Lease. Any Lender may elect to have this Lease and/or any Option
granted hereby superior to the lien of its Security Device by giving written
notice thereof to Lessee, this Lease and such Options shall be deemed prior
to such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.
30.2 Attornment: Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device,
and that in the event of such foreclosure, such new owner shall not: (i) be
liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership, (ii) be subject to any offsets
or defenses which Lessee might have against any prior lessor, or (iii) be
bound by prepayment of more than one month's rent.
30.3 Non-Disturbance: With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall be subject to receiving a commercially reasonable non-
disturbance agreement (a "Non-Disturbance Agreement") from the Lender which
Non-Disturbance Agreement provides that Lessee's possession of the Premises,
and this Lease, including any options to extend the term hereof, will not be
disturbed so long as Lessee is not in Breach hereof and attorns to the
record owner of the Premises. Further, within sixty (60) days after the
execution of this Lease, Lessor shall use its commercially reasonable
efforts to obtain a Non-Disturbance Agreement from the holder of any pre-
existing Security Device which is secured by the Premises. In the event
that Lessor is unable to provide the Non-Disturbance Agreement within said
sixty (60) days, then Lessee may, at Lessee's option, directly contact
Lessor's lender and attempt to negotiate for the execution and delivery of a
Non-Disturbance Agreement.
30.4 Self-Executing: The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents; provided,
however, that upon written request from Lessor or a Lender in connection
with a sale, financing or refinancing of Premises, Lessee and Lessor shall
execute such further writings as may be reasonably required to separately
document any subordination, attornment and/or non-disturbance agreement
provided for herein.
31. Attorneys' Fees: If any Party or Broker brings an action or proceeding
to enforce the terms hereof or declare rights hereunder, the Prevailing
Party (as hereafter defined) in any such proceeding, action, or appeal
thereon, shall be entitled to reasonable attorneys' fees. Such fees may be
awarded in the same suit or recovered in a separate suit, whether or not
such action or proceeding is pursued to decision or judgment. The term
"Prevailing Party" shall include, without limitation, a Party or Broker who
substantially obtains or defeats the relief sought, as the case may be,
whether by compromise, settlement, judgment, or the abandonment by the other
Party or Broker of its claim or defense. The attorneys' fee award shall not
be computed in accordance with any court fee schedule, but shall be such as
to fully reimburse all attorneys' fees reasonably incurred. In addition,
Lessor shall be entitled to attorneys' fees, costs and expenses incurred in
preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently
commenced in connection with such Default or resulting Breach.
32. Lessor's Access; Showing Premises; Repairs: Lessor and Lessor's
agents shall have the right to enter the Premises at any time, in the case
of an emergency, and otherwise at reasonable times for the purpose of
showing the same to prospective purchasers, lenders, or lessees, and making
such alterations, repairs, improvements or additions to the Premises, as
Lessor may deem necessary. All such activities shall be without abatement of
rent or liability to Lessee. Lessor may at any time place on the Premises
any ordinary "For Sale" signs and Lessor may during the last six (6) months
of the term hereof place on the Premises any ordinary "For Lease" signs.
Lessee may at any time place on or about the Premises any ordinary "For
Sublease" sign.
33. Auctions: Lessee shall not conduct, nor permit to be conducted, any
auction upon the Premises without Lessor's prior written consent. Lessor
shall not be obligated to exercise any standard of reasonableness in
determining whether to permit an auction.
34. Signs: Except for ordinary "For Sublease" signs, Lessee shall not
place any sign upon the Premises without Lessor's prior written consent.
All signs must comply with all applicable governmental requirements.
35. Termination; Merger: Unless specifically stated otherwise in writing
by Lessor, the voluntary or other surrender of this Lease by Lessee, the
mutual termination or cancellation hereof, or a termination hereof by Lessor
for Breach by Lessee, shall automatically terminate any sublease or lesser
estate in the Premises; provided, however, that Lessor may elect to continue
any one or all existing subtenancies. Lessor's failure within ten (10) days
following any such event to elect to the contrary by written notice to the
holder of any such lesser interest, shall constitute Lessor's election to
have such event constitute the termination of such interest.
36. Consents: Except as otherwise provided herein, wherever in this Lease
the consent of a Party is required to an act by or for the other Party, such
consent shall not be unreasonably withheld or delayed. Lessor's actual
reasonable costs and expenses (including but not limited to architects',
attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Lessee for any Lessor
consent, including but not limited to consents to an assignment, a
subletting or the presence or use of a Hazardous Substance, shall be paid by
Lessee upon receipt of an invoice and supporting documentation therefor.
Lessor's consent to any act, assignment or subletting shall not constitute
an acknowledgment that no Default or Breach by Lessee of this Lease exists,
nor shall such consent be deemed a waiver of any then existing Default or
Breach, except as may be otherwise specifically stated in writing by Lessor
at the time of such consent. The failure to specify herein any particular
condition to Lessor's consent shall not preclude the impositions by Lessor
at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is
being given. In the event that either Party disagrees with any
determination made by the other hereunder and reasonably requests the
reasons for such determination, the determining party shall furnish its
reasons in writing and in reasonable detail within ten (10) business days
following such request.
37. Guarantor:
37.1 Execution: The Guarantors, if any, shall each execute a guaranty in
the form most recently published by the American Industrial Real Estate
Association, and each such Guarantor shall have the same obligations as
Lessee under this Lease.
37.2 Default: It shall constitute a Default of the Lessee if any such
Guarantor fails or refuses, upon request to provide: (a) evidence of the
execution of the guaranty, including the authority of the party signing on
Guarantor's behalf to obligate Guarantor, and in case of a corporate
Guarantor, a certified copy of a resolution of its board of directors
authorizing the making of such guaranty, (b) current financial statements,
(c) a Tenancy Statement, or (d) written confirmation that the guaranty is
still in effect.
38. Quiet Possession: Subject to payment by Lessee of the Rent and the
performance of all of the covenants, conditions and provisions on Lessee's
part to be observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during the term hereof.
39. Options:
39.1 Definition: "Option" shall mean the right to extend the term of or to
renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor.
39.2 Options Personal to Original Lessee: Each Option granted to Lessee in
this Lease is personal to the original Lessee, and cannot be assigned or
exercised by anyone other than said original Lessee and only while the
original Lessee is in full possession of the Premises and, if requested by
Lessor, with Lessee certifying that Lessee has no intention of thereafter
assigning or subletting.
39.3 Multiple Options: In the event that Lessee has any multiple Options to
extend or renew this Lease, a later Option cannot be exercised unless the
prior Options have been validly exercised.
39.4 Effect of Default on Options:
(a) Lessee shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has
been given three (3) or more notices of Default, whether or not the
Defaults are cured, during the twelve (12) month period immediately
preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised shall not be
extended or enlarged by reason of Lessee's inability to exercise an Option
because of the provisions of Paragraph 39.4(a).
(c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term, (i) Lessee
fails to pay Rent for a period of thirty (30) days after such Rent becomes
due (without any necessity of Lessor to give notice thereof), (ii) Lessor
gives to Lessee three (3) or more notices of separate Default during any
twelve (12) month period, whether or not the Defaults are cured, or (iii) if
Lessee commits a Breach of this Lease.
40. Multiple Buildings: If the Premises are a part of a group of buildings
controlled by Lessor, Lessee agrees that it will observe all reasonable
rules and regulations which Lessor may make from time to time for the
management, safety, and care of said properties, including the care and
cleanliness of the grounds and including the parking, loading and unloading
of vehicles, and that Lessee will pay its fair share of common expenses
incurred in connection therewith.
41. Security Measures: Lessee hereby acknowledges that the rental payable
to Lessor hereunder does not include the cost of guard service or other
security measures, and that Lessor shall have no obligation whatsoever to
provide same. Lessee assumes all responsibility for the protection of the
Premises, Lessee, its agents and invitees and their property from the acts
of third parties.
42. Reservations: Lessor reserves to itself the right, from time to time,
to grant, without the consent of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of
parcel maps and restrictions, so long as such easements, rights,
dedications, maps and restrictions do not unreasonably interfere with the
use of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.
43. Performance Under Protest: If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such
payment shall not be regarded as a voluntary payment and there shall survive
the right on the part of said Party to institute suit for recovery of such
sum. If it shall be adjudged that there was no legal obligation on the part
of said Party to pay such sum or any part thereof, said Party shall be
entitled to recover such sum or so much thereof as it was not legally
required to pay.
44. Authority: If either Party hereto is a corporation, trust, limited
liability company, partnership, or similar entity, each individual executing
this Lease on behalf of such entity represents and warrants that he or she
is duly authorized to execute and deliver this Lease on its behalf. Each
party shall, within thirty (30) days after request, deliver to the other
party satisfactory evidence of such authority.
45. Conflict: Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
46. Offer: Preparation of this Lease by either Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease
to the Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto.
47. Amendments: This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.
48. Not Used.
49. Mediation and Arbitration of Disputes: An Addendum requiring the
Mediation and/or the Arbitration of all disputes between the Parties and/or
Brokers arising out of this Lease [ ] is [x] is not attached to this Lease.
50. Abandoned Personal Property: If Lessee shall fail to remove all of its
personal property and effects from said premises upon termination of this
Lease for any cause whatsoever, Lessor may, at its option, remove the same
in any manner that Lessor shall choose, and store said personal property and
effects without liability to Lessor for loss thereof, and Lessee agrees to
pay Lessor upon demand any and all expenses incurred in such removal,
including court costs and attorney's fees and storage charges on such
personal property and effects for any length of time that the same shall be
in Lessor's possession, or Lessor may, at its option, without notice, sell
said effects, or any of the same, at private sale and without legal process,
for such prices as Lessor may obtain and apply the proceeds of such sale
upon any amounts due under this Lease from Lessee to Lessor and upon the
expenses incident to the removal and sale of said personal property and
effects.
51. Base Rent Increase: The Base Rent shall be adjusted as follows:
July 1, 2005 through June 30, 2006 $58,215.95 per month
Thereafter, on July 1st of each Lease year the Base Rent shall increase
annually in accordance with the change in the Consumer Price Index 1982-
84=100 (C.P.I.) plus 2%, if any, for the Los Angeles-Riverside-Orange Co.,
CA area. Said increase shall not be more than 3% per annum.
52. Option: Lessor grants Lessee two (2) five (5) year option (the
"Option") to extend the Term of the Lease (the "Extended Term"). The Option
is granted subject to the terms of Paragraph #39 and the following terms and
conditions.
(a) Lessee shall exercise the Option by delivering written notice to Lessor
of such exercise no more than two hundred seventy days (270) nor later than
one hundred eighty days (180) prior to the expiration of the Term.
(b) All terms and conditions of the Lease shall remain in full force and
effect, except as follows:
(1) Monthly Base Rent for the first year of the Extended Term shall be at
fair market value but in no event shall the Base Rent be less than three
percent (3%) more than the previous Month's Base Rent.
(2) The Base Rent during the Extended Term shall be adjusted every twelve
(12) months. Said increase shall be no less than three percent (3%) per
annum.
(3) The Security Deposit shall be increased annually in accordance with
Paragraph 5 of the Lease.
(4) Tenant shall have no further option to extend the Lease Term.
53. Leasehold Improvements: Lessee's Base Rent under this Lease includes a
Leasehold Improvement Allowance of $1,000,000.00 (One Million Dollars)
(hereinafter referred to as "L.H. Allowance"). The L.H. Allowance shall be
used exclusively for those improvements that become a part of the permanent
improvements of the Premises and architectural and engineering fees, and
shall not be used for Lessee's personal property and equipment. The L.H.
Allowance is subject to the conditions of Exhibit "B" of this Lease.
54. Confidentiality Clause: Lessee agrees not to discuss the terms and
conditions of this lease with any prospective or existing Lessees of Sunbelt
Enterprises or with anyone other than Lessee's owners, employees and
consultants at any time during the term of this Lease.
55. Mold: To minimize the occurrence and growth of mold in the Lease
Premises, Lessee hereby agrees to the following:
55.1 Moisture Accumulation. Lessee shall remove any visible moisture
accumulation in or on the Premises, including on walls, windows, floors,
ceilings, and bathroom fixtures; mop up spills and thoroughly dry affected
area as soon as possible after occurrence; use exhaust fans in kitchen and
bathroom when necessary; and keep climate and moisture in the Premises at
reasonable levels.
55.2 Notification of Lessor. Lessee shall promptly notify Lessor in writing
of the presence of any of the following conditions:
(a) A water leak, excessive moisture, or standing water inside the Premises;
(b) A water leak, excessive moisture, or standing water in any common area;
(c) Mold growth in or on the Premises that persists after Lessee has tried
several times to remove it with cleaning solution, such as Lysol or Pine-sol
disinfectants, Tilex Mildew Remover, or Clorox, or a combination of water
and bleach;
(d) A malfunction in any part of the heating, air-conditioning, or
ventilation system in the Premises.
55.3 Liability. Lessee shall be liable to Lessor for damages sustained to
the Premises or to Lessee's person or property as a result of Lessee's
failure to comply with the terms of this Paragraph.
55.4 Violation of Paragraph. Violation of this Paragraph shall be deemed a
material breach under the terms of the Lease, and Lessor shall be entitled
to exercise all rights and remedies it possesses against Lessee at law or in
equity.
In case of a conflict between the provisions of this Paragraph and any other
provision of the Lease, the provisions of this Paragraph shall govern.
56. Contingency: This Lease is contingent upon the full execution of the
Lease Termination with ▇▇▇▇▇▇ Communication and vacating the Premises no
later than August 1, 2003.
57. Condition: Lessor will be responsible for all structural defects to the
roof, structural portions of the roof, foundations and bearing walls no
matter when in the Lease Term these arise. Lessor at Lessor's expense shall
slurry and stripe the existing parking lot within the first twelve (12)
months of Lease Term.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW
THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE
THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND
LESSEE WITH RESPECT TO THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY SUNBELT
ENTERPRISES OR ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE
PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCE OF THIS
LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION
OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO:
THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES,
THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,
AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: Oxnard, CA Executed at: Camarillo, CA
On: June 13, 2003 on: June 10, 2003
LESSOR: LESSEE:
SUNBELT ENTERPRISES CALIFORNIA AMPLIFIER,
A DELAWARE CORPORATION
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
Authorized Agent for President & CEO
Sunbelt Enterprises
By: /s/▇▇▇ ▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Director of Real Estate Vice President Operations
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:(▇▇▇)▇▇▇-▇▇▇▇ Telephone:(▇▇▇)▇▇▇-▇▇▇▇
Fax(805)▇▇▇-▇▇▇▇ Fax:(▇▇▇)▇▇▇-▇▇▇▇
ADDENDUM TO LEASE
This ADDENDUM TO LEASE ("Addendum") dated as of June 10, 2003, is attached
to and made a part of that certain Standard Industrial/Commercial Single-
Tenant Lease-Net by and between SUNBELT ENTERPRISES, ("Lessor"), and
CALIFORNIA AMPLIFIER, a Delaware corporation ("Lessee"), as the same may be
amended from time to time ("Lease"). This Addendum shall supplant and amend
the Lease, and the provisions set forth below shall supersede any
inconsistent provisions set forth in the Lease. Capitalized terms used
below which are defined in the Lease shall have the respective meanings as
set forth in the Lease, unless expressly superseded by the terms and
conditions of this Addendum.
Section 1.7. The following language shall be added to the end of the text:
"; provided, however, that all NNN charges relating to taxes shall be paid
before such taxes are due and insurance shall be billed no more than once
per calendar quarter (no more often than in three-month intervals)."
Section 1.9. At the end of text of this Section, the words "and related
uses" are deemed to be inserted.
Section 2.3(b). In addition, if, in conformity with this Section, Lessor
does not contribute its share for any Capital Expenditures and Lessee elects
to advance the same, the applicable interest rate on such funds shall be
calculated as set forth in Section 13.5 of the Lease.
Section 4.3. The following will not be considered NNN Charges:
(a) Expenses paid by Lessee directly to third parties, or as to which Lessor
is otherwise entitled to be reimbursed by any third party, other than
Lessee;
(b) Lessor's federal or state income, franchise, inheritance or state taxes;
(c) Costs incurred by Lessor for the repair of damage to the Premises to the
extent Lessor is reimbursed by insurance or condemnation proceeds or by
tenants, warrantors or other third parties;
(d) Depreciation;
(e) Brokerage commissions, finder's fees, attorney's fees, space planning
costs and other costs incurred by Lessor in leasing or attempting to lease
space (provided however that Lessee continue to be responsible for all costs
and fees, including Lessor's reasonable attorney's fees, incurred by Lessor
in the event of Lessee's breach of this Lease);
(f) Interest, principal, points and fees on debt or amortization of any
mortgage, deed of trust or other indebtedness;
(g) Any ground lease rental;
(h) Attorney's fees and other costs and expenses incurred in connection with
negotiations or disputes with present or prospective tenants;
(i) Costs associated with correction of construction defects;
(j) Late charges or fees accruing as a result of the non-payment or late
payment by Lessor or its agents of any item of costs for which Lessor is
responsible;
(k) Costs associated with any structural maintenance and design of the
Building;
(l) The costs of Lessor's general corporate overhead (other than Lessor's
management fee); and
(m) Costs arising from Lessor's charitable or political contributions.
In addition, any property management fee charged by Lessor shall be capped
at Two Thousand Dollars ($2,000.00) in any twelve (12)-month period and
Lessee will only have to pay increased real estate taxes due to a
reassessment of property taxes assessed pursuant to a change of ownership of
the Premises only once during the Term.
Lessee has a right to audit the triple-net charges with an accounting firm
of Lessee's choice. In the event that Lessee overpaid any such charges,
such charges will be refunded to Lessee, plus interest and, in the event
Lessor's calculations are off by more than two percent (2%) in Lessor's
favor, all costs of the audit will be promptly reimbursed to Lessee with
interest calculated in accordance with Section 13.5.
Section 5. Lessee may, at its sole option, obtain a Letter of Credit to
satisfy the Security Deposit.
Section 6.2(e). The word "gross" at the end of the third line of this
Section is deemed deleted. In addition, in the event Lessor provides Lessee
with a commercially reasonable Phase I Environmental Report prior to
Lessee's occupancy of the Premises, this indemnity shall expire at the end
of the Term. In addition, if Lessee provides to Lessor a commercially
reasonable Phase I Environmental Report (including, without limitation, an
update to the Phase I Report provided by Lessor to Lessee, if any) at the
end or after the expiration of the Term, the indemnity provided by Lessee to
Lessor pursuant to Section 6.2(d) of the Lease shall be deemed terminated at
the end of the Term or earlier termination of this Lease.
Section 6.2(g). Lessor shall not have the right to terminate the Lease
pursuant to this Section unless the estimated cost to remediate a hazardous
condition for which it is responsible exceeds at least six (6) months' Base
Rent.
Section 7.3(a). The provisions of this Section shall only apply in the
event that Building Permits are necessary and the threshold levels of
$50,000 in the aggregate and $10,000 per year set forth on the bottom of
this subsection shall be revised to $100,000 and $20,000, respectively.
Section 7.4(a). The following language is deleted. "Lessor may, at any
time, elect in writing to be the owner of all or any specified part of the
Lessee-Owned Alterations and Utility Installations."
Section 8.3(a). The deductible for the insurance referenced in this Section
shall be $10,000.
Section 8.4(a). The deductible for the insurance referenced in this Section
shall be $10,000.
Section 8.7. The word "sole" in the first sentence of this Section is
deleted.
Section 9.5. In the event of an occurrence meeting the criteria to
terminate the Lease as set forth in this Section, both Lessor and Lessee
shall have the option of terminating the Lease early.
Section 10. Notwithstanding any language in the Lease to the contrary,
Lessee's responsibility to pay for any increase in real property taxes shall
only apply to one (1) change of ownership during the term of the Lease or
any extensions thereof.
Section 12.1(a). Lessor's consent shall not be unreasonably withheld or
delayed.
Section 12.1(c). These provisions shall not be applicable as long as the
shares of Lessee are publicly traded in any exchange or over the counter;
provided, however, that if the equity ownership of Lessee become held by
less than fifty (50) individuals or entities and not traded on a public
exchange or over the counter, all of the terms of these Sections shall be
reinstated.
Section 13.3. If Lessor accepts cure of any alleged breach of the Lease by
Lessee, all of the "Inducement Provisions" shall automatically be restored.
Section 13.6. Provided that Lessee makes a reasonable attempt under the
circumstances to give notice to Landlord in an emergency situation (which is
defined as a present danger to Lessee's employees, invitees, the public,
Premises and/or any alterations and equipment on the Premises), Lessee will
have the right to immediately remediate the same and set off all costs
against next installment of rent.
Section 14. In the event that there is a condemnation of any portion of the
Premises, in addition to the minimum thresholds which can trigger a
termination of the Lease irrespective of the percentage of the land and/or
building ultimately taken, if such taking materially effects the ability of
Lessee to undertake its business of the Premises, Lessee shall have the
option to terminate the Lease.
Section 20. The word "gross" on the first line is deleted.
Section 48. This Section is deleted.
Section 54. The words "To the best of Lessee's ability" shall be added to
the beginning of this Section.
Section 56. The date for ▇▇▇▇▇▇ Communication to execute the Lease
Termination is adjusted to July 1, 2003 and if such notice from ▇▇▇▇▇▇
Communication terminating its current tenancy at the Premises is not
received prior to such date, Lessee may, in its sole election, deem this
Lease of no force and effect.
Exhibit "D". In the event of any conflict and/or ambiguity between the
terms of Sections 6.2 of the Lease and Exhibit "D", the terms of Section
6.2, as the same may be modified an/or clarified in this Addendum, shall
control.
LESSOR: LESSEE:
SUNBELT ENTERPRISES CALIFORNIA AMPLIFIER,
A DELAWARE CORPORATION
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
Authorized Agent for President & CEO
Sunbelt Enterprises
By: /s/▇▇▇ ▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Director of Real Estate Vice President Operations