Exhibit 10.6(b)
STANDARD SUBLEASE
1. Parties. This Sublease, dated, for reference purposes only, January
13, 1997, is made by and between ▇▇▇▇ Medical Systems Inc. therein called
"Sublessor") and Computer LANscapes, therein called "Sublessee").
2. Premises. Sublessor hereby subleases to Sublessee and Sublessee hereby
subleases from Sublessor for the term, at the rental, and upon all of the
conditions set forth herein, that certain real property situated in the County
of Santa ▇▇▇▇▇ State of California, commonly known as ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and described as that +/- 6,104 square foot portion
of that larger +/- 18,000 square foot free standing R&D building. See Exhibit
A. Said real property, including the land and all improvements thereon, is
hereinafter called the "Premises".
3. Term.
3.1 Term. The term of this Sublease shall be for approximately 30.5
months commencing on February 1, 1997 and ending on August 15, 1999 unless
sooner terminated pursuant to any provision hereof.
3.2 Delay in Commencement. Notwithstanding said commencement date,
if for any reason Sublessor cannot deliver possession of the Premises to
Sublessee on said date, Sublessor shall not be subject to any liability
therefore, nor shall such failure affect the validity of this Lease or the
obligations of Sublessee hereunder or extend the term hereof but in such case
Sublessee shall not be obligated to pay rent until possession of the Premises is
tendered to Sublessee, provided, however, that if Sublessor shall not have
delivered possession of the Premises within sixty (60) days form said
commencement date. Sublessee may, at Sublessee's option, by notice in writing
to Sublessor within ten (10) days thereafter, cancel this Sublease, in which
event the parties shall be subject to all provisions hereof, such occupancy
shall not advance the termination date and Sublessee shall pay rent for such
period at the initial monthly rates set forth below.
4. Rent. Sublessee shall pay to Sublessor as rent for the Premises equal
monthly payments of $10,682 in advance, on the 1st day of each month of the term
hereof. Sublessee shall pay Sublessor upon the execution hereof $10,682 as rent
for the month of March. Rent for any period during the term hereof which is for
less than one (1) month shall be a pro-rata portion of the monthly installment.
Rent shall be payable in lawful money of the United States to Sublessor at the
address stated herein or to such other persons or at such other places as
Sublessor may designate in writing.
5. Security Deposit. Sublessee shall deposit with Sublessor upon
execution hereof $10,682.00 as security for Sublessee's faithful performance of
Sublessee's obligations hereunder. If Sublessee fails to pay rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Sublease, Sublessor may use, apply or retain all or any portion of said
deposit for the payment of any rent or other charge in default or for the
payment of any other sum
to which Sublessor may become obligated by reason of Sublessee's default, or to
compensate Sublessor for any loss or damage which Sublessor may suffer thereby.
If Sublessor so uses or applies all or any portion of said deposit, Sublessee
shall within ten (10) days after written demand therefore deposit cash with
Sublessor in an amount sufficient to restore said deposit to the full amount
hereinabove stated and Sublessee's failure to do so shall be a material breach
of this Sublease. Sublessor shall not be required to keep said deposit separate
from its general accounts. If Sublessee performs all of Sublessee's obligations
hereunder, said deposit, or so much thereof as has not therefore been applied by
Sublessor, shall be returned, without payment of interest or other increment for
its use to Sublessee (or at Sublessor's option to the last assignee, if any, of
Sublessee's interest hereunder) at the expiration of the term hereof and after
Sublessee has vacated the Premises. No trust relationship is created herein
between Sublessor and Sublessee with respect to said Security Deposit.
6. Use.
6.1 Use. The Premises shall be used and occupied only for
consulting, application training, and service of computer systems and other
legally related uses.
6.2 Compliance with Law.
(a) Sublessor warrants to Sublessee that the Premises, in its
existing state, but without regard to the use for which Sublessee will use the
Premises, does not violate any applicable building code regulation or ordinance
at the time that this Sublease is executed. In the event that it is determined
that this warranty has been violated, then it shall be the obligation of the
Sublessor, after written notice from Sublessee, to promptly, at Sublessor's sole
cost and expense, rectify any such violation. In the event that Sublessee does
not give to Sublessor written notice of the violation of this warranty within
one (1) year from the commencement of the term of this Sublease, it shall be
conclusively deemed that such violation did not exist and the correction of the
same shall be the obligation of the Sublessee.
(b) Except as provided in paragraph 6.2(a), Sublessee shall, at
Sublessee's expense, comply promptly with all applicable statues, ordinances,
rules, regulations, orders, restrictions of record, and requirements in effect
during the term or any part of the term hereof regulating the use by Sublessee
of the Premises. Sublessee shall not use or permit the use of the Premises in
any manner that will tend to create waste or a nuisance or, if there shall be
more than one tenant of the building containing the Premises, which shall tend
to disturb such other tenants.
6.3 Condition of Premises. Except as provided in paragraph 6.2(a)
Sublessee hereby accepts the Premises in their condition existing as of the date
of the execution hereof, subject to all applicable zoning, municipal, county and
state laws, ordinances, and regulations governing and regulating the use of the
Premises, and accepts this Sublease subject thereto and to all matters disclosed
thereby and by any exhibits attached hereto. Sublessee acknowledges that
neither Sublessor nor Sublessor's agents have made any representation or
warranty as to the suitability of the Premises for the conduct of Sublessee's
business.
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7. Master Lease.
7.1 Sublessor is the lessee of the Premises by virtue of a lease,
hereinafter referred to as the "Master Lease", a copy of which is attached
hereto marked Exhibit I, dated July 12, 1994 wherein The ▇▇▇▇▇ Mt. View Joint
Venture, is the lessor, hereinafter referred to as the "Master Lessor".
7.2 This Sublease is and shall be at all times subject and
subordinate to the Master Lease.
7.3 The terms, conditions and respective obligations of Sublessor and
Sublessee to each other under this Sublease shall be the terms and conditions of
the Master Lease except for those provisions of the Master Lease which are
directly contraindicated by this Sublease in which event the terms of this
Sublease document shall control over the Master Lease. Therefore, for the
purposes of this Sublease, wherever in the Master Lease the word "Lessor" is
used it shall be deemed to mean the Sublessor herein and wherever in the Master
Lease the word "Lessee" is used it shall be deemed to mean the Sublessee herein.
7.4 During the term of this Sublease and for all periods subsequent
for obligations which have arisen prior to the termination of this Sublease,
Sublessee does hereby expressly assume and agree to perform and comply with, for
the benefit of Sublessor and Master Lessor, each and every obligation of
Sublessor under the Master Lease except for the following paragraphs which are
excluded therefrom: 7.1 A&B, 8.1, 8.2b, C, 9.7, 10.1, 10.2, 10.3, 11, 13.3,
16.1, 16.2, 19, 25, 38, 46, 49, 50, 51, 1.3, 1.5, 1.6, 1.7, 3.1, 3.2, 4.1, 4.2,
5, 8.2(a), 8.3, 8.4.
7.5 The obligations that Sublessee has assumed under paragraph 7.4
hereof are hereinafter referred to as the "Sublessee's Assumed Obligations".
The obligations that Sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "Sublessor's Remaining Obligations".
7.6 Sublessee shall hold Sublessor free and harmless of and from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorneys fees, arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the entire
term of this Sublease, subject, however, to any earlier termination of the
Master Lease without the fault of the Sublessor, and to comply with or perform
Sublessor's Remaining Obligations and to hold Sublessee free and harmless of and
from all liability, judgments, costs, damages, claims or demands arising out of
Sublessor's failure to comply with or perform Sublessor's Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is in
full force and effect and that no default exists on the part of any party to the
Master Lease.
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8. Assignment of Sublease and Default.
8.1 Sublessor hereby assigns and transfers to Master Lessor the
Sublessor's interest in this Sublease and all rentals and income arising
therefrom, subject however to terms of Paragraph 8.2 hereof.
8.2 Master Lessor, by executing this document, agrees that until a
default shall occur in the performance of Sublessor's Obligations under the
Master Lease, that Sublessor may receive, collect and enjoy the rents accruing
under this Sublease. However, if Sublessor shall default in the performance of
its obligations to Master Lessor then Master Lessor may, at its option, receive
and collect, directly from Sublessee, all rent owing and to be owed under this
Sublease. Master Lessor shall not, by reason of this assignment of the Sublease
nor by reason of the collection of the rents from the Sublessee, be deemed
liable to Sublessee for any failure of the Sublessor to perform and comply with
Sublessor's Remaining Obligations.
8.3 Sublessor hereby irrevocably authorizes and directs Sublessee,
upon receipt of any written notice from the Master Lessor stating that a default
exists in the performance of Sublessor's obligations under the Master Lease, to
pay to Master Lessor the rents due and to become due under the Sublease.
Sublessor agrees that Sublessee shall have the right to rely upon any such
statement and request form Master Lessor, and that Sublessee shall pay such
rents to Master Lessor without any obligation or right to inquire as to whether
such default exists and notwithstanding any notice from or claim from Sublessor
to the contrary and Sublessor shall have no right or claim against Sublessee for
any such rents to paid by Sublessee.
8.4 No changes or modifications shall be made to this Sublease
without the consent of Master Lessor.
9. Consent of Master Lessor.
9.1 In the event that the Master Lease requires that Sublessor obtain
the consent of Master Lessor to any subletting by Sublessor then, this Sublease
shall not be effective unless, within ten (10) days of the date hereof, Master
Lessor signs this Sublease thereby giving its consent to this Subletting.
9.2 In the event that the obligations of the Sublessor under the
Master Lease have been guaranteed by third parties then this Sublease, nor the
Master Lessor's consent, shall not be effective unless, within twenty (20) days
of the date hereof said guarantors sign this Sublease thereby giving guarantors
consent to this Sublease and the term thereof.
9.3 In the event that Master Lessor does give such consent then:
(a) Such consent will not release Sublessor or its obligations or
alter the primary liability of Sublessor to pay the rent and perform and comply
with all of the obligations of Sublessor to be performed under the Master Lease.
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(b) The acceptance of rent by Master Lessor from Sublessee or any
one else liable under the Master Lease shall not be deemed a waiver by Master
Lessor of any provisions of the Master Lease.
(c) The consent of this Sublease shall not constitute a consent
to any subsequent subletting or assignment.
(d) In the event of any default of Sublessor under the Master
Lease, Master Lessor may proceed directly against Sublessor, any guarantors or
any one else liable under the Master Lease or this Sublease without first
exhausting Master Lessor's remedies against any other person or entity liable
thereon to Master Lessor.
(e) Master Lessor may consent to subsequent sublettings and
assignments of the Master Lease or this Sublease or any amendments or
modifications thereto without notifying Sublessor nor any one else liable under
the Master Lease and without obtaining their consent and such action shall not
relieve such persons from liability.
(f) In the event that Sublessor shall default in its obligations
under the Master Lease, then Master Lessor, at its option and without being
obligated to do so, may require Sublessee to attorn to Master Lessor in which
event Master Lessor shall undertake the obligations of Sublessor under this
Sublease from the time of the exercise of said option to termination of this
Sublease but Master Lessor shall not be liable for any prepaid rents nor any
security deposit paid by Sublessee, nor shall Master Lessor be liable for any
other defaults of the Sublessor under the Sublease.
9.4 The signatures of the Master Lessor and any Guarantors of
Sublessor at the end of this document shall constitute their consent to the
terms of this Sublease.
9.5 Master Lessor acknowledges that, to the best of Master Lessor's
knowledge, no default presently exists under the Master Lease of obligations to
be performed by Sublessor and that the Master Lease is in full force and effect.
9.6 In the event that Sublessor defaults under its obligations to be
performed under the Master Lease by Sublessor, Master Lessor agrees to deliver
to Sublessee a copy of any such notice of default. Sublessee shall have the
right to cure any default of Sublessor described in any notice of default within
ten (10) days after service of such notice of default on Sublessee. If such
default is cured by Sublessee then Sublessee shall have the right of
reimbursement and offset from and against Sublessor.
10. Brokers Fee.
10.1 Upon execution hereof by all parties, Sublessor shall pay to
Colliers ▇▇▇▇▇▇▇ International, Inc./▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, a licensed real
estate broker, therein called "Broker"), a fee as set forth in a separate
agreement between Sublessor and Broker, or in the event there is no separate
agreement between Sublessor and Broker, the sum of $N/A for brokerage services
rendered by Broker to Sublessor in this transaction.
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10.2 Sublessor agrees that if Sublessee exercises any option or right
of first refusal granted by Sublessor herein, or any option or right
substantially similar thereto, either to extend the term of this Sublease, to
renew this Sublease, to purchase the Premises, or to lease or purchase adjacent
property which Sublessor may own or in which Sublessor has an interest, or if
Broker is the procuring cause of any lease, sublease, or sale pertaining to the
Premises or any adjacent property which Sublessor may own or in which Sublessor
has an interest, then as to any of said transactions Sublessor shall pay to
Broker a fee, in cash, in accordance with the schedule of Broker in effect at
the time of the execution of this Sublease. Notwithstanding the foregoing,
Sublessor's obligation under this Paragraph 10.2 is limited to a transaction to
which Sublessor is acting as a sublessor, lessor or seller.
10.3 Master Lessor agrees, by its consent to this Sublease, that if
Sublessee shall exercise any option or right of first refusal granted to
Sublessee by Master Lessor in connection with this Sublease, or any option or
right substantially similar thereto, either to extend the Master Lease, to renew
the Master Lease, to purchase the Premises or any part thereof, or to lease or
purchase adjacent property which Master Lessor may own or in which Master Lessor
has an interest, or if Broker is the procuring cause of any other lease or sale
entered into between Sublessee and Master Lessor pertaining to the Premises, any
part thereof or any adjacent property which Master Lessor owns or in which it
has an interest, then as to any of said transactions Master Lessor shall pay to
Broker a fee, in cash, in accordance with the schedule of Broker in effect at
the time of its consent to this Sublease.
10.4 Any fee due from Sublessor or Master Lessor hereunder shall be
due and payable upon the exercise of any option to extend or renew, as to any
extension or renewal; upon the execution of any new lease, as to a new lease
transaction or the exercise of a right of first refusal to lease; or at the
close of escrow, as to the exercise of any option to purchase or other sale
transaction.
10.5 Any transferee of Sublessor's interest in this Sublease, or of
Master Lessor's interest in the Master Lease, by accepting an assignment thereof
shall be deemed to have assumed the respective obligations of Sublessor or
Master Lessor under this Paragraph 10. Broker shall be deemed to be a third
party beneficiary of this paragraph 10.
11. Attorney's Fees. If any party or the Broker named herein brings an
action to enforce the terms hereof or to declare rights hereunder, the
prevailing party in any such action, on trial and appeal, shall be entitled to
his reasonable attorney's fees to be paid by the losing party as fixed by the
Court. The provision of this paragraph shall inure to the benefit of the Broker
named herein who seeks to enforce a right hereunder.
12. Additional Provisions.
1. This is a full service rent, to include property taxes, insurance,
utilities, and outside maintenance.
2. The month of February shall be free.
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3. Sublessee, nor its agents or contractors are to be permitted to
use or store hazardous materials on subject property during the Sublease term or
any extensions thereafter.
4. Sublessee to be granted a first right of refusal on the adjacent
space. Terms for said space shall be the same as the terms and conditions on
which a third party is willing to lease the refusal space. However, in no event
shall the rent be less than the Sublessee's current rent. Lessee must give
Sublessor written notice of its interest to exercise, 3 days from date of
Sublessees receipt of the offer. Failure to do so will be deemed sub-lessee's
waiver of its right.
5. Sublessee shall be granted the use of 25 non exclusive parking
spaces.
6. Sublessor to deliver the premises "as is". All Tenant
Improvements costs shall be borne by the Sublessee, and performed by licensed
contractors, subject to all government codes and permits, prior to construction.
Sublessor must approve all plans for any Sublessee Tenant Improvement work,
prior to Commencement of work, including Sublessee's intended signage.
If this Sublease has been filled in it has been prepared for
submission to your attorney for his approval. No representation or
recommendation is made by Colliers ▇▇▇▇▇▇▇ International, Inc. or
its agents or employees as to the legal sufficiency, legal effect,
or tax consequences of this Sublease or the transaction relating
thereto,
Executed at ▇▇▇▇ MEDICAL SYSTEMS ▇▇▇▇ Medical Systems, Inc.
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on 1/21/97 By /s/: ▇▇▇▇▇▇ ▇▇▇▇▇
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address ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. By
------------------------ ____________________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ "Sublessor" (Corporate Seal)
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Executed at COMPUTER LANSCAPES, INC. Computer LANscapes Inc.
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on 1/17/97 By /s/: ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------- ------------------------------------
address ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #C By
------------------------ ____________________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ "Sublessee" (Corporate Seal)
------------------------
Executed at _____________________ _______________________________________
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on ______________________________ By ____________________________________
address _________________________ By ____________________________________
"Master Lessor" (Corporate Seal)
Executed at _____________________ _______________________________________
on ______________________________ By ____________________________________
address _________________________ By ____________________________________
__________________________________ "Guarantors"
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EXHIBIT A
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET
1. Basic Provisions ("Basic Provisions")
1.1 Parties: This Lease ("Lease"), dated for reference purposes
only, July 12, 1994 is made by and between The ▇▇▇▇▇ Mountain View Joint Venture
("Lessor") and ZoMed International, a California 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 by the street address of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ View
located in the County of Santa ▇▇▇▇▇, State of California and generally
described as (describe briefly the nature of the property) Free-standing
building of 18.000+ Sq. Ft. ("Premises"). (See Paragraph 2 for further
-
provisions)
1.3 Term: Five (5) years and 0 months ("Original Term") commencing
August 15, 1994 ("Commencement Date") and ending August 14, 1999 ("Expiration
Date"). If the Commencement Date has not occurred for any reason whatsoever
(other than due to a Lessee delay) on or before August 15, 1994, then in
addition to Lessee's other rights or remedies, the date Lessee is otherwise
obliged to commence payment of rent shall be delayed by one day for each day
that the Commencement Date is delayed beyond August 15, 1994. (see Paragraph 3
for further provisions.)
1.4 Early Possession: N/A ("Early Possession Date") (See Paragraphs
3.2 and 3.3 for further provisions.)
1.5 Base Rent: ___________ per month ("Base Rent"), payable on the
fifteenth (15th) day of each month commencing September 15, 1994 - Lessee shall
receive Free Base rent (exclusive of operating expenses) for August 15 -
September 14, 1994. (See paragraph 4 for further provisions.)
[X] If this box is checked, there are provisions in this Lease for
the Base Rent to be adjusted. (See Paragraph 4.2)
1.6 Base Rent Paid Upon Execution: ______________ Base Rent for the
period September 15, 1994 through October 14, 1994.
1.7 Security Deposit: Security Deposit). (See Paragraph 5 for further
provisions.)
1.8 Permitted Use: General office administration, research and
development of the medical device industry and warehousing. (See Paragraph 6
for further provisions.)
1.9 Insuring Party: Lessor is the "Insuring Party" unless otherwise
stated herein. (See Paragraph 8 for further provisions.)
1.10 Real Estate Brokers: The following real estate brokers
(collectively, the "Brokers") and brokerage relationships exist in this
transaction and are consented to by the Parties: al represents the Lessor
exclusively ("Lessor's Broker"); and XXXXiates represents the Lessee exclusively
("Lessee's Broker"). (See Paragraph 15 for further provisions.)
1.11 Guarantor: The obligations of the Lessee under this Lease are to
be guaranteed by N/A ("Guarantor"). (See Paragraph 37 for further provisions.)
1.12 Addenda: Attached hereto are Addenda consisting of Exhibits A &
B.
2. Premises.
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 in this Lease. Unless otherwise
provided herein, any statement of square footage set forth in this Lease, or
that may have been used in calculating rental, is an approximation which Lessor
and Lessee agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual square footage is more or less.
2.2 Condition: Lessor shall deliver the Premises to Lessee clean and
free of debris on the Commencement Date and warrants to Lessee that the
Premises, including, without limitation, the roof, structural elements of the
Building and all building systems serving the Premises, including, without
limitation, electrical, plumbing, fire sprinkler system, lighting, air
conditioning, heating, and loading doors, if any, in the Premises, other than
those constructed by Lessee, shall be in good operating condition on the
Commencement Date. If a non-compliance with said warranty exists as of the
Commencement Date, Lessor shall, except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify same at
Lessor's expense. If Lessee does not give Lessor written notice of a non-
compliance with this warranty within thirty days after the Commencement Date,
correction of that non-compliance shall be the obligation of Lessee at Lessee's
sole cost and expense. Notwithstanding the foregoing, non-conformance of the
roof with the foregoing warranty shall be remedied by Landlord upon notice, at
any time during the term.
2.3 Compliance with Covenants, Restrictions and Building Code:
Lessor warrants to Lessee that the improvements on the Premises comply with all
applicable covenants or restrictions of record and applicable building codes,
regulations and ordinances in effect on the Commencement Date. Said warranty
dues not apply to the use to which Lessee will put the Premises or to any
Alterations or Utility Installations (as defined in Paragraphs 7.3(a)) made or
to be made by Lessee. If the Premises do not comply with said warranty, Lessor
shall, except as
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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 the same at Lessor's expense. If Lessee does not give Lessor
written notice of a non-compliance with this warranty within twelve (12) months
following the Commencement Date, correction of that non-compliance shall be the
obligation of Lessee at Lessee's sole cost and expense.
2.4 Acceptance of Premises: Lessee hereby acknowledges: (a) that it
has been advised by the Brokers to satisfy itself with respect to the present
and future suitability of the Premises 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 therefor as the same relate to Lessee's
occupancy of the Premises and/or the term of this Lease, and (c) that neither
Lessor, nor any Lessor's agents, has made any oral or written representations or
warranties with respect to the said matters other than as set forth in this
Lease.
2.5 Operating Expense History: Lessor has provided to Lessee a true
and correct breakdown of current operating expenses relating to the Premises for
which Lessee shall be responsible in addition to Base Monthly Rent, and Lessor
warrants and represents that the current operating expenses for the Premises,
limited to real property taxes, landscaping and insurance costs for the
Premises, is approximately five and six-tenths cents ($0.056) per square foot of
space.
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, however, (including but not limited to the obligations to pay Real
Property Taxes and insurance premiums and to maintain the Premises) shall be in
effect during such period. Any such early possession shall not affect nor
advance the Expiration Date of the Original Term.
4. Rent.
4.1 Base Rent: Lessee shall cause payment of Base Rent and other rent
or charges, as the same may be adjusted from time to time as provided herein 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 under the terms of this
Lease. Base Rent and all other rent and charges for any period during the term
hereof which is for less than one (1) full calendar month shall be prorated
based upon the actual number of days of the calendar months involved. Payment of
Base Rent and other charges shall be made to Lessor at its address stated herein
or to such other persons or at such other addresses as Lessor may from time to
time designate in writing to Lease.
4.2 Base Rent Adjustment: Consumer Price Index. It is agreed that on
February 14th, 1997, the Base Rent provided for in Paragraph 1.5 on the Lease
shall be adjusted
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in accordance with the following formula based on the Consumer Price Index
("CPI") for All Urban Consumers, subgroup "All Items", San Francisco - Oakland,
California Metropolitan Area (1982-84=100) published by the Bureau of Labor
Statistics, U.S. Department of Labor (the "Index") published nearest but prior
to the date tenant took possession of the premises (the "Beginning Index") and
the Index which is published nearest but prior to February 14, 1997 (the
"Adjustment Index"). The CPI adjusted base rent shall be calculated by
multiplying the base rent provided for in Paragraph 1.5 of the lease by a
fraction, the numerator of which is the Adjustment Index and the denominator of
which is the Beginning Index. In no event, however, shall the adjusted basic
rent decrease below the basic rental provided for in Paragraph 1.5 of the lease
or any subsequent adjustment hereof, nor shall it be less than four percent (4%)
or greater than eight percent (8%) per annum. On such adjustment, the parties
shall execute an amendment to the lease stating the new (adjusted) base rent. If
the Index is changed so that the base year of the Index differs from that used
as of the month immediately preceding the month in which the term commences, the
Index shall be converted in accordance with the conversion factor published by
the United States Department of Labor, Bureau of Labor Statistics. If the Index
is discontinued or revised during the term, such other government index or
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index had not been
discontinued or revised.
5. Security Deposit: Lessee shall deposit with Lessor upon execution
hereof the Security `Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease. If Lessee fails
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under the Lease (as defined in Paragraph 13.1). Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for any liability, cost, expense,
loss or damage (including attorneys' fees) which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefor
deposit moneys with Lessor sufficient to restore said Security Deposit to the
full amount required by this Lease. Lessor shall not be required to keep all or
any part of the Security Deposit separate from its general accounts. Lessor
shall, at the expiration or earlier termination of the term hereof and after
Lessee has vacated the Premises, return to Lessee (or, at Lessor's option, to
the last assignee, if any, of Lessee's interest herein), that portion of the
Security Deposit not used or applied by Lessor. Unless otherwise expressly
agreed in writing by Lessor, no part of the Security Deposit shall be considered
to be held in trust, to bear interest or other increment for its use, or to be
prepayment for any moneys to be paid by Lessee under this Lease.
6. Use.
6.1 Use: Lessee shall use and occupy the Premises only for the
purposes set forth in paragraph 1.8. or any other use which is comparable
thereto and for no other purpose unless approved in writing by Lessor, which
approval shall not be unreasonably withheld. Lessee shall not use or permit the
use of the Premises in a manner that creates waste or a nuisance, or that
unreasonably disturbs owners and/or occupants of, or causes damage to,
neighboring premises or properties.
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6.2 Hazardous Substances.
(a) Reportable Uses Require Consent: The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, chemical
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials expected to be on the
Premises is either: (i) potentially injurious to the public health, safety or
welfare, the environment or the Premises, (ii) regulated or monitored by any
governmental authority, or (iii) a basis for liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products, by products or fraction thereof.
Lessee shall not engage in any activity in on or about the Premises which
constitutes a Reportable Use (as hereinafter defined) of Hazardous Substances
without the express prior written consent of Lessor which consent shall not be
unreasonably withheld or delayed and compliance in a timely manner (at Lessee's
sole cost and expense) with all Applicable Law (as defined in Paragraph 6.3).
"Reportable Use" shall mean (i) the installation or use of any above or below
ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority. Reportable Use shall
also include Lessee's being responsible for the presence in, on or about the
Premises of a Hazardous Substance with respect to which any Applicable Law
requires that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Lessee may without
Lessor's prior consent, but in compliance with all Applicable Law, use any
ordinary and customary materials reasonably required to be used by Lessee in the
normal course of Lessee's business permitted on the Premises, so long as such
use is not a Reportable Use and does not expose the Premises or neighboring
properties to any meaningful risk of contamination or injury and/or liability
therefor. Lessor hereby deems those Hazardous Substances set forth on Exhibit
"A" to be ordinary and customary materials reasonably required to be used by
Lessee in the normal course of the Permitted Use, Lessor hereby consents to the
existence, use, manufacture, storage and transportation of such Hazardous
Substances in, on and about the Premises during the Term of this Lease in
compliance with Applicable Laws, and acknowledges that the same shall not
constitute a Reportable Use under this Lease. If Lessee's use of the Premises
changes at any time during the Lease Term from the Permitted Use identified at
Paragraph 1.8 hereof, Lessee immediately shall notify Lessor of the change in
use and whether any changes are required to the information contained on Exhibit
"B."
(b) Duty to Inform Lessor: If Lessee knows or has reasonable
cause to believe that a Hazardous Substance or a condition involving or
resulting from same has come to be located in, on, under or about the Premises,
other than as previously consented to by Lessor; Lessee shall immediately give
written notice of such fact to Lessor. Lessee shall within Lessee's possession
or control also immediately give Lessor a copy of any statement, report, notice,
registration, application, permit, business plan, license, claim, action or
proceeding given to, or received from, any governmental authority or private
party, or persons entering or occupying the Premises, concerning the presence,
spill, release, discharge of, or exposure to, any
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Hazardous Substance or contamination in, on, or about the Premises, including
but not limited to all such documents as may be involved in any Reportable Uses
involving Premises.
(c) Indemnification: Lessee shall indemnify, protect, defend and
hold Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all loss of rents and/or damages,
liabilities, judgements, costs, claims, liens, expenses, penalties, permits, and
attorney's and consultant's fees during the Lease Term arising out of or
involving any Hazardous Substance or storage tank brought onto the Premises by
or for Lessee or under Lessee's control. Lessee's obligations under this
Paragraph 6 shall include, but not be limited to the effects of any
contamination or injury to person property or the environment created or
suffered by Lessee and the cost of investigation (including consultant's and
attorney's fees and testing), removal, remediation, restoration and/or abatement
thereof, or of any contamination therein involved required by law and shall
survive the expiration or earlier termination of this Lease. No termination,
cancellation or release agreement entered into by Lessor and Lessee shall
release Lessee from its obligations under this Lease with respect to Hazardous
Substances or storage tanks, unless specifically so agreed by Lessor in writing
at the time of such agreement.
6.3 Lessee's Compliance with Law: Except as otherwise provided in
this Lease, Lessee shall at Lessee's sole cost and expense fully, diligently and
in a timely manner comply with all "Applicable Law" which term is used in this
Lease to include all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record permits the requirements of any
applicable fire insurance underwriter or rating bureau relating to the Premises
(including but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous Substance or storage tank), now in effect or which may hereafter
come into effect, and whether or not reflecting a change in policy from any
previously existing policy. Lessee shall, within ten (10) business days after
receipt of Lessor's written request, provide Lessor with copies of all documents
and information, including, but not limited to, permits, registrations,
manifests, applications, reports and certificates, evidencing Lessee's
compliance with any Applicable Law specified by Lessor, and shall immediately
upon receipt, notify Lessor in writing (with copies of any documents involved)
of any threatened or actual claim notice, citation, warning, complaint or report
pertaining to or involving failure by Lessee or the Premises to comply with any
Applicable Law.
6.4 Inspection; Compliance: Lessor and Lessor's Lender(s) (as defined
in Paragraph 8.3(a)) shall have the right to enter the Premises at any time in
the case of an emergency, and otherwise at reasonable times, upon one (1)
business day's prior written notice and subject to Lessee's reasonable security
precautions, for the purpose of inspecting the condition of the Premises and for
verifying compliance by Lessee with this Lease and all Applicable Laws (as
defined in Paragraph 6.3), and to employ experts and/or consultants in
connection therewith and/or to advise Lessor with respect to Lessee's
activities, including but not limited to the installation, operation, use,
monitoring, maintenance, or removal of any Hazardous Substance or storage tank
on or from the Premises. The costs and expenses of any such
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inspections shall be paid by the party requesting same, unless a Default or
Breach of this Lease, violation of Applicable Law, or a contamination, caused by
Lessee is found to exist or be imminent, or unless the inspection is requested
or ordered by a governmental authority as the result of any such existing or
imminent violation or contamination. In any such case, Lessee shall upon request
reimburse Lessor or Lessor's Lender, as the case may be, for the costs and
expenses of such inspections.
6.5 Lessor's Representation and Indemnity: Lessor represents and
warrants that, to the best of Lessor's knowledge, prior to and as of the
Commencement Date, there have been and are no Hazardous Substances located on,
under, in or about the Premises, or the soil, groundwater or surface water
thereof. Except to the extent resulting from the release, discharge or emission
of Hazardous Substances in violation of Applicable Law on or about the Premises
during the term by Lessee, its agents, employees, contractors or invitees,
Lessee is released from and shall not be responsible for, and Lessor shall
indemnify, defend, protect and hold Lessee, its employees, agents, shareholders,
licensees, invitees, officers and directors, harmless from and against, any
claims, actions, losses, costs, damages, liabilities or expenses (including,
without limitation, reasonable attorneys', experts' and consultants' fees,
investigation and laboratory fees) (collectively, "Claims"), arising out of or
in connection with any Hazardous Substance (including, without limitation,
asbestos) present at any time on, under, in or about the Premises, soil,
groundwater or surface water thereof, caused by or resulting from (i) the acts
or omissions of Lessor, its agents, employees, contractors or invitees; and (ii)
the acts or omissions of any previous tenant of Lessor, or the tenant's agents,
employees, contractors or invitees. In addition, except to the extent resulting
from the release, discharge or emission of Hazardous Substances on or about the
Premises in violation of Applicable Law during the term of this Lease by Lessee,
its agents, employees, contractors or invitees, Lessee also is released from and
shall not be responsible for any Claims arising out of or in connection with
Hazardous Substances present on, under, in or about the Premises caused by any
person other than Lessor or its previous tenants (or their agents, employees,
contractors or invitees), including, without limitation, caused by migration,
dumping or other third party source. Lessor's indemnification and warranty under
this Paragraph shall survive termination of this Lease.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures and
Alterations:
7.1 Lessee's Obligations:
(a) Subject to the provisions of Paragraphs 2.2 (Lessor's
warranty as to condition), 2.3 (Lessor's warranty as to compliance with
covenants, etc), 7.2 (Lessor's obligations to repair), 9 (damage and
destruction), and 14 (condemnation), and except to the extent required as a
result of the negligence or willful misconduct of Lessor or Lessor's employees,
agents, licensees or invitees, Lessee shall, at Lessee's sole cost and expense
and at all times keep the Premises and every part thereof in good order,
condition and repair excluding structure elements of the Premises, the roof
structure, exterior walls and foundation of the Premises (whether or not the
need for such repairs occurs as a result of Lessee's use, any prior use, the
elements or the age of such portion of the Premises), including, without
limiting the generality of the foregoing, all equipment or facilities serving
the Premises, such as plumbing,
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heating, air conditioning, ventilating, electrical, lighting facilities,
boilers, fired or unfired pressure vessels, fire sprinkler and/or standpipe and
hose or other automatic fire extinguishing system, including fire alarm and/or
smoke detector systems and equipment, fire hydrants, 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, about or adjacent to the Premises.
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
sanitation sewer system) in violation of hazardous substances laws. Lessee, in
keeping the Premises in good order, condition and repair shall exercise and
perform good maintenance practices.
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain contracts, with copies to Lessor, in customary form and substance and
with contractors specializing and experienced in, the inspection, maintenance
and service of the following equipment and improvements, if located on the
Premises: (i) heating, air conditioning and ventilation equipment, (ii) boiler,
fired or unfired pressure vessels, (iii) fire sprinkler and standpipe and hose
or other automatic fire extinguishing systems, including fire alarm and/or smoke
detection, (iv) landscaping and irrigation systems (v) roof covering and drain
maintenance and (vi) asphalt and parking lot maintenance.
7.2 Lessor's Obligations: Except for the warranties and agreements of
Lessor contained in Paragraphs 2.2 (relating to condition of the Premises) 2.3
(relating to compliance with covenants, restrictions and building code), 9
(relating to destruction of the premises) and 14 (relating to condemnation of
the Premises), it is intended by the Parties hereto that Lessor have no
obligation, in any manner whatsoever, to repair and maintain the Premises,
improvements located thereon, or the equipment therein, whether structural or
non structural, all of which obligations are intended to be that of the Lessee
under Paragraph 7.1 hereof. 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. Lessee and Lessor expressly waive the benefit of any
statute now or hereafter in effect to the extent it is inconsistent with the
terms of this Lease with respect to, or which affords Lessee the right to make
repairs at the expense of Lessor or to terminate this Lease by reason of any
needed repairs.
7.3 Utility Installations; Trade Fixtures; Alterations:
(a) Definitions; Consent Required: The term "Utility
Installations" is used in this Lease to refer to all carpeting, window
coverings, air lines, power panels, electrical distribution, security, fire
protection systems, communication systems, lighting fixtures, heating,
ventilating, and air conditioning equipment, plumbing, and fencing in, on or
about the Premises installed at Lessee's sole expense. The term "Trade Fixtures"
shall mean Lessee's machinery and equipment installed at Lessee's sole expense
that can be removed without doing material damage to the Premises that cannot be
repaired. The term "Alterations" shall mean any modification of the improvements
on the Premises from that which provided by Lessor under the terms of this
Lease, other than Utility Installations or Trade Fixtures, whether by addition
or deletion installed at Lessee's sole expense. Lessee shall not make any
Alterations or Utility
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Installations in, on, under or about the Premises without Lessor's prior written
consent. Lessee may, however, make non-structural Utility Installations or
Alterations to the interior of the Premises (excluding the roof), as long as
they are not visible from the outside, do not involve puncturing, relocating or
removing the roof, and the cost thereof in any one instance does not exceed
$25,000.00.
(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 proposed detailed plans. All consents
given by Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent special
consent, shall be deemed conditioned upon: (i) Lessee's acquiring all applicable
permits required by governmental authorities, (ii) the furnishing of copies of
such permits together with a copy of the plans and specifications for the
Alteration or Utility Installation to Lessor prior to commencement of the work
thereon, and (iii) the compliance by Lessee with all conditions of said permits
in a prompt and expeditious manner. Any Alterations or Utility Installations by
Lessee during the terms of this Lease shall be done in good and workmanlike
manner, with good and sufficient materials, and in compliance with Applicable
Law. Lessee shall promptly upon completion thereof furnish Lessor with as-built
plans and specification therefor. Lessor may (but with no obligation to do so)
condition its consent to any requested Alteration or Utility Installation that
costs $25,000.00 or more upon Lessee's providing Lessor with a lien and
completion bond in an amount equal to one and one quarter times the estimated
cost of such Alteration or Utility Installation.
(c) Indemnification: Lessee shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for Lessee
and for use on the Premises, which claims are or may be secured by an mechanics'
or materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than (10) days' notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim, or
demand, then Lessee shall, at its sole expense defend 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 against the
Lessor or the Premises. If Lessor shall require, Lessee shall furnish to Lessor
a surety bond satisfactory to Lessor in an amount equal to one and one quarter
times the amount of such contested lien claim or demand indemnifying Lessor
against liability for the same, as required by law for the holding of the
Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Lessor's attorney's fees and costs in participating in
such action if Lessor shall decide it is to its best interest to do so.
7.4 Ownership; Removal; Surrender; and Restoration:
(a) Ownership: Subject to Lessor's right to require their
removal or become the owner thereof as hereinafter provided in this Paragraph
all Alterations and Utility Additions made to the Premises by Lessee shall be
the property of and owned by Lessee. Unless otherwise instructed per
subparagraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
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Installations shall, at expiration or earlier termination of this Lease, become
the property of Lessor and remain upon and be surrendered by Lessee with the
Premises.
(b) Removal: Unless otherwise agreed in writing, Lesser may
require that any or all Lessee Owned Alterations or Utility Installations be
removed by the expiration or earlier termination of this Lease, notwithstanding
their installation may have been consented to by Lessor. Lessor may require
removal at any time of all or any part of any Lessee Owned Alterations or
Utility Installations made without the required consent of Lessor.
(c) Surrender/Restoration: Lessee shall surrender the Premises
by the end of the last day of the Lease term or any earlier termination date,
all of the improvements, parts and surfaces thereof clean and free of debris and
in good operating order, condition and state of repair, ordinary wear and tear,
acts of God, casualties, condemnation, Hazardous Substances (other than those
stored, used or disposed of by Lessee in or about the Premises), and Alterations
or Utility Installations which Lessor states in writing may be surrendered at
the termination of the Lease, excepted. "Ordinary wear and tear" shall not
include any damage or deterioration that would have been prevented by good
maintenance practices by Lessee performing all of its obligations under this
Lease. Except as otherwise agreed or specified in writing by Lessor, the
Premises, as surrendered, shall include the Utility Installations. The
obligation of Lessee shall include the repair of any damage occasioned by the
installation, maintenance, removal of Lessee's Trade Fixtures, furnishings,
equipment, and Alterations and/or Utility Installations, as well as the removal
of any storage tank installed by or for Lessee, all as may then be required by
Applicable Law and/or good practice. Lessee's Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee subject to obligation to
repair and restore the Premises per this Lease.
8. Insurance; Indemnity:
8.1 Payment For Insurance: Regardless of whether the Lessor or Lessee
is the Insuring Party, Lessee shall pay for all insurance required under this
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $1,000,000 per occurrence. Premiums policy
periods commencing prior to or extending beyond the Lease term shall be prorated
to correspond to the Lease term. Payment shall be made Lessee to Lessor within
fifteen (15) business days following receipt of an invoice for any amount due.
8.2 Liability Insurance:
(a) Carried by Lessee: Lessee shall obtain and keep in force
during the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee and Lessor (as an additional insured) against claims for
bodily injury, personal injury and property damage based upon, involving, or
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $1,000,000 per
occurrence with an "Additional Insured Managers or Lessors of Premises
Endorsement and contain the "Amendment of the Pollution Exclusion" 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,
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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 required by this Lease as carried by Lessee
shall not, however, limit the liability of Lessee nor relieve Lessee of any
obligation hereunder. All insurance to be carried by Lessee shall be primary to
and not contributory with any similar insurance carried by Lessor, whose
insurance shall be considered excess insurance only.
(b) Carried by Lessor: In the event Lessor is the Insuring
Party, 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 during the term of this lease a policy or policies in the name
of Lessor, with loss payable to Lessor (but naming Lessee as an additional
insured) and to the holders of any mortgages, deeds of trust or ground leases on
the Premises ("Lender(s)"), insuring 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 Lenders,
but in no event more than the commercially reasonable and available insurable
value thereof if, by reason of the unique nature or age of the improvements
involved, such latter amount is less than full replacement cost. If Lessor is
the Insuring Party, however, Lessee Owned Alterations and Utility Installations
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 (except the
perils of flood unless required by a Lender), including coverage for any
additional cost resulting from debris removal and reasonable amounts of coverage
for the enforcement of any building, zoning, safety or land use laws as the
result of a covered cause of loss. Said policy or policies shall also contain an
agreed valuation provision in lieu of any coinsurance 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, as defined in Paragraph 9.1(c).
(b) Rental Value: The Insuring Party shall, in addition, obtain
and keep in force during the term of this Lease a policy or policies in the name
of Lessor, with loss payable to Lessor and Lender(s), insuring the loss of the
full rental and other charges payable by Lessee to Lessor under this Lease for
one (1) year (including all real estate taxes, insurance costs, and any
scheduled rental increases). Said insurance shall
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contain an agreed valuation provision in lieu of any coinsurance clause, and the
amount of coverage shall be adjusted annually to reflect the projected rental
income, property taxes, insurance premium costs and other expenses, if any,
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) Tenant's Improvements: If the Lessor is the Insuring Party,
the Lessor shall not be required to Insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease. If Lessee is the Insuring Party, the policy
carried by Lessee under this Paragraph 8.3 shall insure Lessee Owned Alterations
and Utility Installations.
8.4 Lessee's Property Insurance: Subject to the requirements of
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessee's option, by endorsement to a policy already carried, maintain insurance
coverage on all Lessee's personal property, Lessee Owned Alterations and Utility
Installations and the Tenant Improvements in, on, or about the Premises similar
in coverage to that carried by the Insuring Party under Paragraph 8.3. Such
insurance shall be full replacement cost coverage with a deductible not to
exceed $1,000 per occurrence. Lessee shall be the Insuring Party with respect to
the insurance required by this Paragraph 8.4 and shall provide Lessor with
written evidence that such insurance is in force.
8.5 Insurance Policies: Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term a "General Policyholders Rating"
of at least B+, V, or such other rating as may be required by a Lender having a
lien on the Premises, as set forth in the most current issue of "Vest's
Insurance Guide." Lessee shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this Paragraph 8. If Lessee is
the Insuring Party, Lessee shall cause to be delivered to Lessor certified
copies of policies of such insurance or certificates evidencing the existence
and amounts of such insurance with the insureds and loss payable clauses as
required by this Lease. 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) 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. If the
Insuring Party shall fail to procure and maintain the insurance required to be
carried by the Insuring party under this Paragraph 8, the other Party may, but
shall not be required to, procure and maintain the same, but at Lessee's
expense.
8.6 Waiver of Subrogation: The parties hereto release each other and
their respective agents, employees, successors, assignees and subtenants from
all liability for injury to any person or damage to any property that is caused
by or results from a risk which is actually insured against, which is required
to be insured against under this Lease, or which would normally be covered by
the standard form of "all risk-extended coverage" casualty insurance, without
regard to the negligence or willful misconduct of the entity so released. Each
party shall
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use its best efforts to cause each insurance policy it obtains to provide that
the insurer thereunder waives all right of recovery by the way of subrogation as
required herein in connection with any injury or damage covered by the policy.
If such insurance policy cannot be obtained with such waiver of subrogation, or
if such waiver of subrogation is only available at additional cost and the party
for whose benefit the waiver is not obtained does not pay such additional cost,
then the party obtaining such insurance shall immediately notify the other party
of that fact.
8.7 Indemnity: Except for Lessor's negligence or willful misconduct
and/or breach of express warranties or other provisions of this Lease by Lessor
or Lessor's agents, employees, contractors or invitees, and subject to Paragraph
8.6 above, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, permits, attorney's and consultant's fees,
expenses and/or liabilities arising out of, involving, or in dealing with, the
use of the Premises by Lessee the negligence or willful misconduct of Lessee,
its agents, contractors, employees or invitees, and out of any Breach by Lessee
in the performance in a timely manner of any obligation on Lessee's part to be
performed under this Lease. The foregoing shall include, but not be limited to,
the defense or pursuit of any claim or any action or proceeding involved
therein, and whether or not (in the case of claims made against Lessor)
litigated and/or reduced to judgment, and whether well founded or not. In case
any action or proceeding be brought against Lessor by reason of any of the
foregoing matters, Lessee upon notice from Lessor shall defend the same at
Lessee's expense by counsel reasonable satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense. Lessor need not have first paid any such
claim in order to be so indemnified.
8.8 Exemption of Lessor from Liability: Except to the extent caused
by the negligence or willful misconduct of Lessor, its agents, employees,
contractors or invitees, Lessor shall not be liable for injury or damage to the
person or goods, wares, merchandise or other property of Lessee, Lessee's
employees, contractors, invites, customers, or any other person in or about the
Premises, whether such damage or injury is caused by or results from fire,
steam, electricity, gas, water or rain or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures, or from any other cause,
whether 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, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
Except to the extent caused by the negligence or willful misconduct of Lessor,
its agents, employees, contractors, or invitees, 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's Indemnity: Except to the extent caused by the negligence
or willful misconduct of Lessee, its agents, employees, contractors, or invites,
Lessor shall indemnify, protect, defend and hold harmless Lessee from any and
all damages, liabilities, claims, judgements, actions, attorneys' fees,
consultants' fees, cost and expenses arising from the negligence or willful
misconduct of Lessor or its employees, agents, contractors or invites; any
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violation of Applicable Law; or the breach of Lessor's obligations or
representations under this Lease.
9. Damage or Destruction:
9.1 Definitions:
(a) "Premises Partial Damage" shall mean damage or destruction
to the improvements on the Premises, the repair cost of which damage or
destruction is less than 50% of the then Replacement Cost of the Premises
immediately prior to such damage or destruction.
(b) "Premises Total Destruction" shall mean damage or
destruction to the Premises the repair cost of which damage or destruction is
50% or more of the then Replacement Cost of the Premises immediately prior to
such damage or destruction.
(c) "Insured Loss" shall mean damage or destruction to
improvements on the Premises which was caused by an event required to be covered
by the insurance described in Paragraph 8.3(a), irrespective of any deductible
amounts or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild
the improvements owned by Lessor at the time of the occurrence to their
condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of applicable building codes,
ordinances or laws, and without deduction for depreciation.
9.2 Partial Damage-Insured Loss: If a Premises Partial Damage that is
an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such
damage (but not Lessee's a Trade Fixtures or Lessee Owned Alterations and
Utility Installations) as soon as reasonably possible and this Lease shall
continue in full force and effect.
9.3 Partial Damage - Uninsured Loss: If a Premises Partial Damage
that is not an insured loss occurs, Lessor may at Lessor's option, either: (i)
repair such damage as soon as reasonably possible at Lessor's expense, in which
event this Lease shall continue in full force and effect, or (ii) give written
notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of
the occurrence of such damage of Lessor's desire to terminate this Lease as of
the date of the damage or destruction. In the event Lessor elects to give such
notice of Lessor's intention to terminate this Lease, Lessee shall have the
right within ten (10) days after the receipt of said notice to given written
notice to Lessor of Lessee's commitment to pay for the repair of such damage
totally at Lessee's expense and without reimbursement from Lessor. Lessee shall
provide Lessor with the required funds or satisfactory assurance thereof within
thirty (30) days following Lessee's 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 and the required funds are available. If Lessee
does not give such notice and provide the funds or assurance
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thereof within the times specified above, this Lease shall terminate as of the
date specified in Lessor's notice of termination.
9.4 Total Destruction: Notwithstanding any other provision hereof, if
a Premises Total Destruction occurs (including any destruction required by an
authorized public authority), this Lease shall terminate as of the date of such
Premises Total Destruction, whether or not the damage or destruction in an
Insured Loss or was caused by a negligent or willful act of Lessee.
9.5 Insured Casualty: Lessor shall not have the right to terminate
this Lease if damage to or destruction of the Premises results from a casualty
ordinarily covered by insurance required to be carried by Lessor under this
Lease.
9.6 Uninsured Casualty: In the case of damage which is not required
to be covered by insurance, Lessor shall not have the right to terminate this
Lease (i) if the damage is relatively minor (e.g., repair or restoration would
take fewer than one hundred twenty (120) days or would cost less than ten
percent (10%) of the replacement cost of the Building); or (ii) if Lessee agrees
to pay the cost of repair in excess of a pre-agreed base amount.
9.7 Damage at the End of Lease Term: If the Premises are damaged by
any peril during the last twelve (12) months of the Lease Term, and in the
reasonable opinion of the Lessor's architect or construction consultant, the
restoration of the Premises cannot by substantially completed within sixty (60)
days, either party shall have the option to terminate this Lease, which option
may be exercised only by delivery to the other party of a written notice of
election to terminate within thirty (30) days after the date of such damage;
provided, however, that Lessor may not terminate this Lease pursuant to this
Paragraph 9.7 if Lessee, at the time of such damage, has an express written
option to extend further the Term of this Lease and Lessee exercises such option
so to extend further the Lease Term within thirty (30) days following the
delivery to Lessee of Lessor's written termination notice.
9.8 Lessee's Right to Terminate: Lessor shall notify Lessee within
thirty (30) days after any damage to or destruction of the Premises, the length
of time Lessor reasonably estimates to be necessary for repair or restoration.
Lessee shall have the right to terminate this Lease within fifteen (15) days
after the receipt of such notice if restoration or repair of the Premises will
take more than ninety (90) days.
9.9 Construction Standard: If this Lease is not terminated by Lessor
or Lessee pursuant to this Paragraph, Lessor shall restore the Premises and all
tenant improvements installed by Lessor to the condition in which they existed
immediately prior to the destructive event.
9.10 Abatement of Rent: Rent shall be temporarily abated
proportionately during any period when, by reason of any damage or destruction,
Lessee reasonably determines that there is substantial interference with
Lessee's use of the Premises, having regard to the extent to which Lessee may be
required to discontinue Lessee's use of the Premises. Such abatement shall
commence upon the date of such damage or destruction and end upon substantial
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completion by Lessor of the repair or reconstruction which Lessor is obligated
or undertakes to do. Lessee shall not be entitled to any compensation or damages
from Lessor for loss of the use of the Premises, damage to Lessee's personal
property or any inconvenience occasioned by such damage, repair or restoration.
9.11 Termination - Advance Payments: Upon termination of this Lease
pursuant to this Paragraph 9, a prorata adjustment shall be made concerning any
advance Base Rent and any other advance payments 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 under the terms
of this Lease.
9.12 Waive 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 (a) Payment of Taxes: Lessee shall pay the Real Property
Taxes, as defined in Paragraph 10.2 applicable to the Premises during the term
of the Lease. All such payments shall be made at least ten (10) days prior to
the delinquency date of the applicable installments upon Lessor's request,
Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes
have been paid. If any such taxes to be paid by Lessee shall cover a period of
time prior to or after the expiration or earlier termination of the term hereof,
Lessee's share of such taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year this Lease is in effect, and Lessor
shall reimburse Lessee for any overpayment after such proration if Lessee shall
fail to pay any Real Property Taxes required by this Lease to be paid by Lessee,
Lessor shall have the right to pay the same, and Lessee shall reimburse Lessor
therefor upon demand.
10.2 Definition of "Real Property Taxes": As used herein, the term
"Real Property Taxes" shall include any form of real estate tax or assessment
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income, gift, transfer, conveyance or estate taxes) imposed upon the
Premises by any authority having the direct or indirect power to tax, including
any city, state or federal government, or any school, agricultural, sanitary,
fire, street, drainage or other improvement district thereof, levied against any
legal or equitable interest of Lessor in the Premises or in the real property of
which the Premises are a part, Lessor's right to rent or other income therefrom.
The term "Real Property Taxes" shall also include any tax, fee, levy, assessment
or charge or increase thereon imposed by reason of events occurring, or changes
in applicable law taking effect, during the term of this Lease, but shall
exclude any such tax, fee, levy, assessment or charge, or any increases in the
foregoing, caused by or relating to a voluntary or involuntary change in
ownership or other conveyance of the Premises.
10.3 Joint Assessment: If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes,
all of the land and
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improvements included within the tax parcel assessed, such proportion to be
determined by Lessor from the respective valuation assigned in the assessor's
work sheets or such other information as may be reasonably available. Lessor's
reasonable determination thereof, in good faith shall be conclusive.
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 contained in the Premises or elsewhere. When possible, Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal 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 within ten (10) days
prior to delinquency thereof as detailed in a written statement setting forth
the taxes applicable to Lessee's property.
11. Utilities: Lessee shall pay for all water, gas, heat, light, power,
telephone trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon.
12. Assignment and Subletting:
12.1 Lessor's Consent Required:
(a) Lessee shall not voluntarily or by operations of law
assign, transfer, mortgage, or otherwise transfer or encumber (collectively
"assignment") or sublet all or any part of Lessee's interest in this Lease or in
the Premises without Lessor's prior written consent given under and subject to
the terms of Paragraph 36.
(b) Lessee may, without Lessor's prior written consent and
without any participation by Lessor in assignment and subletting proceeds,
sublet the Premises or assign the Lease to: (i) a subsidiary, affiliate,
division or corporation controlling, controlled by or under common control with
Lessee; or (ii) a successor corporation related to Lessee by merger,
consolidation, non-bankruptcy reorganization, or government action. For the
purpose of this Lease, a sale or transfer of Lessee's capital stock through any
public exchange shall not be deemed an assignment, subletting, or any other
transfer of this Lease or the Premises requiring Lessor's consent. Lessee shall
notify Lessor in writing within ten (10) days after any of the foregoing
assignments or sublets has become effective.
(c) An assignment or subletting of Lessee's interest in
this Lease without Lessor's specific prior written consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(c)
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) after the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
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hereunder or for the performance of any other obligations to be performed by
Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending approval or disapproval of
an assignment Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this lease.
(c) The consent of Lessor to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting by
Lessee or to any subsequent or successive assignment or subletting by the
sublessee. However, Lessor may consent to subsequent subletting and assignments
of the sublease or any amendments or modifications thereto so long as Lessor
notifies Lessee or anyone else liable on the Lease or sublease and obtain their
consent and such action shall not relieve such persons from liability under this
Lease or sublease.
(d) In the event of any Default or Breach of Lessee's
obligations under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or any one else responsible for the performance of the Lessee's
obligations under this Lease, including the sublessee without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(e) Each request for consent to an assignment or subletting
shall be in writing, accompanied by information relevant to Lessor's
determination and to the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including, but not
limited to, the intended usage and/or required modification of the Premises if
any, together with a non-refundable deposit of $500.00 as reasonable
consideration for Lessor's considering and processing the request for consent.
Lessee agrees to provide Lessor with provisions of an assignment or sublease to
which Lessor has specifically consented 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 rentals and income arising from any sublease of all or
a portion of the Premises heretofore or hereafter made by Lessee, and Lessor may
collect such rent and income and apply same toward Lessee's obligations under
this Lease; provided, however, that until a Breach (as defined in Paragraph
13.1) shall occur in the performance of Lessee's obligations under this Lease,
Lessee may, except as otherwise provided in this Lease, receive, collect and
enjoy the rents accruing under such sublease. Lessor shall not, by reason of
this or any other assignment of such sublease to Lessor, nor by reason of the
collection of the rents from a sublease, be deemed liable to the sublessee for
any failure of Lessee to perform and comply with any of Lessee's obligations to
such sublessee under such sublease. Lessee hereby irrevocably authorizes and
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directs any such sublessee, upon receipt of a written notice from Lessor stating
that a Breach exists in the performance of Lessee obligations under this Lease,
to pay to Lessor the rents and other charges due and to become due under the
sublease. Sublessee shall rely upon any such statement and request from Lessor
and shall pay such rents and other charges to Lessor without any obligation or
right to inquire as to whether such Breach exists and notwithstanding any notice
from or claim from Lessee to the contrary. Lessee shall have no right or claim
against said sublessee or, until the Breach has been cured, against Lessor, for
any such rents and other charges so paid by said sublessee to Lessor unless
received by Lessor.
(b) In the event of a Breach by Lessee in the performance
of its obligations under this Lease, Lessor, at its option and without any
obligation to do so, may require any sublessee to attorn to Lessor, in which
event Lessor shall undertake the obligations of the sublessor under such
sublease from the time of the exercise of said option to the expiration of such
sublease; provided, however, Lessor shall not be liable for any prepaid rents or
security deposit paid by such sublessee to such sublessor or for any other prior
Defaults or Breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the
sublessor under a sublease shall also require the consent of the Lessor herein.
(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.
12.4 Lessor's Response: If Lessor's consent to any assignment or
subletting shall not be given or withheld within twenty (20) business days
following Lessee's request for consent, such consent shall be deemed given.
13. Default; Breach; Remedies:
13.1 Default; Breach: A "Default" is defined as a failure by the
Lessee to observe, comply with or perform any of the terms, covenants,
conditions or rules applicable to Lessee under this Lease. A "Breach" is defined
as the occurrence of any one or more of the following Defaults, and, where a
grace period for cure after notice is specified herein, the failure by Lessee to
cure such a Default prior to the expiration of the applicable grace period, and
shall entitle Lessor to pursue the remedies set forth in Paragraph 13.2 and/or
13.3.
(a) The abandonment of the Premises without payment of Rent
or performance of Lessee's other obligations hereunder.
(b) Except as expressly otherwise provided in this Lease,
the failure by Lessee to make any payment of Base Rent or any other monetary
payment required to be made by Lessee hereunder, whether to Lessor or to a third
party, as and where due when such failure
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continues for three (3) days after receipt of written notice by Lessee from
Lessor or the failure by Lessee to provide Lessor with reasonable evidence of
insurance or surety bond required under this Lease, or the failure of Lessee to
fulfill any other obligation under this Lease where such failure continues for a
period of ten (10) days following receipt of written notice thereof by Lessee.
(c) A Default by Lessee as to the terms, covenants,
conditions or provisions of this Lease, or of the rules adopted under Paragraph
40 hereafter that are to be observed, complied with or performed by Lessee other
than those described in subparagraphs (a) or (b) above, where such Default
continues for a period of thirty (30) days after written notice thereof by or on
behalf of Lessor to Lessee; provided, however, that if the nature of Lessee's
Default is such that more than thirty (30) days are reasonably required for its
cure, then it shall not be deemed to be a breach of this Lease by Lessee if
Lessee commences such cure within said thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
(d) The occurrence of any of the following events: (i) The
making by Lessee of any general arrangement or assignment for the benefit of
creditors (ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. (S)101 or
any successor statue thereto (unless, in the case of a petition filed against
Lessor or 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 sixty (60) days; or (iv) the attachment,
executed by 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 discharged within sixty (60) days; provided, however, in the event
that any provision of this subparagraph (d) is contrary to any applicable law.
This provision shall be of no force or effect, and not affect the validity of
the remaining provisions.
(e) The discovery by Lessor that any financial statement
given to Lessor by Lessee or any Guarantor of Lessee's obligations hereunder
intentionally and materially false.
13.2 Remedies: If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessor (or in case of an emergency, without notice), Lessor may at its option
(but without obligation to do so), perform such duty or obligation on Lessee's
behalf including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The costs
and expenses of any such performance by Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn more than three (3)
times in any year, Lessor, at its option, may require all future payments to be
made under this Lease by Lessee to be made only by cashier's check. In the event
of a Breach of this Lease by Lessee, as defined in Paragraph 13.1 with or
without further notice, demand, and without limiting Lessor in the exercise of
any right or remedy which Lessor may have by reason of such Breach, Lessor may:
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(a) Terminate Lessee's right to possession of the Premises
by any lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately surrender possession of the Premises to
Lessor. In such event, Lessor shall be entitled to recover from Lessee: (i) the
worth at the time of the award of the unpaid rent which had been earned at the
time of termination; (ii) the worth at the time of award of the amount by which
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 amount 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 time 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 attorney's fees, and that
portion of the leasing commission paid by Lessor 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 prior sentence shall be computed by discounting the
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent. Efforts by Lessor to mitigate damages caused by
Lessee's Default or Breach of this Lease shall not waive Lessor's right to
recover damages under this Paragraph. 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 that are recoverable
therein, or Lessor may reserve therein the right to recover all or any part
thereof in a separate suit for such rent and/or damages. If a notice and grace
period required under subparagraphs 13.1(a), (b) or (d) was not previously
given, a notice to pay rent or quit, or to perform or quit as the case may be,
given to Lessee under any statute authorizing the forfeiture of leases for
unlawful detainer shall also constitute the applicable notice for grace period
purposes required by subparagraphs 13.1(a), (b), or (d). In such case, the
applicable grace period under subparagraphs 13.1(a), (b), or (d) and the
unlawful detainer statute shall run concurrently after the one such statutory
notice, and the failure of Lessee to cure the Default within the greater of the
two such grace periods shall constitute both an unlawful detainer and a Breach
of this Lease entitling Lessor to the remedies provided for in this lease and/or
by said statute.
(b) Continue the Lease and Lessee's right to possession in
effect (in California under California Civil Code Section 1951.4) after Lessee's
Breach and abandonment and recover the rent as it becomes due, provided Lessee
has the right to sublet or assign, subject only to reasonable limitations of
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not constitute termination
of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the state wherein the Premises is
located.
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(d) The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the term hereof prior to such termination or by reason of
Lessee's use of the Premises.
13.3 Inducement Recapture in Event Of Breach: Any agreement by
Lessor for free or abated rent or other charges applicable to the Premises, or
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 terms,
covenants and conditions of this Lease to be performed or observed by Lessee
during the term hereof as the same may be extended. Upon occurrence of a
monetary Breach of this Lease, more than three (3) times during the term by
Lessee, as defined in Paragraph 13.1(a), 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 Lessee under such an Inducement Provision
shall be immediately due and payable by Lessee to Lessor, and recoverable by
Lessor as additional rent due under this Lease, notwithstanding any subsequent
cure of said Breech by Lessee. The acceptance by Lessor of rent or the cure of
the Breach which initiates 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 to Lessor at the time of such acceptance.
13.4 Late Charges: Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited
processing and accounting charges, and late charges which may be imposed upon
Lessor by the terms of any ground lease, mortgage or trust deed covering the
Premises. Accordingly, if any installment of rent or any other sum due from
Lessee shall not be received by Lessor or Lessor's designee within five (5) days
after receipt by Lessee of written notice from Lessor that such amount shall be
due, then, without any requirement for notice to Lessee, Lessee shall pay to
Lessor a late charge equal to six percent (6%) of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Lessor with incur by reason of late payment by Lessee.
Acceptance of such late charge by Lessor shall in no event constitute a waiver
of Lessee's Default Breach with respect to such overdue amount, nor prevent
Lessor from exercising any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of Base Rent, then notwithstanding
Paragraph 4.1 or any other provision of this Lease to the contrary. Base Rent
shall, at Lessor's option, become due and payable quarterly in advance.
13.5 Breach by Lessor: Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph 13.5, a
reasonable time shall be thirty (30) days after receipt by Lessor, and by the
holders of any ground lease, mortgage or deed of trust covering the Premises
whose name and address shall have been furnished to Lessee in writing for such
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purpose, of written notice specifying wherein such obligation of Lessor has not
been performed; provided, however, that the nature of Lessor's obligation is
such that more than thirty (3) days after such notice are reasonably required
for its performance, then Lessor shall be in breach of this Lease if performance
is commenced within such thirty (30) day period and thereafter diligently
pursued to completion. If Lessor should fail to make payment of any amount
payable by Lessor to third parties, or fail to perform any of its other
obligations hereunder, and if such failure continues for thirty (30) days
following written notice from Lessee (unless the nature of Lessor's obligation
is such that more than thirty (30) days is required for performance and Lessor
commences such performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion), Lessee shall have the right, in
addition to any other rights or remedies it may have under this Lease, or at law
or in equity, to cure such default; provided however, in case of emergency,
where immediate action is necessary to protect persons or property, Lessee shall
have the right to effect such cure immediately, without prior notice to Lessor,
but shall notify lessor of the action taken as soon thereafter as is reasonably
practicable. All costs incurred by Lessee in effecting such cure, together with
interest thereon at the rate of two percent (2%) plus the "prime rate" charged
by Bank of America NT & SA or the highest rate permitted by law, whichever is
less ("Interest Rate"), from the date such costs were incurred until paid, shall
be reimbursed to Lessee by Lessor within thirty (30) days after Lessor's receipt
of a statement therefor.
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 power
(all of which are herein called "condemnation"). This Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If the portion of the Premises taken by
condemnation materially impairs Lessee's use and occupancy of the Premises in
Lessee's reasonable opinion, Lessee may, at Lessee's option, to be exercised in
writing within ten (10) days and 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 the same proportion as the rentable floor
area of the Premises taken bears to the total rentable floor area of the
building located on the Premises, and Rent shall be further equitably abated
during any restoration of the Premises. No reduction of Base Rent shall occur if
the only portion of the Premises taken is land on which there is no building.
Any award for the taking of all or any part of the Premises under the power of
eminent domain or any payment made under threat of the exercise of such power
shall be the property of Lessor, whether such award shall be made as
compensation for diminution in value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that Lessee shall be entitled
to any compensation separately awarded to Lessee for Lessee's relocation
expenses and/or loss of Lessee's Trade fixtures, Utility Installations,
Alterations, personal property and the "bonus value" of the Lease. In the event
that this Lease in not terminated by reason of such condemnation, Lessor shall
to the extent of its net severance damages received, over and above the legal
and other expenses incurred by Lessor in the condemnation, repair any damage to
the Premises caused by such condemnation, except the extent that Lessee has been
reimbursed therefor by the condemning
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authority and Lessee shall be responsible for the payment of any amount in
excess of such net severance damages required to complete such repair to the
extent that Lessee has been reimbursed therefor by the condemning authority.
15. [INTENTIONALLY LEFT BLANK.]
16. Tenancy Statement:
16.1 Each Party (as "Responding Party") shall within ten (10)
business days after written notice from the other Party (the "Requesting Party")
execute, and deliver to the Requesting Party a statement in writing certifying:
(1) that none of the terms or provisions of this Lease have been changed (or, if
they have been changed, stating how they have been changed); (2) that this Lease
has not been canceled or terminated; (3) the last date of payment of Base Rent
and other charges and the time period covered by such payment; and (4) that, to
the party's actual current knowledge; the other party is not in default under
this Lease (or, if the other party is claimed to be in default, stating why).
16.2 If Lessor desires to finance, refinance, or sell the
Premises, any part thereof, or the building of which the Premises are a part,
Lessee and all Guarantors of Lessee's performance hereunder shall deliver to any
potential lender or purchaser designated by Lessor such available financial
statements of Lessee and such Guarantors as may be reasonably required by such
lender or purchaser, including but not limited to Lessee's financial statements
for the past three (3) years. All such financial statements shall be received by
Lessor and such lender or purchaser in confidence and shall be used only for the
purpose herein set forth.
17. Lessor's Liability: The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, 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 in this Lease,
Lessor shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Lessor at the time of such transfer or
assignment. Except as provided in Paragraph 15, 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, provided that the
transferee or assignee assumes in writing all of Lessor's obligations under this
Lease. Nothing contained herein shall, however, release Lessor from any
obligations accruing during such Lessor's ownership or possession of the
Premises. 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.
18. Severability: The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. Interest on Past-Due Obligations: Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within thirty (30)
days following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per annum, but not
exceeding the maximum rate allowed by law, in addition to the
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late charge provided for in Paragraphs 13.4. Notwithstanding anything to the
contrary contained in this Lease, for each late payment, (i) Lessee shall not be
required to pay interest pursuant to this paragraph 19 if Lessee has paid a late
charge pursuant to Paragraph 13.4 hereof for such late payment; and (ii) Lessee
shall not be required to pay any such late charge if Lessee has made an interest
payment pursuant to this Paragraph 19.
20. Time of Essence: Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties under
this Lease.
21. Rent Defined: All monetary obligations of Lessee to Lessor under the
terms of this Lease are deemed to be rent.
22. No Prior or Other Agreements; Broker Disclaimer: This Lease and the
exhibits attached hereto 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.
23. Notices:
23.1 All notices required or permitted by this Lease shall be in
writing and may be delivered in person (by hand or by messenger or courier
service) or may be sent 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 notice purposes. Either
Party may, by written notice to the other specify a different address for notice
purposes. A copy of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate by written notice
to Lessee.
23.2 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. Notices
delivered by United States Express Mail or overnight courier that guarantees
next day delivery shall be deemed given twenty-four (24) hours after delivery of
the same to the United States Postal Service or courier, if any notice is
transmitted by facsimile transmission or similar means, the same shall be deemed
served or delivered upon telephone confirmation of receipt of the transmission
thereof, provided a copy is also delivered via delivery or mail. If notice is
received on a Sunday or legal holiday, it shall be deemed received on the next
business day.
24. Waivers: No waiver by Lessor or Lessee of the Default or Breach of any
term, covenant or condition hereof by Lessee or Lessor shall be deemed a waiver
of any other term, covenant or condition hereof, or of any subsequent Default or
Breach by Lessee or Lessor of the same or of any other term, covenant or
condition hereof Lessor's consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of Lessor's consent to, or approval
of, any subsequent or similar act by Lessee, or be constructed as the basis of
an estoppel to
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enforce the provision or provisions of this Lease requiring such consent.
Regardless of Lessor's knowledge of a Default or Breach by Lessee of any
provision hereof, other than the failure of Lessee to pay the particular rent so
accepted. Any payment given Lessor by Lessee may be accepted by lessor on
account of moneys or damages due Lessor, notwithstanding any qualifying
statements or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of deposit of
such payment.
25. Recording: Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. No Right To Holdover: Lessee has no eight to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease.
27. Cumulative Remedies: No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions: All provisions of this Lease to be observed
or performed by Lessee and Lessor are both covenants and conditions.
29. Binding Effect; Choice of Law: This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the court
in which the Premises are located.
30. Subordination; Attornment: Non-Disturbance:
30.1 Subordination: Provided that the ground Lessor, Lender, or
other holder of the interest to which this Lease would be subordinated executes
a recognition and non-disturbance agreement reasonably acceptable to Lessee
which (i) provides that this Lease shall not be terminated so long as no Breach
by Lessee exists under this Lease; and (ii) recognizes all of Lessee's rights
hereunder, this Lease and any Option granted hereby shall be subject and
subordinate to any ground lease, mortgage, deed of trust, or other hypothecation
or security device (collectively, "Security Device"), now or hereafter placed by
Lessor upon the real property of which the Premises are part, to any and all
advances made on the security thereof, and to all renewals, modifications,
consolidations, replacements and extensions thereof Lessee agrees that the
Lenders holding any such Security Device shall have no duty, liability or
obligation to perform any of the obligations of Lessor under this Lease, but
that in the event of Lessor's default with respect to any such obligation,
Lessee will give any Lender whose name and address has been furnished Lessee in
writing for such purpose notice of Lessor's default and allow such Lender thirty
(30) days following receipt of such notice, the cure of said default before
invoking any remedies Lessee may have by reason thereof. If any Lender shall
elect to have this Lease and/or any Options granted hereby superior to the lien
of its Security Device and shall give written notice thereof to Lessee, this
Lease and such Options shall be deemed prior to
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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 and such recognition and attornment agreement, 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, provided that such Lender or other
party assumes in writing all of Lessor's obligations under this Lease, 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 unless such Lender had previously consented to
the same; or (iii) be bound by prepayment of more than one month's rent unless
the same was paid to such Lender.
30.3 Non-Disturbance: With respect to Security Devices entered
into by Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall be subject to receiving assurance (a "non-disturbance agreement")
from the Lender that Lessee's possession and this Lease, including any options
to extend the term hereof, will not be disturbed so long as Lessee is not in
Breach hereof and attorns to the record owner of the Premises.
30.4 Self-Executing: Upon written request from Lessor or a Lender
in connection with a sale, financing or refinancing of the Premises, Lessee and
Lessor shall execute such further writings as may be reasonably required to
separately document any such subordination or non-subordination, attornment and
non-disturbance agreement as is provided for herein.
31. Attorneys Fees: If any Party or Broker brings an action or proceeding
to enforce the terms hereof or declare rights hereunder, the Prevailing Party
(as hereafter defined) or Broker in any such proceeding, action, or appeal
thereon, shall be entitled to reasonable attorney's 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, whereby compromise,
settlement, judgment, or the abandonment by the other Party or Broker of its
claim or defense. The attorney's fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably incurred. Lessor shall be entitled to attorney's
fees, costs and expenses incurred in the 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
emergency, and otherwise at reasonable times upon one (1) business day's prior
notice, subject to Lessee's reasonable security measures, for the purpose of
showing the same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or the building
of which they are a part, as Lessor may reasonably deem necessary. Lessor may at
any time place on or about the Premises or building any ordinary "For Sale"
signs and Lessor may at any time
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during the last one hundred twenty (120) days of the term hereof place on or
about the Premises any ordinary "For Lease" signs. All such activities of Lessor
shall be without abatement of rent or liability to Lessee. Lessor, however, at
all times shall minimize any interference with Lessee's operations at the
Premises.
33. Auctions: Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. Signs: Lessee shall have die right to erect and install building and
monument signage at Lessee's expense; provided however, that Lessee first
obtains all necessary governmental approvals therefor. Lessee shall remove all
such signage at Lessee's expense promptly upon the expiration or sooner
termination of this Lease. The installation of any sign on the Premises by or
for Lessee shall be subject to provision of Paragraph 7 (Maintenance, Repairs,
Utility Installation, Trade Fixtures and Alteration).
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 of the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or more of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. Consents:
(a) Except for Paragraphs 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent, approval, designation,
determination or judgment, of a Party is required, such consent, approval,
designation, determination or judgment shall not be unreasonably withheld or
delayed. Lessor's actual reasonable costs and expenses (including but not
limited to architects', engineers' or other consultants' fees) incurred in the
consideration of, or response to, a request by Lessee for any Lessor consent
pertaining to the Lease or the Premises, including but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
practice or storage tank, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify hereafter any
particular condition to Lessor's consent shall not preclude the imposition by
Lessor at the time of consent of such further or other conditions as then
reasonable with reference to the particular matter for which consent is being
given.
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37. Quiet Possession: Upon payment by Lessee of the rent for the Premises
and the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of this provisions of this Lease.
38. Options:
38.1 Definition: As used in this Paragraph 38 the word "Option"
has the following meaning: (a) the right to extend the term of this Lease or to
renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor.
38.2 Options Personal To Original Lessee: Each Option granted to
Lessee in this Lease may only be assigned concurrently with an assignment of
this Lease. The Options, if any, herein granted to Lessee are not assignable
separately or apart from this Lease, and no Option may be separated from this
Lease in any manner, by reservation or otherwise.
38.3 Multiple Options: In the event that Lessee has any multiple
Options to extend or renew this Lease, a later option cannot be exercised unless
the prior Options to extend or renew this Lease have been validly exercised.
38.4 Effect of Default on Options:
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary, during the
time the Lessee is in Breach of this Lease.
(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 38.4(a).
39. 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.
40. Reservations: Lessor reserves to itself the right, from time to time,
to grant, without the consent or joinder 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 or increase Lessee's cost of such use of occupancy or Lessee's
obligations hereunder. Lessee agrees to sign any documents reasonably requested
by Lessor to effectuate any such easement rights, dedication, map or
restrictions.
41. 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
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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 of any part
thereof, said Party shall be entitled to recover such sum or so much thereof as
it was not legally required to pay under the provisions of this Lease.
42. Authority: If either Party hereto is a corporation, trust, or general
or limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
43. 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. Any conflict between this form of the
Lease and any Addenda, Work Letter of Exhibits shall be controlled by the
latter. This Lease is meant to supersede a previous Lease between the Lessor and
VidaMed, Inc. The substance of this Lease is meant to be identical to the
previous Lease.
44. Offer: Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to lease to Lessee.
This Lease is not intended to be binding until executed by all Parties hereto.
45. Multiple Parties: Except as otherwise expressly provided herein, if
more than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple Parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
46. Lessee Improvements: Lessor shall pay for and complete interior
improvements "Tenant Improvements" mutually agreed upon as shown on attached
Exhibit B.
47. Truck Access: Lessee will allow passage of semi-truck deliveries in
▇▇▇▇▇▇ Critical Care Systems, Hospital Products Division of ▇▇▇▇▇▇ Laboratories
and Illness Corp., an average of five times per business day through the parking
lot.
48. Right to Inspect Books and Records: Notwithstanding anything to the
contrary contained in this Lease, within thirty (30) days after receipt by
Lessee of Lessor's statement of operating expenses for any prior calendar year
during the Term, Lessee or its authorized representative shall have the right to
inspect the books of Lessor during the business hours of Lessor at Lessor's
office in the Building, or, at Lessor's option, such other location as Lessor
reasonably may specify, for the purpose of verifying the information contained
in the statement. Unless Lessee asserts specific errors within thirty (30) days
after receipt of the statement, the statement shall be deemed correct as between
Lessor and Lessee, except as to individual components subsequently determined to
be in error by a future audit.
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49. Option to Extend: Notwithstanding anything to the contrary contained
in this Lease:
(a) Grant of Option: Lessor hereby grants to Lessee one (1) option
("Option") to extend the term of this Lease, for an additional term of five (5)
years, commencing when the then existing Term expires, upon the terms and
conditions set forth in this Paragraph.
(b) Exercise of Option: Lessee may exercise such option by giving
Lessor written notice of its intention not less than one hundred eighty (180)
days' notice prior to the expiration of the then-existing term of the Lease.
(c) Extended Term Rent: If the Option is exercised, the monthly rent
for the Premises shall be the then current fair market monthly rent ("Fair
Market Rent") for the Premises as of the commencement date of the applicable
extended term, as determined by the agreement of the parties, or, if the parties
cannot agree term, then the Fair Market Rent shall be determined by three
competent Real Estate Professionals mutually agreeable to the parties. All other
terms and conditions contained in this Lease, as the same may be amended from
time to time by the parties in accordance with the provisions of this Lease,
shall remain in full force and effect and shall apply during the Option Term.
(d) Rescission: Notwithstanding anything to the contrary contained in
this Paragraph, if the monthly rent for an Option period is determined by
appraisal and if Lessee does not, in its discretion, approve the rental amount
established by the appraisal, Lessee may rescind its exercise of the Option by
giving Lessor written notice of its election to rescind within ten (10) days
after the receipt of all appraisals. If Lessee rescinds its exercise of the
Option, the (i) this Lease shall terminate on the sixtieth (60th) day after
Lessee's notice of rescission or on the date this Lease would have otherwise
terminated absent Lessee's exercise of the Option, whichever date is later; and
(ii) Lessee shall pay all costs and expenses of the appraisal.
50. Right of First Refusal: If at any time during the Term, as extended,
Lessor shall solicit or receive a bona fide offer in writing ("Offer") from a
third party to purchase the Premises, Lessee shall have a right of first refusal
("Right of First Refusal") to purchase the Premises upon the same terms and
conditions as set forth in the Offer. Lessor, promptly following Lessor's
receipt of the Offer, Shall deliver written notice to Lessee specifying the
terms and conditions contained in the Offer. Lessee shall exercise its Right of
First Refusal by providing Lessor with written notice of its exercise within
twenty (20) business days after the date of receipt of Lessor's notice regarding
the Offer. If Lessee exercises its Right of First Refusal within the twenty (20)
business-day period, Lessor and Lessee promptly shall execute an amendment to
this Lease relating to the Premises, which includes the terms and conditions set
forth in the Offer. If Lessee fails to provide Lessor with its written notice of
exercise within the twenty (20) business day period, then Lessee shall be deemed
to have elected not to exercise its Right of First Refusal with respect to the
particular Offer at issue. Notwithstanding the foregoing, if Lessor negotiates
with the proposed purchaser terms materially more favorable then those offered
to Lessee but rejected, Lessor shall be required to submit the more favorable
terms to Lessee for its review. Lessee shall have seven (7) business days after
receipt of the more
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favorable terms to accept or reject the Premises. If Lessee rejects the more
favorable terms, Lessor shall be free to enter a purchase agreement with the
proposed purchaser. Lessee's Right of First Refusal; shall be continuous during
the Term of this Lease and any extension thereof. Lessee's rejection of any
particular Offer shall not relieve Lessor of its obligation to again offer the
Premises to Lessee at any time that the Premises subsequently becomes available.
51. Construction of Tenant Improvements: At Lessor's sole cost and
expense, Lessor shall construct the improvements ("Tenant Improvements")
described in that certain letter from ▇▇▇▇▇ ▇. ▇▇▇▇▇ & Sons, Inc. to VidaMed
Inc., dated July 13, 1994, attached hereto as Exhibit "B" and incorporated by
reference herein. The Tenant Improvements shall be constructed in accordance
with such attached plans and specifications, in a good and workmanlike manner,
free of defects and using new materials and equipment of good quality and in
compliance with all Applicable Law (including, without limitation, the Americans
with Disabilities Act of 1990). Within thirty (30) days after the Commencement
Date, Lessee shall have the right to submit a written "punchlist" to Lessor,
setting forth any defective items to be corrected. Notwithstanding anything to
the contrary contained in this Lease or in the foregoing, Lessee's acceptance of
the Premises or submission of a "punchlist" shall not be deemed a waiver of
Lessee's right to have defects in the Tenant Improvements or the Premises
repaired at Lessor's sole expense. Lessee shall give notice to Lessor whenever
any such defect becomes reasonably apparent, and Lessor shall repair such defect
as soon as practicable. Lessor also hereby assigns to Lessee all warranties with
respect to the Tenant Improvements, including, without limitation, warranties
which would reduce Lessee's maintenance obligations hereunder, and shall
cooperate with Lessee to enforce such warranties.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR
SUBMISSION TO YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS
SHOULD BE CONSULTED TO EVALUATE THE CONDITION OF THE PROPERTY
AS TO THE POSSIBLE PRESENCE OF ASBESTOS, STORAGE TANKS OR
HAZARDOUS SUBSTANCES. NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY
THE REAL ESTATE BROKERS(S) OR THEIR AGENTS OR EMPLOYEES AS TO
THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF
THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES
SHALL RELAY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO
THE LEGAL AND TAX CONSEQUENCES OF
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THIS LEASE, IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER
THAN CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY
IS LOCATED SHOULD BY CONSULTED.
The parties hereto have executed this Lease at the place on the dates
specified above to their respective signatures.
Executed at_________________________ Executed at__________________________
On__________________________________ On___________________________________
By: LESSOR By: LESSEE
The ▇▇▇▇▇ Mountain View Joint Venture ZoMed International
------------------------------------- -------------------------------------
By:_________________________________ By:__________________________________
Name Printed: ▇▇▇▇▇ ▇▇▇▇▇ Name Printed: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Managing Joint Venturer Title: Executive Vice President
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Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT A
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VidaMed, Inc., Scionex Corporation and ZoMed International do not use hazardous
materials as of the signing of the attached lease.
Alex Rossakos
June 22, 1999
Page 2
▇▇▇▇
MEDICAL SYSTEMS, INC.
June 22, 1999
▇▇▇▇ ▇▇▇▇▇▇▇▇
Cohesive Technology Solutions, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Subject: Extension of sublease of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Alex,
This letter shall serve as the formal agreement to extend the sublease between
▇▇▇▇ Medical Systems, Inc. ("Sublessor") and Computer LANscapes, Inc. (now
Cohesive Technology Solutions, Inc.) ("Sublessee"), said sublease dated 13
January 1997. Reference is made, also, to Addendum One dated as of 13 January
1997 and Addendum Number Two, dated 19 February 1999. The standard sublease
agreement as amended by Addendum One and Addendum Two and further described in
this letter shall be referred to as the "Sublease Agreement". All capitalized
terms are defined in the sublease.
1. First Extension Term:
Beginning Date: August 16, 1999
Ending Date: August 15, 2000
2. Extension of Term:
As agreed in Addendum Two - dated 19 February 1999
3. Basic Rent during First Extension Term:
$13,825.56 per month
4. Additional Security Deposit:
$3,143.56 (due upon execution of this sublease extension)
Alex Rossakos
June 22, 1999
Page 2
5. Master Lessor shall implement the following tenant improments which will be
completed prior to August 16, 1999:
HVAC System - brought up to good operating condition
Exterior painting - touch up as needed
Parking lot - seal coat and restripe
Interior painting and acoustic ceiling tile repairs as needed
Installation of new accent carpet in the Cohesive lobby area (approx. 184
sq. ft), requires sublessee to remove existing furniture, reception desk or
computer equipment and replace at end of job
Repair of existing 2x4 lay in light fixtures, as necessary
Except to the extent amended, by the terms of this letter, all terms and
conditions contained in the Sublease Agreement, Addendum One and Addendum Number
Two shall remain in full force and effect and shall apply during the First
Extension Term.
▇▇▇▇ Medical Systems, Inc. Cohesive Technology Solutions, Inc.
By: /s/: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/: ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Vice President Title: Managing Partner
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Date: June 24, 1999 Date: June 25, 1999
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Addendum Number One
Addendum to Sublease dated January 13, 1997 between ▇▇▇▇ Medical Systems, Inc.
("Sublessor") and ComputerLANscapes ("Sublessee") for a portion (+6,104 square
-
feet) of ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇.
The following additions apply to Section 12 - Additional Provisions:
1. Add: "building systems maintenance."
2. "As written".
3. Add: "except customary amounts of office supplies and janitorial products
provided that the use thereof is incidental to Sublessee's use of the
Premises and is performed in compliance with applicable laws."
4. Delete and substitute the following: "Sublessee is hereby granted a first
right of refusal on any space made available in the building by Sublessor.
Prior to subleasing any portion of such space to a third party, Sublessor
shall notify Sublessee of such proposed Sublease, and the terms and
conditions of such proposed Sublease. Sublessee shall have the option,
exercisable by written notice to Sublessor within ten (10) days after
Sublessee's receipt of such notice, to Sublease such portion of the
adjacent space from Sublessor for the same duration and on the same terms
and conditions offered by such third party. If Sublessee fails to exercise
such option within such period, Sublessor shall be free to Sublease such
portion of such adjacent space to such third party on the terms and
conditions specified in the notice to Sublessee. If Sublessor and such
third party fail to execute a Sublease agreement within sixty (60) days
after the expiration of Sublessee's option period, Sublessee's first, right
of refusal shall be revived and shall again apply to any proposed Sublease
of such portion of the adjacent space."
5. Add: "Sublessee shall be permitted to ▇▇▇▇ twelve (12) spaces as
"ComputerLANscape Visitor".
6. Add: "Upon signature of this Sublease, Sublessor agrees to allow Sublessee
and Sublessee's contractors access to the Premises during normal business
hours in order to make improvements. Sublessee's planned improvements shall
be per Attachment 1."
Add the following:
7. If Sublessor exercises its option to extend the term of the Master Lease,
Sublessee shall have the option to extend the term of this Sublease for the
same duration. Sublessor shall notify Sublessee of Sublessor's exercise of
such option and Sublessee shall have the option, exercisable by written
notice to Sublessor within ten (10) days after Sublessee's receipt of such
notice, to extend this Sublease for the same duration. If Sublessee's
option is exercised, the monthly rent for the Premises shall be the same as
the new rent to be paid by Sublessor to the Master Lessor, on a square
footage basis. If Sublessor
▇▇▇▇ ▇▇▇▇▇▇▇▇
June 22, 1999
Page 5
rescinds its exercise of the extension under the terms of the Master Lease,
then Sublessee's exercise of its option to extend this Sublease shall also
be deemed rescinded and this Sublease shall then terminate upon termination
of the Master Lease.
8. Sublessee shall be permitted to erect a monument sign in the front of the
building and a canopy over the entrance to the Premises. Said work to be in
consonance with Paragraph 6 of Section 12.
Executed at ▇▇▇▇ MEDICAL SYSTEMS ▇▇▇▇ Medical Systems, Inc.
-------------------------- ---------------------------------
on 1/21/97 By /s/: ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------- -------------------------------
address ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. By ______________________________
------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Sublessor (corporate seal)
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Executed at COMPUTER LANSCAPES, INC. Computer LANscapes Inc.
------------------------ ---------------------------------
on 1/17/97 By /s/: ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------- -------------------------------
address ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ #C By ______________________________
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▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Sublessee (corporate seal)
-----------------------------------
Executed at________________________ _________________________________
on ________________________________ By ______________________________
address____________________________ By ______________________________
___________________________________ Master Lessor (corporate seal)
[DIAGRAM OF PREMISES]
Addendum Number Two
This Addendum Number Two is an addendum to the Standard Sublease agreement
dated January 13, 1997, entered into between ▇▇▇▇ Medical Systems, Inc.
("Sublessor") and Computer LANscapes, Inc. (now Cohesive Technology Solutions,
Inc., referred to as "Sublessee"). That Standard Sublease agreement, as amended
by its Addendum Number One, shall be referred to as the "Sublease Agreement."
Background
Under the Sublease Agreement, Sublessee has subleased (the "Sublease") from
Sublessor certain portions of the premises at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Subleased Premises"). Under the Sublease Agreement, the
term of the Sublease will end on August 15, 1999. The parties wish to extend the
term of the Sublease under the terms and conditions of this Addendum.
Capitalized terms not otherwise defined in this Addendum shall have the meanings
defined for them in the Sublease Agreement.
Agreement
1. Extension of Term. The term of the Sublease is hereby extended through
-----------------
August 15, 2000 (unless sooner terminated pursuant to any provision of the
Sublease Agreement). The period from August 16, 1999 through August 15, 2000
shall be referred to as the "First Extension Term." Sublessee shall have options
to further extend the Sublease beyond the First Extension Term as provided in
Section 3 below.
2. Rent During First Extension Term. During the First Extension Term,
--------------------------------
Sublessee shall pay to Sublessor, as full compensation for the Sublease of the
Subleased Premises, in advance on the 1st day of each month, a proportionate
share (on a square footage basis) of the base monthly rent paid by Sublessor to
the Master Lessor from time to time for the entire premises at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ (which shall be fair market rent, as negotiated in good faith by
Sublessor and the Master Lessor). During the First Extension Term, Sublessee
shall not be required to pay any additional amounts for property taxes,
insurance, utilities, outside maintenance, building system maintenance,
janitorial service, or repair. Promptly after final establishment of the base
rent to be paid by Sublessor to the Master Lessor, Sublessor shall notify
Sublessee of such amount, what Sublessee's proportionate share will be, and what
adjustments, if any, will be made to such amount over the time period covered by
the Sublease (including extensions). Sublessee shall have the right to elect to
cancel the extensions contemplated by this Addendum and to cause the Sublease to
terminate on August 16, 1999, by notifying Sublessor of that election within ten
(10) days after receipt of such notice from Sublessor.
3. Options to Extend. Sublessor hereby grants to Sublessee two (2) options
-----------------
("Options") to extend the term of the Sublease, each for an additional term of
six (6) months, commencing when the then-existing term expires, on the following
terms and conditions:
(a) Exercise of Options. Sublessee may exercise such Options by giving
-------------------
Sublessor written notice not less than ninety (90) days prior to the
expiration of the then-existing term of the Sublease.
(b) Extended Term Rent. If an Option is exercised, the monthly rent for
------------------
the Premises during such Option term shall be (i) a proportionate share (on
a square footage basis) of the base monthly rent paid by Sublessor to the
Master Lessor from time to time during such Option term for the entire
premises at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, plus (ii) a proportionate share (on a
square footage basis) of amounts Sublessor pays to the Master Lessor or
third parties for property taxes, insurance, utilities, outside
maintenance, building system maintenance, janitorial service, and repair,
for the entire premises at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ during such month.
Notwithstanding the above, for (i) any repair the total cost of which is
over $5,000, or (ii) any amount which Sublessee is required to pay under
the above provisions which should be treated as a capital improvement under
generally accepted accounting principles, Sublessee shall be required to
pay only its proportionate share of that portion of the cost corresponding
to the ratio of the balance of the remaining term of the Sublease (assuming
exercise of all Options) to the total useful life of such capital
improvement or repair. If Sublessee does not exercise all of the Options,
then Sublessor shall refund a corresponding amount to Sublessee or an
appropriate adjustment shall be made to the amount payable by Sublessee.
4. Additional Amendments to Sublease Agreement. Section 7 of Addendum
-------------------------------------------
Number One to the Sublease Agreement is deleted and shall be of no further force
or effect. Except to the extent amended, or to the extent inconsistent with the
terms of this Addendum, all terms and conditions contained in the Sublease
Agreement shall remain in full force and effect and shall apply during the First
Extension Term and any Option terms.
▇▇▇▇ Medical Systems, Inc. Cohesive Technology Solutions, Inc.
By: /s/: ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/: ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------- --------------------------------
/s/: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President & CEO /s/: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Managing Partner
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Printed Name and Title Printed Name and Title
Date: February 19, 1999 Date: February 19, 1999
-3-
