LEASE AGREEMENT FOR THE TRW DENVER BUILDING
EXHIBIT 10.72
LEASE AGREEMENT FOR THE TRW DENVER BUILDING
Exhibit A
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE
(Do not use this form for Multi-Tenant
Property)
1. Basic provisions (“Basic Provisions”)
1.1 Parties: This Lease (“Lease”), dated for reference purposes only,
November, 1996, is made by and between Pacifica Holding Company, LLC, a Colorado limited liability company (“Lessor”) and TRW, Inc., an Ohio corporation (“Lessee”) (collectively the “Parties,” or individually as
“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
N/A , located in the County of
Arapahoe , State of
Colorado , and generally described as (describe briefly the nature of the property)
▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Subdivision, Filing No. 1 (“Premises”). (See Paragraph 2
for further provisions.)
1.3 Term: ten (10) years and zero (0) months
(“Original Term”) commencing See Addendum attached hereto (“Commencement Date”) and ending see Addendum (“Expiration Date”). (See Paragraph 3 for further provisions.) (See Paragraphs 3.2 and 3.3 for
further provisions.)
1.4 Early
Possession: N/A (“Early Possession Date”).
1.5 Base Rent: $See Addendum per month (“Base Rent”), payable on the first
(1st) day of each month commencing see addendum. (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.
1.6 Base Rent paid upon
Execution: $see Addendum as Base Rent for the period .
1.7 Security
Deposit: $ N/A (“Security Deposit”). (See Paragraph 5 for further
provisions.)
1.8 Permitted Use: General offices, software development
and computer assembly. (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 (check applicable boxes): Pacifica Holding Company represents xLessor exclusively (“Lessor’s Broker”) ▇▇▇▇▇ & ▇▇▇▇▇; [ ]both Lessee and Lessor. (See
Paragraph 15 for further provisions.)
1.11 Guarantor. The obligations of
the Lessee under this Lease are to be guaranteed by
(“Guarantor”). (See Paragraph 37 for further provisions.)
1.12 Addenda. Attached hereto is an Addendum or Addenda consisting of Paragraphs
through and Exhibits
, all of which constitute a part of this Lease.
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, o 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 existing plumbing, fire sprinkler system, lighting, air conditioning, heating, and loading doors, if any, in the Premises, other than those
constructed by Lessor shall, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and within thirty (30) days after the Commencement Date, correction of that
non-compliance shall be the obligation of Lessee at Lessee’s sole cost and expense.
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 does not apply to the use to which Lessee will put the Premises or to any Alterations or Utility Installations (as defined in Paragraph
7.3(a)) made or to be made by Lessee. If the Premises do not comply with said warranty, 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 the same at Lessor’s expense. If Lessee does not give Lessor written notice of a non-compliance with this warranty within six (6) months following the 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 condition of the Premises (including but not limited to the electrical and fire sprinkler systems,
security, environmental aspects, compliance with Applicable Law, as defined in Paragraph 6.3) and 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 of 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 Lessee Prior Owner/Occupant. The warranties made by Lessor in this Paragraph 2 shall be of no force or effect if immediately prior to the date set forth in Paragraph 1.1 Lessee was the
owner or occupant of the Premises. In such event, Lessee shall, at Lessee’s sole cost and expense, correct any non-compliance of the Premises with said warranties.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
3.3 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.
3.3 Delay in Possession. If for any reason lessor cannot deliver possession of the Premises to Lessee as agreed herein by the Early Possession if one is specified in Paragraph 1.4, or if no
Early Possession Date is specified, by the Commencement Date, Lessor shall not be subject to any therefor, nor shall such failure affect the validity of this Lease, or the
obligations of Lessee hereunder, or extend the term hereof, but in such case, shall not, except as otherwise provided herein, be obligated to pay rent or perform any other
obligation of Lessee under the terms of this Lease until delivers possession of the Premises to Lessee. If possession of the Premises is not delivered to Lessee within sixty
(60) days after the Commencement Date, Lessee may, at its option, by notice in writing to Lessor within ten (1) days thereafter, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder; provided, however,
that if such written notice by Lessee is not received by Lessor within said ten (10) day period, ’s right to cancel this Lease shall terminate and be of no further force or
effect. Except as may be otherwise provided, and regardless of whom the period free of the obligation to pay Base Rent, if any, that Lessee would otherwise have enjoyed shall run from the date of delivery of possession continue for a period equal to
what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the changes or omissions of lessee.
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, 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 month 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 Lessee.
2
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. Lessee shall not use or permit the use of the Premises in a manner that creates waste or a nuisance, or that disturbs owner and/or occupants of, or causes damage to,
neighboring premises or properties.
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
fractions 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 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 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 damage or expose Lessor to any liability therefor. In addition, Lessor may (but without any obligation to do so) condition its consent to the use or presence of any Hazardous
substance, activity or storage tank by Lessee upon Lessee’s giving Lessor such additional assurances as Lessor, in its reasonable discretion, deems necessary to protect itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefrom or therefor, including, but not limited to, the installation (and removal on or before Lease expiration or earlier termination) of reasonably necessary protective modifications to the Premises (such
as concrete encasements) and/or the deposit of an additional Security Deposit under Paragraph 5 hereof.
(b) Duty to inform Lessor If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance, 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 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 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 the 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, judgments, costs, claims, liens, expenses, penalties, permits and attorney’s and consultant’s fees 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, 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 records, permits, the requirements of any applicable fire insurance underwriter or railing bureau, and the recommendations of lessor’s
engineers and/or consultants, relating in any manner to the Premises (including but not limited to matters pertaining to (i) industrial hygiene, (ii) environmental conditions on, in, under or about 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 five (5) days after receipt of lessor’s written request, provide Lessor with copies of all documents and information, including, but not
limited to, permits, registrations, manifests, applications, reports and certificates, evidencing Lessee’s compliance with any Applicable Law specified by Lessor, and shall immediately
3
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, 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 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 or materially contributed to by Lessee is found to
exist or be imminent, or unless the inspection is requested or ordered by a governmental authority as the results 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.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.
(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), 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, structural and non-structural (whether or not such portion of the Premises requiring repair, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee’s use, any prior use, the elements or the age of such portion of the Premises), including, without limiting the generality of the foregoing all equipment
or facilities serving the Premises, such as plumbing, 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 detection 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 sanitary sewer system) and shall promptly, at Lessee’s expense, take all investigatory and/ore remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the
maintenance, security and/or monitoring of, the Premises, the elements surrounding same, or neighboring properties that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance and/or storage tank
brought onto the premises by or for lessee or under its control. Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. Lessee’s obligations shall include restorations,
replacements or renewals when necessary to keep the Promises and all improvements thereon or a part thereof in good order, condition and state of repair. If Lessee occupies the Premises for seven (7) years or more, lessor may require Lessee to
repaint the exterior of the buildings on the Premises as reasonably required, but not more frequently than once every seven (7) years.
(b) Lessee shall, at Lessee’s sole cost and expense, procure and maintain contracts, with copies to Lessor, in customary form and substance for, and with contractors specializing and
experienced in, the inspection, maintenance and service of the following equipment and improvements, if any, located on the Premises: (i) heating, air conditioning and ventilation equipment, (ii) boiler, fired or unfired pressure vessels, (iii) fire
sprinkler and/or 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, the 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. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed without doing material
4
damage to the Premises. The term “Alterations” shall mean any modification of the improvements on the Premises
from that which are provided by lessor under the terms of this Lease, other than Utility Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or Utility Installations” are defined as Alterations
and/or Utility Installations made by Lessee that are not yet owned by Lessor as defined in Paragraph 7.4(a). Lessee shall not make any Alterations or Utility Installations in, on, under or about the Premises without Lessor’s prior written
consent. Lessee may, however, make non-structural Utility Installations to the interior of the Premises (excluding the roof), as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any
existing walls, and the cumulative costs thereof during the terms of this Lease as extended does not exceed $25,000.
(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 specific consent, shall be deemed conditioned upon: (i) Lessee’s acquiring all applicable permits required by governmental
authorities, (ii) the furnishings 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 a good and workmanlike manner, with good and sufficient materials, and in
compliance with all Applicable Law. Lessee shall promptly upon completion thereof furnish Lessor with as-built plans and specifications therefor. Lessor may (but without obligation to do so) condition its consent to any requested Alteration or
Utility Installation that costs $10,000 or more upon lessee’s providing Lessor with a lien and completion bond in an amount equal to one and one-half times the estimated cost of such Alteration or Utility Installation and/or upon Lessee’s
posting an additional Security Deposit with Lessor under Paragraph 36 hereof.
(c) Indemnification. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for lessee at or for use on the Premises, which claims are
or may be secured by any mechanics’ or materialmen’s lien against the Premises or any interest therein. Lessee shall give lessor not less than ten (10) days’ notice prior to the commencement of any work in, on or about the Premises,
and lessor shall have the right to post notices of 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-half 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 7.4, all Alterations and Utility Additions made to the Premises by lessee shall be the property of and owned by Lessee, but considered a part of the Premises. Lessor may, at any time and at its option, elect in
writing to Lessee to be the owner of all or any specified part of the lessee Owned Alterations, and Utility Additions made to the Premises by Lessee shall be the property of an owned by Lessee, but considered a part of the Premises. Lessor may, at
any time and at its option, elect in writing to Lessee to be the owner of all or any specified part of the Lessee Owned Alterations, and Utility Installations. Unless otherwise instructed per subparagraph 7.4(b) hereof, all lessee Owned Alterations
and Utility Installations shall, at the expiration or 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, Lessor may require that any or all Lessee Owned Alterations or
Utility Installations be removed by the expiration or earlier termination of this Lease, notwithstanding their installation may have been consented to by Lessor. Lessor may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent 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, with 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 excepted. “Ordinary wear and tear” shall not include any damage or deterioration that would have been prevented by good
maintenance practice or by lessee performing all 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 or 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 of
for Lessee, and the removal, replacement or remediation of any soil, material or ground water contaminated by Lessee, all as may then be required by Applicable Law and/or good practice. Lessee’s Trade
5
Fixtures shall remain the property of Lessee and shall be removed by Lessee subject to its obligation in 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 for policy periods commencing prior to or
extending beyond the Lease term shall be prorated to correspond to the Lease term. Payment shall be made by Lessee to Lessor within ten (10) 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 terms 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 properly 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, 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 or as carried by Lessee
shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. All insurance to be carried by Lessee shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be
considered excess insurance only.
(b) Carried by
Lessor. 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 terms of this Lease a policy or policies in the name of Lessor, with loss payable to Lessor 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 and/or earthquake unless required by a Lender), including coverage for any additional costs resulting from debris removal and reasonable amounts of coverage for the
enforcement of any ordinance or law regulating the reconstruction or replacement of any undamaged sections of the Premises required to be demolished or removed by reason of the enforcement of any building, zoning, safety or land use laws as the
result of a covered 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 Lendor(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 provide that in the vent the Lease is terminated by reason of an insured loss, the period of indemnity for such coverage shall be extended beyond the date of the completion of repairs
or replacement of the Premises, to provide for one full year’s loss of rental revenues from the date of any such loss. Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage
shall be adjusted annually to reflect the projected rental income property taxes, insurance premium costs and other expense, if any, otherwise payable by Lessee, for the next twelve (12) months period. Lessee shall be liable for any deductible
amount in the event of such loss.
6
(c) Adjacent
Premises. If the Premises are part of a larger building, or if the Premises are part of a group of buildings owned by Lessor which are adjacent to the Premises, the Lessee shall pay for any increase in the premiums for the
property insurance of such building or buildings if said increase is caused by Lessee’s acts, omissions, use or occupancy of the Premises.
(d) 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 Lessor’s option, by endorsement to a policy already carried, maintain insurance coverage on all of Lessee’s personal property. Lessee Owned
Alterations and Utility Installations 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 of not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of person property or the restoration of Lessee Owned Alterations and Utility Installations. 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 “Best’s Insurance Guide.” Lessee shall not
do or permit to be done anything which shall invalidate the insurance policies referred to in this Paragraph 8. 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 the Lease. No such policy shall be cancelable or subject to modification except after thirty (30) days prior written notice
to Lessor. Lessee 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. Without affecting any other rights or remedies, Lessee and Lessor (“Waiving Party”) each
hereby release and relieve the other, and waive their entire right to recover damages (whether in contract or in tort) against the other, for loss of or damage to the Waiving Party’s property arising out of or incident to the perils required to
be insured against under Paragraph 8. The effect of such releases and waivers of the right to recover damages shall not be limited by the amount of insurance carried or required, or by any deductibles applicable thereto.
8.7 Indemnity. Except for Lessor’s negligence and/or breach of express warranties, Lessee
shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor’s master or ground lessor, partners and Lenders, from and against and an 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 occupancy of the Premises by Lessee, the conduct of Lessee’s business, any act, omission or neglect of
Lessee, its agents, contractors, employees or invitees, and out of any Default or Breach by Lessee in the performance in a timely manner of any obligation on Lessee’s part to be performed under this Lease. The foregoing shall include, but not
be limited to, the defense or pursuit of any claim or any action or proceeding involved therein, and whether or not (in the case of claims made against Lessor by reason of any of the foregoing matters, Lessee upon notice from Lessor shall defend the
same at Lessee’s expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be so indemnified.
8.8 Exemption of Lessor from Liability. Lessor shall not be liable for injury or damage to the
person or goods, wares, merchandise or other property of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam,
electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, whether 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, Lessor shall not be liable for any damages arising from any act of 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.
9. Damage or
Destruction.
9.1 Definitions.
7
(a) “Premises Partial Damage” shall mean
damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility installations, 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, excluding from such calculation the value of the land and Lessee Owned Alterations and Utility installations.
(b) “Premises Total Destruction” shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations the repair cost of which damage or
destruction is 50% or more of the then Replacement Cost of the Premises immediately prior to such damage or destruction, excluding from such calculation the value of the land and Lessee Owned Alterations and Utility Installations.
(c) “Insured Loss’ shall mean damage or destruction to improvements on the Premises, other
than Lessee Owned Alterations and Utility installations, 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 law, and not without deduction for
depreciation.
(e) “Hazardous Substance Condition” shall mean the occurrence
or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the Premises.
9.2 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 Trade Fixtures or Lessee Owned Alterations and Utility installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at
Lessor’s election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make the insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, fi the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the insuring Party shall promptly contribute the shortage in proceeds (except as to the deductible which is
Lessee’’ responsibility) as and when required to complete said repairs. In the event, however, the shortage in proceeds was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage
was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or
adequate assurance thereof, within ten (10) days following receipt of written notice of such shortage and request therefor. IF Lessor receives said funds or adequate assurance thereof within said ten (10) day period, the party responsible for making
the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If Lessor does not receive such funds or assurance within said period, Lessor may nevertheless elect by written notice to Lessee
within ten (10) days thereafter to make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect. If in such case Lessor does not so elect,
then this Lease shall terminate sixty (60) days following the occurrence of the damage or destruction. Unless otherwise agreed, Lessee shall in no event have any right to reimbursement from Lessor for any funds contributed by Lessee to repair any
such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall
be made available for the repairs if made by either Party.
9.3 Partial Damage-Uninsured
Loss. If a Premises Partial Damage that is not an insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee’s expense and this Lease shall
continue in full force and effect, but subject to Lessor’s rights under Paragraph 13), Lessor may at Lessor’s option, either: (i) repair such damage as soon as reasonably possible at Lessor’s expense, in which event this Lease shall
continue in full force and effect; or (ii) give written notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of the occurrence of such damage of Lessor’s desire to terminate this Lease as of the date sixty (60) days
following the giving of such notice. In the event notice to give 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 said 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 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 any authorized public authority), this Lease shall terminate sixty (60) days following the date of such Premises Total Destruction, whether or not the
damage or destruction is an insured Loss or was caused by a negligent or willful act of Lessee. In the event, however, that the damage or destruction was caused by Lessee, Lessor shall have the right to recover Lessor’s damages from Lessee
except as released and waived in Paragraph 8.6.
8
9.5 Damage Near End of Term. If at any
time during the last six (6) months of the term of this Lease there is damage for which the cost to repair exceeds one (1) month’s Base Rent, whether or not an insured Loss, Lessor may, at Lessor’s option, terminate this Lease effective
sixty (60) days following the date of occurrence of such damage by giving written notice to Lessee of Lessor’s election to do so within thirty (30) days after the date of occurrence of such damage. Provided, however, if Lessee at that time has
an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, within twenty (20) days following the occurrence of the damage, or before the expiration of the time provided in such option for its
exercise, whichever is earlier (“Exercise Period”), (i) exercising such option and (ii) providing Lessor with any shortage in insurance proceeds (or adequate insurance thereof) needed to make the repairs. If Lessee duly exercises such
option during said Exercise Period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor’s expense repair such damage as soon as reasonably possible and this Lease
shall continue in full force and effect. IF Lessee fails to exercise such option and provide such funds or assurance during said Exercise Period, then Lessor may at Lessor’s option terminate this Lease as of the expiration of said sixty (60)
day period following the occurrence of damage by giving written notice to Lessee of Lessor’s election to do so within ten (10) days after the expiration of the Exercise Period, notwithstanding any term or provision in the grant of option to the
contrary.
9.6 Abatement of Rent; Lessee’s Remedies.
(a) In the event of damage described in Paragraph 9.2 (Partial Damage-Insured), whether or not Lessor or Lessee
repairs or restores the Premises, the Base Rent, Real Property Taxes, insurance premiums, and other charges, if any, payable by Lessee hereunder for the period during which such damage, its repair or the restoration continues (not to exceed the
period for which rental value insurance is required under Paragraph 8.3(b), shall be abated in proportion to the degree to which Lessee’s use of the Premises is impaired. Except for abatement of Base Rent, Real Property Taxes, insurance
premiums, and other charges, if any, as aforesaid, all other obligations of Lessee hereunder shall be performed by Lessee, and Lessee shall have no claim against Lessor for any damage suffered by reason of any such repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises under the
provisions of this Paragraph 9 and shall not commence, in a substantial and meaningful way, the repair or restoration of the Premises within ninety (90) days after such obligations shall accrue, Lessee may, at any time prior to the commencement of
such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice of Lessee’s election to terminate this Lease on a date not less than sixty (60) days following the giving of such notice. If Lessee
gives such notice to Lessor and such Lenders and such repair or restoration is not commenced within thirty (30) days after receipt of such notice, this Lease shall terminate as of the date specified in said notice. If Lessor or a Lender commences
the repair or restoration of the Premises within thirty (30) days after receipt of such notice, this Lease shall continue in full force and effect. “Commence” as used in this Paragraph shall mean either the unconditional authorization of
the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.
9.7 Hazardous Substance Conditions. If a Hazardous Substance Condition occurs, unless Lessee is legally responsible therefor (in which case Lessee shall make the investigation and remediation
thereof required by Applicable Law and this Lease shall continue in full force and effect, but subject to Lessor’s rights under Paragraph 13), Lessor may at Lessor’s option either (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to investigate and remediate such condition exceeds twelve (12) times
the then monthly Base Rent or $1000,000, whichever is greater, give written notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition of Lessor’s desire to terminate
this Lease as of the date sixty (60) days following the giving of such notice. In the event Lessor elects to give such notice of Lessor’s intention to terminate this Lease, Lessee shall have the right within ten (10) days after receipt of such
notice to give written notice to Lessor of Lessee’s commitment to pay for the investigation and remediation of such Hazardous Substance Condition totally at Lessee’s expense and without reimbursement from Lessor except to the extent of an
amount equal to twelve (12) times the then monthly Base Rent or $1000,000, whichever is greater. Lessee shall provide Lessor with the funds required of Lessee or satisfactory assurance thereof within thirty (30) days following Lessee’s said
commitment. In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such investigation and remediation as soon as reasonably possible and the required funds are available. If Lessee does not give such
notice and provide the required funds or assurance thereof within the times specified above, this Lease shall terminate as of the date specified in Lessor’s notice of termination. If a Hazardous Substance Condition occurs for which Lessee is
not legally responsible, there shall be abatement of Lessee’s obligations under this Lease to the same extent as provided in Paragraph 9.6(a) for a period of not to exceed twelve months.
9.8 Termination-Advance Payments. Upon termination of this Lease pursuant to this Paragraph 9, an equitable adjustment shall
be made concerning 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
9.9 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 this Lease. Subject to Paragraph 10.1(b), all such payments shall be made at least ten (10) days prior to the delinquency date of the applicable
installment. 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 any 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.
(b) Advance Payment. In order to insure payment when due and before delinquency of any or all Real Property Taxes, Lessor reserves
the right, at Lessor’s option, to estimate the current Real Property Taxes applicable to the Premises, and to require such current year’s Real Property Taxes to be paid in advance to Lessor by Lessee, either: (i) in a lump sum amount equal
to the installment due, at least twenty (20) days prior to the applicable delinquency date, or (ii) monthly in advance with the payment of the Base Rent. If Lessor elects to require payment monthly in advance, the monthly payment shall be that equal
monthly amount which, over the number of months remaining before the month in which the applicable tax installment would become delinquent (and without interest thereon), would provide a fund large enough to fully discharge before delinquency the
estimated installment of taxes to be paid. When the actual amount of the applicable tax ▇▇▇▇ is known, the amount of such equal monthly advance payment shall be adjusted as required to provide the fund needed to pay the applicable taxes before
delinquency. If the amounts paid to Lessor by Lessee under the provisions of this Paragraph are insufficient to discharge the obligations of Lessee to pay such Real Property Taxes as the same become due, Lessee shall pay to Lessor, upon
Lessor’s demand, such additional sums as are necessary to pay such obligations. All moneys paid to Lessor under this Paragraph may be intermingled with other moneys of Lessor and shall not bear interest. In the event of a Breach by Lessee in
the performance of the obligations of Lessee under this Lease, then any balance of funds paid to Lessor under the provisions of this Paragraph may, subject to proration as provided in Paragraph 10.1(a), at the option of Lessor, be treated as an
additional Security Deposit under Paragraph 5.
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 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, and/or Lessor’s business of leasing the Premises. The term “Real Property Taxes” shall also include any tax, levy, assessment or charge, or any increase therein, imposed by reason of events occurring, or
changes in applicable law taking effect, during the term of this Lease, including but not limited to a change in the ownership of the Premises or in the improvements thereon, the execution of this Lease, or any modification, amendment or transfer
thereof, and whether or not contemplated by the Parties.
10.3 Joint
Assessment. If the Premises are not separately assessed, Lessee’s ability shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included with the tax parcel assessed, such
proportion to be determined by Lessor from the respective valuations assigned in the assessor’s work schools 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 after receipt of a written statement setting forth the taxes applicable to Lessee’s property or, at Lessor’s option, as provided in Paragraph 10.1(b).
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. If any such services are not separately metered to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of
all charges jointly metered with other premises.
12. Assignment and Subletting.
10
12.1 Lessor’s Consent Required.
(a) Lessor shall not voluntarily or by operation 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) A change in the control of Lessee shall constitute an assignment required Lessor’s consent.
The transfer, on a cumulative basis, of twenty-five (25%) or more of the voting control of Lessee shall constitute a change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee’s assets occurs, which results or will result in a reduction of the Net Worth of Lessee, as hereinafter defined,
by an amount equal to or greater than twenty-five percent (25%) of such Net Worth of Lessee as it was represented to Lessor at the time of the execution by Lessor of this Lease or at the time of the most recent assignment to which Lessor has
consented, or as it exists immediately prior to said transaction or transaction constituting such reduction, at whichever time said Net Worth of Lessee as it was represented to Lessor at the time of the execution by Lessor of this Lease or at the
time of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, at whichever time said Net Worth of Lessee was or is greater, shall be considered an
assignment of this Lease by Lessee to which Lessor may reasonably withhold its consent. “Net Worth of Lessee” for purposes of this Lease shall be the net worth of Lessee (excluding any guarantors) established under generally accepted
accounting principles consistently applied.
(d) An assignment or subletting of
Lessee’s interest in this Lease without Lessor’s specific prior written consent shall, at Lessor’s option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any notice and grace
period. If Lessor elects to treat such unconsented to assignment or subletting as a noncurable Breach, Lessor shall have the right to either: (i) terminate this Lease, or (ii) upon thirty (30) days written notice (“Lessor’s Notice”),
increase the monthly Base Rent to fair market value, if disputed by Lessee, Lessee shall pay the amount set forth in Lessor’s Notice, with any overpayment credit against the next installment(s) of Base Rent coming due, and any underpayment for
the period retroactively to the effective date of the adjustment being due and payable immediately upon the determination thereof. Further, in the event of such Breach and market value adjustment, (i) the purchase price of any option to purchase the
Premises held by Lessee shall be subject to similar adjustment in the then fair market value (without the Lease being considered an encumbrance or any deduction for depreciation or obsolescence, and considering the Premises at its highest and best
use and in good condition), or one hundred ten percent (110%) of the price previously in effect, whichever is greater, (ii) any index-oriented rental or price adjustment formulas contained in this Lease shall be adjusted to require that the base
index be determined with reference to the index applicable to the time of such adjustment, and (iii) any fixed rental adjustments scheduled during the remainder of the Lease term shall be increased in the same ratio as the new market rental bears to
the Base Rent in effect immediately prior to the market value adjustment.
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 sublease of the obligations of Lessor 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 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 obligation 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 sublettings and
assignments of the sublease or any amendments or modification thereto without notifying Lessee or anyone else liable on the Lease or sublease and without obtaining their consent, and such action shall not relieve such persons from liability 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.
11
(e) Each request for consent to an assignment or
subletting shall be in writing, accompanied by information relevant to Lessor’s determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the
intended use and/or required modification of the Premises. If any, together with a non-refundable deposit of $1,000 or ten percent (10%) of the current monthly Base Rent, whichever is greater, as reasonable consideration for Lessor’s
considering and processing the request for consent. Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment or entering into such sublease, be deemed, for
the benefit of Lessor, to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such
obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented in writing.
(g) The occurrence of a transaction described in Paragraph 12.1(c) shall give Lessor the right (but not the obligation) to require that the
Security Deposit be increased to an amount equal to six (6) times the then monthly Base Rent, and Lessor may make the actual receipt by Lessor of the amount required to establish such Security Deposit a condition to Lessor’s consent to such
transaction.
(h) Lessor, as a condition to giving its consent to any assignment or
subletting, may require that the amount and adjustment structure of the rent payable under this Lease be adjusted to what is then the market value and/or adjustment structure for property similar to the Premises as then constituted.
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, of this or any other assignment of such sublease to Lessor, nor by reason of the collection of the rents from a sublessee, be deemed liable to the sublessee for any
failure of Lessee to perform and comply with any of Lessee’s obligations to such sublessee under such sublease. 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.
(b) In the event of a Breach by Lessee in the performance of its obligations under this Lease, 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; provide, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any other prior Defaults or Breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor under a sublease shall also require the consent of Lessor herein.
(d) No sublessee shall further reassign or sublet all or any part of the Premises without Lessor’s prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who
shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. Lessor and Lessee agree that if any attorney is consulted by Lessor in connection with a Lessee Default
or Breach (as hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence for legal services and costs in the preparation and service of a notice of Default, and that Lessor may include the cost of such services and costs in said
notice as rent due an payable to cure said Default. 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
12
to cure such Default prior to the expiration of the applicable grace period, and shall entitle Lessor to
pursue the remedies set forth in Paragraphs 13.2 and/or 13.3:
(a) The vacating of the
Premises without the intention to reoccupy the same, or the abandonment of the Premises .
(b) Except as expressly otherwise provide in this Lease, the failure by 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 within ten (10) business days after receiving written notice of 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 any obligation under this Lease which endangers or threatens life or property, where such failure continues
for a period of three (3) days following written notice thereof by or on behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the failure by Lessee to provide Lessor with reasonable written evidence (in duplicate executed original form, if applicable) of (i) compliance with applicable law
per Paragraph 6.8, (ii) the inspection, maintenance and service contract required under Paragraph 7.1(b), (iii) the recission of an unauthorized assignment or subletting per paragraph 12.1(b), (iv) a Tenancy Statement provided in Paragraphs 16 or
37, (v) the subordination or non-subordination of this Lease per Paragraph 30, (v) the guaranty of the performance of Lessee obligations under this Lease if required under Paragraphs 1.11 and 37, (vii) the execution of any document requested under
Paragraph 42 (easements or (viii) any other documentation or information which Lessor may reasonably require of Lessee under this the terms of this Lease, where any such failure continues for a period of ten business (10) days following written
notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms,
covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof that are to be observed, complied with or performed by Lessee, other than those described in subparagraphs (a), (b) or (c), above, where such
Default continues for a period of thirty (30) days after written notice thereof by or on behalf of Lessor to Lessee; provided, however, that if the nature of Lessee’s Default is such that more 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 Lessor commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) The making by Lessee of any general arrangement or
assignment for the benefit of creditors; (ii) Lessee’s becoming a “debtor” as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at he Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days;
provided, however, in the event that any provision of this subparagraph (a) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions.
(f) The discovery by Lessor that any financial statement given to Lessor or any Guarantor of Lessee’s
obligations hereunder was materially false.
(g) If the performance of Lessee’s
obligations under this Lease is guaranteed: (i) the death of a guarantor, (ii) the termination of a guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a guarantor’s becoming
insolvent or the subject of a bankruptcy filing, (iv) a guarantor’s refusal to honor the guaranty, or (v) a guarantor’s breach of its guaranty obligation on an anticipatory breach basis, and Lessee’s failure, within sixty (60) days
following written notice by or on behalf of Lessor to Lessee of any such event, to provide Lessor with written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined
financial resources of Lessee and the guarantors at the time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any affirmative duty or obligation of Lessee under this Lease, within ten (10) business days after written notice to Lessee (or in case of an
emergency, without notice), Lessor may at its option (but without obligation to do so), perform such duty or obligation on Lessee’s behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or
governmental licenses, permits or approvals. The costs and expenses of any such performance by Lessor shall be due and payable by Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee shall not be honored by the bank upon
which it is drawn, Lessor, at its option, may require all future payments to be made under this Lease by Lessee to be made only by cashier’s check. In the event of a Breach of this Lease by Lessee, as defined in Paragraph 13.1, with or without
further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such a Breach, Lessor may:
(a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately surrender possession of the Premises to Lessor. In such event, Lessor shall
13
be entitled to recover from Lessee: (i) the worth at the time of the award of the
unpaid rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss
that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves
could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee’s failure to perform its obligation under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable 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 such 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 damage under this
Paragraph. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover such proceeding the unpaid rent and damages as 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(b), (c) or (d) was not previously given, a notice to pay rent or quit, or to perform or quit, as
the case may be, given to Lessee under any statute authorizing the forfeiture of leases for unlawful detainer shall also constitute the applicable notice for grace period purposes required by subparagraphs 13.1(b), (c) or (d). In such case, the
applicable grace period under subparagraphs 13.1(b), (c) or (d) and under the unlawful detainer statute shall run concurrently after the one such statutory notice, and the failure of Lessee to cure the Default within the greater of 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 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. See 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 a termination of the Lessee’s right to
possession.
(c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located.
(d) The
expiration or termination of this Lease and/or the termination of Lessee’s right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by
reason of Lessee’s occupancy 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 for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for
Lessee’s entering into this Lease, all of which concessions are hereinafter referred to as “Inducement Provisions,” shall be deemed conditioned upon Lessee’s full and faithful performance of all of the terms, covenants and
conditions of this Lease to be performed or observed by Lessee during the term hereof as the same may be extended. Upon the occurrence of a Breach of this Lease by Lessee, as defined in Paragraph 13.1, any such inducement Provision shall
automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an inducement Provision shall be immediately due
and payable by Lessee to Lessor, and recoverable by Lessor as additional rent due under this Lease, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this Paragraph shall not be deemed a waiver by Lessor of the provisions of this Paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor of rent and other sums due hereunder will cause
Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon
Lessor by the terms of any ground lease, mortgage or 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 ten (10) business days
after receiving written notice, 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 will incur by
reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount, no 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
14
installments of Base Rent, then notwithstanding Paragraph 4.1 of any other provision of this Lease to
the contrary, Base Rent shall, at Lessor’s option, become due and payable quarterly in advance.
Breach by
Lessor. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable time
shall in no event be less than thirty (30) days after receipt by Lessor, and by the holders of any ground lease, mortgage or deed of trust covering the Premises whose name and address shall have been furnished Lessee in writing for such purpose, of
written notice specifying where such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor’s obligation is such that more than thirty (30) days after such notice are reasonably required for its
performance, then Lessor shall not be in breach of this Lease if performance is commenced within such thirty (30) day period and thereafter diligently pursued to completion.
14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of
the exercise of said power (all of which are herein called “condemnation”), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than ten
percent (10%) of the floor area of the Premises, or more than twenty-five percent (25%) of the land area not occupied by any building, is taken by condemnation, Lessee may, at Lessee’s option, to be exercised in writing within ten (10) days
after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within ten (10) days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in the same
proportion as the rentable floor area of the Premises taken bears to the rentable floor area of the building located on 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 or Lessee’s relocation expenses and/or loss of Lessee’s Trade Fixtures. In the event that this Lease is not terminated by reason of such condemnation, Lessor shall to the extent of its net severance damages received, over
and above the legal and other expenses incurred by Lessor in the condemnation matter, repair any damage to the Premises caused by such condemnation, except to the extent that Lessee has been reimbursed therefor by the condemning authority, Lessee
shall be responsible for the payment of any amount in excess of such net severance damages required to complete such repair.
15. Broker’s Fee.
15.1 The
Brokers named in Paragraph 1.10 are the procuring causes of this Lease.
15.2 Upon execution of this
Lease by both Parties, Lessor shall pay to said Brokers jointly, or in such separate shares as they may mutually designate in writing, a fee as set forth in a separate written agreement between Lessor and said Broker (or in this event there is no
separate written agreement in writing, a fee as set forth in a separate written agreement between Lessor and said Brokers s, the sum of
$ N/A ) for brokerage services rendered by said Brokers to Lessor in this transaction.
15.3 Unless Lessor and Brokers have otherwise agreed in writing, Lessor further agrees that
??? if Lessee exercises any Option (as defined in Paragraph 39.1) or any Option subsequently granted which is substantially similar to an Option granted to Lessee in this Lease,
or (B) if Lessee acquires any right to the Premises or other premises described in this Lease which are substantially similar to what Lessee would have acquired had an Option herein granted to Lessee been exercised, or (c) if Lessee remains in
possession of the Premises, with the consent of Lessor, after the expiration of the term of this Lease after having failed to exercise an Option, or (d) if said Brokers are the procuring cause of any other lease or sale entered into between the
Parties pertaining to the Premises and/or any adjacent property in which Lessor has an interest, or (e) if Base Rent is increased, whether by agreement or operation of an escalation clause herein, then as to any of said transactions, Lessor shall
pay said Brokers a fee in accordance with the schedule of said Brokers in effect at the time of the execution of this Lease.
15.4 Any buyer or transferee of Lessor’s interest in this Lease, whether such transfer is by agreement or by operation of law, shall be deemed to have assumed Lessor’s obligation under this Paragraph 15. Each
Broker shall be a third party beneficiary of the provisions of this Paragraph 15 to the extent of its interest in any commission arising from this Lease and may enforce that right directly against Lessor and its successors.
15.5 Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or
finder (other than the Brokers, if any named in Paragraph 1.10) in connection with the negotiation of this Lease and/or the consummation of the transaction contemplated hereby, and that no broker or other person, firm or entity other than said named
Brokers is entitled to any commission or finder’s fee in connection with said transaction, Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges
15
which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings
or actions of the indemnifying Party, including any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.
15.6 Lessor and Lessee hereby consent to and approve all agency relationships, including any dual agencies, indicated in Paragraph 1.10.
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, acknowledge and deliver to the Requesting Party a
statement in writing in form similar to the then most current “Tenancy Statement” form published by the American Industrial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably
requested by the Requesting Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises,
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 financial statements of Lessee and Such
Guarantors as may be reasonably required by such lender or purchaser, including but not limited to Lessee’s financial statements for the past three (3) years. All such financial statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the purposes herein set forth.
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, s aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease
thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.
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 form 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 late charge provided for in Paragraph 13.4.
20. Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.
21. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease are
deemed to be rent.
22. No Prior or Other Agreements; Broker
Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each
represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the nature, quality and character
of the Premises. Brokers have no responsibility with respect or with respect to any default or breach hereof by either Party.
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 by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or
by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing
of notice purposes. Either Party may by written notice to the other specify a different address for notice purposes, except that upon Lessee’s taking possession of the Premises, the Premises shall constitute Lessee’s address for the
purpose of mailing or delivering notices to Lessee. A copy of all notices required or permitted to be given to Lessor hereunder shall be concurrently transmitted to such party or parties at such address as Lessor may from time to time hereafter
designate by written notice to Lessee.
16
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. IF sent by regular mail the notice shall be deemed given forty-eight (48) hours after the same is addressed as
required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given twenty-four (24) hours after delivery of the same to the United States
Postal Service or courier. If any notice is transmitted by facsimile transmission or similar means, the same shall be deemed served or delivered upon telephone 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 receive on the next business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of
any subsequent Default or Breach by Lessee of the same or 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 construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. Regardless of Lessor’s knowledge of a Default or Breach at the time
of accepting rent, the acceptance of rent by Lessor shall not be a waiver of any preceding Default or Breach by Lessee of any provision hereof, other than the failure of Lessor 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 right 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 shall be deemed exclusive but shall, wherever
possible, be cumulative with all other remedies at law or in equity.
28. Covenants and
Conditions. All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties, their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, “Security Device”), now or hereafter placed by Lessor upon the real property of which the Premises are part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements, and extensions thereto. 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 have 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 to Lessor the cure of said default before invoking any remedies. Lessee may have be reason thereof. If any Lender shall elect to have this Lease and/or any Option granted hereby superior to the lien of its
Security Device and shall give written notice thereof to Lessee, this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.
30.2 Attornment. Subject to the non-disturbance provisions of Paragraph 30.3, Lessee agrees to
attorn to a Lender or any other party who acquires ownership of the Premises by reason of a foreclosure of a Security Device, and that in the event of such foreclosure, such new owner shall not: (i) be liable for any act or omission of any prior
lessor or with respect to events occurring prior to acquisition of ownership, (ii) be subject to any offsets or defenses which Lessee might have against any prior lessor, or (iii) be bound by prepayment of more than one month’s rent.
30.3 Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee’s subordination of this Lease shall be subject to receiving assurance (a “non-disturbance agreement”) from the Lender that
17
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. The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor
or a Lender in connection with a sale, financing or refinancing of 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/or non-disturbance agreement as is provided for herein.
31. Attorney’s
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 defaults the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The
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 an emergency, and otherwise at reasonable times for the purpose of showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs, improvements or
additions to the Premises or to 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
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 or rent or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either voluntarily
or involuntarily, any auction upon the Premises without first having obtained Lessor’s prior written consent. Notwithstanding anything to the contrary in this Lease, Lessor shall not be obligated to exercise any standard of reasonableness in
determining whether to grant such consent.
34. Signs. Lessee shall not
place any sign upon the Premises, except that Lessee may, with Lessor’s prior written consent, install (but not on the roof) such signs as are reasonably required to advertise Lessee’s own business. The installation of any sign on the
Premises by or for Lessee shall be subject to the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations). Unless otherwise expressly agreed upon herein, Lessor reserves all rights to the use of the
roof and the right to install, and all revenues from the installation of, such advertising signs on the Premises, including the roof, as do not unreasonably interfere with the conduct of Lessee’s business.
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 in termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however,
Lessor shall, in the event of any such surrender, termination or cancellation, have the option to continue any one or all of any existing subtenancies. Lessor’s failure within ten (10) days following any such event to make a written election to
the contrary by written notice to the holder of any such lessor interest, shall constitute Lessor’s election to have such event constitute the termination of such interest.
36. Consents.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld
or delayed. Lessor’s actual reasonable costs and expenses (including, but not limited to architects’ attorneys’ engineers’ or other consultants’ fees) incurred in the consideration of, or response to, a request by Lessee for
any Lessor consent pertaining to this Lease or the Premises, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, practice or storage tank, shall be paid by Lessee to Lessor upon
receipt of an invoice and supporting documentation therefor. Subject to Paragraph 12.2(a) (applicable to assignment or subletting), Lessor may, as a condition to considering any such request by Lessee, require that Lessee deposit with Lessor an
amount of money (in addition to the Security Deposit held under Paragraph reasonably calculated by Lessor to represent the cost Lessor will incur in considering and responding
to Lessee’s request. Except as otherwise provided, any unused portion of said deposit shall be refunded to Lessee without interest. Lessor’s consent to any act, assignment or this Lease and subletting of the Premises by Lessee shall not
constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing Lessor at the time of
such consent.
18
(b) All conditions to Lessor’s consent authorized by this
Lease are acknowledged by Lessee as being reasonable. The failure to specify herein any particular condition to Lessor’s consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being given.
37. Guarantor.
37.1 If there are to be any Guarantors of this Lease per Paragraph 1.11, the term of the guaranty
to be executed by each such Guarantor shall be in the form most recently published by the American Industrial Real Estate Association, and each said Guarantor shall have the same obligations as Lessee under this Lease, including but not limited to
the obligation to provide the Tenancy Statement and information called for by Paragraph 16.
37.2 It shall
constitute a Default of the Lessee under this Lease if any such Guarantor fails or refuses, upon reasonable request by Lessor to give: (a) evidence of the due execution of the guaranty called for by this Lease, including the authority of the
Guarantor (and of the party signing on Guarantor’s behalf) to obligate such Guarantor on said guaranty, and including in the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of
such guaranty, together with a certificate of incumbency showing the signature of the persons authorized to sign on its behalf, (b) current financial statements of Guarantor as may from time to time be requested by Lender, (c) a Tenancy Statement,
or (d) written confirmation that the guaranty is still in effect.
38. Quiet
Possession. Upon payment by Lessee of the rent for the Premises and the 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 the provisions of this Lease.
39. Options.
39.1 Definition. As used in this Paragraph 39 the word “Option” has the following meaning: (a) the right to extend the term of this Lease or to renew this Lease or to extend or renew
any lease that Lessee has on other property of Lessor; (b) the right of first refusal to lease the Premises or the right of first refusal to lease other property of Lessor or the right of first offer to lease other property of Lessor; (c) the right
to purchase the Premises, or the right of first refusal to purchase the Premises, or the right of first offer to purchase the Premises, or the right to purchase other property of Lessor, or the right of first refusal to purchase other property of
Lessor, or the right of first offer to purchase other property of Lessor.
39.2 Options Personal to
Original Lessee. Each Option granted to Lessee in this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and cannot be voluntarily or involuntarily assigned or exercised by any person or entity other
than said original Lessee while the original Lessee is in full and actual possession of the Premises and without the intention of thereafter assigning or subletting. The Options, if any, herein granted to Lessee are not assignable, either as a part
of an assignment of this Lease or separately or apart therefrom, and no Option may be separated from this Lease in any manner, by reservation or otherwise.
39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior
Options to extend or renew this Lease have been validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option, notwithstanding any provision in
the grant of Option to the contrary: (i) during the period commencing with the giving of any notice of Default under Paragraph 13.1 and continuing until the noticed Default is cured, or (ii) during the period of time any monetary obligation due
Lessor from Lessee is unpaid (without regard to whether notice thereof is given Lessee), or (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event that lessor has given to Lessee three (3) or more notices of Default under
Paragraph 13.1, whether or not the Defaults are cured, during the twelve (12) month period immediately preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee’s inability to exercise any Option because of the provisions of
Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of the Option, if, after such exercise and during the term of this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee for a
period of thirty (30) days after such obligation becomes due (without any necessity of Lessor to give notice thereof to Lessee), or (ii) Lessor gives to lessee three or more notices of Default
19
under Paragraph 13.1 during any twelve-month period, whether or not the Defaults are cured, or (iii) if
Lessee commits a Breach of this Lease.
40. Multiple Buildings. If the
Premises are part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by, keep and observe all reasonable rules and regulations which lessor may make from tie to time for the management, safety, care and cleanliness of the
grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or tenants of such other buildings and their invitees, and that lessee will pay its fair share of common expenses
incurred in connection therewith.
41. Security Measures. Lessee hereby
acknowledges that the rental payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection
of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.
42. Reservations. Lessor reserves to itself the right, from time to time, to grant, without the consent 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. Lessee agrees to sign any documents reasonably
requested by Lessor to effectuate any such easement rights, dedication, map or restrictions.
43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against who the
obligation to pay the money is asserted shall have the right to make payment “under protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for
recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay
under the provisions of this lease.
44. Authority. If either Party
hereto is a corporation, trust, or general or limited partnership, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. If Lessee is
a corporation, trust or partnership, Lessee shall, within thirty (30) days after request by Lessor, deliver to Lessor evidence satisfactory to Lessor of such authority.
45. Conflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be
controlled by the typewritten or handwritten provisions.
46. Offer. Preparation of this lease by 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.
47. Amendments. This Lease may be
modified only in writing, signed by the parties in interest at the time of the modification. The Parties shall amend this Lease from time to time to reflect any adjustments that are made to the Base Rent or other rent payable under this Lease. As
long as they do not materially change lessee’s obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be reasonably required by an institutional, insurance company, or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property of which the Premises are a part.
48. Multiple Parties. Except as otherwise 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.
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 ON HAZARDOUS SUBSTANCES. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
20
OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE ON THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY IS
LOCATED IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place on the dates specified above to their respective signatures
| Executed at
On
By LESSOR:
PACIFICA HOLDING COMPANY, LLC, A COLORADO LIMITED LIABILITY COMPANY By: /s/ ▇▇▇▇▇
▇▇▇▇▇▇▇ Name Printed: ▇▇▇▇▇
▇▇▇▇▇▇▇ Title:
Manager
By:
Name Printed:
Title:
Address:
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Tel. No. (▇▇▇)
▇▇▇-▇▇▇▇ Fax No. (▇▇▇) ▇▇▇-▇▇▇▇ |
Executed at
On
By LESSEE: TRW, INC AN OHIO CORPORATION By: /s/ M.A. ▇▇▇▇▇▇
Name Printed: M.A.
▇▇▇▇▇▇ Title: ASSISTANT SECRETARY________________ By:
Name Printed:
Title:
Address: Real Estate Operations ▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Tel. No. ( )
Fax No. ( ) _________ |
NOTICE: These forms are often modified to
meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form: American Industrial Real Estate Association, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. (▇▇▇)
▇▇▇-▇▇▇▇, Fax No. (▇▇▇) ▇▇▇-▇▇▇▇.
21
ADDENDUM
THIS ADDENDUM is to that certain Standard Industrial/Commercial Single-Lessee Lease – Net (the “Lease”) by and between Pacifica holding Company, LLC, a Colorado limited liability company
(“Lessor”), and TRW Inc., an Ohio corporation (“Lessee”), with respect to that certain property in Arapahoe County, Colorado. In the event of any conflict between the terms and provisions of the Lease and the terms and provisions
of this Addendum, the terms and provisions of this Addendum shall control.
1. Real
Property. The real property on which the building will be constructed will be as described on Exhibit A, attached hereto and incorporated herein by this reference (the “Real Property”).
2. Construction of Improvements. Lessor agrees that Building shall be constructed by Lessor in a
manner which is reasonably consistent with the design development plans to be agreed upon in writing by Lessor and Lessee (the “Plans”), subject to compliance with applicable laws, rules and regulations concerning such Building, including
the same applicable to zoning. In the event that Lessor and Lessee cannot agree upon the Plans, as determined in each party’s sole and absolute discretion, then this Lease may be terminated by either party upon written notice to the other, in
which event Lessee shall pay Lessor upon demand the Project Costs incurred by Lessor through the date of termination reduced by the amount of prepaid rent (excluding prepaid rent attributable to the $25,000 ▇▇▇▇▇▇▇ money deposit for the Shell
purchase) and Lessor shall simultaneously transfer fee title to the Premises to Lessee.
Lessor shall commence
construction of Building promptly following its receipt of all governmental approvals and the parties’ approval of the Plans. The Building will be approximately 100,000 square feet of rentable area. The parties shall use their best efforts to
agree upon the Plans within thirty (30) days following the mutual execution of this lease. Lessee shall thereafter prosecute the completion of such Building in a diligent manner. Lessor’s obligations hereunder are subject to matters outside of
Lessor’s reasonable control, including delays attributable to compliance with applicable laws and delays in issuance of permits by the respective regulatory authority. For purposes hereof, Lessor shall be deemed to have commenced construction
of the Building upon commencement grading of the Real Property.
3. Cost of
Improvements. The total costs incurred by Lessor in connection with its purchase of the Real Property and construction of the improvements thereon in accordance with the Plan shall be equal to the “Project Cost.”
Said Project Cost shall include without limitation, land costs, closing costs, interest on lessor’s equity (at the interest rate for lessor’s debt) and debt occurred prior to the Commencement Date, legal costs, commissions, building
permits, tap fees, recording costs, engineering fees, costs of on-site and off-site improvements required by governmental authorities, and development fees, all as shown on the preliminary budget attached hereto and incorporated herein by this
reference as Exhibit B. Project Costs between $115.00 per square foot of rentable area of the Premises and $200.00 per square foot of rentable area of the Premises shall be determined Special Improvements. The costs of Special Improvements shall be
amortized over the Original Term at 10.5% and paid in monthly installments as part of Base Rent (the “Special Improvement Rent”). In the event that the Project Costs exceed or are projected to exceed $200 per square foot of rentable area
of the Premises, Lessor and Lessee shall cooperate to attempt to increase Lessor’s construction loan. In the event that lessor’s lender is unable to increase said loan pursuant to terms acceptable to Lessor as determined in its sole and
absolute discretion, then (i) Lessee shall alter the Plans to reduce the Project Costs below $200 per square foot of rentable area, or (ii) Lessee shall pay said amount to Lessor upon demand, after the date said expenses are actually incurred by
Lessor.
4. Commencement Date. The Commencement Date will be upon
substantial completion of the facility in accordance with the plans and receipt by Lessor of a certificate of occupancy. Lessor and Lessee will execute a memorandum of commencement date when said date has been determined.
5. Base Rent. The annual Base Rent shall be calculated in the following manner: the Project Cost,
less the cost of Special Improvements, shall be multiplied by the following factors in the following respective years:
| Years 1 – 3 |
10.30% | |
| Years 4 – 6 |
11.26% | |
| Years 7 – 9 |
12.30% | |
| Year 10 |
13.40% |
Said amount shall be added to the amortized Special Improvement
Rent pursuant to Section 3 above.
22
Upon the determination of the final Project Cost, the parties will enter into a
memorandum of lease rates setting forth the actual dollar amounts of rent to be paid by Lessee hereunder. For example, if the actual project cost is $22,000,000 ($220 psf), Special Improvements are $8,500,000 ($ 5 psf), then
the annual Base Rent for year one will be equal to the product of $13,500,000 multiplied by 10.3%, which equals $1,390-,500, plus the amortized Special Improvement Rent, which equals $1,376,377. Consequently, lessee would owe $2,766,837 per year for
years one through three of the term, payable in monthly installments of $230,570. Additionally, lessee would owe the Project Costs in excess of $200 per square foot of rentable area of $2,000,000 to Lessor upon demand.
6. Improvements to premises. The last phrase in Section 7.3(a) of the Lease, which reads
“and the cumulative cost thereof during the term of this lease thereof during any consecutive twelve (12) month period during the term of this Lease as extended does not exceed $20,000.” Where Lessor’s consent is required to approve
of Alterations, said consent shall not be unreasonably withheld. Lessee shall not be required to remove Alterations, the installation of which Lessor has given written approval; however, the parties understand and agree that Landlord may reasonably
withhold its approval of Alterations that (i) will be more expense to remove than typical standard office building improvements in the greater Denver area, or (ii) are not typical standard office building improvements.
7. Option to Extend. As additional consideration for the covenants of Lessee hereunder, Lessor
hereby grants unto Lessee for two (2) additional terms of five (5) years (the “Option Term(s)”). The Option shall apply only to the original space leased hereunder and shall be on the following terms and conditions:
A. Written notice of Lessee’s interest in exercising the Option shall be given to lessor no
earlier than twelve (12) months and no later than six (6) months prior to the expiration of the Original Term or First Option Term, as applicable (“Lessee’s Notice”). Not later than thirty (30) days after receiving Lessee’s
Notice, Lessor shall give to Lessee notice of the terms, conditions and rental rate applicable during the Option Term, in accordance with subparagraph E below (“Lessor’s Notice”).
B. Lessee shall have fifteen (15) days following lessee’s receipt of lessor’s Notice within which to exercise the Option by
delivering written notice of such exercise to Lessor under the terms, conditions and rental rate set forth in Lessor’s Notice. If Lessee timely exercises the Option, the Lease shall be deemed extended and thereafter the parties shall execute an
amendment to the Lease setting forth the terms of the extension.
C. Unless Lessor is
timely notified by Lessee in accordance with subparagraphs A and B above, it shall be conclusively deemed that lessee does not desire to exercise the Option, and the Lease shall expire in accordance with its terms, at the end of the Original Term or
current Option Term, as applicable.
D. Lessee’s right to exercise its Option
shall be conditioned on: (i) lessee not being in default under the Lease at the time of exercise of the Option or at the time of the commencement of the Option Term; and (ii) Lessee not having subleased more that twenty-five percent (25%) of the
Premises or assigned its interest under the Lease as of the commencement of the Option Term or having vacated more than twenty-five percent (25%) of the Premises.
E. The Option granted hereunder shall be upon the terms and conditions contained in the Lease except that the rental to be paid by lessee to
Lessor during the Option Term shall be 95% of the rate which Lessor would quote to third parties for the Premises, if it were to become available for leasing, for a lease term scheduled to commence at the time of commencement of the Option Term, but
in no event shall the rental rate be less than the rent which Lessee is paying immediately prior to the commencement of the respective Option Term, exclusive of any Special Improvement Rent. Such rental rate may include escalations and
pass-throughs. If Lessee, by written notice delivered no later than five (5) business days after the date lessor notifies Lessee of the Base Rent, objects to the Base Rent determined by Lessor and elects to submit the rate determination to
appraisal, then, within seven (7) days of the later of the date of lessee’s objection or the expiration of the five (5) day period, each party shall appoint a real estate office broker that has at least five (5) years’ full-time commercial
office experience to determine the Market Base Rent, such process to be completed within twenty (20) days after the date of the appointment of the last broker. If a party does not appoint a qualified broker within five (5) days after the other party
has given notice of the name of the broker, then the single broker shall be the sole broker and shall set the Market Base Rent. The brokers appointed by the parties shall meet promptly and attempt to set the Market Base Rent. If they are unable to
agree on the Market Base Rent within twenty (20) days after the date the second broker has been appointed, they shall elect a third broker meeting the qualifications stated in this paragraph within seven (7) days after the last day the two (2)
brokers are to set the Market Base Rent. If the brokers are unable to agree on the third broker, either of the parties to this Lease, after giving five (5) days’ prior written notice to the other party, may apply to the then president of the
real estate board of Denver, Colorado for the selection of a third broker who meets the qualifications stated in this Article, which selection shall be made within three (3) days. Each of the parties shall pay for the broker appointed by it and
shall bear one-half of the cost of appointing the third broker and of paying the third broker’s fee. The third broker, however selected, shall be a person who has not previously acted in any capacity for either party. The brokers shall be
instructed to consider the criteria above stated in determining the Market Base Rent.
23
Within twenty (20) days after the selection of the third broker, a majority of
the brokers shall set the Market Base Rent. If a majority of the brokers are unable to agree on the market Base Rent within the stipulated period of time, the average of the three brokers shall be the applicable Market Base Rent.
Within three (3) business days after receipt of the Market Base Rent, lessee may reject the Base Rent determination. Said
rejection shall be in writing. In the event that lessee rejects said determination, then Lessee shall surrender the Premises in accordance with the terms of the Lease at the expiration of the Term and, notwithstanding anything hereinabove to the
contrary, pay, upon demand, the costs of all brokers engaged in connection with the market rate determination.
F. After exercise of the Options above described, there shall be no further rights on the part of Lessee to extend the term of the Lease.
8. Termination Right. Provided Lessee is not in default hereinunder, has no sublet or assigned its Premises and has otherwise kept
and performed all obligations of lessee on its part to be performed, lessor hereby agrees that lessee may elect to terminate the Lease pursuant to the following terms and conditions:
A. After the expiration of the seventh (7th) year of the Lease Term (the “Termination Date”), Lessee may terminate this Lease.
B. Lessee shall provide lessor with written notice of its intent to terminate (the “Termination Notice”) no later than 180 days
prior to Lessee’s desired Termination Date (the “Termination Notice Date”).
C. lessee shall surrender the Premises on or before the Termination Date in accordance with the terms of the Lease.
D. Lessee shall pay to lessor a cancellation fee (the “Cancellation Fee”) equal to the sum of the following items: (i) the present value of all Base Rent payments due and
payable under the Lease as it may have been extended, discounted at 8.0%, (ii) the unamortized Special Improvement Rent, amortized at 10.5%, (iii) the unamortized legal fees and brokerage commissions paid by lessor in connection with this Lease,
which shall be paid to lessor within thirty (30) days of Lessor’s notice to Lessee of the amount of the Cancellation Fee.
E. Any notice or payment to be given by Lessee hereunder not given in accordance herewith, time being of the essence, shall render the option to terminate, at lessor’s option, void and
of no further force and effect.
F. Provided that all terms and conditions hereof and
of the Lease have been performed by Lessee as of the Termination Date, then this Lease shall be deemed terminated subject to Lessee’s obligation to surrender the Premises in accordance with the terms of the Lease, the survival of lessee’s
obligation to pay adjustments in Operating Expenses, the survival of any indemnities given hereunder, and Lessee’s obligation to remove the accessway described in Section 18 of this Addendum.
9. Right of First Offer.
A. In the event Lessor desires to sell the Premises after the expiration of the first ninety (90) days of the Lease Term, then, provided Lessee
is not in default under the Lease, Lessor shall give written notice thereof to Lessee (hereinafter referred to as the “Offering Notice”).
▇. ▇▇▇▇▇▇ will afford lessee thirty (30) days from the delivery of the Offering Notice within which to negotiate the terms and conditions of a
contract of sale acceptable to Lessor and Lessee as determined in their sole and absolute discretion.
C. During said thirty (30) day period, Lessor will not negotiate any agreements for sale with any third parties.
D. After the expiration of said thirty (30) day period, in the event that a contract for sale has not been executed by both Lessor and Lessee, for any reason, then this right of first offer
shall automatically terminate and be of no force or effect as if it never existed, unless lessor does not sell the Property within twelve (12) months after the expiration of said thirty (30) day period in which event Lessor shall reoffer the
Property to Lessee in accordance with this Section 9 prior to any sale. Upon five (5) day’s request from lessor, lessee will deliver any evidence of the termination of said right of first offer reasonably requested by Lessor. Lessee’s
failure to so deliver said evidence shall be a default under the Lease and shall additionally be evidence that said Right of First Offer’s expiration and termination.
24
10. Assignment/Subletting.
Notwithstanding anything to the contrary contained in Section 12 of the Lease, Lessee shall have the right, without obtaining
lessor’s prior written consent, to assign or sublet the Lease to the following parties on the following conditions:
A. The successor of lessee to the contract pursuant to which Lessee shall be initially improving and occupying the Building, which is known as the Diamond Contract;
B. Any corporation into which Lessee may be merged or consolidated or which purchases all or substantially all
of the assets or stock of Lessee; provided that the resulting corporation has a net worth at least equal to lessee’s net worth as of the date hereof;
And provided that:
(i) The assignee
and/or sublessee has a net worth at least equal to Lessee’s net worth as of the date hereof;
(ii) Any such sublessee and/or assignee shall assume and be bound by all obligations of Lessee for payment of all amounts of rental and other sums and the performance of all covenants required by Lessee pursuant to this
Agreement;
(iii) Any such sublessee and/or assignee intends to operate the Premises in
accordance with the usage restrictions of this Lease and under the same name as lessee; and
(iv) Not less than thirty (30) days prior to the effective date of such transaction, Lessee provides lessor with copies of the documents evidencing such transaction and such evidence as Lessor may reasonably required to
establish that such transaction and such evidence as Lessor may reasonably require to establish that such transaction falls within the terms and provisions of this paragraph 8.
Subject to the terms and conditions of Section 12 of the Lease, lessor’s consent to any subletting requested by Lessee shall not be unreasonably withheld, provided (i)
Lessee is not in default and has not defaulted under the terms of the Lease; (ii) the proposed sublessee or assignee is engaged in a business and the Premises will be used in a manner which is in keeping with the then standards of the Building; and
(iii) the proposed sublessee or assignee has reasonably financial worth in light of the responsibilities involved and Lessee shall have provided Lessor with reasonable evidence thereof.
11. Purchase of Property. Lessor’ obligations under this Lease, are contingent upon its purchase or the Real Property on or
before the expiration of one hundred eighty days after the mutual execution hereof. In the event that lessor does not ;purchase the Real Property for any reason on or before said date, then this Lease shall automatically terminate and be of no force
or effect as if it were never entered into and lessee shall pay Lessor upon demand the Project Costs incurred by lessor through the date of termination reduced by the amount of prepaid rent (excluding prepaid rent attributable to the $25,000 ▇▇▇▇▇▇▇
money deposit for the Shell purchase).
12. First Month’s Rent
Payment. Simultaneously with the execution hereof Lessee has deposited with Lessor the sum of $171,667 which shall be applied to the first month’s Base Rent as same becomes due and payable. Prior to the application of
said payment in the event that Lessee defaults in its performance of any of the terms and conditions hereunder Lessee hereby agrees that the rent prepayment shall be treated as a security deposit and lessor may use, apply or retain said sum in
accordance with Article 5 of the Lease. Notwithstanding the foregoing, Lessee shall receive a credit against the first month’s Base Rent payment obligation specified above of $25,000 for its security deposit under the Shell purchase and sale
agreement, which agreement and deposit shall be transferred to Lessor simultaneous with the mutual execution hereof.
13. Title Documents. Lessee’s use and occupancy of the Premises shall be subject and subordinate to all documents recorded in the real property records in the County of Arapahoe, State of
Colorado affecting the Real Property (the “Underlying Documents”). In the event of any conflict between this Lease and the Underlying Documents, the Underlying Documents shall prevail; and any failure of lessee to comply with the terms of
the Underlying Documents shall be a default hereunder. All sums owed by Lessor under the Underlying Documents, shall be paid by Lessee as directed under the Underlying Documents, as additional rent, on or before the date due thereunder.
14. Compliance with Applicable Laws. Lessor shall only have the right to
require Lessee to provide evidence of its compliance with Applicable Laws in accordance with the terms of Section 6.3 of the Lease in the event that Lessor reasonably suspects that Lessee is in violation of an Applicable Law.
25
15. Vacation of the
Premises. Notwithstanding the terms of Section 13.1 of the Lease to the contrary, Lessee shall not be in Default of the Lease if it abandons the Premises, provided that Lessee provides Lessor with 30 days’ advance
written notice of its intent to abandon the Premises, Lessee otherwise complies with all of the other terms, conditions and obligations under the Lease, and Lessee engages in a security and periodic inspection program, which program shall be subject
to Lessor’s written approval prior to the date of Lessee’s vacation of the Premises.
16. Building Permit. In the event that Lessor is unable to obtain a building permit after exercising commercially reasonable efforts for a period of six (6) months after the formal submittal
for a building permit, then this Lease may be terminated by Lessor or lessee upon written notice to the other, in which event Lessee shall pay Lessor upon demand the Project Costs incurred by Lessor through the date of termination reduced by the
amount of prepaid rent (excluding prepared rent attributable to the $25,000 ▇▇▇▇▇▇▇ money deposit for the Shell purchase) and Lessor shall simultaneously transfer fee title to the Premises to Lessee.
17. Accessway to Adjoining Property. The parties acknowledge and agree that lessee desires that
the Building be connected via a covered accessway to lessee’s premises adjacent the land. Provided that lessor is able to negotiate an easement and maintenance agreement with the adjoining land owner, which is acceptable to Lessor, Lessor shall
use commercially reasonable efforts to allow said accessway to be incorporated into the Plans and the Project Cost. Lessee acknowledges that the accessway shall be considered part of the Premises. On or before the expiration or termination of the
Lease, Lessee shall remove the accessway at its sole cost and expense and repair any damage to the Building and close any openings in the Building resulting from said removal, all to Lessor’s reasonable satisfaction.
18. Repair and Maintenance.
A. Notwithstanding anything in the Lease to the contrary, Lessor shall be responsible for the cost of performing repairs to the following structural items: the foundation, structural
components of exterior walls, structural defects in the floor of the Building, roof replacement (Lessee shall be responsible for roof repairs other than roof replacement, which repairs shall be accomplished in accordance with the terms and
conditions of lessor’s roof warranty so as not to invalidate or compromise said warranty), and Major Repairs/Replacements to the heating, ventilating and air conditioning, electrical or plumbing systems serving the Building (collectively,
“Structural Repairs”). “Major Repairs/Replacements” shall mean any single repair or replacement costing in excess of $5,000.
B. Notwithstanding anything in the Lease to the contrary, lessor shall be additionally responsible for the cost of painting the exterior of the Building when commercially necessary and
replacing the carpet and painting the painted surfaces of the interior of the Building in the event that lessee elects to exercise any option to extend the term of the Lease as provided in Section 7 of this Addendum (the “Added Repairs”).
C. Lessee shall be responsible for performing the Major Repairs and Added Repairs in accordance with
Section 7.3(b) and (c) of the Lease. Furthermore, Lessee shall obtain three competitive bids for each item of Major Repair or Added Repair that lessee desires to perform, which bids and the selection of the winning bid shall be subject to
Lessor’s review and written approval. All Major Repairs and Added Repairs shall be subject to Lessor’s prior review and written approval and lessee shall submit all pertinent information to lessor for its review, including, without
limitation plans and specifications of said repairs, evidence of the need for same, and repair contracts.
D. All of lessor’s costs and expenses incurred in connection with a Major Repair or an Added Repair shall be amortized at 10.5% per annum over the shorter of (i) the useful life of said repair, or (ii) the remaining
term of the lease, as it may be extended, and paid by Lessee in monthly installments with and in the manner as Basic Rent is paid. Said payments shall be considered additional rent under the Lease.
19. Hazardous Substances. Lessor warrants to Lessee that to Lessor’s actual knowledge,
without investigation, the Premises and property are as of the date of the Lease free from contamination from any Hazardous Substances. In the event that Hazardous Substances are later discovered to be present in, on or below the Premises or
property which is required by any governmental agency to be abated or removed, the cost of abatement or removal thereof shall not be lessee’s except as otherwise set forth in the Lease.
20. Indemnification. Lessor shall indemnify, defend and hold Lessee harmless from all costs, damages, claims, liabilities and
expenses (including reasonable attorneys’ fees), losses and court costs for personal injury or arising from incidents occurring in or about the Premises or Building and caused by the gross negligence or willful misconduct of Lessor, its agents
or employees, not covered by lessee’s liability insurance required to be carried under this Lease.
IN
WITNESS WHEREOF, this Addendum is executed as of , 200 .
26
| PACIFICA HOLDING COMPANY, LLC, A Colorado limited liability company | ||
| By: |
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇ Manager | ||
| TRW INC., AN OHIO CORPORATION | ||
| By: |
/s/ M. A. ▇▇▇▇▇▇ | |
| M. A. ▇▇▇▇▇▇ Assistant Secretary | ||
27