Exhibit 10.20
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--MODIFIED NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("LEASE"), dated for reference
purposes only, June 17, 1996, is made by and between BLUE SKY
VENTURE, A California General Partnership ("LESSOR") and ZYTEC
CORPORATION, A Minnesota Corporation ("LESSEE"), (collectively the
"PARTIES," or individually a "PARTY").
1.2(a) PREMISES: That certain portion of the Building,
including all improvements therein or to be provided by Lessor under
the terms of this Lease, commonly known by the street address of ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, located in the City of Lincoln, County of Placer, State
of California, with zip code 95648, as outlined on Exhibit A attached
hereto ("PREMISES"). The "BUILDING" is that certain building containing
the Premises and generally described as (describe briefly the nature of
the Building): Approximately 30,240 square feet of warehouse area. In
addition to Lessee's rights to use and occupy the Premises as
hereinafter specified, Lessee shall have non-exclusive rights to the
Common Areas (as defined in Paragraph 2.7 below) as hereinafter
specified, but shall not have any rights to the roof, exterior walls or
utility raceways of the Building or to any other buildings in the
Industrial Center. The Premises, the Building, the Common Areas, the
land upon which they are located, along with all other buildings and
improvements thereon, are herein collectively referred to as the
"INDUSTRIAL CENTER." (Also see Paragraph 2.)
1.2(b) PARKING: 25 unreserved vehicle parking spaces
("UNRESERVED PARKING SPACES"); and eight (8) reserved vehicle parking
spaces ("RESERVED PARKING SPACES"). (Also see Paragraph 2.6.)
1.3 TERM: Month to month ("ORIGINAL TERM") commencing June 21,
1996 ("COMMENCEMENT DATE") and ending upon thirty (30) days written
notice by either party ("EXPIRATION DATE"). (Also see Paragraph 3.)
1.4 EARLY POSSESSION: N/A ("EARLY POSSESSION DATE"). (Also see
Paragraphs 3.2 and 3.3.)
1.5 BASE RENT: $7,560.00 per month ("BASE RENT"), payable on
the first day of each month commencing June 21, 1996 (Also see
Paragraph 4.) [x] If this box is checked, this Lease provides for the
Base Rent to be adjusted per Addendum 4.1, attached hereto.
1.6(a) BASE RENT PAID UPON EXECUTION: $7,560.00 as Base Rent
for the period first month's rent.
1.6(b) LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES:
eighty percent (80%) ("LESSEE'S SHARE") as determined by [x] prorata
square footage of the Premises as compared to the total square footage
of the Building or [ ] other criteria as described in Addendum________.
1.7 SECURITY DEPOSIT: $7,560.00 ("SECURITY DEPOSIT"). (Also
see Paragraph 5.) SEE ADDENDUM
1.8 PERMITTED USE: distribution building and other legal uses
("PERMITTED USE"). (Also see Paragraph 6.)
1.9 INSURING PARTY. Lessor is the "INSURING PARTY." (Also see
Paragraph 8.)
1.10(a) REAL ESTATE BROKERS. The following real estate broker(s)
(collectively, the "BROKERS") and brokerage relationships exist in this
transaction and are consented to by the Parties (check applicable
boxes):
[ ]____________________________________________________ represents
Lessor exclusively ("LESSOR'S BROKER");
[ ]____________________________________________________ represents
Lessee exclusively ("LESSEE'S BROKER"); or
[x] BUZZ ▇▇▇▇▇ REAL ESTATE represents both Lessor and Lessee ("DUAL
AGENCY"). (Also see Paragraph 15.)
1.10(b) PAYMENT TO BROKERS. Upon the execution of this Lease
by both Parties, Lessor shall pay to said Broker(s) 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(s)
(or in the event there is no separate written agreement between Lessor
and said Broker(s), the sum of $ per separate agreement) for brokerage
----------------------
services rendered by said Broker(s) in connection with this
transaction.
1.11 GUARANTOR. The obligations of the Lessee under this Lease
are to be guaranteed by N/A ("GUARANTOR"). (Also see Paragraph 37.)
1.12 ADDENDA AND EXHIBITS. Attached hereto is an Addendum or
Addenda consisting of Paragraphs 2.1 through 58, and Exhibits A, all
of which constitute a part of this Lease.
2. PREMISES, PARKING AND COMMON AREAS.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises, for the term, at the rental, and upon
all of the terms, covenants and conditions set forth in this Lease.
Unless otherwise provided herein, any statement of square footage set
forth in this Lease, or that may have been used in calculating rental
and/or Common Area Operating Expenses, is an approximation which Lessor
and Lessee agree is reasonable and the rental and Lessee's Share (as
defined in Paragraph 1.6(b)) based thereon is not subject to revision
whether or not the actual square footage is more or less. SEE ADDENDUM
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 ROOF, plumbing, electrical systems, fire
sprinkler system, lighting, air conditioning and heating systems and
loading doors, if any, in the Premises, other than those constructed by
Lessee, shall be in good operating condition on the Commencement Date.
If a non-compliance with said warranty exists as of the Commencement
Date, Lessor shall, except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify same
at Lessor's expense. If Lessee does not give Lessor written notice of a
non-compliance with this warranty within three hundred sixty five (365)
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 that any improvements (other than those constructed by
Lessee or at Lessee's direction) on or in the Premises which have been
constructed or installed by Lessor or with Lessor's consent or at
Lessor's direction shall comply with all applicable covenants or
restrictions of record and applicable building codes, regulations and
ordinances in effect on the Commencement Date. Lessor further warrants
to Lessee that Lessor has no knowledge of any claim having been made by
any governmental agency that a violation or violations of applicable
building codes, regulations, or ordinances exist with regard to the
Premises as of the Commencement Date. Said warranties shall not apply
to any Alterations or Utility Installations (defined in Paragraph
7.3(a)) made or to be made by Lessee. If the Premises do not comply
with said warranties, Lessor shall, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessee given
within six (6) months following the Commencement Date and setting forth
with specificity the nature and extent of such non-compliance, take
such action, at Lessor's expense, as may be reasonable or appropriate
to rectify the non-compliance. Lessor makes no warranty that the
Permitted Use in Paragraph 1.8 is permitted for the Premises under
Applicable Laws (as defined in Paragraph 2.4).
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a)
that it has been advised by the Broker(s) 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, seismic and earthquake requirements, and compliance with the
Americans with Disabilities Act and applicable zoning, municipal,
county, state and federal laws, ordinances and regulations and any
covenants or restrictions of record (collectively, "APPLICABLE LAWS")
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, is satisfied with reference
thereto, and assumes all responsibility therefore as the same relate to
Lessee's occupancy of the Premises and/or the terms 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 said matters
other than as set forth in this Lease.
2.5 LESSEE AS 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.
2.6 VEHICLE PARKING. Lessee shall be entitled to use the
number of Unreserved Parking Spaces and Reserved Parking Spaces
specified in Paragraph 1.2(b) on those portions of the Common Areas
designated from time to time by Lessor for parking. Lessee shall not
use more parking spaces than said number. Said parking spaces shall be
used for parking by vehicles no larger than full-size passenger
automobiles or pick-up trucks, herein called "PERMITTED SIZE VEHICLES."
Vehicles other than Permitted Size Vehicles shall be parked and loaded
or unloaded as directed by Lessor in the Rules and Regulations (as
defined in Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)
(a) Lessee shall not permit or allow any vehicles
that belong to or are controlled by Lessee or Lessee's employees,
suppliers, shippers, customers, contractors or invitees to be loaded,
unloaded, or parked in areas other than those designated by Lessor for
such activities.
(b) If Lessee permits or allows any of the prohibited
activities described in this Paragraph 2.6, then Lessor shall have the
right, without notice, in addition to such other rights and remedies
that it may have, to remove or tow away the vehicle involved and charge
the cost to Lessee, which cost shall be immediately payable upon demand
by Lessor.
(c) Lessor shall at the Commencement Date of this
Lease, provide the parking facilities required by Applicable Law.
2.7 COMMON AREAS - DEFINITION. The term "COMMON AREAS" is
defined as all areas and facilities outside the Premises and within the
exterior boundary line of the Industrial Center and interior utility
raceways within the Premises that are provided and designated by the
Lessor from time to time for the general non-exclusive use of Lessor,
Lessee and other lessees of the Industrial Center and their respective
employees, suppliers, shippers, customers, contractors and invitees,
including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped
areas.
2.8 COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby grants to
Lessee, for the benefit of Lessee and its employees, suppliers,
shippers, contractors, customers and invitees, during the term of this
Lease, the non-exclusive right to use, in common with others entitled
to such use, the Common Areas as they exist from time to time, subject
to any rights, powers, and privileges reserved by Lessor under the
terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Industrial Center. Under no
circumstances shall the right herein granted to use the Common Areas be
deemed to include the right to store any property, temporarily or
permanently, in the Common Areas. Any such storage shall be permitted
only by the prior written consent of Lessor or Lessor's designated
agent, which consent may be revoked at any time. In the event that any
unauthorized storage shall occur then Lessor shall have the right,
without notice, in addition to such other rights and remedies that it
may have, to remove the property and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.
2.9 COMMON AREAS - RULES AND REGULATIONS. Lessor or such other
person(s) as Lessor may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to
time, to establish, modify, amend and enforce reasonable Rules and
Regulations with respect thereto in accordance with Paragraph 40.
Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause its employees, suppliers, shippers,
customers, contractors and invitees to so abide and conform. Lessor
shall not be responsible to Lessee for the non-compliance with said
rules and regulations by other lessees of the Industrial Center.
2.10 COMMON AREAS - CHANGES. Lessor shall have the right, in
Lessor's sole discretion, from time to time:
(a) To make changes to the Common Areas, including,
without limitation, changes in the location, size, shape and number of
driveways, entrances, parking spaces, parking areas, loading and
unloading areas, ingress, egress, direction of traffic, landscaped
areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises
remains available;
(c) To designate other land outside the boundaries of
the Industrial Center to be a part of the Common Areas;
(d) To add additional buildings and improvements to
the Common Areas;
(e) To use the Common Areas while engaged in making
additional improvements, repairs or alterations to the Industrial
Center, or any portion thereof; and
(f) To do and perform such other acts and make such
other changes in, to or with respect to the Common Areas and Industrial
Center as Lessor may, in the exercise of sound business judgment, deem
to be appropriate.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original
Term of this Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If an Early Possession Date is specified
in Paragraph 1.4 and if Lessee totally or partially occupies the
Premises after the Early Possession Date but prior to the Commencement
Date, the obligation to pay Base Rent shall be abated for the period of
such early occupancy. All other terms of this Lease, however,
(including but not limited to the obligations to pay Lessee's Share of
Common Area Operating Expenses and to carry the insurance required by
Paragraph 8) shall be in effect including such period. Any such early
possession shall not affect nor advance the Expiration Date of the
Original Term.
SEE ADDENDUM
4. RENT.
4.1 BASE RENT. Lessee shall pay Base Rent and other rent or
charges, as the same may be adjusted from time to time, to 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 full month shall be prorated based
upon the actual number of days of the 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.
4.2 COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor
during the term hereof, in addition to the Base Rent, Lessee's Share
(as specified in Paragraph 1.6(b)) of all Common Area Operating
Expenses, as hereinafter defined, during each calendar year of the term
of this Lease, in accordance with the following provisions:
(a) "COMMON AREA OPERATING EXPENSES" are defined, for
purposes of this Lease, as all costs incurred by Lessor relating to the
ownership and operation of the Industrial Center, including, but not
limited to, the following:
(i) The operation, repair and maintenance,
in neat, clean, good order and condition, of the following:
(aa) The Common Areas, including
parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, driveways, landscaped areas, striping,
bumpers, irrigation systems, Common Area lighting facilities, fences
and gates, elevators and roof.
(bb) Exterior signs and any tenant
directories.
(cc) Fire detection and sprinkler
systems.
(ii) The cost of water, gas, electricity and
telephone to service the Common Areas.
(iii) Trash disposal, property management
and security services and the costs of any environmental inspections.
(iv) Reserves set aside for maintenance and
repair of Common Areas.
(v) Real Property Taxes (as defined in
Paragraph 10.2) to be paid by Lessor for the Building and the Common
Areas under Paragraph 10 hereof.
(vi) The cost of the premiums for the
insurance policies maintained by Lessor under Paragraph 8 hereof.
(viii) Any other services to be provided by
Lessor that are stated elsewhere in this Lease to be a Common Area
Operating Expense.
(b) Any Common Area Operating Expenses and Real
Property Taxes that are specifically attributable to the Building or to
any other building in the Industrial Center or to the operation, repair
and maintenance thereof, shall be allocated entirely to the Building or
to such other building. However, any Common Area Operating Expenses and
Real Property Taxes that are not specifically attributable to the
Building or to any other building or to the operation, repair and
maintenance thereof, shall be equitably allocated by Lessor to all
buildings in the Industrial Center.
(c) The infusion of the improvements, facilities and
services set forth in Subparagraph 4.2(a) shall not be deemed to impose
an obligation upon Lessor to either have said improvements or
facilities or to provide those services unless the Industrial Center
already has the same, Lessor already provides the services, or Lessor
has agreed elsewhere in this Lease to provide the same or some of them.
(d) Lessee's Share of Common Area operating Expenses
shall be payable by Lessee within ten (10) days after a reasonably
detailed statement of actual expenses is presented to Lessee by Lessor.
At Lessor's option, however, an amount may be estimated by Lessor from
time to time of Lessee's Share of annual Common Area Operating Expenses
and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each 12-month period of the Lease term, on the same
day as the Base Rent is due hereunder. Lessor shall deliver to Lessee
within sixty (60) days after the expiration of each calendar year a
reasonably detailed statement showing Lessee's Share of the actual
Common Area Operating Expenses incurred during the preceding year. If
Lessee's payments under this Paragraph 4.2(d) during said preceding
year exceed Lessee's Share as indicated on said statement, Lessor shall
be credited the amount of such overpayment against Lessee's Share of
Common Area Operating Expenses next becoming due. If Lessee's payments
under this Paragraph 4.2(d) during said preceding year were less than
Lessee's Share as indicated on said statement, Lessee shall pay to
Lessor the amount of the deficiency within ten (10) days after delivery
by Lessor to Lessee of said statement. SEE ADDENDUM 4.2E
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon Lessee's
execution hereof the Security Deposit set forth in Paragraph 1.7 as
security for Lessee's faithful performance of Lessee's obligations
under this Lease. If Lessee fails to pay Base Rent or other rent or
charges due hereunder, or otherwise Defaults under this Lease (as
defined in Paragraph 13.1 ), Lessor may use, apply or retain all or any
portion of said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for any liability, cost,
expense, loss or damage (including attorneys' fees) which Lessor may
suffer or incur by reason thereof. If Lessor uses or applies all or any
portion of said Security Deposit, Lessee shall within ten (10) days
after written request therefore deposit monies with Lessor sufficient
to restore said Security Deposit to the full amount required by this
Lease. Any time the Base Rent increases during the term of this Lease,
Lessee shall, upon written request from Lessor, deposit additional
monies with Lessor as an addition to the Security Deposit so that the
total amount of the Security Deposit shall at all times bear the same
proportion to the then current Base Rent as the initial Security
Deposit bears to the initial Base Rent set forth in Paragraph 1.5.
Lessor shall not be required to keep all or any part of the Security
Deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee
has vacated the Premises, return to Lessee (or, at Lessor's option, to
the last assignee, if any, of Lessee's interest herein), that portion
of the Security Deposit not used or applied by Lessor. Unless otherwise
expressly agreed in writing by Lessor, no part of the Security Deposit
shall be considered to be held in trust, to bear interest or other
increment for its use, or to be prepayment for any monies to be paid by
Lessee under this Lease.
6. USE.
6.1 PERMITTED USE.
(a) Lessee shall use and occupy the Premises only for
the Permitted Use set forth in Paragraph 1.8, or any other legal use
which is reasonably comparable thereto, and for no other purpose.
Lessee shall not use or permit the use of the Premises in a manner that
is unlawful, creates waste or a nuisance, or that disturbs owners
and/or occupants of, or causes damage to the Premises or neighboring
premises or properties.
(b) Lessor hereby agrees to not unreasonably withhold
or delay its consent to any written request by Lessee, Lessee's
assignees or subtenants, and by prospective assignees and subtenants of
Lessee, its assignees and subtenants, for a modification of said
Permitted Use, so long as the same will not impair the structural
integrity of the improvements on the Premises or in the Building or the
mechanical or electrical systems therein, does not conflict with uses
by other lessees, is not significantly more burdensome to the Premises
or the Building and the improvements thereon, and is otherwise
permissible pursuant to this Paragraph 6. If Lessor elects to withhold
such consent, Lessor shall within five (5) business days after such
request give a written notification of same, which notice shall include
an explanation of Lessor's reasonable objections to the change in use.
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term
"HAZARDOUS SUBSTANCE" as used in this Lease shall mean any product,
substance, 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 potential 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 or by-products thereof. Lessee shall not
engage in any activity in 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
Requirements (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, and (iii) the
presence in, on or about the Premises of a Hazardous Substance with
respect to which any Applicable Laws require that a notice be given to
persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may, without Lessor's prior
consent, but upon notice to Lessor and in compliance with all
Applicable Requirements, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of the
Permitted Use, 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 any Reportable Use of any Hazardous Substance 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 therefor, including but not limited to the
installation (and, at Lessor's option, removal on or before Lease
expiration or earlier termination) of reasonably necessary protective
modifications to the Premises (such as concrete encasement) 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 has come to be
located in, on, under or about the Premises or the Building, other than
as previously consented to by Lessor, Lessee shall immediately give
Lessor written notice thereof, together with a copy of any statement,
report, notice, registration, application, permit, business plan,
license, claim, action, or proceeding given to, or received from, any
governmental authority or private party concerning the presence, spill,
release, discharge of, or exposure to, such Hazardous Substance
including but not limited to all such documents as may be involved in
any Reportable Use involving the Premises. Lessee shall not cause or
permit any Hazardous Substance to be spilled or released in, on, under
or about the Premises (including, without limitation, through the
plumbing or sanitary sewer system).
(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
damages, liabilities, judgments, costs, claims, liens, expenses,
penalties, loss of permits and attorneys' and consultants' fees arising
out of or involving any Hazardous Substance brought onto the Premises
by or for Lessee or by anyone under Lessee's control. Lessee's
obligations under this Paragraph 6.2(c) shall include, but not be
limited to, the effects of any contamination or injury to ▇▇▇▇▇▇,
property or the environment created or suffered by Lessee, and the cost
of investigation (including consultants' and attorneys' 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, unless specifically so agreed by Lessor in
writing at the time of such agreement.
6.3 LESSEE'S COMPLIANCE WITH REQUIREMENTS. Lessee shall, at
Lessee's sole cost and expense, fully, diligently and in a timely
manner, comply with all "APPLICABLE REQUIREMENTS," which term is used
in this Lease to mean all laws, rules, regulations, ordinances,
directives, covenants, easements and restrictions of record, permits,
the requirements of any applicable fire insurance underwriter or rating
bureau, and the REASONABLE 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),
now in effect or which may hereafter come into effect. 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
Requirements specified by Lessor, and shall immediately upon receipt,
notify Lessor in writing (with copies of any documents involved) of any
threatened or actual claim, notice, citation, warning, complaint or
report pertaining to or involving failure by Lessee or the Premises to
comply with any Applicable Requirements. SEE ADDENDUM 6.3A
6.4 INSPECTION; COMPLIANCE WITH LAW. Lessor, Lessor's agents,
employees, contractors and designated representatives, and the holders
of any mortgages, deeds of trust or ground leases on the Premises
("LENDERS") shall have the right to enter the Premises at any time in
the case of an emergency, and otherwise at reasonable advance notice
times, for the purpose of inspecting the condition of the Premises and
for verifying compliance by Lessee with this Lease and all Applicable
Requirements (as defined in Paragraph 6.3), and Lessor shall be
entitled to employ experts and/or consultants in connection therewith
to advise Lessor with respect to Lessee's activities, including but not
limited to Lessee's installation, operation, use, monitoring,
maintenance, or removal of any Hazardous Substance 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
by Lessee or a violation of Applicable Requirements or a contamination,
caused or materially contributed to by Lessee, is found to exist or to
be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent
violation or contamination. In 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 END
ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance with Covenants, Restrictions and Building
Code), 7.2 (Lessor's Obligations), 9 (Damage or 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 (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
specifically serving the Premises, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting facilities, boilers,
fired or unfired pressure vessels, fire hose connections if within the
Premises, fixtures, interior walls, interior surfaces of exterior
walls, ceilings, floors, windows, doors, plate glass, and skylights,
but excluding any items which are the responsibility of Lessor pursuant
to Paragraph 7.2 below. 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 Premises and all
improvements thereon or a part thereof in good order, condition and
state of repair.
(b) Lessee shall, at Lessee's sole cost and expense,
procure and maintain a contract, with copies to Lessor, in customary
form and substance for and with a contractor specializing and
experienced in the inspection, maintenance and service of the heating,
air conditioning and ventilation system for the Premises. However,
Lessor reserves the right, upon notice to Lessee, to procure and
maintain the contract for the heating, air conditioning and ventilating
systems, and if Lessor so elects, Lessee shall reimburse Lessor, upon
demand, for the cost thereof.
(c) If Lessee fails to perform Lessee's obligations
under this Paragraph 7.1, Lessor may enter upon the Premises after ten
(10) days' prior written notice to Lessee (except in the case of an
emergency, in which case no notice shall be required), perform such
obligations on Lessee's behalf, and put the Premises in good order,
condition and repair, in accordance with Paragraph 13.2 below.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of
Paragraphs 2.2 (Condition), 2.3 (Compliance with Covenants,
Restrictions and Building Code), 4.2 (Common Area Operating Expenses),
6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14
(Condemnation), Lessor, subject to reimbursement pursuant to Paragraph
4.2, shall keep in good order, condition and repair the foundations,
exterior walls, structural condition of interior bearing walls,
exterior reef, fire sprinkler and/or standpipe and hose (if located in
the Common Areas) or other automatic fire extinguishing system
including fire alarm and/or smoke detection system and equipment, fire
hydrants, parking lots, walkways, parkways, driveways, landscaping,
fences, signs and utility systems serving the Common Areas and all
parts thereof, as well as providing the services for which there is a
Common Area Operating Expanse pursuant to Paragraph 4.2. Lessor shall
not be obligated to paint the exterior or interior surfaces of exterior
walls nor shall Lessor be obligated to maintain, repair or replace
windows, doors or plate glass of the Premises. Lessee expressly waives
the benefit of any statute now or hereafter in effect which would
otherwise afford Lessee the right to make repairs at Lessor's expanse
or to terminate this Lease because of Lessor's failure to keep the
Building, Industrial Center or Common Areas in good order, condition
and repair.
7.3 UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY
INSTALLATIONS" is used in this Lease to refer to all air lines, power
panels, electrical distribution, security, fire protection systems,
communications 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 which can be removed without doing material damage to the
Premises. The term "ALTERATIONS" shall mean any modification of the
improvements on the Premises which are provided by Lessor under the
terms of this Lease, other than Utility Installations or Trade
Fixtures. "LESSEE-OWNED ALTERATIONS AND/OR UTILITY INSTALLATIONS" are
defined as Alterations and/or Utility Installations made by Lessee that
are not yet owned by Lessor pursuant to Paragraph 7.4(a). Lessee shall
not make nor cause to be made 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) without Lessor's
consent but upon notice to Lessor, so long as they are not visible from
the outside of the Premises, do not involve puncturing, relocating or
removing the roof or any existing walls, or changing or interfering
with the fire sprinkler or fire detection systems and the cumulative
cost thereof during the term of this Lease as extended does not exceed
$10,000.00.
(b) CONSENT. Any Alterations or Utility Installations
that Lessee shall desire to make and which require the consent of the
Lessor shall be presented to Lessor in written form with 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 furnishing of copies of such permits
together with a copy of the plans and specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work
thereon; and (iii) the compliance by Lessee with all conditions of said
permits in a prompt and expeditious manner. Any Alterations or Utility
Installations by Lessee during the term of this Lease shall be done in
a good and workmanlike manner, with good and sufficient materials, and
be in compliance with all Applicable Requirements. 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 $10,000.00 or more upon Lessee's providing
Lessor with a lien and completion bond in an amount equal to one and
one-haft times the estimated cost of such Alteration or Utility
Installation.
(c) LIEN PROTECTION. Lessee shall pay when due all
claims for labor or materials furnished or alleged to have been
furnished to or for Lessee ator for use on the Premises, which claims
are or may be secured by any mechanic's or materialmen's lien against
the Premises or any interest therein. Lessee shall give Lessor not less
than ten (10) days' notice prior to the commencement of any work in,
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 attorneys' 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 and to cause Lessee to become the owner thereof as
hereinafter provided in this Paragraph 7.4, all Alterations and Utility
Installations 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 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 the Premises and be surrendered
with the Premises by Lessee.
(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 that their installation may have been
consented to by Lessor. Lessor may require the removal at any time of
all or any part of any 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, 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 herein, the Premises, as surrendered,
shall include the Alterations and 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 Lessee-Owned Alterations and Utility
Installations, as well as the removal of any storage tank installed by
or for Lessee, and the removal, replacement, or remediation of any
soil, material or ground water contaminated by Lessee, all as may then
be required by Applicable Requirements and/or good practice. Lessee's
Trade Fixtures shall remain the property of Lessee and shall be removed
by Lessee subject to its obligation to repair and restore the Premises
per this Lease.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT OF PREMIUMS. The cost of the premium for the
insurance policies maintained by Lessor under this Paragraph 8 shall be
a Common Area Operating Expanse pursuant to Paragraph 4.2 hereof.
Premiums for policy periods commencing prior to, or extending beyond,
the term of this Lease shall be pro-rated to coincide with the
corresponding Commencement Date or Expiration Date.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep
in force during the term of this Lease a Commercial General Liability
policy of insurance protecting Lessee, Lessor and any Lender(s) whose
names have been provided to Lessee in writing (as additional insured)
against claims for bodily injury, personal injury and property damage
based upon, involving or arising out of the ownership, use, occupancy
or maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis providing single limit
coverage in an amount not less than $1,000,000 per occurrence with an
"Additional Insured-Managers or Lessors of Premises" endorsement and
contain the "Amendment of the Pollution Exclusion" endorsement for
damage caused by heat, smoke or fumes from a hostile fire. The policy
shall not contain any intra-insured exclusions as between insured
persons or organizations, but shall include coverage for liability
assumed under this Lease as an "INSURED CONTRACT" for the performance
of Lessee's indemnity obligations under this Lease. The limits of said
insurance 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. SEE
ADDENDUM
(b) CARRIED BY LESSOR. Lessor shall also maintain
liability insurance described in Paragraph 8.2(a) above, in addition to
and not in lieu of, the insurance required to be maintained by Lessee.
Lessee shall not be named as an additional insured herein.
8.3 PROPERTY INSURANCE-BUILDING, IMPROVEMENTS AND RENTAL
VALUE.
(a) BUILDING END IMPROVEMENTS. Lessor shall obtain
and keep in force during the term of this Lease a policy or policies in
the name of Lessor, with loss payable to Lessor and to any Lender(s),
insuring against loss or damage to the Premises. Such insurance shall
be for full replacement cost, as the same shall exist from time to
time, or the amount required by any Lender(s), 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. Lessee-Owned
Alterations and Utility Installations, Trade Fixtures and Lessee's
personal property shall be insured by Lessee pursuant to Paragraph 8.4.
If the coverage is available and commercially appropriate, Lessor's
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 Building 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 loss, but
not including plate glass insurance. Said policy or policies shall also
contain an agreed valuation provision in lieu of any co-insurance
clause, waiver of subrogation, and inflation guard protection causing
an increase in the annual property insurance coverage amount by a
factor of not less than the adjusted U.S. Department of Labor Consumer
Price Index for All Urban Consumers for the city nearest to where the
Premises are located.
(b) RENTAL VALUE. Lessor shall also 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 any Lender(s), insuring the
loss of the full rental and other charges payable by all lessees of the
Building to Lessor for one year (including all Real Property Taxes,
insurance costs, all Common Area operating Expenses and any scheduled
rental increases). Said insurance may provide that in the event the
Lease is terminated by reason of an insured loss, the period of
indemnity for such coverage shall be extended beyond the date of the
completion of repairs or replacement of the Premises, to provide for
one full year's loss of rental revenues from the date of any such loss.
Said insurance shall contain an agreed valuation provision in lieu of
any co-insurance clause, and the amount of coverage shall be adjusted
annually to reflect the projected rental income, Real Property Taxes,
insurance premium costs and other expenses, if any, otherwise payable,
for the next 12-month period. Common Area Operating Expenses shall
include any deductible amount in the event of such loss.
(c) ADJACENT PREMISES. Lessee shall pay for any
increase in the premiums for the property insurance of the Building and
for the Common Areas or other buildings in the Industrial Center if
said increase is caused by Lessee's acts, omissions, use or occupancy
of the Premises.
(d) LESSEE'S IMPROVEMENTS. Since Lessor is the
Insuring Party, 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. SEE
ADDENDUM
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 carded,
maintain insurance coverage on all of Lessee's personal property, Trade
Fixtures and Lessee-Owned Alterations and Utility Installations in, on,
or about the Premises similar in coverage to that carried by Lessor as
the Insuring Party under Paragraph 8.3(a). Such insurance shall be full
replacement cost coverage with a deductible not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by
Lessee for the replacement of personal property and the restoration of
Trade Fixtures and Lessee-Owned Alterations and Utility Installations.
Upon request from Lessor, Lessee 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, 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. Lessee shall cause to be delivered to Lessor, within seven
(7) days after the earlier of the Early Possession Date or the
Commencement Date, certified copies of, or certificates evidencing the
existence and amounts of, the insurance required under Paragraph 8.2(a)
and 8.4. No such policy shall be cancelable or subject to modification
except after thirty (30) days' prior written notice to Lessor. Lessee
shall at least thirty (30) days prior to the expiration of such
policies and charge the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights
or remedies, Lessee and Lessor each hereby release and relieve the
other, and waive their entire right to recover damages (whether in
contract or in tort) against the other, for loss or damage to their
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. Lessor and Lessee agree to have their respective
insurance companies issuing property damage insurance waive any right
to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated
thereby.
8.7 INDEMNITY. Except for Lessor's 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 any and all claims, loss
of rents and/or damages, costs, liens, judgments, penalties, loss of
permits, attorneys' and consultants' fees, expenses and/or liabilities
arising out of, involving, or in connection 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)
litigated and/or reduced to judgment. In case any action or proceeding
be brought against Lessor by reason of any of the foregoing matters,
Lessee upon notice from Lessor shall defend the same at Lessee's
expense by counsel 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. SEE ADDENDUM
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
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, 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 or neglect of any other lessee of Lessor nor from the
failure by Lessor to enforce the provisions of any other lease in the
Industrial Center. 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.
(a) "PREMISES PARTIAL DAMAGE" 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 less than fifty percent (50%) of the then Replacement Cost (as
defined in Paragraph 9.1 (d)) of the Premises (excluding Lessee-Owned
Alterations and Utility Installations and Trade Fixtures) immediately
prior to such damage or destruction.
(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 fifty percent (50%) or more of the than Replacement Cost of the
Premises (excluding Lessee-Owned Alterations and Utility Installations
and Trade Fixtures) immediately prior to such damage or destruction. In
addition, damage or destruction to the Building, other than
Lessee-Owned Alterations and Utility Installations and Trade Fixtures
of any lessees of the Building, the cost of which damage or destruction
is fifty percent (50%) or more of the then Replacement Cost (excluding
Lessee-Owned Alterations and Utility Installations and Trade Fixtures
of any lessees of the Building) of the Building shall, at the option of
Lessor, be deemed to be Premises Total Destruction.
(c) "INSURED LOSS" shall mean damage or destruction
to the Premises, other than Lessee-Owned Alterations and Utility
Installations and Trade Fixtures, which was caused by an event required
to be covered by the insurance described in Paragraph 8.3(a)
irrespective of any deductible amounts or coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair
or rebuild the improvements owned by Lessor at the time of the
occurrence to their condition existing immediately prior thereto,
including demolition, debris removal and upgrading required by the
operation of applicable building codes, ordinances or laws, and without
deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the
occurrence or discovery of a condition involving the presence of, or a
contamination by, a Hazardous Substance as defined in Paragraph 6.2(a),
in, on, or under the Premises.
9.2 PREMISES PARTIAL DAMAGE - INSURED LOSS. If Premises
Partial Damage that is an Insured Loss occurs, then Lessor shall, at
Lessor's expense, repair such damage (but not Lessee's Trade Fixtures
or Lessee-Owned Alterations and Utility Installations) as soon as
reasonably possible and this Lease shall continue in full force and
effect. In the event, however, that there is a shortage of insurance
proceeds and such shortage is due to the fact that, by reason of the
unique nature of the improvements in the Premises, 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,
Lessor 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 Lessor does not receive such funds
or assurance within such ten (10) day period, 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 it made by either Party.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. If Premises Partial
Damage that is not an Insured Loss occurs (as provided in a standard
commercial all risk policy), unless caused by a negligent or willful
act of Lessee (in which event Lessee shall make the repairs at Lessee's
expanse and this Lease shall continue in full force and effect), 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 date 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 the receipt of such notice to give written notice to Lessor of
Lessee's commitment to pay for the repair of such damage totally at
Lessee's expanse and without reimbursement from Lessor. Lessee shall
provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following such commitment from Lessee.
In such event this Lease shall continue in full force and effect, and
Lessor shall proceed to make such repairs as soon as reasonably
possible after the required funds are available. If Lessee does not
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 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 9.7.
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 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 (a) exercising such option, and (b) providing Lessor with any
shortage in insurance proceeds (or adequate assurance thereof) needed
to make the repairs on or before the earlier of (i) the date which is
ten (10) days after Lessee's receipt of Lessor's written notice
purporting to terminate this Lease, or (ii) the day prior to the date
upon which such option expires. If Lessee duly exercises such option
during such period and provides Lessor with funds (or adequate
assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's expense repair such damage as soon as reasonably
possible and this Lease shall continue in full force and effect. If
Lessee fails to exercise such option and provide such funds or
assurance during such period, then this Lease shall terminate as of the
date set forth in the first sentence of this Paragraph 9.5.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event of (i) Premises Partial Damage or
(ii) Hazardous Substance Condition for Which Lessee is not legally
responsible, the Base Rent, Common Area Operating Expenses and other
charges, if any, payable by Lessee hereunder for the period during
which such damage or condition, its repair, remediation or restoration
continues, shall be abated in proportion to the degree to which
Lessee's use of the Premises is impaired, but not in excess of proceeds
from insurance required to be carried under Paragraph 8.3(b). Except
for abatement of Base Rent, Common Area Operating Expenses 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 damage,
destruction, repair, remediation 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
obligation shall accrue, Lessee may, at any time prior to the
commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice of Lessee's
election to terminate this Lease on a date not less than sixty (60)
days following the giving of such notice. If Lessee gives such notice
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 the receipt of such notice, this Lease
shall continue in full force and effect. "COMMENCE" as used in this
Paragraph 9.6 shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work
on the Premises, whichever occurs first.
9.8 TERMINATION - ADVANCE PAYMENTS. Upon termination of this
Lease pursuant to this Paragraph 9, Lessor shall return to Lessee any
advance payment made by Lessee to Lessor and 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 WAIVER OF STATUTES. Lessor and Lessee agree that the terms
of this Lease shall govern the effect of any damage to or destruction
of the Premises and the Building with respect to the termination of
this Lease and hereby waive the provisions of any present or future
statute to the extent it is inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the Real Property
Taxes, as defined in Paragraph 10.2, applicable to the Industrial
Center, and except as otherwise provided in Paragraph 10.3, any such
amounts shall be included in the calculation of Common Area Operating
Expenses in accordance with the provisions of Paragraph 4.2.
10.2 REAL PROPERTY TAX DEFINITION. 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 Industrial Center 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 Industrial Center or any portion thereof,
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, fee, 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 Industrial Center
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. In calculating Real Property Taxes for any
calendar year, the Real Property Taxes for any real estate tax year
shall be included in the calculation of Real Property Taxes for such
calendar year based upon the number of days which such calendar year
and tax year have in common.
10.3 ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses
shall not include Real Property Taxes specified in the tax assessor's
records and work sheets as being caused by additional improvements
placed upon the Industrial Center by other lessees or by Lessor for the
exclusive enjoyment of such other lessees. Notwithstanding Paragraph
10.1 hereof, Lessee shall, however, pay to Lessor at the time Common
Area Operating Expenses are payable under Paragraph 4.2, the entirety
of any increase in Real Property Taxes if assessed solely by reason of
Alterations, Trade Fixtures or Utility Installations placed upon the
Premises by Lessee or at Lessee's request.
10.4 JOINT ASSESSMENT. If the Building is not separately
assessed, Real Property Taxes allocated to the Building shall be an
equitable proportion of the Real Property Taxes for all of the land and
improvements included within the tax parcel assessed, such proportion
to be determined by Lessor from the respective valuations assigned in
the assessor's work sheets or such other information as may be
reasonably available. Lessor's reasonable determination thereof, in
good faith, shall be conclusive.
10.5 LESSEE'S PROPERTY TAXES. Lessee shall pay prior to
delinquency all taxes assessed against and levied upon Lessee-Owned
Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all personal property of Lessee contained in the Premises
or stored within the Industrial Center. When possible, Lessee shall
cause its Lessee-Owned Alterations and Utility Installations, 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 property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee's
property within ten (10) days after receipt of a written statement
setting forth the taxes applicable to Lessee's property.
11. UTILITIES. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity,
telephone, security, gas and cleaning of the Premises, together with
any taxes thereon. If any such utilities or services are not separately
metered to the Premises or separately billed to the Premises, Lessee
shall pay to Lessor a reasonable proportion to be determined by Lessor
of all such charges jointly metered or billed with other premises in
the Building, in the manner and within the time periods set forth in
Paragraph 4.2(d).
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of
law assign, transfer, mortgage or otherwise transfer or encumber
(collectively, "assign") 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 requiring Lessor's consent. The transfer, on a
cumulative basis, of twenty-five percent (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 full
execution and delivery 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 withheld 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,
or a non-curable Breach without the necessity of any notice and grace
period. If Lessor elects to treat such unconsented to assignment or
subletting as a non-curable 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 for
the Premises to the greeter of the then fair market rental value of the
Premises, as reasonably determined by Lessor, or one hundred ten
percent (110%) of the Base Rent then in effect. Pending determination
of the new fair market rental value, if disputed by Lessee, Lessee
shall pay the amount set forth in Lessor's Notice, with any overpayment
credited 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 rental adjustment,
(i) the purchase price of any option to purchase the Premises held by
Lessee shall be subject to similar adjustment to the then fair market
value as reasonably determined by Lessor (without the Lease being
considered an encumbrance or any deduction for depreciation or
obsolescence, and considering the Premises at its highest and ▇▇▇▇ use
and in good condition) or one hundred ten percent (110%) of the price
previously in effect, (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 rental hears to the Base Rent in
effect immediately prior to the adjustment specified in Lessor's
Notice.
(e) Lessee's remedy for any breach of this Paragraph
12.1 by Lessor shall be limited to compensatory damages and/or
injunctive relief. SEE ADDENDUM
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND
SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or
subletting shall not (i) be effective without the express written
assumption by such assignee or sublessee of the obligations of Lessee
under this Lease, (ii) release Lessee of any obligations hereunder, nor
(iii) alter 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 he performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of
Lessee's obligations from any person other than Lessee pending approval
or disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of any rent for
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 assignee or sublessee. However, Lessor may consent
to subsequent subletting and assignments of the sublease or any
amendments or modifications thereto without notifying Lessee or anyone
else liable under this Lease or the sublease and without obtaining
their consent, and such action shall not relieve such persons from
liability under this Lease or the sublease.
(d) In the event of any Default or Breach of Lessee's
obligation under this Lease. Lessor may proceed directly against
Lessee, any Guarantors or anyone else responsible for the performance
of the Lessee's obligations under this Lease, including any sublessee,
without first exhausting Lessor's remedies against any other person or
entity responsible therefor to Lessor, or any security held by Lessor.
(f) Any assignee of, or sublessee under, this Lease
shall, by reason of accepting such assignment or entering into such
sublease, he 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 he 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.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING.
The following terms and conditions shall apply to any subletting by
Lessee of all or any part of the Premises and shall be deemed included
in all subleases under this Lease whether or not expressly incorporated
therein:
(a) Lessee hereby assigns and transfers to Lessor all
of Lessee's interest in all rentals and income arising from any
sublease of all or a portion of the Premises heretofore or hereafter
made by Lessee, and Lessor may collect such rent and income and apply
same toward Lessee's obligations under this Lease; provided, however,
that until a Breach (as defined in Paragraph 13.1) shall occur in the
performance of Lessee's obligations under this Lease, Lessee may,
except as otherwise provided in this Lease, receive, collect and enjoy
the rents accruing under such sublease. Lessor shall not, by reason of
the foregoing provision 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. Lessee hereby irrevocably authorizes and directs any
such sublessee, upon receipt of a written notice from Lessor stating
that a Breech exists in the performance of Lessee's obligations under
this Lease, to pay to Lessor the rents and other charges due and to
become due under the sublease. Sublessee shall rely upon any such
statement and request from Lessor and shall pay such rents and other
charges to Lessor without any obligation or right to inquire as to
whether such Breach exists and notwithstanding any notice from or claim
from Lessee to the contrary. Lessee shall have no right or claim
against such 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, Lessor, at its option
and without any obligation to do so, may require any sublessee to
attorn to Lessor, in which event Lessor shall undertake the obligations
of the sublessor under such sublease from the time of the exercise of
said option to the expiration of such sublease; provided, however,
Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to such sublessor or for any other prior
defaults or breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the
sublessor under a sublease shall also require the consent of Lessor
herein.
(d) No sublessee under a sublease approved by Lessor
shall further assign or sublet all or any part of the Premises without
Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of
Default or Breach by Lessee to the sublessee, who shall have the right
to cure the Default of Lessee within the grace period, if any,
specified in such notice. The sublessee shall have a right of
reimbursement and offset from and against Lessee for any such Defaults
cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an
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 and payable to cure
said default. A "DEFAULT" by Lessee is defined as a failure by Lessee
to observe, comply with or perform any of the terms, covenants,
conditions or roles applicable to Lessee under this Lease. A "BREACH"
by Lessee is defined as the occurrence of any one or more of the
following Defaults, and, where a grace period for cure after notice is
specified herein, the failure by Lessee to cure such 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:
(b) Except as expressly otherwise provided in this
Lease, the failure by Lessee to make any payment of Base Rent, Lessee's
Share of Common Area Operating Expenses, or any other monetary payment
required to be made by Lessee hereunder as and when due, the failure by
Lessee to provide Lessor with reasonable evidence of insurance or
surety bond required under this Lease, or the failure of Lessee to
fulfill any obligation under this Lease which endangers or threatens
life or property, where such failure continues for a period of three
(3) BUSINESS days following written notice 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 duly executed original form, if applicable) of (i)
compliance with Applicable Requirements per Paragraph 6.3, (ii) the
inspection, maintenance and service contracts required under Paragraph
7.1 (b), (iii) the rescission of an unauthorized assignment or
subletting per Paragraph 12.1, (iv) a Tenancy Statement per Paragraphs
16 or 37, (v) the subordination or non-subordination of this Lease per
Paragraph 30, (vi) the guaranty of the performance of Lessee's
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 the terms of this lease,
where any such failure continues for a period of ten (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 13.1 (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 Lessee
commences such cure within said thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events:
(i) the making 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. Code Section 101 or any successor statute thereto (unless,
in the case of a petition filed against Lessee, the same is dismissed
within sixty (60) days); (iii) the appointment of a trustee or receiver
to take possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where possession is
not restored to Lessee within thirty (30) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this Lease,
where such seizure is not discharged within thirty (30) days; provided,
however, in the event that any provision of this Subparagraph 13.1 (e)
is contrary to any applicable law, such provision shall be of no force
or effect, and shall not affect the validity of the remaining
provisions.
(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 assurances of security, which, when coupled with
the then existing resources of Lessee, equals or exceeds the combined
financial resources of Lessee and the Guarantors that existed at the
time of execution of this Lease.
13.2 REMEDIES. If Lessee fails to perform any affirmative duty
or obligation of Lessee under this Lease, within ten (10) 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 Lessees behalf, including but not limited to
the obtaining of reasonably required bends, 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
own 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 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 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 obligations under this
Lease or which in the ordinary course of things would be likely to
result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees,
and that portion of any leasing commission paid by Lessor in connection
with this Lease applicable to the unexpired term of this Lease. The
worth at the time of award of the amount referred to in provision (iii)
of the immediately preceding sentence shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San
Francisco or the Federal Reserve Bank District in which the Premises
are located at the time of award plus one percent (1%). Efforts by
Lessor to mitigate damages caused by Lessee's Default or Breach of this
Lease shall not waive Lessor's right to recover damages under this
Paragraph 13.2. If termination of this Lease is obtained through the
provisional remedy of unlawful detainer, Lessor shall have the right to
recover in such proceeding the unpaid rent and damages as are
recoverable therein, or Lessor may reserve the right to recover all or
any part thereof in a separate suit for such rent and/or damages. If a
notice and grace period required under Subparagraph 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
Subparagraph 13.1 (b),(c) or (d). In such case, the applicable grace
period under the unlawful detainer statue shall run concurrently after
the one such statutory notice, and the failure of Lessee to cure the
Default within the greater of the two (2) such grace periods shall
constitute both an unlawful detainer and a Breach of this Lease
entitling Lessor to the remedies provided for in this Lease and/or by
said statute.
(b) Continue the Lease and Lessee's right to
possession in effect (in California under California Civil Code Section
1951.4) after Lessee's Breach and recover the rent as it becomes due,
provided Lessee has the right to sublet or sign, subject only to
reasonable limitations. Lessor and Lessee agree that the limitations on
assignment and subletting in this Lease 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 this
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 tree 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 (as defined in Paragraph 13.1) of this Lease by Lessee, any such
Inducement Provision shall automatically be deemed deleted from this
Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by
Lessor under such an Inducement Provision shall be immediately due and
payable by Lessee to Lessor, 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 sure of the
Breach which initiated the operation of this Paragraph 13.3 shall not
be deemed a waiver by Lessor of the provisions of this Paragraph 13.3
unless specifically so stated in written 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 deed of trust covering the Premises.
Accordingly, if any installment of rent or other sum due from Lessee
shall not be received by Lessor or Lessor's designee within ten (10)
days after such amount shall be due, then, without any requirement for
notice to Lessee, Lessee shall pay to Lessor a late charge equal to six
percent (6%) of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs
Lessor 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, nor
prevent Lessor from exercising any of the other rights and remedies
granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding Paragraph 4.1 or any
other provision of this Lease to the contrary, Base Rent shall, at
Lessor's option, become due and payable quarterly in advance.
13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of
this Lease unless Lessor fails within a reasonable time to perform an
obligation required to be performed by Lessor. For purposes of this
Paragraph 13.5, a reasonable time shall in no event be less than
fourteen (14) days after receipt by Lessor, and by any Lender(s) whose
name and address shall have been furnished to Lessee in writing for
such purpose, of written notice specifying wherein such obligation of
Lessor has not been performed; provided, however, that if the nature of
Lessor's obligation is such that more then 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 (ell 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 portion of the Common Areas
designated for Lessee's parking, is taken by condemnation, Lessee may,
at Lessee's option, to be exercised in writing within THIRTY (30) 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 total rentable floor area of the Premises. No reduction of
Base Rent shall occur if the condemnation does not apply to any portion
of the Premises. 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 of
value of the leasehold or for the taking of the fee, or as severance
damages; provided, however, that Lessee shall be entitled to any
compensation, separately awarded to Lessee for Lessee's relocation
expenses and/or loss of Lessee's Trade Fixtures. 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
Lessee's Share of the legal and other expenses incurred by Lessor in
the condemnation matter, repair any damage to the Premises caused by
such condemnation authority. Lessee shall be responsible for the
payment of any amount in excess of such net severance damages required
to complete such repair.
15. BROKERS' FEES.
15.1 PROCURING CAUSE. The Broker(s) named in Paragraph 1.10
is/are the procuring cause of this Lease.
15.2 ADDITIONAL TERMS. Unless Lessor and Broker(s) have
otherwise agreed in writing, Lessor agrees that: (a) if Lessee
exercises any Option (as defined in Paragraph 39.1 ) granted under this
Lease or any Option subsequently granted, or (b) if Lessee acquires any
rights to the Premises or other premises in which Lessor has an
interest, 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) it 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 Broker(s) a fee in
accordance with the schedule of said Broker(s) in effect at the time of
the execution of this Lease.
15.3 ASSUMPTION OF OBLIGATIONS. 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 an intended
third party beneficiary of the provisions of Paragraph 1.10 and 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.
15.4 REPRESENTATIONS AND WARRANTIES. 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 as named in Paragraph 1.10(a)
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 Broker(s) 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 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,
and/or attorneys' fees reasonably incurred with respect thereto.
16. TENANCY AND FINANCIAL STATEMENTS.
16.1 TENANCY STATEMENT. Each Party (as "RESPONDING PARTY")
shall within ten (10) days after written notice from the other Party
(the "REQUESTING PARTY") execute, acknowledge and deliver to the
Requesting Party a statement in writing in a 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 FINANCIAL STATEMENT. If Lessor desires to finance,
refinance, or sell the Premises or the Building, or any part thereof,
Lessee and all Guarantors 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. 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 15.3, upon such transfer or assignment and delivery of the
Security Deposit, as aforesaid, the prior Lessor shall be relieved of
all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the
foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as
hereinabove defined.
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 ten
(10) days following the date on which it was due, shall bear interest
from the date due at the prime rate charged by the largest state
chartered bank in the state in which the Premises are located plus four
percent (4%) per annum, but not exceeding the maximum rate allowed by
law, in addition to the potential 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 thereto or with respect to any default or
breach hereof by either Party. Each Broker shall be an intended third
party beneficiary of the provisions of this Paragraph 22.
23. NOTICES.
23.1 NOTICE REQUIREMENTS. All notices required or permitted by
this Lease shall be in writing and may be delivered in person (by hand
or by 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 during normal business
hours, 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 addresses as Lessor may
from time to time hereafter designate by written notice to Lessee.
23.2 DATE OF NOTICE. Any notice sent by registered or
certified mail, return receipt requested, shall he 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 FORTY-EIGHT (48) 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 or
facsimile confirmation of receipt of the transmission thereof, provided
a copy is also delivered via delivery or mall. If notice is received on
a Saturday or a Sunday or a legal holiday, it shall be deemed received
on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default
or Breach by Lessee of the same or any other term, covenant or
condition hereof. Lessor's consent to, or approval of, any such act
shall not be deemed to render unnecessary the obtaining of Lessor's
consent to, or approval of, any subsequent or similar act by Lessee, or
be construed as the basis of an estoppel to enforce the provision or
provisions of this Lease requiring such consent. 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 Default or
Breach by Lessee of any provision hereof. 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.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all
other remedies at law or in equity.
28. COVENANTS AND CONDITIONS. All provisions of this Lease to be
observed or performed by Lessee 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 a part, to any and all advances made
on the security thereof, and to all renewals, modifications,
consolidations, replacements and extensions thereof. Lessee agrees that
the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor
under this Lease, but that in the event of Lessor's default with
respect to any such obligation, Lessee will give any Lender whose name
and address have been furnished Lessee in writing for such purpose
notice of Lessor's default pursuant to Paragraph 13.5. 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 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
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. ATTORNEYS' FEE. If any Party or Broker brings an action or
proceeding to enforce the terms hereof or declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding, action,
or appeal thereon, shall be entitled to reasonable attorneys' fees.
Such fees may be awarded in the same suit or recovered in a separate
suit, whether or not such action or proceeding is pursued to decision
or judgment. The term "PREVAILING PARTY" shall include, without
limitation, a Party or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by settlement, judgment,
or the abandonment by the other Party or Broker of its claim or
defense. The attorneys' fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse
all attorneys' fees reasonably incurred. Lessor shall be entitled to
attorneys' fees, costs and expenses incurred in preparation and service
of notices of Default and consultations in connection therewith,
whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach. Broker(s) shall be intended
third party beneficiaries of this Paragraph 31.
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, 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 eighty (180) days of the term hereof place on or about the
Premises any ordinary "For Lease" signs. All such activities of Lessor
shall be without abatement of rent or liability to Lessee.
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 exterior of the
Premises or the Building, 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 so long as such
signs are in a location designated by Lessor and comply with Applicable
Requirements and the signage criteria established for the Industrial
Center by Lessor. 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 herein, Lessor reserves
all rights to the use of the roof of the Building, and the right to
install advertising signs on the Building, including the roof, which do
not unreasonably interfere with the conduct of Lessee's business;
Lessor shall be entitled to all revenues from such advertising signs.
35. TERMINATION; MERGER. Unless specifically stated otherwise in
writing by Lessor, the voluntary or other surrender of this Lease by
Lessee, the mutual termination or cancellation hereof, or a termination
hereof by Lessor for Breach by Lessee, shall automatically terminate
any sublease or lessor 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' and 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, shall be paid by Lessee
to Lessor upon receipt of an invoice and supporting documentation
therefor. in addition to the deposit described in Paragraph 12.2(e),
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 5) reasonably calculated
by Lessor to represent the cost Lessor will incur in considering and
responding to Lessee's request. Any unused portion of said deposit
shall be refunded to Lessee without interest. Lessor's consent to any
act, assignment of this Lease or 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 by Lessor at the time of such consent.
(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 impositions by Lessor at the time of consent of such
further or other conditions as are then reasonable with reference to
the particular matter for which consent is being given.
37. GUARANTOR
37.1 FORM OF GUARANTY. If there are to be any Guarantors of
this Lease per Paragraph 1.11, the form 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 such
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 required in Paragraph 16.
37.2 ADDITIONAL OBLIGATIONS OF GUARANTOR. 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 resolution of
its board of directors authorizing the making of such guaranty,
together with a certificate of incumbency showing the signatures of the
persons authorized to sign on its behalf, (b) current financial
statements of Guarantor as may from time to time be requested by
Lessor, (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 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 Lease, 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 offer 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.
39.3 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 (but regard to whether notice thereof is
given Lessee), or (iii) during the time Lessee is in Breach of this
Lease, or
(b) The period of time within which an Option may be
exercised shall not be extended or enlarged by reason of Lessee's
inability to exercise an Option because of the provisions of Paragraph
39.4(a)
(c) All rights of Lessee under the provisions of an
option shall terminate and be of no further force or effect,
notwithstanding Lessee's due andtimely 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 (3) or more notices of separate Defaults under Paragraph
13.1 during any twelve (12) month period, whether or not the Defaults
are cured, or (iii) if Lessee commits a Breach of this Lease.
40. RULES AND REGULATIONS. Lessee agrees that it will abide by, and
keep and observe all reasonable rules and regulations ("Rules and
Regulations") which Lessor may make from time 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 the Building
and the Industrial Center and their invitees.
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 the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights
of way, utility raceways, and dedications that Lessor deems necessary,
and to cause the recordation of parcel maps and restrictions, as long
as such easements, rights of way, utility raceways, dedications, maps
and restrictions do not reasonably interfere with the use of the
Premises by Lessee. Lessee agrees to sign any documents reasonably
requested by Lessor to effectuate any such easement rights, dedication,
map or restrictions.
43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as
to any amount or sum of money to be paid by one Party to the other
under the provisions hereof, the Party against whom the obligation to
pay the money is asserted shall have the right to make payment "under
protest" and such payment shall not be regarded as a voluntary payment
and there shall survive the right on the part of said Party to
institute suit for recovery of such sum. If it shall be adjudged that
there was no legal obligation on the part of said Party to pay such sum
or any part thereof, said Party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay 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 he controlled by
the typewritten or handwritten provisions.
46. OFFER. Preparation of this Lease by either Lessor or Lessee or
Lessor's agent or Lessee's agent and submission of same to Lessee or
Lessor shall not be deemed an offer to lease. This Lease is not
intended to be binding until executed and delivered by all Parties
hereto.
47. AMENDMENTS. This Lease may be modified only in writing, signed by
the parties in interest at the time of the modification, 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 expressly provided herein, if
more than one person or entity is named herein as either Lessor or
Lessee the obligations of such multiple parties shall be the joint and
several responsibility of all persons or entities named herein as such
Lessor or Lessee.
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 YOUR
ATTORNEY'S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO
EVALUATE THE CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF
ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL
REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKERS OR THEIR
CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH
IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE
SUBJECT PROPERTY IS 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 and on the
dates specified above their respective signatures.
Executed at:___________________________________ Executed at: Lincoln, CA
on:____________________________________________ on: June 18, 1996
By LESSOR: By LESSEE:
BLUE SKY VENTURE ZYTEC CORPORATION,
A California General Partnership A Minesota Corporation
By:____________________________________________ By: ____________________________
Name Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name Printed: ▇▇▇ ▇▇▇▇
Title: Partner Title: Vice President
By:____________________________________________ By:______________________________
Name Printed: ▇. ▇. ▇▇▇▇▇▇▇▇ Name Printed:____________________
Title: Partner Title:___________________________
Address:21 Blue ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇, MINN
Telephone:(▇▇▇)▇▇▇-▇▇▇▇ Telephone:(▇▇▇)▇▇▇-▇▇▇▇
Facsimile:(▇▇▇)▇▇▇-▇▇▇▇ Facsimile: ( )_________________
BROKER: BROKER:
Executed at:___________________________________ Executed at: ___________________
on:____________________________________________ on: ____________________________
By:____________________________________________ By:_____________________________
Name Printed:__________________________________ Name Printed:___________________
Title:_________________________________________ Title:__________________________
Address:_______________________________________ Address:________________________
Telephone:( )________________________________ Telephone:( )_________________
Facsimile: ( )_______________________________ Facsimile: ( )________________
Exhibit 10.20 Addendum
ADDENDUM TO STANDARD INDUSTRIAL COMMERCIAL MULTI-TENANT NET, DATED JUNE
17, 1996 BY AND BLUE SKY VENTURE, A CALIFORNIA GENERAL PARTNERSHIP
(LESSOR) AND ZYTEC CORPORATION, A MINNESOTA CORPORATION (LESSEE)
2.1 (CONT.) In the event that part of the building becomes
unusable, the monthly rent will be adjusted based prorata over the
usable square foot space.
4.2E Lessee's share shall not exceed $.80 per square foot per month.
6.3(a) Lessor warrants that the building is in conformity with the
building plans and permits, and complies with the Americans With
Disabilities Act of 1990 ("ADA). However, if any governmental authority
should require any additional improvements, permits or approvals, under
ADA or otherwise, due to Lessee's particular use, or Lessee's
employees, customers, or invitees, other than those which are stated in
this Lease, and other than requirements generally for buildings of this
type, including without limitation additional fire protection equipment
or flow capacity, use permits, or zoning variances, such improvements
or changes to be permitted uses shall be made at Lessee's sole expense.
7.4 LESSEE'S INSTALLATIONS: Lessee shall have the right to install
certain equipment to the building with Lessor's consent and by
notifying Lessor's property manager, in writing, of their intent to do
so. Lessor shall not withhold consent for any reasonable request. At
the end of the Lease term, Lessee shall have the right to remove said
equipment provided the building and premises are restored to repaired
condition and any harm or damage to the building is corrected.
8.2 LIABILITY INSURANCE - LESSEE. (CONTINUED) Lessee shall, at Lessee's
expense, obtain and keep in force during the term of this Lease a
policy of Combined Single Limit bodily Injury, Personal Injury,
Advertising Injury, and Property Damage insurance insuring Lessee and
Lessor against any claim arising out of, or related in any manner to,
the use, occupancy, or maintenance of the Premises and the Industrial
Center. Such insurance shall be in an amount not less than $1,000,000
per occurrence. The policy shall insure performance by Lessee of the
indemnity provisions of this PARAGRAPH 8. The provisions of said
insurance nor the limits of said insurance shall not, however, limit
the liability of Lessee hereunder. Lessee covenants and agrees that
Lessor and LessorOs property manager will be listed as an Additional
Named Insured in said policy in conformity with the agreements to
defend and indemnify herein, and that said insurance maintained by
Lessee is agreed to be primary, with any insurance maintained by Lessor
to be excess.
10.4 (CONT) Lessee shall have the right, at its own expense, to appeal
tax assessments.
12.1 (CONT) Lessee shall have the right to assign the Lease, as long as
Lessee remains obligated and guarantees the terms of this Lease, and
the sub-lessee is bound by the same terms and conditions of the Lease.
Lessor shall have the right to approve the sublessee. Lessor will not
withhold approval if sublessee meets requirements including but not
limited to type of business and financial condition.
26. HOLD OVER: If Lessee, with Lessor's consent, remains in possession
of the Premises or any part thereof after the expiration of the terms
thereof, or any optional extension, such occupancy shall be a tenancy
from month to month upon all provisions of this Lease pertaining to the
obligations of the Lessee shall remain the same except rent which shall
be subject to a ten percent (10%) increase, at Lessor's discretion.
Lessor shall notify Tenant of any termination, or desire to terminate,
after the expiration of this Lease and all Options, by giving Lessee
sixty (60) days written notice.
ADDENDUM TO STANDARD INDUSTRIAL COMMERCIAL MULTI-TENANT NET, DATED JUNE
17, 1996, BY AND BETWEEN BLUE SKY VENTURE, A CALIFORNIA GENERAL
PARTNERSHIP (LESSOR) AND ZYTEC CORPORATION, A MINNESOTA CORPORATION
(LESSEE) PAGE TWO
49. MATERIALS DISCLOSURE. The United States Congress has recently
enacted the Americans with Disabilities Act. Among other things, this
act is intended to make many business establishments equally accessible
to persons with a variety of disabilities; modifications to real
property may be required. State and local laws also may mandate
changes. The real estate brokers in this transaction are not qualified
to advise you as to what, if any, changes may be required now, or in
the future. Owners and tenants should consult the attorneys and
qualified design professionals of their choice for information
regarding these matters. Real estate brokers cannot determine which
attorneys or design professionals have the appropriate expertise in
this area.
Various construction materials may contain items that have been or may
be in the future be determined to be hazardous (toxic) or undesirable
and may need to be specifically treated/handled or removed. For
example, some transformers and other electrical components contain
PCB's and asbestos has been used in components such as fireproofing,
heating, and cooling systems, air duct insulation, spray-on and tile
acoustical materials, linoleum, floor tiles, roofing dry wall and
plaster. Due to prior or current uses of the Property or in the area,
the Property may have hazardous or undesirable metals, minerals,
chemicals, hydrocarbons, or biological or radioactive items (including
electric and magnetic fields) in soils, water, building components,
above or below-ground containers or elsewhere in areas that may or may
not be accessible or noticeable. Such items may not leak or otherwise
be released. Real estate agents have no expertise in the detection or
correction of hazardous or undesirable items. Expert inspections are
necessary. Current or future laws may require clean up by past, present
and/or future owners and/or operators. It is the responsibility of the
Seller/Lessor and Buyer/Tenant to retain qualified experts to detect
and correct such matters and to consult with legal counsel of their
choice to determine what provision, if any, they may wish to include in
transaction documents regarding the Property. To the best of
Seller/Lessor's knowledge, Seller/Lessor has attached to this
Disclosure copies of all existing surveys and reports known to
Seller/Lessor regarding asbestos and other hazardous materials and
undesirable substances related to the Property. Sellers/Lessors are
required under California Health and Safety Code Section 25915 at seq.
to disclose reports and surveys regarding asbestos to certain persons,
including their employees, contractors, co-owners, purchasers and
tenants. Buyers/Tenants have similar disclosure obligations.
Sellers/Lessors and Buyers/Tenants have additional hazardous materials
disclosure responsibilities to each other under California Health and
Safety Code Section 25359.7 and other California laws. Consult your
attorney regarding this matter. LESSOR HAS NO KNOWLEDGE OF ANY
HAZARDOUS SUBSTANCES ON OR ABOUT THE PROPERTY.
50. OCCUPANCY: If any, governmental authority should require any
additional improvements due to Lessee's occupancy other than those
which are stated in this addendum, such improvement shall be made at
Lessee's sole expense.
51. FIRE EXTINGUISHERS: Lessee responsible for supplying fire
extinguishers (2A 10:BC) as required per code within 75 feet of any
door in space.
52. FORKLIFT RESTRICTIONS: Asphaltic cement can not withstand hard
rubber forklift tires. In the event the asphalt is damaged by Lessee's
use of a forklift with hard rubber tires, it will be Lessee's
obligation to repair the damaged asphaltic cement at Lessee's sole
expense.
53. OUTSIDE STORAGE: Lessee shall only store materials within the
building or outside on concrete inside a screened fence as specifically
allowed by the applicable governmental authorities.
EXHIBIT A -- ORIGINAL DOCUMENT CONTAINS A MAP SHOWING THE LOCATION OF
THE LEASED BUILDING AND PARKING LOTS.
ADDENDUM TO STANDARD INDUSTRIAL COMMERCIAL MULTI-TENANT NET, DATED JUNE
17, 1996, BY ANDBLUE SKY VENTURE, A CALIFORNIA GENERAL PARTNERSHIP
(LESSOR) AND ZYTEC CORPORATION, A MINNESOTA CORPORATION (LESSEE)
PAGE THREE
54. HAZARDOUS WASTE: Each party shall be fully and completely
responsible and shall indemnify and hold the other party harmless from
and against waste on the Premises as a result of each such party's
activity, or permitted or suffered by each such party on or about the
Premises, as well as all costs, attorney's fees, expenses, and
liabilities incurred in defense of any such claim, action or proceeding
brought thereon, including provision of counsel reasonably satisfactory
to the other party, and regardless of whether suit or any
administrative action is filed or commenced. Lessor warrants there is
not currently any hazardous waste in, on, or under the Premises, and
similarly indemnifies Lessee for any such currently existing hazardous
waste.
55. FLOOR SEALER: Lessor does not warrant the fitness of the floor slab
for applying floor sealer. For example, soil conditions may cause
moisture to be present under the concrete slab or migrate through the
slab, which may affect the sealer's performance. Lessee has been
advised to consult directly with the manufacturer's representative, and
Lessee shall look directly to the manufacturer in the event of product
failure.
56. TENANT IMPROVEMENTS DONE BY OTHERS: Tenant improvements done by
contractors other than Buzz Oaks Enterprises or its subcontractors,
shall be subject to a fifteen percent (15%) ▇▇▇▇ up on the cost of the
invoice from that particular contractor.
57. Buzz ▇▇▇▇▇ Real Estate represents both Lessor and Lessor's
designates and Lessee and Lessee's designates in all future expansions
and renewals of leases and/or sales in the Zytec Corporation project
noted by Exhibit E - "Zytec Campus".
58. FORCE MAJEURE: If Lessor can not perform any of its
obligations due to events beyond Lessor's control, the time provided
for performing such obligations shall be extended by a period of time
equal to the duration of such events. Events beyond Landlord's control
include, but are not limited to, Acts of God, war, civil commotion,
labor disputes, strikes, fire, flood, excessive rain or other casualty,
shortages of labor or material, governments regulation or restriction
and weather conditions.
AGREED AND ACCEPTED
LESSOR: LESSEE:
BLUE SKY VENTURE ZYTEC CORPORATION
A CA GENERAL PARTNERSHIP A MINNESOTA CORPORATION
_________________________ _______________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
PARTNER GENERAL MANAGER
DATE:____________________ DATE: 6/18/96
_________________________
▇. ▇. ▇▇▇▇▇▇▇▇
PARTNER
DATE: ________________