EXHIBIT 10.2.7
INDUSTRIAL LEASE
between
JMB/PENNSYLVANIA ASSOCIATES-IV, L.P.,
A DELAWARE LIMITED PARTNERSHIP
(LANDLORD)
and
Q.E.P. COMPANY, INC., A NEW YORK CORPORTATION
---------------------------------------------
CORPORATION
---------------------------------------------
(TENANT)
TABLE OF CONTENTS
INDUSTRIAL LEASE
ARTICLE TITLE PAGE
1 Definitions 1
2 Premises 2
3 Term 2
4 Rental; Adjustments 2
5 Security Deposit 5
6 Use of Premises 5
7 Utilities and Services 7
8 Maintenance and Repairs 8
9 Alterations, Additions and Improvements 9
10 Indemnification and Insurance 9
11 Damage or Destruction 11
12 Condemnation 12
13 Relocation 12
14 Assignment and Subletting 12
15 Default and Remedies 14
16 Attorneys' Fees; Costs of ▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ Quiet Enjoyment 16
19 Parking 16
20 Rules and Regulations 17
21 Estoppel Certificates 17
22 Entry by Landlord 17
23 Landlord's Lease Undertakings-Exculpation
from Personal Liability; Transfer of Landlord's 17
Interest
24 Surrender; Holdover Tenancy 18
25 Notices 18
26 Brokers 18
27 Communications and Computer Lines 18
28 Miscellaneous 19
29 Floor Load Limits ▇▇
▇▇ ▇▇▇▇▇▇▇▇'▇ ▇▇▇▇ ▇▇
▇▇ Uniform Commercial Code 20
EXHIBITS
Exhibit A Floor Plan of the Premises
Exhibit C Suite Acceptance Letter
Exhibit D Tenant Operations Inquiry
Schedule I List of Permissible Hazardous Materials and
to Exhibit D Quantities for Tenant
Exhibit E List of Additional Insureds
Exhibit F Rules and Regulations
Supplemental Rider
CARSON INDUSTRIAL PARK II
INDUSTRIAL LEASE
[FORM NET LEASE/MULTI-TENANT]
THIS LEASE ("Lease"), dated August 1, 1996, is made and entered into by and
between JMB/PENNSYLVANIA ASSOCIATES-IV, L.P., a Delaware limited partnership
("Landlord") and Q.E.P. Company, Inc., a New York corporation ("Tenant") upon
the following terms and conditions:
ARTICLE I-DEFINITIONS
Unless the context otherwise specifies or requires, the following terms
shall have the meanings specified herein:
1.01 BUILDING. The term "Building" shall mean that certain office/warehouse
building located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, together
with all related site land, improvements, parking facilities, common areas,
driveways, sidewalks and landscaping. If the Building is in a development
containing one or more other buildings, such buildings together with all related
site land, improvements, parking facilities, common areas, driveways, sidewalks
and landscaping, and together with the Building, shall be referred to herein as
the "Project".
1.02 PREMISES. The term "Premises" shall mean the space leased to Tenant in
the Building, as more particularly outlined on the drawing attached hereto as
Exhibit A and incorporated herein by reference.
1.03 RENTABLE AREA OF THE PREMISES. The term "Rentable Area of the
Premises" shall mean 29,227 square feet, which Landlord and Tenant have
stipulated as the Rentable Area of the Premises. Tenant acknowledges that the
Rentable Area of the Premises includes the usable area, without deduction for
columns or projections, multiplied by a load factor to reflect a share of
certain areas, which may include lobbies, corridors, mechanical, utility,
janitorial, boiler and service rooms and closets, restrooms and other public,
common and service areas of the Building.
1.04 LEASE TERM. The terms "Lease Term" or "Term" shall mean the period
between the Commencement Date and the Expiration Date (as such terms are
hereinafter defined), unless sooner terminated or renewed as otherwise provided
in this Lease.
1.05 COMMENCEMENT DATE. Subject to adjustment as provided in Article 3, the
term "Commencement Date" shall mean August 15, 1996.
1.06 EXPIRATION DATE. Subject to adjustment as provided in Article 3, the
term "Expiration Date" shall mean August 14, 1999.
1.07 BASE RENT. Subject to adjustment as provided in Article 4, the term
"Base Rent" shall mean Seven thousand eight hundred ninety one and 29/100
Dollars ($7,891.29) per month.
1.08 TENANT'S PERCENTAGE SHARE. The term "Tenant's Percentage Share" shall
mean six and 5/100 percent (6.5%) with respect to Operating Expenses (as
hereinafter defined), One hundred percent (100%) with respect to Property Taxes
(as hereinafter defined) six and 5/100 percent (6.5%) with respect to Insurance
Expenses (as hereinafter defined) and six and 5/100 percent (6.5%) with respect
to Tenant's law compliance obligations under Section 6.02(C) of this Lease and
for all other purposes under this Lease. Landlord may reasonably redetermine
Tenant's Percentage Share from time to time to reflect reconfigurations,
additions or modifications to the Building.
1.09 SECURITY DEPOSIT. The term "Security Deposit" shall mean Ten thousand
five hundred thirty nine and 72/100 Dollars ($10,539.72).*
1.10 TENANT'S PERMITTED USE. The term "Tenant's Permitted Use" shall mean
general office and warehousing duties associated with the distribution of
contractor tools and manufacturing and assembly of tools and no other use.
1. II LANDLORD'S ADDRESS FOR NOTICES. The term "Landlord's Address for
Notices" shall mean ▇▇▇▇▇▇▇ Properties Ltd., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ Properties Ltd., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Property
Management.
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* THE SECURITY DEPOSIT OF $10,539.72 HAS BEEN PREVIOUSLY PAID BY TENANT'S
PREDECESSOR IN INTEREST, O'TOOL COMPANY, INC. TO LANDLORD AS A PART OF THAT
CERTAIN LEASE DATED JANUARY 3, 1991 BETWEEN LANDLORD AND O'TOOL COMPANY, INC.
WHICH WAS ASSIGNED TO TENANT BY THAT CERTAIN ASSIGNMENT OF LEASE EFFECTIVE JUNE
9, 1994.
1.12 TENANT'S ADDRESS FOR NOTICES. The term "Tenant's Address for Notices"
shall mean Q.E.P. Company, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇.
1.13 BROKER. The term "Broker" shall mean ▇▇▇▇▇▇▇ Properties Ltd.
1.14 GUARANTOR. The term "Guarantor" shall mean N/A.
ARTICLE II - PREMISES
2.01 LEASE OF PREMISES. Landlord hereby leases the Premises to Tenant, and
Tenant hereby leases the Premises from Landlord, upon all of the terms,
covenants and conditions contained in this Lease.
2.02 ACCEPTANCE OF PREMISES. Tenant acknowledges that Landlord has not made
any representation or warranty with respect to the condition of the Premises or
the Building or with respect to the suitability or fitness of either for the
conduct of Tenant's Permitted Use or for any other purpose. Tenant shall execute
a Suite Acceptance Letter in the form and content of Exhibit C, accepting the
Premises. Tenant agrees to accept the Premises in its "as is" physical condition
without any agreements, representations, understandings or obligations on the
part of Landlord to perform any alterations, repairs or improvements (or to
provide any allowance for same).
2.03 COMMON AREAS. Tenant and Tenant's employees and invitees may use the
common areas of the Building, and the Project, if applicable, on a non-exclusive
basis in common with all other parties to whom the right to use such common
areas has been or is hereafter granted. Tenant shal1 not interfere in any way
with the use of the common areas by such other parties, and Tenant's use of the
common areas shall be subject to the other provisions of this Lease. Landlord
shall administer, operate, clean, maintain and repair the common areas of the
Building, and the Project, if applicable, and the costs and expenses thereof
shall be included in the definition of "Operating Expenses" set forth below. If
the Building is in a Project containing one or more other buildings, Landlord
may designate separate common areas for the Building, for the Project as a whole
("Project Common Areas"), and for other portions of the Project ("Other Common
Areas"). In such case, Tenant and Tenant's employees and invitees shall not use
the Other Common Areas.
ARTICLE III - TERM
3.01 Except as otherwise provided in this Lease, the Lease Term shall be
for the period described in Section 1.04 of this Lease, commencing on the
Commencement Date described in Section 1.05 of this Lease and ending on the
Expiration Date described in Section 1.06 of this Lease; provided, however,
that, if, for any reason, Landlord is unable to deliver possession of the
Premises on the date described in Section 1.05 of this Lease, Landlord shall not
be liable for any damage caused thereby, nor shall the Lease be void or
voidable, but, rather, the Lease Term shall commence upon, and the Commencement
Date shall be, the date that possession of the Premises is so tendered to Tenant
(except for Tenant-caused delays which shall not be deemed to delay commencement
of the Lease Term), and, unless Landlord elects otherwise, the Expiration Date
described in Section 1.06 of this Lease shall be extended by an equal number of
days.
ARTICLE IV - RENTAL; ADJUSTMENTS
4.01 DEFINITIONS. As used herein,
(A) "Property Taxes" shall mean the aggregate amount of all real estate
taxes, assessments (whether they be general or special), sewer rents and
charges, transit taxes, taxes based upon the receipt of rent and any other
federal, state or local governmental charge, general, special, ordinary or
extraordinary (but not including income or franchise taxes, capital stock,
inheritance, estate, gift, or any other taxes imposed upon or measured by
Landlord's gross income or profits, unless the same shall be imposed in
lieu of real estate taxes or other ad valorem taxes), which Landlord shall
pay or become obligated to pay in connection with the Building or the
Project, if applicable, or any part thereof. Property Taxes shall also
include all fees and costs, including attorneys' fees, appraisals and
consultants' fees, incurred by Landlord in seeking to obtain a
reassessment, reduction of, or a limit on the increase in, any Property
Taxes, regardless of whether any reduction or limitation is obtained.
Property Taxes for any calendar year shall be Property Taxes which are due
for payment or are paid during such year. Property Taxes shall include any
tax, assessment, levy, imposition or charge imposed upon Landlord, and
measured by or based in whole or in part upon the Building or the Project,
if applicable, or the rents or other income from the Building or the
Project, if applicable, to the extent that such items would be payable if
the Building or the Project, if applicable, was the only property of
Landlord subject to same and the income received by Landlord from the
Building or the Project, if applicable, was the only income of Landlord.
Property Taxes shall also include any personal property taxes imposed upon
the furniture, fixtures,
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machinery, equipment, apparatus, systems and appurtenances of Landlord used
in connection with the Building or the Project, if applicable.
(B) "Operating Expenses" shall mean all costs, fees, disbursements and
expenses paid or incurred by or on behalf of Landlord in the operation,
ownership, maintenance, administration, insurance, management, replacement
and repair of the Building or the Project, if applicable, (excluding
Property Taxes). If the Building is part of a Project containing one or
more other buildings: (i) Landlord may reasonably allocate expenses (or
categories thereof) incurred in connection with the Project Common Areas
between such buildings (based on the relative square footage thereof or
such other factors as Landlord reasonably deems appropriate), in which case
the amount allocated to the Building shall be added to "Operating Expenses"
for the Building for such year, or (ii) Landlord may determine expenses (or
categories thereof) incurred in connection with the Project Common Areas as
a whole, in which case Tenant's Percentage Share of "Operating Expenses"
shall be based on the Rentable Area of the Premises as a percentage of the
total rentable area occupied by tenants in all buildings in the Project
(excluding single tenant buildings for which the tenants maintain the Other
Common Areas applicable thereto) and Tenant shall pay Tenant's Percentage
Share of Operating Expenses for the Project.
Operating Expenses shall not include costs of alteration of the premises of
tenants of the Building or the Project, if applicable, depreciation
charges, interest and principal payments on mortgages, ground rental
payments, real estate brokerage and leasing commissions, expenses incurred
in enforcing obligations of tenants of the Building or the Project, if
applicable, salaries and other compensation of executive officers of the
managing agent of the Building or the Project, if applicable, senior to the
Building manager, costs of any special service provided to any one tenant
of the Building or the Project, if applicable, but not to tenants of the
Building or the Project, if applicable, generally, and costs of marketing
or advertising the Building or the Project, if applicable.
(C) "Insurance Expenses" shall mean all costs, fees. disbursements and
expenses paid or incurred by or on behalf of Landlord for premiums for
hazard, "all risk", casualty, rent interruption and liability insurance and
all other insurance, obtained by Landlord in connection with or relating to
the Building or the Project, if applicable.
For purposes of calculating the Tax Adjustment, the Operating Expense
Adjustment, and the Insurance Adjustment (as such terms are defined in Sections
4.02, B, C and D hereof), Property Taxes, Operating Expenses and Insurance
Expenses hereinabove defined shall each be increased by ten 10% percent to
cover Landlord's administrative costs in connection with the Building or the
Project, if applicable.
If the Building or the Project, if applicable, does not have one hundred
percent (100%) occupancy during an entire calendar year, then the variable cost
components of Property Taxes, Operating Expenses and Insurance Expenses shall be
adjusted so that the total amount of Property Taxes, Operating Expenses and
Insurance Expenses equals the total amount which would have been paid or
incurred by Landlord had the Building or the Project, if applicable, been one
hundred percent (100%) occupied for the entire calendar year.
4.02 BASE RENT. During the Lease Term, Tenant shall pay to Landlord as
rental for the Premises the Base Rent described in Section 1.07 above, subject
to the following adjustments (herein collectively called the "Rent
Adjustments"):
(A) Effective the l9th month of the Lease term, the Base Rent payable by
Tenant to Landlord as described in Section 1.07 shall be increased to the sum of
(i) the amount contained in Section 1.07; plus (ii) the product obtained by
multiplying such amount by the percentage increase in the Consumer Price Index
(as defined below) from the second calendar month preceding the calendar month
containing the Commencement Date to the second calendar month preceding the
calendar month containing the annual anniversary of the Commencement Date in the
applicable adjustment year in which the rental increase is to occur (herein
called the "CPI Adjustment"). As used herein, the term "Consumer Price Index"
shall mean the Consumer Price Index for All Urban Consumers, U.S. City Average,
All Items, (1982-84=100) issued by the United States Department of Labor, Bureau
of Labor Statistics; provided, however, that if said Consumer Price Index shall
cease to exist, or be changed, the term "Consumer Price Index" shall mean such
other or similar index or formula as Landlord reasonably selects to measure
change in the purchasing power of the U.S. Dollar. Landlord shall notify Tenant
in writing when each adjustment under this Section 4.02(A) occurs. A decrease in
the Consumer Price Index below the Consumer Price Index for the second calendar
month preceding the calendar month containing the Commencement Date shall not
decrease the amount of the Base Rent due hereunder or give rise to a credit in
favor of Tenant. Notwithstanding the foregoing, said increase shall not be less
than 4.5%.
(B) During each calendar year during the Lease Term, the Base Rent payable
by Tenant to Landlord, as adjusted pursuant to Section 4.02(A) above, shall be
increased by Tenant's Percentage Share of the Property Taxes for such year (the
"Tax Adjustment").
(C) During each calendar year during the Lease Term, the Base Rent payable
hy Tenant to Landlord, as adjusted pursuant to Section 4.02(A) above, also shall
be increased by Tenant's Percentage Share of the Operating Expenses paid or
incurred by Landlord during such year (the "Operating Expense Adjustment ").
(D) During each calendar year during the Lease Term, the Base Rent payable
by Tenant to Landlord, as adjusted pursuant to Section 4.02(A) above, also
shall be increased by Tenant's Percentage Share of the Insurance Expenses
for such year (the "Insurance Adjustment").
(E) The Tax Adjustment, the Operating Expense Adjustment and the Insurance
Adjustment are hereinafter referred to collectively as the "Tax, Operating
Expense and Insurance Adjustments".
4.03 ADIUSTMENT PROCEDURE; ESTIMATES. The Tax, Operating Expense and
Insurance Adjustments specified in Sections 4.02(B), 4.02(C) and 4.02(D) shall
be determined and paid as follows:
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(A) During each calendar year during the Lease Term, Landlord shall
give Tenant written notice of Landlord's estimate of amounts payable under
Sections 4.02(B), 4.02(C) and 4.02(D) for that calendar year. On or before
the first day of each calendar month during the calendar year. Tenant shall
pay to Landlord one-twelfth (1/12th) of such estimated amounts; provided,
however, that, not more often than quarterly, Landlord may, by written
notice to Tenant, revise its estimate for such year, and subsequent
payments by Tenant for such year shall be based upon such revised estimate.
(B) Within one hundred twenty (120) days after the close of each
calendar year in which any Rent Adjustment is made or as soon thereafter
as is practicable, Landlord shall deliver to Tenant a statement of that
year's Property Taxes, Operating Expenses and Insurance Expenses, and the
actual Tax, Operating Expense and Insurance Expense Adjustments to be made
pursuant to Sections 4.02(B), 4.02(C) and 4.02(D) for such calendar year,
as determined and certified by Landlord (the "Landlord's Statement") and
such Landlord's Statement shall be binding upon Tenant, except as provided
in Section 4.04 below. If the amount of the actual Tax Adjustment,
Insurance Adjustment or Operating Expense Adjustment is more than the
estimated payments for the Tax Adjustment, Insurance Adjustment or
Operating Expense Adjustment for such calendar year made by Tenant, Tenant
shall pay the deficiency to Landlord upon receipt of Landlord's Statement.
If the amount of the actual Tax Adjustment, Insurance Adjustment or
Operating Expense Adjustment is less than the estimated payments for such
calendar year made by Tenant, any excess shall be credited against Rent (as
hereinafter defined) next payable by Tenant under this Lease or, if the
Lease Term has expired, any excess thereof shall be paid to Tenant. No
delay in providing the statements described in this Section 4.03(B) shall
act as a waiver of Landlord's right to payment under Sections 4.02(B),
4.02(C) or 4.02(D) above. Notwithstanding the foregoing, Tenant's right to
receive any credit or payment pursuant to the preceding sentences of this
Section 4.03(B) is conditioned on this Lease being in full force and effect
and Tenant not being in default under this Lease on the date such credit or
payment is due.
(C) If this Lease shall terminate on a day other than the end of a
calendar year, the amount of the Tax, Operating Expense and Insurance
Adjustments to be paid pursuant to Sections 4.02(B), 4.02(C) and 4.02(D)
that is applicable to the calendar year in which such termination occurs
shall be prorated on the basis of the number of days from January 1 of the
calendar year to the termination date bears to 365. The termination of this
Lease shall not affect the obligations of Landlord and Tenant pursuant to
Sections 4.03(B) and 4.03(C) to be performed after such termination.
4.04 REVIEW OF LANDLORD'S STATEMENT. Provided this Lease is in full force
and effect and that Tenant is not then in default under this Lease and provided
further that Tenant strictly complies with the provisions of this Section 4.04,
Tenant shall have the right, once each calendar year, to reasonably review
supporting data for any portion of a Landlord's Statement that Tenant claims is
incorrect, in accordance with the following procedure:
(A) Tenant shall, within ten (10) business days after any such
Landlord's Statement is delivered, deliver a written notice to Landlord
specifying the portions of the Landlord's Statement that are claimed to be
incorrect, and Tenant shall simultaneously pay to Landlord all amounts due
from Tenant to Landlord as specified in the Landlord's Statement. Except as
expressly set forth in subsection (C) below, in no event shall Tenant be
entitled to withhold, deduct, or offset any monetary obligation of Tenant
to Landlord under the Lease (including without limitation, Tenant's
obligation to make all payments of Base Rent including the CPI Adjustment
and all payments of Tenant's Tax, Operating Expense and Insurance
Adjustments) pending the completion of and regardless of the results of any
review of records under this Section 4.04. The right of Tenant under this
Section 4.04 may only be exercised once for any Landlord's Statement, and
if Tenant fails to meet any of the above conditions as a prerequisite to
the exercise of such right, the right of Tenant under this Section 4.04 for
a particular Landlord's Statement shall be deemed waived.
(B) Tenant acknowledges that Landlord maintains its records for the
Building or the Project, if applicable, at Landlord's manager's corporate
offices and Tenant agrees that any review of records under this Section
4.04 shall be at the sole expense of Tenant and shall be conducted by an
independent firm of certified public accountants of national standing.
Tenant acknowledges and agrees that any records reviewed under this Section
4.04 constitute confidential information of Landlord, which shall not be
disclosed to anyone other than the accountants performing the review and
the principals of Tenant who receive the results of the review. The
disclosure of such information to any other person, whether or not caused
by the conduct of Tenant, shall constitute a material breach of this Lease.
(C) Any errors disclosed by the review shall be promptly corrected by
Landlord, provided, however, that if Landlord disagrees with any such
claimed errors, Landlord shall have the right to cause another review to be
made by an independent firm of certified public accountants of national
standing. In the event of a disagreement between the two accounting firms,
the review that discloses the least amount of deviation from the Landlord's
Statement shall be deemed to be correct. In the event that the results of
the review of records (taking into account, if applicable, the results of
any additional review caused by Landlord) reveal that Tenant has overpaid
obligations for a preceding period, the amount of such overpayment shall be
credited against Tenant's subsequent installment obligations to pay the
estimated Tax, Operating Expense and Insurance Adjustments. In the event
that such results show that Tenant has underpaid its obligations for a
preceding period, Tenant shall be liable for Landlord's actual accounting
fees, and the amount of such underpayment shall be paid by Tenant to
Landlord with the next succeeding installment obligation of estimated Tax,
Operating Expense and Insurance Adjustments.
4.05 PAYMENT. Concurrently with the execution hereof, Tenant shall pay
Landlord Base Rent for the first calendar month of the Lease Term. Thereafter
the Base Rent described in Section 1.07, as adjusted in accordance with Section
4.02, shall be payable in advance on the first day of each calendar month. If
the Commencement Date is other than the first day of a calendar month, the
prepaid Base Rent for such partial month shall be prorated in the proportion
that the number of days this Lease is in effect during such partial month bears
to the total number of days in the calendar month. All Rent, and all other
amounts payable to Landlord by Tenant pursuant to the provisions of this Lease,
shall be paid to Landlord, without notice, demand, abatement, deduction or
offset, in lawful money of the United States at Landlord's office in the
Building or to such other person or at such other place as Landlord may
designate from time to time by written notice given to Tenant. No payment by
Tenant or receipt
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by Landlord of a lesser amount than the correct Rent due hereunder shall be
deemed to be other than a payment on account; nor shall any endorsement or
statement on any check or any letter accompanying any check or payment be deemed
to effect or evidence an accord and satisfaction; and Landlord may accept such
check or payment without prejudice to Landlord's right to recover the balance or
pursue any other remedy in this Lease or at law or in equity provided.
4.06 LATE CHARGE; INTEREST. Tenant acknowledges that the late payment of
Base Rent or any other amounts payable by Tenant to Landlord hereunder (all of
which shall constitute additional rent to the same extent as Base Rent) will
cause Landlord to incur administrative costs and other damages, the exact amount
of which would be impracticable or extremely difficult to ascertain. Landlord
and Tenant agree that if Landlord does not receive any such payment on or before
five (5) days after the date the payment is due, Tenant shall pay to Landlord,
as additional rental, (a) a late charge equal to five percent (5%) of the
overdue amount to cover such additional administrative costs; and (b) interest
on the delinquent amounts at the lesser of the maximum rate permitted by law if
any or twelve percent (12%) per annum from the date due to the date paid.
4.07 ADDITIONAL RENT. For purposes of this Lease, all amounts payable by
Tenant to Landlord pursuant to this Lease. whether or not denominated as such
shall constitute additional rental hereunder. Such additional rental, together
with the Base Rent and Rent Adjustments, shall sometimes be referred to in this
Lease as "Rent".
4.08 ADDITIONAL TAXES. In addition to the Rent and other charges to be paid
by Tenant hereunder, Tenant shall reimburse Landlord upon demand for all taxes
payable by or imposed upon Landlord upon or with respect to: any fixtures or
personal property located in the Premises; any leasehold improvements made in or
to the Premises by or for Tenant; the Rent payable hereunder, including, without
limitation, any gross receipts tax, license fee or excise tax levied by any
governmental authority; the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy of any portion of the Premises
(including, without limitation, any applicable possessory interest taxes); or
this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises.
ARTICLE V - SECURITY DEPOSIT
5.01 Upon the execution of this Lease, Tenant shall deposit with Landlord
the Security Deposit described in Section 1.09 above. The Security Deposit is
made by Tenant to secure the faithful performance of all the terms, covenants
and conditions of this Lease to be performed by Tenant. If Tenant shall default
with respect to any covenant or provision hereof, Landlord may use, apply or
retain all or any portion of the Security Deposit to cure such default or to
compensate Landlord for any loss or damage which Landlord may suffer thereby. If
Landlord so uses or applies all or any portion of the Security Deposit, Tenant
shall immediately upon written demand deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to the full amount hereinabove
stated. Landlord shall not be required to keep the Security Deposit separate
from its general accounts and Tenant shall not be entitled to interest on the
Security Deposit. Within thirty (30) days after the expiration of the Lease Term
and the vacation of the Premises by Tenant, the Security Deposit, or such part
as has not been applied to cure the default, shall be returned to Tenant. In the
event of any bankruptcy or other proceeding initiated by or against Tenant, it
is agreed that all such Security Deposit held hereunder shall be deemed to be
applied by Landlord to rent, sales tax and all other charges due from Tenant to
Landlord for the last month of the Term and each preceding month until such
Security Deposit is fully applied.
ARTICLE VI - USE OF PREMISES
6.01 TENANT'S PERMITTED USE. Tenant shall use the Premises only for
Tenant's Permitted Use as set forth in Section 1.10 above and shall not use or
permit the Premises to be used for any other purpose. Tenant shall, at its sole
cost and expense, obtain all governmental licenses and permits required to allow
Tenant to conduct Tenant's Permitted Use. Landlord disclaims any warranty that
the Premises are suitable for Tenant's use and Tenant acknowledges that it has
had a full opportunity to make its own determination in this regard.
6.02 COMPLIANCE WITH LAWS AND OTHER REOUIREMENTS.
(A) Tenant shall cause the Premises to comply in all material respects
with all laws, ordinances, regulations and directives of any governmental
authority having jurisdiction including without limitation any certificate
of occupancy and any law, ordinance, regulation, covenant, condition or
restriction affecting the Building or the Premises which in the future may
become applicable to the Premises (collectively "Applicable Laws").
(B) Tenant shall not use the Premises, or permit the Premises to be
used, in any manner which: (a) violates any Applicable Law; (b) causes or
is reasonably likely to cause damage to the Building, the Project, if
applicable, or the Premises; (c) violates a requirement or condition of any
fire and extended insurance policy covering the Building or the Project, if
applicable; and/or the Premises, or increases the cost of such policy; (d)
constitutes or is reasonably likely to constitute a nuisance, annoyance or
inconvenience to other tenants or occupants of the Building or the Project,
if applicable, or their equipment, facilities or systems; (e) interferes
with, or is reasonably likely to interfere with, the transmission or
reception of microwave, television, radio, telephone or other communication
signals by antennae or other facilities located in the Building or the
Project, if applicable; or (f) violates the Rules and Regulations described
in Article XX.
(C) In addition to any other amounts payable by Tenant to Landlord
hereunder, Tenant shall pay to Landlord, as and when billed to Tenant and
as additional rental, Tenant's Percentage Share of the cost of any
improvements, capital expenditures, repairs or replacements to the Building
or the Project, if applicable, or any equipment or machinery used in
connection with the Building or the Project, if applicable, if any such
item is required under any Applicable Law as of the date of this Lease and
throughout the Lease Term; provided, however, that any such costs which are
properly charged to a capital account (together with reasonable financing
charges) shall be amortized for purposes of this Lease over the shorter of
(i) their useful lives, or (ii) three (3) years and only the annual
amortization amount (prorated
5
based on the number of days of the Lease term in the calendar year) shall be
payable by the Tenant with respect to any calendar year.
6.03 HAZARDOUS MATERIALS.
(A) No Hazardous Materials (as defined herein) shall be Handled (as
defined herein) upon, about, above or beneath the Premises or any portion
of the Building or the Project, if applicable. by or on behalf of a
Responsible Party (as defined herein), unless the Hazardous Materials are
iisted in Exhibit D hereto and then only in the quantities listed in the
exhibit. Any such Hazardous Materials so Handled, or the presence or
migration of which is a result of the act or omission of a Responsible
Party, shall be known as Tenant's Hazardous Materials. Notwithstanding the
foregoing, Landlord acknowledges that, due to Tenant's permitted use of the
Premises, as indicated in Paragraph 6.01 of this Lease, Tenant will
occasionally Handle Hazardous Materials on the Premises which are in
transit to their final destination; however, such presence and Handling of
Hazardous Materials shall be in compliance with all applicable federal,
state, local and environmental laws and regulations and the following
guidelines: (i) no nuclear or explosive materials will be Handled by Tenant
on the Premises, except such radioactive isotopes as Tenant may Handle from
time to time; provided that such Handling shall be in accordance with the
U.S. Department of Transportation regulations and the International
Airtransport Association Dangerous Goods regulations; (ii) all Hazardous
Materials will be Handled in a well-marked area which is segregated from
other storage and handling areas and is used exclusively for hazardous
materials; (iii) Hazardous Materials will be Handled in such a way that any
such Materials which are incompatible or reactive to each other shall be
kept separate at all times such Materials are on the Premises; (iv)
Hazardous Materials shall only be Handled on the Premises for a maximum
period of twenty-four (24) hours; (v) Tenant shall provide written
documents or other written evidence to Landlord upon execution of the Lease
that all personnel who are responsible for the Handling or other contact
with Hazardous Materials have been properly trained, in accordance with any
applicable laws and/or regulations, to handle spills of Hazardous Materials
and that the required, appropriate spill response equipment is maintained
on site; (vi) Tenant will provide Landlord with written evidence that it is
maintaining the appropriate insurance coverage for the occasional presence
of such Hazardous Materials on the Premises upon execution of this Lease;
and (vii) Tenant will provide Landlord with written evidence that all of
its employees whose responsibilities include driving Tenant's trucks or
other vehicles are licensed in accordance with state, federal and local
laws and regulations to transport and Handle Hazardous Materials. Also,
notwithstanding the foregoing, normal quantities of those Tenant Hazardous
Materials customarily used in the conduct of general administrative and
executive office activities (e.g., copier fluids and cleaning supplies)
may be Handled at the Premises without Landlord's prior written consent.
(B) Tenant's Hazardous Materials shall be Handled at all times in
compliance with the manufacturer's instructions therefor and all applicable
Environmental Laws (as defined herein). Tenant's Hazardous Materials shall
not be disposed of, released, discharged or permitted to spill, leak or
migrate upon about, above or beneath the Premises or any portion of the
Building.
(C) Tenant agrees to maintain only the Hazardous Materials listed in
Schedule I to Exhibit D in or at the Premises or the Building and only in
the quantities listed in Schedule I to Exhibit D. Tenant further agrees
that changes to the type and quantities of such Tenant's Hazardous
Materials may be done only with the prior written consent of the Landlord,
which consent shall not be unreasonably withheld. Tenant further agrees
that Landlord shall have the right to inspect the Building to verify the
types and quantities of the materials stored therein.
(D) Notwithstanding the obligation of Tenant to indemnify Landlord
pursuant to this Lease, Tenant shall, at its sole cost and expense,
promptly take all actions required by any Regulatory Authority, or
necessary for Landlord to make full economic use of the Premises or any
portion of the Building, or the Project, if applicable, which requirements
or necessity arises from the Handling, presence or migration of Tenant's
Hazardous Materials upon, about, above or beneath the Premises or any
portion of the Building, or the Project, if applicable. Such actions shall
include, but not be limited to, the investigation of the environmental
condition of the Premises or any portion of the Building, or the Project,
if applicable, the preparation of any feasibility studies or reports and
the performance of any cleanup, remedial, removal or restoration work.
Tenant shall take all actions necessary to restore the Premises or any
portion of the Building or the Project, if applicable, to the condition
existing prior to the introduction of Tenant's Hazardous Materials,
notwithstanding any less stringent standards or remediation allowable under
applicable Environmental Laws. Tenant shall nevertheless obtain Landlord's
written approval prior to undertaking any actions required by this Section,
which approval shall not be unreasonably withheld so long as such actions
would not potentially have a material adverse long-term or short-term
effect on the Premises or any portion of the Building or the Project, if
applicable.
(E) Tenant shall immediately notify Landlord of; (i) its knowledge of
any disposal, release, discharge, spill, leak on, about, above, or beneath,
or any migration to or from the Premises or the Building of Hazardous
Materials, (ii) any inspection, enforcement, cleanup or other regulatory
action taken or threatened by any Regulatory Authority with respect to any
Hazardous Materials on, about, above, beneath or from the Premises or the
Building or the migration thereof from or to other property, (iii) any
demands or claims made or threatened by any party relating to any loss or
injury claimed to have resulted from any Hazardous Materials on, about,
above, beneath or from the Building, and (iv) any matters where Tenant is
required by Law to give a notice to any Regulatory Authority concerning
Hazardous Materials on or from the Premises or the Building. Landlord shall
have the right but not the obligation to notify Regulatory Authorities
concerning actual and claimed violations of this Article.
(F) Tenant agrees to execute affidavits, representations and the like
from time to time at Landlord's request stating Tenant's best knowledge and
belief regarding the presence of Hazardous Materials in the Premises or in
or at the Building.
(G) "Environmental Laws" means and includes all now and hereafter
existing statutes, laws, ordinances, codes, regulations, rules, rulings,
orders, decrees, directives, policies and requirements by any
6
federal, state or local governmental authority regulating, relating to, or
imposing liability or standards of conduct concerning public health and
safety or the environment.
(H) "Hazardous Materials" means: (a) any material or substance: (i)
which is defined or becomes defined as a "hazardous substance", "hazardous
waste," "infectious waste," "chemical mixture or substance," or "air
pollutant" under Environmental Laws; (ii) containing petroleum, crude oil
or any fraction thereof; (iii) containing polychlorinated biphenyls
(PCB's); (iv) containing asbestos; (v) which is radioactive; (b) any other
material or substance displaying toxic, reactive, ignitable or corrosive
characteristics, as all such terms are used in their broadest sense, and
are defined or become defined by Environmental Laws, or (c) materials which
cause a nuisance upon or waste to the Premises or any portion of the
Building or the Project, if applicable.
(I) "Handle", "handle", "Handled", "handled", "Handling" or "handling"
shall mean any installation, handling, generation, storage, treatment, use,
disposal, discharge, release, manufacture, refinement, emission, abatement,
removal, transportation, or any other activity of any type in connection
with or involving Hazardous Materials.
(J) "Responsible Party" shall mean Tenant, its subtenants and its
assignees and their respective contractors, clients, officers, directors,
employees, agents, and invitees, or any of them, as the case may be.
(K) "Regulatory Authority" shall mean any federal, state or local
governmental agency, commission, board or political subdivision.
ARTICLE VII - UTILITIES AND SERVICES
7.01 SERVTCES. Landlord shall permit Tenant to use any existing utility
service connection into the Premises and Tenant, at its sole expense, shall
arrange with the appropriate utility company to install all necessary
connections and without fail to maintain in continuous operation during the
entire term of the Lease, all such utility service, whether or not Tenant is in
actual possession of the Premises. Tenant shall pay to the appropriate utility
company or other provider directly, or at Landlord's election as provided in
Section 7.02 below, to Landlord, for all water, gas, heat, electricity, light,
power, sweeping and other janitorial services, rubbish and trash disposal, pest
and rodent control, sewer, steam, fire protection, alarm or other security
services and any other utilities and services supplied in, about or related to
the Premises, together with any taxes thereon, connection charges and deposits,
and also shall pay for all electrical light bulbs, lamps and tubes in connection
therewith. Landlord reserves the right during the Term of this Lease to grant
easements or public utility purposes on, over, or below the Premises without any
abatement in rent, provided that said easements do not unreasonably interfere
with the normal operation of the business conducted by Tenant in the Premises.
Landlord shall not be required to pay for any service, supplies or upkeep in
connection with the Premises. Tenant shall arrange for and pay for all telephone
and other communication services and equipment, including any additions or
alterations to the existing telephone service boards and conduit, which shall be
completed without interference to the service and/or equipment of other tenants
in the Building or the Project, if applicable, and which shall be appropriately
labeled upon the termination of this Lease.
7.02 SEPARATE METERING. If any utilities are not separately metered for the
Premises, Landlord may: (i) require that Tenant make reasonable arrangements to
share such utilities with the other parties whose premises are on such meter,
(ii) require that Tenant pay Landlord a share of such utilities based on the
Rentable Area of the Premises as a percentage of the total rentable area of
occupied space that is jointly metered, or (iii) require that Tenant pay
Landlord a share of such utilities based on consumption estimates of Landlord's
engineer or consultant (in which case, such engineer's or consultant's fees and
costs shall be added to the utility bills). In such case, either Landlord or
Tenant may elect to install separate meters (but the costs of installing,
maintaining and reading such meters shall be borne by Tenant). Landlord may
reasonably estimate in advance any amounts payable by Tenant to Landlord
hereunder and Tenant shall pay such amounts within ten (10) days after the same
are billed, subject to periodic adjustment (and additional payment by Tenant or
credit or refund by Landlord) after the actual amounts have been determined.
7.03 INSTALLATION, CONNECTION AND USE OF UTILITY EQUIPMENT. Tenant shall
install and connect all equipment and lines required to supply such utilities to
the extent not already available at or serving the Premises, or at Landlord's
option shall repair, alter or replace any such existing items (or Tenant shall
share the costs thereof for any equipment shared with other tenants), subject to
the terms of Section 2.02 hereof. Tenant shall maintain, repair and replace all
such items, operate the same, and keep the same in good working order, condition
and repair, as provided in Section 8.02. Tenant shall not install any equipment
or fixtures, or use the same, so as to exceed the safe and lawful capacity of
any utility equipment or lines serving the same. The installation, alteration,
replacement or connection of any utility equipment and lines shall be subject to
the requirements for Alterations of the Premises set forth in Article 9. Tenant
shall ensure that any supplemental HVAC equipment is installed and all HVAC
equipment is operated at all times in a manner to prevent roof leaks, damage or
noise due to vibrations or improper installation, maintenance or operation.
Tenant shall at all times keep the Premises sufficiently heated to avoid
freezing of pipes.
7.04 INTERRUPTION OF SERVICES. Landlord shall not be liable for any failure
to furnish, stoppage of, or interruption in furnishing any of the services or
utilities described in Section 7.01, when such failure is caused by accident,
breakage, repairs, strikes, lockouts, labor disputes, labor disturbances,
governmental regulation, civil disturbances, acts of war, moratorium or other
governmental action, or any other cause beyond Landlord's reasonable control,
and, in such event, Tenant shall not be entitled to any damages nor shall any
failure or interruption ▇▇▇▇▇ or suspend Tenant's obligation to pay Base Rent
and additional rent required under this Lease or constitute or be construed as a
constructive or other eviction of Tenant. Further, in the event any governmental
authority or public utility promulgates or revises any law, ordinance, rule or
regu1ation, or issues mandatory controls or voluntary controls relating to the
use or conservation of energy, water, gas, light or electricity, the reduction
of automobile or other emissions, or the provision of any other utility or
service, Landlord may take any reasonably appropriate action to comply with such
law, ordinance, rule, regulation, mandatory control or voluntary guideline and
Tenant's obligations hereunder shall not be affected by any such action of
Landlord. The parties acknowledge
7
that safety and security devices, services and programs provided by Landlord,
if any, while intended to deter crime and ensure safety, may not in given
instances prevent theft or other criminal acts, or ensure safety of persons or
property. The risk that any safety or security device, service or program may
not be effective, or may malfunction, or be circumvented by a criminal, is
assumed by Tenant with respect to Tenant's property and interests, and Tenant
shall obtain insurance coverage to the extent Tenant desires protection against
such criminal acts and other losses, as further described in this Lease. Tenant
agrees to cooperate in any reasonable safety or security program developed by
Landlord or required by Law.
Any amounts which Tenant is required to pay to Landlord pursuant to this
Article Vll shall be payable upon demand by Landlord and shall constitute
additional rent or Rent under this Lease.
ARTICLE VIII - MAINTENANCE AND REPAIRS
8.01 LANDLORD'S OBLIGATIONS.
(A) During the Lease Term, Landlord shall, at its expense, maintain
only the foundation and the structural soundness of the exterior walls
(excluding all windows, plate glass, doors and pest control and
extermination) of the portion of the Building containing the Premises in
good working order, repair and condition except for reasonable wear and
tear. Landlord also shall maintain, at its expense, subject to
reimbursement as part of Operating Expenses, the roof, downspouts and fire
safety sprinkler system of the Building. If Tenant determines that any such
repair or maintenance by Landlord is required, Tenant shall promptly give
written notice to Landlord of the need for such repair or maintenance and
unless Landlord in good faith disagrees with such determination by Tenant,
Landlord shall proceed with reasonable promptness to perform such
maintenance. Landlord shall not be liable to Tenant, except as otherwise
expressly provided in this Lease, for any damage or inconvenience. Tenant
shall not be entitled to any abatement or reduction of Rent by reason of
any repairs, alterations or additions made by Landlord under this Lease.
(B) Tenant shall, at its sole cost, pay for any damage to the
foundation and/or external walls of the Building, or the Project, if
applicable, caused by any act, omission, negligence or fault of Tenant or
any employee, agent or contractor of Tenant.
8.02 TENANT'S OBLIGATIONS. During the Lease Term, Tenant shall, at its risk
and at its own sole cost and expense maintain all other parts of the Building
and other improvements in or on the Premises in good working order, repair and
condition (including all necessary replacements), including, but not limited to,
HVAC systems, all glass elements, doors (including dock doors), dock bumpers,
light bulbs, light fixtures, regular mowing of any grass, trimming, weed
removal, and regular removal of debris. However, in a multi-occupancy Building,
Landlord reserves the right to perform lawn and other common area maintenance
(including, without limitation, exterior painting and maintenance of any HVAC
system serving the common areas of the Building or serving the Premises as well
as other premises in the Building) and in such instance Tenant agrees to pay
Landlord for lawn and other common area maintenance (including, without
limitation, exterior painting and HVAC maintenance) based on Tenant's Percentage
Share with respect to Operating Expenses, as provided in Article IV hereof (or,
with respect to HVAC maintenance, based on the ratio of the Rentable Area of the
Premises to the rentable area of all premises served by said HVAC system).
Tenant shall take good care of all property and its fixtures, including all
landscaping, and suffer no waste. Tenant shall engage a certified pest control
firm to perform regular (not less frequent than monthly but more frequent if
Landlord determines the need therefor) extermination for pests including, but
not limited to, roaches, rodents and termites. Should Tenant neglect to keep and
maintain the Premises as required herein, the Landlord shall have the right, but
not the obligation, to have the work done and any reasonable costs plus a ten
percent (10%) overhead charge therefor shall be charged to Tenant as additional
rental and shall become payable by Tenant with the payment of the rental next
due under this Lease. In connection with Tenant's maintenance and repair of the
HVAC systems, Tenant shall provide Landlord during the Term of this Lease and
any renewal hereof with a duplicate original of a maintenance contract, in form
and substance acceptable to Landlord, with an HVAC maintenance firm acceptable
to Landlord. Further, Tenant shall be responsible for, and upon demand by
Landlord shall promptly reimburse Landlord for, any damage to any portion of the
Project, if applicable, the Building or the Premises caused by (a) Tenant's
activities in the Building or the Premises; (b) the performance or existence of
any alterations, additions or improvements made by Tenant in or to the Premises;
(c) the installation, use, operation or movement of Tenant's property in or
about the Building or the Premises; or (d) any act or omission by Tenant or its
officers, partners, employees, agents, contractors or invitees.
8.03 REPAIR DAMAGE. Tenant shall, at its own cost and expense, repair or
replace any damage or injury to all or any part of the Premises, the Building
and the Project, if applicable, caused by Tenant or Tenant's agents, employees,
invitees, licensees or visitors; provided, however, if Tenant fails to make such
repairs or replacements promptly, Landlord may, at its option, make such repairs
or replacements and Tenant shall reimburse the cost, plus a ten percent (10%)
overhead charge therefor, to Landlord on demand.
8.04 NO WASTE. Tenant shall not commit or allow any waste or damage to be
committed on any portion of the Premises.
8.05 LANDLORD'S RIGHTS. Landlord and its contractors shall have the right,
at all reasonable times and upon prior oral or telephone notice to Tenant at the
Premises, other than in the case of any emergency in which case no notice shall
be required, to enter upon the Premises to make any repairs to the Premises or
the Building reasonably required or deemed reasonably necessary by Landlord and
to erect such equipment, including scaffolding, as is reasonably necessary to
effect such repairs. During the pendency of such repairs, Landlord shall use
reasonable efforts to minimize any material interruption of Tenant's business;
provided, that if such repairs by Landlord are required to remedy an emergency
situation or to cure a breach or default by Tenant under this Lease, Landlord
shall not be obligated to minimize such interference.
8
ARTICLE IX - ALTERATIONS, ADDITIONS AND IMPROVEMENTS
9.01 LANDLORD'S CONSENT; CONDITIONS. Tenant shall not make or permit to be
made any alterations, additions, or improvements in or to the Premises
("Alterationsn) without the prior written consent of Landlord which consent,
with respect to non-structural alterations, shall not be unreasonably withheld.
or delayed, Landlord may impose as a condition to making any Alterations such
requirements as Landlord in its sole discretion deems necessary or desirable
including without limitation: Tenant's submission to Landlord, for Landlord's
prior written approval, of all plans and specifications relating to the
Alterations; Landlord's prior written approval of the time or times when the
Alterations are to be performed; Landlord's prior written approval of the
contractors and subcontractors performing work in connection with the
Alterations; employment only of union contractors and subcontractors who shall
not cause labor disharmony; Tenant's receipt of all necessary permits and
approvals from all governmental authorities having jurisdiction over the
Premises prior to the construction of the Alterations; Tenant's delivery to
Landlord of such bonds and insurance as Landlord shall reasonably require; and
Tenant's payment to Landlord of all costs and expenses incurred by Landlord
because of Tenant's Alterations, including but not limited to costs incurred in
reviewing the plans and specifications for, and the progress of, the
Alterations. Tenant is required to provide Landlord written notice of whether
the Alterations include the Handling of any Hazardous Materials and whether
these materials are of a customary and typical nature for industry practices.
Upon completion of the Alterations. Tenant shall provide Landlord with copies of
as-built plans. Neither the approval bv Landlord of plans and specifications
relating to any Alterations nor Landlord's supervision or monitoring of any
Alterations shall constitute any warranty by Landlord to Tenant of the adequacy
of the design for Tenant's intended use or the proper performance of the
Alterations. *
9.02 PERFORTNANCE OF ALTERATIONS WORK. All work relating to the Alterations
shall be performed in compliance with the plans and specifications approved by
Landlord, all applicable laws, ordinances, rules, regulations and directives of
all governmental authorities having jurisdiction (including without limitation
Title 24 of the California Administrative Code) and the requirements of all
carriers of insurance on the Premises and the Building, the Board of
Underwriters, Fire Rating Bureau, or similar organization. All work shall be
performed in a diligent, first class manner and so as not to unreasonably
interfere with any other tenants or occupants of the Building or the Project, if
applicable. All costs incurred by Landlord relating to the Alterations shall be
payable to Landlord by Tenant as additional rent upon demand. No
asbestos-containing materials shall be used or incorporated in the Alterations,
No lead-containing surfacing material, solder, or other construction materials
or fixtures where the presence of lead might create a condition or exposure not
in compliance with Environmental Laws shall be incorporated in the Alterations.
9.03 LIENS. Tenant shall pay when due all costs for work performed and
materials supplied to the Premises. Tenant shall keep Landlord, the Premises and
the Building free from all liens, stop notices and violation notices relating to
the Alterations or any other work performed for, materials furnished to or
obligations incurred by or for Tenant and Tenant shall protect, indemnify, hold
harmless and defend Landlord, the Premises and the Building of and from any and
all loss, cost, damage, liability and expense, including attorneys' fees,
arising out of or related to any such liens or notices. Further, Tenant shall
give Landlord not less than seven (7) business days prior written notice before
commencing any Alterations in or about the Premises to permit Landlord to post
appropriate notices of non-responsibility. Tenant shall also secure, prior to
commencing any Alterations, at Tenant's sole expense, a completion and lien
indemnity bond satisfactory to Landlord for such work. During the progress of
such work, Tenant shall, upon Landlord's request, furnish Landlord with sworn
contractor's statements and lien waivers covering all work theretofore
performed. Tenant shall satisfy or otherwise discharge all liens, stop notices
or other claims or encumbrances within ten (10) days after Landlord notifies
Tenant in writing that any such lien, stop notice, claim or encumbrance has been
filed. If Tenant fails to pay and remove such lien, claim or encumbrance within
such ten (10) days, Landlord, at its election, may pay and satisfy the same and
in such event the sums so paid by Landlord, with interest from the date of
payment at the rate set forth in Section 4.06 hereof for amounts owed Landlord
by Tenant shall be deemed to be additional rent due and payable by Tenant at
once without notice or demand.
9.04 REMOVAL OF ALTERATIONS. All Alterations shall become a part of the
Premises and shall become the property of Landlord upon the expiration or
earlier termination of this Lease, unless Landlord shall, by written notice
given to Tenant, require Tenant to remove some or all of Tenant's Alterations,
(whether installed during the Term of this Lease or any previous occupancy of
the Premises by Tenant), in which event Tenant shall promptly remove the
designated Alterations and shall promptly repair any resulting damage, all at
Tenant's sole expense. All business and trade fixtures, machinery and equipment,
furniture, movable partitions and items of personal property owned by Tenant or
installed by Tenant at its expense in the Premises shall be and remain the
property of Tenant; upon the expiration or earlier termination of this Lease,
Tenant shall, at its sole expense, remove all such items and repair any damage
to the Premises or the Building caused by such removal. If Tenant fails to
remove any such items or repair such damage promptly after the expiration or
earlier termination of the Lease, Landlord may, but need not, do so with no
liability to Tenant, and Tenant shall pay Landlord the cost thereof upon demand.
Notwithstanding the foregoing to the contrary, in the event Landlord gives its
consent, pursuant to the provisions of Section 9.01 of this Lease, to allow
Tenant to make an Alteration in the Premises, Landlord agrees, upon Tenant's
written request, to notify Tenant in writing at the time of the giving of such
consent whether Landlord will require Tenant, at Tenant's cost, to remove such
Alteration at the end of the Lease Term.
ARTICLE X - INDEMNIFICATION AND INSURANCE
10.01 INDEMNIFICATION.
(A) Tenant agrees to protect, indemnify, hold harmless and defend
Landlord and any Mortgagee, as defined herein, and each of their
respective partners, directors, officers, agents and employees, successors
and assigns, regardless of any negligence of, or imputed to Landlord as
owner of the Building, Premises or underlying real property, from and
against:
(i) any and all loss, cost, damage, liability or expense as
incurred (including but not limited to actual attorneys' fees
and legal costs) arising out of or related to any claim, suit or judgment
brought by or in favor of any person or persons for damage, loss or
expense due to, but not limited to, bodily
9
* NOTWITHSTANDING THE HREGOING AND THE PROVISIONS OF ARTICLE 9.01 TENANT
MAY MAKE NON-STRUCTURAL ALTERATIONS TO THE INTERIOR OF THE PREMISES COSTING
LESS THAN $5,000.00 WITHOUT OBTAINING THE LANDLORD'S CONSENT.
injury, including death, or property damage sustained by such person or
persons which arises out of, is occasioned by or is in any way attributable
to the use or occupancy of the Premises or any portion of the Building or
the Project, if applicable, by Tenant or the acts or omissions of Tenant or
its agents, employees, contractors, clients, invitees or subtenants except
that caused by the sole active negligence of Landlord or its agents or
employees. Such loss or damage shall include, but not be limited to, any
injury or damage to, or death of, Landlord's employees or agents or damage
to the Premises or any portion of the Building or the Project, if
applicable.
(ii) any and all environmental damages which arise from: (i) the
Handling, presence or migration of any Tenant's Hazardous Materials, as
defined in Section 6.03 or (ii) the breach of any of the provisions of this
Lease. For the purpose of this Lease, "environmental damages" shall mean
(a) all claims, judgments, damages, penalties, fines, costs, liabilities,
and losses (including without limitation, diminution in the value of the
Premises or any portion of the Building or the Project, if applicable,
damages for the loss of or restriction on the use of rentable or usable
space or of any amenity of the Premises or any portion of the Building or
the Project, if applicable, and from any adverse impact of Landlord's
marketing of space); (b) all reasonable sums paid for settlement of claims,
attorneys' fees, consultants' fees and experts' fees; and (c) all costs
incurred by Landlord in connection with investigation or remediation
relating to the Handling of Tenant's Hazardous Materials, whether or not
required by Environmental Laws, necessary for Landlord to make full
economic use of the Premises or any portion of the Building or the Project,
if applicable, or otherwise required under this Lease. To the extent that
Landlord is strictly liable under any Environmental Laws, Tenant's
obligation to Landlord and the other indemnities under the foregoing
indemnification shall likewise be without regard to fault on Tenant's part
with respect to the violation of any Environmental Law which results in
liability to the indemnitee. Tenant's obligations and liabilities pursuant
to this Section 10.01 shall survive the expiration or earlier termination
of this Lease.
(iii) any and all testing or investigation as may be requested by
any governmental agency or lender for the purpose of investigating the
presence of Tenant's Hazardous Materials that may not be in compliance with
Environmental Laws.
(B) Notwithstanding anything to the contrary contained herein, nothing
shall be interpreted or used to in any way affect, limit, reduce or
abrogate any insurance coverage provided by any insurers to either Tenant
or Landlord.
(C) Notwithstanding anything to the contrary contained in this Lease,
nothing herein shall be construed to infer or imply that Tenant is a
partner, joint venturer, agent, employee, or otherwise acting by or at the
direction of Landlord.
10.02 PROPERTY INSURANCE.
(A) At all times during the Lease Term, Tenant shall procure and
maintain, at its sole expense, "all-risk" property insurance, for damage or
other loss caused by fire or other casualty or cause including, but not
limited to, vandalism and malicious mischief, theft, water damage of any
type, including sprinkler leakage, bursting of pipes, explosion, in an
amount not less than one hundred percent (100%) of the replacement cost
covering (a) all leasehold improvements in and to the Premises and (b)
Tenant's trade fixtures, equipment, business records and other personal
property from time to time situated in the Premises, including, without
limitation, all floor and wall coverings. The proceeds of such insurance
shall be used for the repair or replacement of the property so insured,
except that if not so applied or if this Lease is terminated following a
casualty, the proceeds applicable to the leasehold improvements shall be
paid to Landlord and the proceeds applicable to Tenant's personal property
shall be paid to Tenant.
(B) At all times during the Lease Term, Tenant shall procure and
maintain business interruption insurance in such amount as will reimburse
Tenant for direct or indirect loss of earnings attributable to all perils
insured against in Section 10.02(A).
(C) Landlord shall at all times during the Lease Term procure and
maintain "all-risk" property insurance in the amount not less than ninety
percent (90%) of the insurable replacement cost covering the Building in
which the Premises are located and such other insurance as may be required
by a Mortgagee or otherwise desired by Landlord.
10.03 LIABILITY INSURANCE.
(A) At all times during the Lease Term, Tenant shall procure and
maintain, at its sole expense, commercial general liability insurance
applying to the use and occupancy of the Premises and the business operated
by Tenant. Such insurance shall have a minimum combined single limit of
liability of at least Two Million Dollars ($2,000,000) per occurrence and a
general aggregate limit of at least Two Million Dollars, ($2,000,000). All
such policies shall be written to apply to all bodily injury, property
damage, personal injury losses and shall be endorsed to include Landlord
and its agents, beneficiaries, partners, employees, and any deed of trust
holder or mortgagee of Landlord or any ground lessor as additional
insureds. (A list of the current persons and entities to be named as
additional insureds is attached hereto as Exhibit E.) Such liability
insurance shall be written as primary policies, not excess or
contributing with or secondary to any other insurance as may be available
to the Landlord or additional insureds.
(B) Prior to the sale, storage, use or giving away of alcoholic
beverages on or from the Premises by Tenant or another person, Tenant, at
its own expense, shall obtain a policy or policies of insurance issued by
a responsible insurance company and in a form acceptable to Landlord saving
harmless and protecting Landlord and the Premises against any and all
damages, claims, liens, judgments, expenses and costs, including actual
attorney's fees, arising under any present or future law, statute, or
ordinance of the State of California or other governmental authority having
jurisdiction of the Premises, by reason of any storage, sale, use or giving
away of alcoholic beverages on or from the Premises. Such policy or
policies of insurance shall have a minimum combined single limit of One
Million Dollars ($1,000,000) per occurrence and shall apply to bodily
injury, fatal or nonfatal; injury to means of support; and injury to
10
property of any person. Such policy or policies of insurance shall name the
Landlord and its agents, beneficiaries, partners, employees and any
mortgagee of Landlord or any ground lessor of Landlord as additional
insureds. (A list of the current persons and entities to be named as
additional insureds is attached hereto as Exhibit E.)
(C) Landlord shall, at all times during the Lease Term, procure and
maintain commercial general liability insurance for the Building and Common
Area in which the Premises are located. Such insurance shall have minimum
combined single limit of liability of at least Two Million Dollars
($2,000,000) per occurrence, and a general aggregate limit of at least Two
Million Dollars ($2,000,000).
10.04 WORKERS' COMPENSATION INSURANCE. At all times during the Lease Term,
Tenant shall procure and maintain Workers' Compensation Insurance in accordance
with the laws of the State of California, and Employers' Liability insurance
with a limit not less than One Million Dollars ($1,000,000) Bodily Injury Each
Accident; One Million Dollars ($1,000,000) Bodily Injury By Disease - Each
Person; and One Million Dollars ($1,000,000) Bodily Injury by Disease - Policy
Limit.
10.05 AUTOMOBILE LIABILITY INSURANCE. At all times during the Lease Term,
Tenant shall provide and maintain, at its sole expense, commercial automobile
liability insurance including owned, non-owned and hired vehicles, applying to
the use of any vehicles arising out of the operations of Tenant. Such insurance
shall apply to bodily injury and property damage in a combined single limit of
not less than One Million Dollars ($1,000,000) per accident.
10.06 PLATE GLASS INSURANCE. At any time during the Lease Term when there
is plate glass in or on the Premises, Tenant shall procure and maintain, at its
sole expense, plate glass insurance covering all the plate glass of the Premises
in amounts satisfactory to Landlord.
10.07 Warehouseman's Insurance. At any time during the Lease Term when
Tenant's use of the Premises includes or involves any activity as a bonded
agent, consignee or warehouseman, Tenant shall procure and maintain, at its sole
expense, insurance covering all goods and materials held at the Premises in such
capacity, providing protection against all damage, loss, theft, or other peril
which may occur in connection therewith in an amount not less than Five Million
Dollars ($5,000,000.00).
10.08 POLICY REQUIREMENTS. All insurance required to be maintained by
Tenant shall be issued by insurance companies authorized to do insurance
business in the State of California and rated not less than A-VIII in Best's
Insurance Guide or a Standard and Poor's claims paying ability rating of not
less than AA. A certificate of insurance (or, at Landlord's option, copies of
the applicable policies) evidencing the insurance required under this Article X
shall be delivered to Landlord not less than thirty (30) days prior to the
Commencement Date. No such policy shall be subject to cancellation or
modification without thirty (30) days prior written notice to Landlord and to
any deed of trust holder, mortgagee or ground lessor designated by Landlord to
Tenant. Tenant shall furnish Landlord with a replacement certificate with
respect to any insurance not less than thirty (30) days prior to the expiration
of the current policy. Tenant shall have the right to provide the insurance
required by this Article X pursuant to blanket policies, but only if such
blanket policies expressly provide coverage to the Premises and the Landlord as
required by this Lease.
10.09 WAIVER OF CLAIMS. Except for claims arising from Landlord's
intentional or grossly negligent acts that are not covered by Tenant's insurance
hereunder, Tenant waives all claims against Landlord for injury or death to
persons, damage to property or to any other interest of Tenant sustained by
Tenant or any party claiming through Tenant resulting from: (i) any occurrence
in or upon the Premises, (ii) leaking of roofs, bursting, stoppage or leaking of
water, gas, sewer or steam pipes or equipment, including sprinklers, (iii) wind,
rain, snow, ice, flooding, freezing, fire, explosion, earthquake, excessive heat
or cold, fire or other casualty, (iv) the Building, Premises, systems or
equipment therefor being defective, out of repair, or failing, and (v)
vandalism, malicious mischief, theft or other acts or omissions of any other
parties including, without limitation, other tenants, contractors and invitees.
To the extent that Tenant is required to or does carry insurance hereunder,
Tenant agrees that Tenant's property loss risks shall be borne by such
insurance, and Tenant agrees to look solely to and seek recovery only from its
insurance carriers in the event of such losses; for purposes hereof, any
deductible amount shall be treated as though it were recoverable under such
policies.
10.10 WAIVER OF SUBROGATION. Each party hereby waives any right of recovery
against the other for injury or loss covered by insurance or required to be
covered, to the extent of the injury or loss covered thereby. Any policy of
insurance to be provided by Tenant pursuant to this Article X shall contain a
clause denying the insurer any right of subrogation against Landlord.
10.11 FAILURE TO INSURE. If Tenant fails to maintain any insurance which
Tenant is required to maintain pursuant to this Article X, Tenant shall be
liable to Landlord for any loss or cost resulting from such failure to maintain.
Tenant may not self-insure against any risks required to be covered by insurance
without Landlord's prior written consent.
ARTICLE Xl - DAMAGE OR DESTRUCTION
11.01 TOTAL DESTRUCTION. Except as provided in Section 11.03 below, this
Lease shall automatically terminate if the Building is totally destroyed.
11.02 PARTIAL DESTRUCTION OF PREMISE. If the Premises are damaged by any
casualty and, in Landlord's opinion, the Premises (exclusive of any Alterations
made to the Premises by Tenant) can be restored to its pre-existing condition
within one hundred eighty (180) days after the date of the damage or destruction
using only the insurance proceeds made available to Landlord, Landlord shall,
upon written notice from Tenant to Landlord of such damage, except as provided
in Section 11.03, promptly and with due diligence use available insurance
proceeds to repair any damage to the Premises (exclusive of any Alterations to
the Premises made by Tenant, which shall be promptly repaired by Tenant at its
sole expense) and, until such repairs are completed, the Rent shall be abated
from the date of damage or destruction in the same proportion that the rentable
area of the portion of the Premises which is unusable by Tenant in the conduct
of its business bears to the total rentable area of the Premises. If such
repairs cannot, in Landlord's opinion, either (i) be made within said one
hundred eighty day (180) period, or (ii) be
11
completed using only the insurance proceeds made available to Landlord, then
Landlord may, at its option, exercisable by written notice given to Tenant
within thirty (30) days after the date of the damage or destruction elect to
make the repairs within a reasonable time after the damage or destruction, in
which event this Lease shall remain in full force and effect but the Rent shall
be abated as provided in the preceding sentence; if Landlord does not so elect
to make the repairs, then either Landlord or Tenant shall have the right, by
written notice given to the other within sixty (60) days after the date of the
damage or destruction, to terminate this Lease as of the date of the damage or
destruction.
11.03 EXCEPTIONS TO LANDLORD'S OBLIGATIONS. Notwithstanding anything to the
contrary contained in this Article Xl, Landlord shall have no obligation to
repair the Premises if either: (a) the Building in which the Premises are
located is so damaged as to require repairs to the Building exceeding twenty
percent (20%) of the full insurable value of the Building; or (b) Landlord
elects to demolish the Building in which the Premises are located; or (c) the
damage or destruction occurs less than two (2) years prior to the Expiration
Date, exclusive of option periods. In addition, Landlord's obligation to repair
as set forth in this Article Xl shall be limited to the extent of insurance
proceeds made available to Landlord. Further, Tenant's Rent shall not be abated
if either (i) the damage or destruction is repaired within five (5) business
days after Landlord receives written notice from Tenant of the casualty, or (ii)
Tenant, or any officers, partners, employees, agents or invitees of Tenant, or
any assignee or subtenant of Tenant, is, in whole or in part, responsible for
the damage or destruction.
11.04 WAIVER. The provisions contained in this Lease shall supersede any
contrary laws (whether statutory, common law or otherwise) now or hereafter in
effect relating to damage, destruction, self-help or termination, including
California Civil Code Sections 1932 and 1933. Notwithstanding the provisions of
Article XI, in the event the Lease is terminated by either Landlord or Tenant
under Article XI the Security Deposit shall be returned to Tenant.
ARTICLE XII - CONDEMNATION
12.01 TAKING. If the entire Premises or so much of the Premises as to
render the balance unusable by Tenant shall be taken by condemnation, sale in
lieu of condemnation or in any other manner for any public or quasi-public
purpose (collectively "Condemnation"), and if the Landlord, at its option, is
unable or unwilling to provide substitute premises containing at least as much
rentable area as described in Section 1.02 above, then this Lease shall
terminate on the date that title or possession to the Premises is taken by the
condemning authority, whichever is earlier.
12.02 AWARD. In the event of any Condemnation, the entire award for such
taking shall belong to Landlord. Tenant shall have no claim against Landlord or
the award for the value of any unexpired term of this Lease or otherwise. Tenant
shall be entitled to independently pursue a separate award in a separate
proceeding for Tenant's relocation costs directly associated with the taking,
provided such separate award does not diminish Landlord's award.
12.03 TEMPORARY TAKING. No temporary taking of the Premises shall terminate
this Lease or entitle Tenant to any abatement of the Rent payable to Landlord
under this Lease; provided, further, that any award for such temporary taking
shall belong to Tenant to the extent that the award applies to any time period
during the Lease Term and to Landlord to the extent that the award applies to
any time period outside the Lease Term.
ARTICLE XIII - DELETED
ARTICLE XIV - ASSIGNMENT AND SUBLETTING
14.01 Restriction. Without the prior written consent of Landlord, Tenant
shall not, either voluntarily or by operation of law, assign, encumber, or
otherwise transfer this Lease or any interest herein, or sublet the Premises or
any part thereof, or permit the Premises to be occupied by anyone other than
Tenant or Tenant's employees (any such assignment, encumbrance, subletting,
occupation or transfer is hereinafter referred to as a "Transfer"). For purposes
of this Lease, the term "Transfer" shall also include (a) if Tenant is a
partnership, the withdrawal or change, voluntary, involuntary or by operation of
law, of a majority of the partners, or a transfer of a majority of partnership
interests, within a twelve month period, or the dissolution of the partnership,
and (b) if Tenant is a closely held corporation (i.e. whose stock is not
publicly held and not traded through an exchange or over the counter), or a
limited liability company, the dissolution, merger, consolidation, division,
liquidation or other reorganization of Tenant, or within a twelve month period:
(i) the sale or other transfer of more than an aggregate of 50% of the voting
securities of Tenant (other than to immediate family members by reason of gift
or death) or (ii) the sale, mortgage, hypothecation or pledge of more than an
aggregate of 50% of Tenant's net assets. An assignment, subletting or other
action in violation of the foregoing shall be void and, at Landlord's option,
shall constitute a material breach of this Lease. Notwithstanding anything
contained in this Article XIV to the contrary, Tenant shall have the right to
assign the Lease or sublease the Premises, or any part thereof, to an
"Affiliate" without the prior written consent of Landlord, but upon at least
twenty (20) days prior written notice to Landlord, provided that the use of the
Premises by said Affiliate is identical to the use in Section 1.10 of the Lease,
and provided further that said Affiliate is not in default under any other lease
for space in a property that is managed by ▇▇▇▇▇▇▇ Properties Ltd. or any of its
affiliates. For purposes of this provision, the term "Affiliate" shall mean any
corporation or other entity controlling, controlled by, or under common control
with (directly or indirectly) Tenant, including, without limitation, any parent
corporation controlling Tenant or any subsidiary that Tenant controls. The term
"control", as used herein, shall mean the power to direct or cause the direction
of the
12
management and policies of the controlled entity through the ownership of more
than fifty percent (50%) of the voting securities in such controlled entity.
Notwithstanding anything contained in this Article XIV to the contrary, Tenant
expressly covenants and agrees not to enter into any lease, sublease, license,
concession or other agreement for use, occupancy or utilization of the Premises
which provides for rental or other payment for such use, occupancy or
utilization based in whole or in part on the net income or proftts derived by
any person from the property leased, used, occupied or utilized (other than an
amount based on a fixed percentage or percentages of receipts or sales), and
that any such purported lease, sublease, license, concession or other agreement
shall be absolutely void and ineffective as a conveyance of any right or
interest in the possession, use, occupancy or utilization of any part of the
Premises.
14.02 NOTICE TO LANDLORD. If Tenant desires to assign this Lease or any
interest herein, or to sublet all or any part of the Premises, then at least
thirty (30) days but not more than one hundred eighty (180) days prior to the
effective date of the proposed assignment or subletting, Tenant shall submit to
Landlord in connection with Tenant's request for Landlord's consent:
(A) A statement containing (i) the name and address of the proposed
assignee or subtenant: (ii) such financial information with respect to the
proposed assignee or subtenant as Landlord shall reasonably require; (iii)
the type of use proposed for the Premises; and (iv) all of the principal
terms of the proposed assignment or subletting; and
(B) Four (4) originals of the assignment or sublease on a form approved
by Landlord and four (4) originals of the Landlord's Consent to Sublease or
Assignment and Assumption of Lease and Consent.
14.03 LANDLORD'S RECAPTURE RIGHTS. At any time within twenty (20) business
days after Landlord's receipt of all (but not less than all) of the information
and documents described in Section 14.02 above, Landlord may, at its option by
written notice to Tenant, elect to: (a) sublease the Premises or the portion
thereof proposed to be sublet by Tenant upon the same terms as those offered to
the proposed subtenant; (b) take an assignment of the Lease upon the same terms
as those offered to the proposed assignee; or (c) terminate the Lease in its
entirety or as to the portion of the Premises proposed to be assigned or sublet,
with a proportionate adjustment in the Rent payable hereunder if the Lease is
terminated as to less than all of the Premises. If Landlord does not exercise
any of the options described in the preceding sentence, then, during the
above-described twenty (20) business day period, Landlord shall either consent
or deny its consent to the proposed assignment or subletting.*
14.04 LANDLORD'S CONSENT; STANDARDS. Landlord's consent to a proposed
assignment or subletting shall not be unreasonably withheld; but, in addition to
any other grounds for denial, Landlord's consent shall be deemed reasonably
withheld if, in Landlord's good faith judgment: (i) the proposed assignee or
subtenant does not have the financial strength to perform its obligations under
this Lease or any proposed sublease; (ii) the business and operations of the
proposed assignee or subtenant are not of comparable quality to the business and
operations being conducted by other tenants in the Building; (iii) the proposed
assignee or subtenant intends to use any part of the Premises for a purpose not
permitted under this Lease; (iv) either the proposed assignee or subtenant, or
any person which directly or indirectly controls, is controlled by, or is under
common control with the proposed assignee or subtenant occupies space in the
Building or the Project, if applicable, or is negotiating with Landlord to lease
space in the Building or the Project, if applicable; (v) the proposed assignee
or subtenant is disreputable; or (vi) the use of the Premises or the Building by
the proposed assignee or subtenant would, in Landlord's reasonable judgment
impact the Building in a negative manner including, but not limited to,
significantly increasing the pedestrian traffic, parking capacity and
requirements, and truck traffic in and out of the Building or requiring any
alterations to the Building to comply with applicable laws; (vii) the subject
space is not regular in shape with appropriate means of ingress and egress
suitable for normal renting purposes; (viii) the transferee is a government (or
agency or instrumentality thereof) or (ix) Tenant has failed to cure a default
at the time Tenant requests consent to the proposed Transfer.
14.05 ADDITIONAL RENT. If Landlord consents to any such assignment or
subletting, all sums or other economic consideration received by Tenant in
connection with such assignment or subletting, whether denominated as rental or
otherwise, exceeds, in the aggregate, the total sum which Tenant is obligated to
pay Landlord under this Lease (prorated to reflect obligations allocable to less
than all of the Premises under a sublease) shall be paid to Landlord promptly
after receipt as additional Rent under the Lease without affecting or reducing
any other obligation of Tenant hereunder.
14.06 LANDLORD'S COSTS. If Tenant shall Transfer this Lease of all or any
part of the Premises or shall request the consent of Landlord to any Transfer,
Tenant shall pay to Landlord as additional rent Landlord's costs related
thereto, including Landlord's reasonable attorneys' fees and a minimum fee to
Landlord of Five Hundred Dollars ($500.00).
14.07 CONTINUING LIABILITY OF TENANT. Notwithstanding any Transfer,
including an assignment or sublease to an affiliate, Tenant shall remain as
fully and primarily liable for the payment of Rent and for the performance of
all other obligations of Tenant contained in this Lease to the same extent as if
the Transfer had not occurred; provided, however, that any act or omission of
any transferee that violates the terms of this Lease shall be deemed a violation
of this Lease by Tenant.
14.08 NON-WAIVER. The consent by Landlord to any Transfer shall not relieve
Tenant, or any person claiming through or by Tenant, of the obligation to obtain
the consent of Landlord, pursuant to this Article XIV, to any further Transfer.
In the event of an assignment or subletting, Landlord may collect rent from the
assignee or the subtenant without waiving any rights hereunder and collection of
the rent from a person other than Tenant shall not be deemed a waiver of any of
Landlord's rights under this Article XIV, an acceptance of assignee or subtenant
as Tenant, or a release of Tenant from the performance of Tenant's obligations
under this Lease. If Tenant shall default under this Lease and fail to cure
within the time permitted, Landlord is irrevocably authorized, as Tenant's agent
and attorney-in-fact, to direct any assignee or subtenant to make all payments
under or in connection with the Transfer directly to Landlord (which Landlord
shall apply towards Tenant's obligations under this Lease) until such default is
cured.
* "NOTWITHSTANDING THE FOREGOING, LANDLORD'S TERMINATION RIGHT SET FORTH IN THIS
PARAGRAPH SHALL NOT APPLY TO THE EXTENT OF A SUBLEASE OR ASSIGNMENT OF LESS THAN
25% OF THE RENTABLE SQUARE FOOTAGE IN THE PREMISES. IN ADDITION, IN THE EVENT
LANDLORD ELECTS TO TERMINATE THE LEASE IN ACCORDANCE WITH THE TERMS OF THIS
ARTICLE, SUCH TERMINATION SHALL NOT BE EFFECTIVE AND THE LEASE SHALL REMAIN IN
FULL FORCE AND EFFECT IF TENANT REVOKES IN WRITING ITS PRIOR REQUEST FOR CONSENT
WITHIN 48 HOURS AFTER RECEIVING LANDLORD'S TENNINATION NOTICE".
13
ARTICLE XV - DEFAULT AND REMEDIES
15.01 EVENTS OF DEFAULT BY TENANT. The occurrence of any of the following
shall constitute a material default and breach of this Lease by Tenant:
(A) The failure by Tenant to pay Base Rent or make any other payment
required to be made by Tenant hereunder as and when due.
(B) The abandonment of the Premises by Tenant or the vacation of the
Premises by Tenant for fourteen (14) consecutive days (with or without the
payment of Rent).
(C) The making by Tenant of any assignment of this Lease or any
sublease of all or part of the Premises, except as expressly permitted
under Article XIV of this Lease.
(D) The failure by Tenant to observe or perform any other provision of
this Lease to be observed or performed by Tenant, other than those
described in Sections 15.01(A), 15.01(B) or 15.01(C) above, if such failure
continues for thirty (30) days after written notice thereof by Landlord to
Tenant: provided, however, that if the nature of the default is such that
it cannot be cured within the thirty (30) day period, no default shall be
deemed to exist if Tenant commences the curing of the default promptly
within such thirty (30) day period and thereafter diligently prosecutes the
same to completion and achieves the same within sixty (60) days after the
occurrence of such default. The thirty (30) day notice described herein
shall be in lieu of, and not in addition to, any notice required under
Section 1161 of the California Code of Civil Procedure or any other law now
or hereafter in effect requiring that notice of default be given prior to
the commencement of an unlawful detainer or other legal proceeding.
(E) The making by Tenant of any general assignment for the benefit of
creditors, the filing by or against Tenant or any one or more of the
Guarantors, if any, of a petition under any federal or state bankruptcy or
insolvency laws (unless, in the case of a petition filed against Tenant or
any one or more of the Guarantors, if any, the same is dismissed within
thirty (30) days after filing); the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets at the Premises or
Tenant's interest in this Lease or the Premises, when possession is not
restored to Tenant within thirty (30) days; the attachment, execution or
other seizure of substantially all of Tenant's assets located at the
Premises or Tenant's interest in this Lease or the Premises, if such
seizure is not discharged within thirty (30) days; or the death or the
dissolution of Tenant or any one or more of the Guarantors, if any.
(F) Any material misrepresentation herein, or material
misrepresentation or omission in any financial statements or other
materials provided by Tenant in connection with negotiating or entering
into this Lease or in connection with any Transfer under Section 14.01.
15.02 LANDLORD'S RIGHT TO TERMINATE UPON TENANT DEFAULT. In the event of
any default by Tenant as provided in Section 15.01 above, Landlord shall have
the right to terminate this Lease and recover possession of the Premises by
giving written notice to Tenant of Landlord's election to terminate this Lease,
in which event Landlord shall be entitled to receive from Tenant:
(A) The worth at the time of award of any unpaid Rent which had been
earned at the time of such termination; plus
(B) 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 Tenant proves could have been
reasonably avoided; plus
(C) 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 Tenant proves could be reasonably avoided; plus
(D) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely
to result therefrom; and
(E) At Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable
law.
As used in subparagraphs (A) and (B) above, "worth at the time of award"
shall be computed by allowing interest on such amounts at the then highest
lawful rate of interest, but in no event to exceed one percent (1%) per annum
plus the rate established bv the Federal Reserve Bank of San Francisco on
advances made to member banks under Sections 13 and 13a of the Federal Reserve
Act ("discount rate") prevailing at the time of the award. As used in paragraph
(C) above, "worth at the time of award" shall be computed by discounting such
amount by (i) the discount rate of the Federal Reserve Bank of San Francisco
prevailing at the time of award plus (ii) one percent (1%).
15.03 MITIGATION OF DAMAGES. If Landlord terminates this Lease or Tenant's
right to possession of the Premises, Landlord shall have no obligation to
mitigate Landlord's damages except to the extent required by applicable law. If
Landlord has not terminated this Lease or Tenant's right to possession of the
Premises, Landlord shall have no obligation to mitigate under any circumstances
and may permit the Premises to remain vacant or abandoned. If Landlord is
required to mitigate damages as provided herein: (i) Landlord shall be required
only to use reasonable efforts to mitigate, which shall not exceed such efforts
as Landlord generally uses to lease other space in the Building, (ii) Landlord
will not be deemed to have failed to mitigate if Landlord or its affiliates
lease any other portions of the Building, Project or other projects owned by
Landlord or its affiliates in the same geographic area, before reletting all or
any portion of the Premises, and (iii) any failure to mitigate as described
herein with respect to any period of time shall only reduce the Rent and other
amounts to which Landlord is entitled hereunder by the reasonable rental value
of the Premises during such period. In recognition that the value of the
Building depends on the rental rates and terms of leases therein, Landlord's
rejection of a prospective replacement
14
tenant based on an offer of rentals below Landlord's published rates for new
leases of comparable space at the Building at the time in question, or at
Landlord's option, below the rates provided in this Lease, or containing terms
less favorable than those contained herein, shall not give rise to a claim by
Tenant that Landlord failed to mitigate Landlord's damages.
15.04 LANDLORD'S RIGHT TO CONTINUE LEASE UPON TENANT DEFAULT. In the event
of a default of this Lease and abandonment of the Premises by Tenant, if
Landlord does not elect to terminate this Lease as provided in Section 15.02
above Landlord may from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease. Without limiting the foregoing,
Landlord has the remedy described in California Civil Code Section 1951.4
(Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
Transfer, subject only to reasonable limitations). In the event Landlord re-lets
the Premises, to the fullest extent permitted by law, the proceeds of any
reletting shall be applied first to pay to Landlord all costs and expenses of
such reletting (including without limitation, costs and expenses of retaking or
repossessing the Premises, removing persons and property therefrom, securing new
tenants, including expenses for redecoration, alterations and other costs in
connection with preparing the Premises for the new tenant, and if Landlord shall
maintain and operate the Premises, the costs thereof) and receivers' fees
incurred in connection with the appointment of and performance by a receiver to
protect the Premises and Landlord's interest under this Lease and any necessary
or reasonable alterations; second, to the payment of any indebtedness of Tenant
to Landlord other than Rent due and unpaid hereunder; third, to the payment of
Rent due and unpaid hereunder: and the residue, if any, shall be held by
Landlord and applied in payment of other or future obligations of Tenant to
Landlord as the same may become due and payable, and Tenant shall not be
entitled to receive any portion of such revenue.
15.05 RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense. If Tenant shall fail to pay any sum of money, other than
Rent, required to be paid by it hereunder or shall fail to perform any other act
on its part to be performed hereunder, Landlord may, but shall not be obligated
to, make any payment or perform any such other act on Tenant's part to be made
or performed, without waiving or releasing Tenant of its obligations under this
Lease. Any sums so paid by Landlord and all necessary incidental costs, together
with interest thereon at the lesser of the maximum rate permitted by law if any
or twelve percent (12%) per annum from the date of such payment, shall be
payable to Landlord as additional rent on demand and Landlord shall have the
same rights and remedies in the event of nonpayment as in the case of default by
Tenant in the payment of Rent.
15.06 DEFAULT UNDER OTHER LEASES. If the term of any lease, other than this
Lease, heretofore or hereafter made by Tenant for any space in the Building or
the Project, if applicable, shall be terminated or terminable after the making
of this Lease because of any default by Tenant under such other lease, such fact
shall empower Landlord, at Landlord's sole option, to terminate this Lease by
notice to Tenant or to exercise any of the rights or remedies set forth in
Section 15.02.
15.07 NON-WAIVER. Nothing in this Article shall be deemed to affect
Landlord's rights to indemnification for liability or liabilities arising prior
to termination of this Lease or Tenant's right to possession of the Premises for
personal injury or property damages under the indemnification clause or clauses
contained in this Lease. No acceptance by Landlord of a lesser sum than the Rent
then due shall be deemed to be other than on account of the earliest installment
of such Rent due, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or pursue any other
remedy in the Lease provided. The delivery of keys to any employee of Landlord
or to Landlord's agent or any employee thereof shall not operate as a
termination of this Lease or a surrender of the Premises, unless Landlord in
writing both accepts such surrender and acknowledges such termination.
15.08 CUMULATIVE REMEDIES. The specific remedies to which Landlord may
resort under the terms of the Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which it may be lawfully
entitled in case of any breach or threatened breach by Tenant of any provisions
of the Lease. In addition to the other remedies provided in the Lease, Landlord
shall be entitled to a restraint by injunction of the violation or attempted or
threatened violation of any of the covenants, conditions or provisions of the
Lease or to a decree compelling specific performance of any such covenants,
conditions or provisions.
15.09 DEFAULT BY LANDLORD. Landlord's failure to perform or observe any of
its obligations under this Lease shall constitute a default by Landlord under
this Lease only if such failure shall continue for a period of thirty (30) days
(or the additional time, if any, that is reasonably necessary to promptly and
diligently cure the failure) after Landlord receives written notice from Tenant
specifying the default. The notice shall give in reasonable detail the nature
and extent of the failure and shall identify the Lease provision(s) containing
the obligation(s). If Landlord shall default in the performance of any of its
obligations under this Lease (after notice and opportunity to cure as provided
herein), Tenant may pursue any remedies available to it under the law and this
Lease, except that, in no event shall Landlord be liable for punitive damages,
lost profits, business interruption, speculative, consequential or other such
damages.
ARTICLE XVI-ATTORNEYS FEES: COSTS OF SUIT
If either Landlord or Tenant shall commence any action or other proceeding
against the other arising out of, or relating to, this Lease or the Premises,
the prevailing party shall be entitled to recover from the losing party, in
addition to any other relief, its actual attorneys fees irrespective of whether
or not the action or other proceeding is prosecuted to judgment and irrespective
of any court schedule of reasonable attorneys' fees. In addition, Tenant shall
reimburse Landlord, upon demand, for all reasonable attorneys' fees incurred in
collecting Rent or otherwise seeking enforcement against Tenant, its sublessees
and assigns, of Tenant's obligations under this Lease.
Should Landlord be made a party to any litigation instituted by Tenant
against a party other than Landlord, or by a third party against Tenant, Tenant
shall indemnify, hold harmless and defend Landlord from any and all loss, cost,
liability, darnage or expense incurred by Landlord, including attorneys' fees,
in connection with the litigation, unless a final non-appealable judgment is
rendered against Landlord in such litigation.
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ARTICLE XVII-SUBORDINATION AND ATTORNMENT
17.01 SUBORDINATION. This Lease, and the rights of Tenant hereunder, are
and shall be subject and subordinate to the interests of (i) all present and
future ground leases and master leases of all or any part of the Building: (ii)
present and future mortgages and deeds of trust encumbering all or any part of
the Building or the underlying real estate; (iii) all past and future advances
made under any such mortgages or deeds of trust; and (iv) all renewals,
modifications, replacements and extensions of any such ground leases, master
leases, mortgages and deeds of trust; provided, however, that any lessor under
any such ground lease or master lease or any mortgagee or beneficiary under any
such mortgage or deed of trust (any such lessor, mortgagee or beneficiary is
hereafter referred to as a "Mortgagee") shall have the right to elect, by
written notice given to Tenant, to have this Lease made superior in whole or in
part to any such ground lease, master lease, mortgage or deed of trust (or
subject and subordinate to such ground lease, master lease, mortgage or deed of
trust but superior to any junior mortgage or junior deed of trust). Upon demand,
Tenant shall execute, acknowledge and deliver any instruments reasonably
requested by Landlord or any such Mortgagee to effect the purposes of this
Section 17.01. Such instruments may contain, among other things, provisions to
the effect that such Mortgagee (hereafter, for the purposes of this Section
17.01, a "Successor Landlord") shall (i) not be liable for any act or omission
of Landlord or its predecessors, if any, prior to the date of such Successor
Landlord's succession to Landlord's interest under this Lease: (ii) not be
subject to any offsets or defenses which Tenant might have been able to assert
against Landlord or its predecessors. if any, prior to the date of such
Successor Landlord's succession to Landlord's interest under this Lease; (iii)
not be liable for the return of any security deposit under the Lease unless the
same shall have actually been deposited with such Successor Landlord; and (iv)
be entitled to receive notice of any Landlord default under this Lease plus a
reasonable opportunity to cure such default prior to Tenant having any right or
ability to terminate this Lease as a result of such Landlord default; (v) not be
bound by any rent or additional rent which Tenant might have paid for more than
the current month to Landlord; (vi) not be bound by any amendment or
modification of the Lease or any cancellation or surrender of the same made
without Successor Landlord's prior written consent; (vii) not be bound by any
obligation to make any payment to Tenant which was required to be made prior to
the time such Successor Landlord succeeded to Landlord's interest and (viii) not
be bound by any obligation under the Lease to perform any work or to make any
improvements to the demised Premises. Any obligations of any Successor Landlord
under its respective lease shall be non-recourse as to any assets of such
Successor Landlord other than its interest in the Premises and improvements.
(see Supplemental Rider Insert #1)
17.02 ATTORNMENT. If requested to do so, Tenant shall attorn to and
recognize as Tenant's landlord under this Lease any superior Mortgagee or other
purchaser or person taking title to the Building by reason of the termination of
any superior lease or the foreclosure of any superior mortgage or deed of trust,
and Tenant shall, upon demand, execute any documents reasonably requested by any
such person to evidence the attornment described in this Section 17.02.
17.03 MORTGAGE AND GROUND LESSOR PROTECTION. Tenant agrees to give any
Mortgagee, by registered or certified mail, a copy of any notice of default
served upon the Landlord by Tenant, provided that prior to such notice Tenant
has been notified in writing (by way of service on Tenant of a copy of
Assignment of Rents and Leases, or otherwise) of the address of such Mortgagee
(hereafter the "Notified Party"). Tenant further agrees that if Landlord shall
have failed to cure such default within twenty (20) days after such notice to
Landlord (or if such default cannot be cured or corrected within that time, then
such additional time as may be necessary if Landlord has commenced within such
twenty (20) days and is diligently pursuing the remedies or steps necessary to
cure or correct such default), then the Notified Party shall have an additional
thirty (30) days within which to cure or correct such default (or if such
default cannot be cured or corrected within that time, then such additional time
as may be necessary if the Notified Party has commenced within such thirty (30)
days and is diligently pursuing the remedies or steps necessary to cure or
correct such default). Until the time allowed, as aforesaid, for the Notified
Party to cure such default has expired without cure, Tenant shall ▇▇▇▇ no right
to, and shall not, terminate this Lease on account of Landlord's default.
ARTICLE XVIII - OUIET ENJOYMENT
18.01 Provided that Tenant performs all of its obligations hereunder,
Tenant shall have and peaceably enjoy the Premises during the Lease Term free of
claims by or through Landlord, subject to all of the terms and conditions
contained in this Lease.
ARTICLE XIX - PARKING
19.01 Tenant, its employees and invitees, are hereby granted the
non-exclusive privilege to use parking spaces adjacent to the Premises as
described in Exhibit A. Tenant shall abide by all rules and regulations
regarding the use of the parking area as may now exist or as may hereinafter be
promulgated by Landlord. Landlord reserves the right to modify, restripe and
otherwise change the location of drives, parking spaces and parking area
adjacent to the Premises as described in Exhibit A. Landlord may, but shall
have no obligation to, designate certain parking spaces for trucks, handicapped
persons or designated tenants as Landlord, in its sole discretion, may deem
necessary for the professional and efficient operation of the parking area and
the Building or the Project, if applicable. Landlord shall have the right to
reasonably restrict the number and location of truck/tractor trailers for the
overall benefit of all tenants, it being agreed by Tenant that it is not the
intent of this Lease to provide unrestricted parking for truck/tractor trailers.
Tenant agrees not to overburden the parking facilities and agrees to cooperate
with Landlord and other tenants in the use of parking facilities. Tenant will
reimburse Landlord upon demand for any damage caused to the parking surfaces or
facilities caused by Tenant's or any of its employees', agents' or invitees'
trucks/tractor trailers or any other vehicles. Landlord reserves the right in
its absolute discretion to determine whether parking facilities are becoming
crowded and, in such event, to allocate parking spaces among Tenant and other
tenants. At no time shall the parking of any vehicle be permitted in the fire
lanes or handicapped parking areas servicing the Building or the Project, if
applicable.
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ARTICLE XX - RULES AND REGULATIONS
20.01 The Rules and Regulations attached hereto as Exhibit F are hereby
incorporated by reference herein and made a part hereof. Tenant shall abide by,
and faithfully observe and comply with the Rules and Regulations and any
reasonable and non-discriminatory amendments, modifications and/or additions
thereto as may hereafter be adopted and published by written notice to tenants
by Landlord for the safety, care, security, good order and/or cleanliness of the
Premises, the Building and/or the Project, if applicable. Landlord shall not be
liable to Tenant for any violation of such rules and regulations by any other
tenant or occupant of the Building or the Project, if applicable.
ARTICLE XXI - ESTOPPEL CERTIFICATES
21.01 Tenant agrees at any time and from time to time upon not less than
ten (10) days' prior written notice from Landlord to execute, acknowledge and
deliver to Landlord a statement in writing addressed and certifying to Landlord,
to any current or prospective Mortgagee or any assignee thereof, prospective
purchaser of the land, improvements or both comprising the Building and to any
other party designated by Landlord, that this Lease is unmodified and in full
force and effect (or if there have been modifications, that the same is in full
force and effect as modified and stating the modifications); that Tenant has
accepted possession of the Premises, which are acceptable in all respects, and
that any improvements required by the terms of this Lease to be made by Landlord
have been completed to the satisfaction of Tenant; that Tenant is in full
occupancy of the Premises; that no rent has been paid more than thirty (30) days
in advance; that the first month's Base Rent has been paid; that Tenant is
entitled to no free Rent or other concessions except as stated in this Lease;
that Tenant has not been notified of any previous assignment of Landlord's or
any predecessor landlord's interest under this Lease; the dates to which Base
Rent, additional rental and other charges have been paid; that Tenant, as of the
date of such certificate, has no charge, lien or claim of setoff under this
Lease or otherwise against Base Rent, additional rental or other charges due or
to become due under this Lease; that Landlord is not in default in performance
of any covenant, agreement or condition contained in this Lease; or any other
matter relating to this Lease or the Premises or, if so, specifying each such
default. If there is a Guaranty under this Lease, said Guarantor shall confirm
the validity of the Guaranty by joining in the execution of the Estoppel
Certificate or other documents so requested by Landlord or Mortgagee. In
addition, in the event that such certificate is being given to any Mortgagee,
such statement may contain certifications of such other matters, and any other
provisions, customarily required by such Mortgagee including, without
limitation, an agreement on the part of Tenant to furnish to such Mortgagee,
written notice of any Landlord default and a reasonable opportunity for such
Mortgagee to cure such default prior to Tenant being able to terminate this
Lease. Any such statement delivered pursuant to this Section may be relied upon
by Landlord or any Mortgagee, or prospective purchaser to whom it is addressed
and such statement, if required by its addressee, may so specifically state. If
Tenant does not execute, acknowledge and deliver to Landlord the statement as
and when required herein, Landlord is hereby granted an irrevocable
power-of-attorney, coupled with an interest, to execute such statement on
Tenant's behalf, which statement shall be binding on Tenant to the same extent
as if executed by Tenant (and such grant shall not be in limitation of
Landlord's other remedies for such failure by Tenant).
ARTICLE XXII - ENTRY BY LANDLORD
22.01 Landlord may enter the Premises at all reasonable times to: inspect
the same; exhibit the same to prospective purchasers, Mortgagees or tenants:
determine whether Tenant is complying with all of its obligations under this
Lease; supply janitorial and other services to be provided by Landlord to Tenant
under this Lease; post notices of non-responsibility; and make repairs or
improvements in or to the Building or the Premises; provided, however, that all
such work shall be done as promptly as reasonably possible and so as to cause as
little interference to Tenant as reasonably possible. Tenant hereby waives any
claim for damages for any injury or inconvenience to, or interference with,
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises or
any other loss occasioned by such entry. As provided for in clause (xiii) of
Section 27.19 of this Lease, Landlord shall at all times have the right, but not
the obligation, to obtain from Tenant and retain a key with which to unlock all
of the doors in, on or about the Premises (excluding Tenant's vaults, safes and
similar areas designated by Tenant in writing in advance), and Landlord shall
have the right to use any and all means by which Landlord may deem proper to
open such doors to obtain entry to the Premises, and any entry to the Premises
obtained by Landlord by any such means, or otherwise, shall not under any
circumstances be deemed or construed to be a forcible or unlawful entry into or
a detainer of the Premises or an eviction, actual or constructive, of Tenant
from any part of the Premises. Such entry by Landlord shall not act as a
termination of this Lease. If Landlord shall be required to obtain entry by
means other than a key provided by Tenant, the cost of such entry shall be
payable by Tenant to Landlord as additional rent.
ARTICLE XXIII
LANDLORD'S LEASE UNDERTAKINGS - EXCULPATION
FROM PERSONAL LlABlLITY;
TRANSFER OF LANDLORD'S INTEREST
23.01 LANDLORD'S LEASE UNDERTAKINGS. Notwithstanding anything to the
contrary contained in this Lease or in any exhibits, Riders or addenda hereto
attached (collectively the "Lease Documents"), it is expressly understood and
agreed by and between the parties hereto that: (a) the recourse of Tenant or its
successors or assigns against Landlord with respect to the alleged breach by or
on the part of Landlord of any representation, warranty, covenant undertaking or
agreement contained in any of the Lease Documents or otherwise arising out of
this transaction or Tenant's use of the Premises or the Building or the Project,
if applicable (collectively, "Landlord's Lease Undertakings") shall extend only
to Landlord's interest in the real estate of which the Premises demised under
the Lease Documents are a part ("Landlord's Real Estate"), and not to any other
assets of Landlord or its constituent partners; and (b) except to the extent of
Landlord's interest in Landlord's Real Estate, no personal liability or personal
responsibility of any sort with respect to any of Landlord's Lease Undertakings
or any alleged breach thereof is assumed by, or shall at any time be asserted or
enforceable against, Landlord, its constituent partners, ▇▇▇▇▇▇▇ Capital
Management Corporation, or ▇▇▇▇▇▇▇ Properties Ltd. or against any of their
respective directors, officers, shareholders, employees, agents, constituent
partners, beneficiaries, trustees or representatives.
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23.02 TRANSFER OF LANDLORD'S INTEREST. In the event of any transfer of
Landlord's interest in the Building, Landlord shall be automatically freed and
relieved from all applicable liability with respect to performance of any
covenant or obligation on the part of Landlord, provided any deposits or advance
rents held by Landlord are turned over to the grantee and said grantee expressly
assumes, subject to the limitations of this Section 23, all the terms, covenants
and conditions of this Lease to be performed on the part of Landlord, it being
intended hereby that the convenants and obligations contained in this Lease on
the part of Landlord shall, subject to all the provisions of this Section 23, be
binding on Landlord, its successors and assigns, only during their respective
successive periods of ownership.
ARTICLE XXIV - SURRENDER; HOLDOVER TENANCY
24.01 CONDITION OF PREMISES AND REMOVAL OF PROPERTY. At the expiration or
earlier termination of this Lease or Tenant's right to possession of the
Premises, Tenant shall: (a) surrender possession of the Premises in broom-clean
condition and good repair, free of debris, and otherwise in the condition
required under Section 8.02, ordinary wear and tear excepted, (b) ensure that
all signs, movable trade fixtures and personal property (except items originally
provided by Landlord) have been removed from the Premises as required under
Section 9.04 hereof (subject to Article XXIX hereof), (c) ensure that all
Alterations required to be removed from the Premises pursuant to Section 9.04
have been removed from the Premises, (d) ensure that any damage caused by such
removal has been repaired in a good and workmanlike manner as required under
Section 9.04 hereof (and Landlord may deny permission to remove items where such
removal may damage the structural integrity of the Building), and (e) ensure
that all actions required under the Rules and Regulations set forth in Exhibit F
to this Lease have been taken. Tenant understands that "ordinary wear and tear"
does not mean Tenant shall be relieved of performing its obligations under this
Lease relating to maintenance, repairs and replacements as provided for in the
Lease. The cost and expense of any repairs necessary to restore the condition of
the Premises shall be borne by Tenant, and if Landlord undertakes to restore the
Premises, it shall have a right of reimbursement against Tenant.
24.02 ABANDONED PROPERTY. If Tenant shall fail to perform any repairs or
restoration, or fail to remove any items from the Premises as required
hereunder, Landlord may do so at Tenant's expense as provided in Sections 9.04
and 15.04 hereof and Tenant shall pay Landlord's charges therefor upon demand.
All property removed from the Premises by Landlord hereunder may be handled,
discarded or stored by Landlord at Tenant's expense, and Landlord shall in no
event be responsible for the value, preservation or safekeeping thereof. All
such property shall at Landlord's option be conclusively deemed to have been
conveyed by Tenant to Landlord as if by ▇▇▇▇ of sale without payment by
Landlord. If Landlord arranges for storage of any such property, Landlord shall
have a lien against such property for costs incurred in removing and storing the
same.
24.03 HOLDOVER TENANCY. If Tenant holds possession of the Premises after
the expiration or termination of the Lease Term, by lapse of time or otherwise,
Tenant shall become a tenant at sufferance upon all of the terms contained
herein, except as to Lease Term and Rent. During such holdover period, Tenant
shall pay to Landlord a monthly rental equivalent to*. The monthly rent
payable for such holdover period shall in no event be construed as a penalty or
as liquidated damages for such retention of possession. Without limiting the
foregoing, Tenant hereby agrees to indemnify, defend and hold harmless Landlord,
its beneficiary, and their respective agents, contractors and employees, from
and against any and all claims, liabilities, actions, losses, damages (including
without limitation, direct, indirect, incidental and consequential) and expenses
(including, without limitation, court costs and reasonable attorneys' fees)
asserted against or sustained by any such party and arising from or by reason of
such retention of possession, which obligations shall survive the expiration or
termination of the Lease Term.
ARTICLE XXV - NOTICES
25.01 All notices which Landlord or Tenant may be required, or may desire,
to serve on the other may be served, as an alternative to personal service, by
mailing the same by registered or certified mail, postage prepaid, or may be
sent by overnight courier, addressed to the Landlord at the address for Landlord
set forth in Section 1.11 above and to Tenant at the address for Tenant set
forth in Section 1.12 above, or, from and after the Commencement Date, to the
Tenant at the Premises whether or not Tenant has departed from, abandoned or
vacated the Premises, or addressed to such other address or addresses as either
Landlord or Tenant may from time to time designate to the other in writing. Any
notice shall be deemed to have been given and served when delivered personally
or otherwise at the time the same was posted, except that any notice given by
overnight courier shall be deemed given on the first business day following the
date such notice is delivered by such courier provided such courier verifies
delivery thereof.
ARTICLE XXVI - BROKERS
26.01 The parties recognize as the Broker(s) who procured this Lease the
firm(s) specified in Section 1.13 and agree that Landlord shall be solely
responsible for the payment of any brokerage commissions to said Broker(s), and
that Tenant shall have no responsibility therefor unless written provision to
the contrary has been made a part of this Lease. If Tenant has dealt with any
other person or real estate broker in respect to leasing, subleasing or renting
space in the Building or the Project, if applicable, Tenant shall be solely
responsible for the payment of any fee due said person or firm and Tenant
shall protect, indemnify, hold harmless and defend Landlord from any liability
in respect thereto.
ARTICLE XXVII-COMMUICATIONS AND COMPUTER LINES
27.01 Tenant may, in a manner consistent with the provisions and
requirements of this Lease, install, maintain, replace, remove or use any
communications or computer wires, cables and related devices (collectively the
"Lines") at the Building in or serving the Premises, provided: (a) Tenant shall
obtain Landlord's prior written consent, which consent may be conditioned as
required by Landlord, (b) if Tentant at any time uses any equipment that mav
create an electromagnetic field exceeding the normal insulation ratings of
ordinary twisted pair riser cable or cause radiation higher than normal
background radiation, the Lines therefor (including riser cables) shall be
appropriately insulated to prevent such excessive electromagnetic fields or
radiation, and (c) Tenant shall pay all costs in connection therewith. Landlord
reserves the right to require that Tenant remove any Lines which are installed
in violation of these provisions.
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* 150% OF THE RENT PAYABLE BY TENANT TO LANDLORD WITH RESPECT TO THE LAST MONTH
OF THE LEASE TERM FOR THE FIRST MONTH OF SUCH HOLDOVER PERIOD AND 200% OF SAID
RENT PAYABLE FOR SUCH HOLDOVER PERIOD EXCEEDING THE FIRST MONTH.
Landlord may (but shall not have the obligation to): (i) install new Lines
at the Property, and (ii) create additional space for Lines at the Property, and
adopt reasonable and uniform rules and regulations with respect to the Lines.
Notwithstanding anything to the contrary contained in Article IX, Landlord
reserves the right to require that Tenant remove any or all Lines installed by
or for Tenant within or serving the Premises upon termination of this Lease.
Tenant shall not, without the prior written consent of Landlord in each
instance, grant to any third party a security interest or lien in or on the
Lines, and any such security interest or lien granted without Landlord's written
consent shall be null and void. Except to the extent arising from the
intentional or negligent acts of Landlord or Landlord's agents or employees.
Landlord shall have no liability for damages arising from, and Landlord does not
warrant that the Tenant's use of any Lines will be free from the following
(collectively called "Line Problems"): (x) any eavesdropping or wire-tapping by
unauthorized parties, (y) any failure of any lines to satisfy Tenant's
requirements, or (z) any shortages, failures, variations, interruptions,
disconnections, loss or damage caused by the installation, maintenance,
replacement, use or removal of Lines by or for other tenants or occupants at the
Property. Under no circumstances shall any Line Problems be deemed an actual or
constructive eviction of Tenant, render Landlord liable to Tenant for abatement
of Rent, or relieve Tenant from performance of Tenant's obligations under this
Lease. Landlord in no event shall be liable for damages by reason of loss of
profits, business interruption or other consequential damage arising from any
Line Problems.
ARTICLE XXVIII - MISCELLANEOUS
28.01 ENTIRE AGREEMENT. This Lease contains all of the agreements and
understandings relating to the leasing of the Premises and the obligations of
Landlord and Tenant in connection with such leasing. Landlord has not made, and
Tenant is not relying upon, any warranties, or representations, promises or
statements made by Landlord or any agent of Landlord, except as expressly set
forth herein. This Lease supersedes any and all prior agreements and
understandings between Landlord and Tenant and alone expresses the agreement of
the parties.
28.02 AMENDMENTS. This Lease shall not be amended, changed or modified in
any way unless in writing executed by Landlord and Tenant. Landlord shall not
have waived or released any of its rights hereunder unless in writing and
executed by the Landlord.
28.03 SUCCESSORS. Except as expressly provided herein, this Lease and the
obligations of Landlord and Tenant contained herein shall bind and benefit the
successors and assigns of the parties hereto.
28.04 FORCE MAJEURE. Landlord shall incur no liability to Tenant with
respect to, and shall not be responsible for any failure to perform, any of
Landlord's obligations hereunder if such failure is caused by any reason beyond
the control of Landlord including, but not limited to strike, labor trouble,
governmental rule, regulations, ordinance, statute or interpretation, fire,
earthquake, civil commotion, or failure or disruption of utility services. The
amount of time for Landlord to perform any of Landlord's obligations shall be
extended by the amount of time Landlord is delayed in performing such
obligation by reason of any force majeure occurrence whether similar to or
different from the foregoing types of occurrences.
28.05. SURVIVAL OF OBLIGATIONS. Any obligations of Tenant accruing prior to
the expiration of the Lease shall survive the expiration or earlier termination
of the Lease, and Tenant shall promptly perform all such obligations whether or
not this Lease has expired or been terminated.
28.06 LIGHT AND AIR. No diminution or shutting off of any light, air or
view by any structure now or hereafter erected shall in any manner affect this
Lease or the obligations of Tenant hereunder, or increase any of the obligations
of Landlord hereunder.
28.07 GOVERNING LAW. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.
28.08 SEVERABILITY. In the event any provision of this Lease is found to be
unenforceable, the remainder of this Lease shall not be affected, and any
provision found to be invalid shall be enforceable to the extent permitted by
law. The parties agree that in the event two different interpretations may be
given to any provision hereunder, one of which will render the provision
unenforceable, and one of which will render the provision enforceable, the
interpretation rendering the provision enforceable shall be adopted.
28.09 CAPTIONS. All captions, headings, titles, numerical references and
computer highlighting are for convenience only and shall have no effect on the
interpretation of this Lease.
28.10 INTERPRETATION. Tenant acknowledges that it has read and reviewed
this Lease and that it has had the opportunity to confer with counsel in the
negotiation of this Lease. Accordingly, this Lease shall be construed neither
for nor against Landlord or Tenant, but shall be given a fair and reasonable
interpretation in accordance with the meaning of its terms and the intent of the
parties.
28.11 INDEPENDENT COVENANTS. Each covenant, agreement, obligation or other
provision of this Lease to be performed by Tenant are separate and independent
covenants of Tenant, and not dependent on any other provision of the Lease.
28.12 NUMBER AND GENDER. All terms and words used in this Lease, regardless
of the number or gender in which they are used, shall be deemed to include the
appropriate number and gender, as the context may require.
28.13 TIME IS OF THE ESSENCE. Time is of the essence of this Lease and the
performance of all obligations hereunder.
28.14 JOINT AND SEVERAL LIABILITY. If Tenant comprises more than one person
or entity, or if this Lease is guaranteed by any party, all such persons shall
be jointly and severally liable for payment of rents and the performance of
Tenant's obligations hereunder.
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28.15 EXHIBITS AND SCHEDULES. Exhibits A (Outline of Premises), B (Work
Letter Agreement), C (Suite Acceptance Letter), D (Tenant Operations Inquiry), E
(List of Additional Insureds), F (Rules and Regulations) and G (Guaranty), and
Schedule 1 to Exhibit D (List of Permissible Hazardous Materials and Quantities)
are incorporated into this Lease by reference and made a part hereof.
28.16 OFFER TO LEASE. The submission of this Lease to Tenant or its broker
or other agent, does not constitute an offer to Tenant to lease the Premises.
This Lease shall have no force and effect until (a) it is executed and delivered
by Tenant to Landlord and (b) it is fully reviewed and executed by Landlord;
provided, however, that, upon execution of this Lease by Tenant and delivery to
Landlord, such execution and delivery by Tenant shall, in consideration of the
time and expense incurred by Landlord in reviewing the Lease and Tenant's
credit, constitute an offer by Tenant to Lease the Premises upon the terms and
conditions set forth herein (which offer to Lease shall be irrevocable for
twenty (20) business days following the date of delivery).
28.17 WAIVER; NO COUNTERCLAIM; CHOICE OF LAWS. To the extent permitted by
applicable law, Tenant hereby waives the right to a jury trial in any action or
proceeding regarding this Lease and the tenancy created by this Lease. It is
mutually agreed that in the event Landlord commences any summary proceeding for
non-payment of Rent, Tenant will not interpose any counterclaim of whatever
nature or description in any such proceeding. In addition, Tenant hereby submits
to local jurisdiction in the State of California and agrees that any action by
Tenant against Landlord shall be instituted in the State of California and that
Landlord shall have personal jurisdiction over Tenant for any action brought by
Landlord against Tenant in the State of California. To the extent permitted by
applicable law, Tenant hereby waives any and all rights of redemption granted by
any present or future laws.
28.18 ELECTRICAL SERVICE TO THE PREMISES. Anything set forth in Section
7.01 or elsewhere in this Lease to the contrary notwithstanding, electricity to
the Premises shall not be furnished by Landlord, but shall be furnished by the
approved electric utility company serving the Building. Landlord shall permit
Tenant to receive such service directly from such utility company at Tenant's
cost (except as otherwise provided herein) and shall permit Landlord's wire and
conduits, to the extent available, suitable and safely capable, to be used for
such purposes.
28.19 RIGHTS RESERVED BY LANDLORD. Landlord reserves the following rights
exercisable without notice (except as otherwise expressly provided to the
contrary in this Lease) and without being deemed an eviction or disturbance of
Tenant's use or possession of the Premises or giving rise to any claim for
set-off or abatement of Rent: (i) to change the name or street address of the
Building; (ii) to install, affix and maintain all signs on the exterior and/or
interior of the Building; (iii) to designate and/or approve prior to
installation, all types of signs, window shades, blinds, drapes, awnings or
other similar items, and all internal lighting that may be visible from the
exterior of the Premises; (iv) to change the arrangement of entrances, doors,
corridors, elevators and/or stairs in the Building, provided no such change
shall materially adversely affect access to the Premises; (v) to grant any party
the exclusive right to conduct any business or render any service in the
Building, provided such exclusive right shall not operate to prohibit Tenant
from using the Premises for the purposes permitted under this Lease: (vi) to
prohibit the placement of vending or dispensing machines of any kind in or about
the Premises other than for use by Tenant's employees; (vii) to prohibit the
placement of video or other electronic games in the Premises; (viii) to have
access for Landlord and other tenants of the Building to any mail chutes and
boxes located in or on the Premises according to the rules of the United States
Post Office; (ix) to close the Building after normal business hours, except that
Tenant and its employees and invitees shall be entitled to admission at all
times under such rules and regulations as Landlord prescribes for security
purposes; (x) to install, operate and maintain security systems which monitor,
by close circuit television or otherwise, all persons entering or leaving the
Building; (xi) to install and maintain pipes, ducts, conduits, wires and
structural elements located in the Premises which serve other parts or other
tenants of the Building; and (xii) to retain at all times master keys or pass
keys to the Premises.
28.20 TENANT OPERATIONS INQUIRY. As a material inducement to Landlord to
enter into this Lease (i) Tenant has completed Exhibit D hereto, and (ii) Tenant
represents and warrants to Landlord that Exhibit D is true and correct in all
material respects and is not misleading.
ARTICLE XXIX - FLOOR LOAD LIMITS
29.01 FLOOR LOAD LIMITS. Tenant shall not place a load upon any floor of
the Premises exceeding the floor load per square foot area which it was designed
to carry and which is allowed by law. Landlord reserves the right to prescribe
the weight and position of all safes, business machines and mechanical equipment
in the Building. Such installations shall be placed and maintained by Tenant, at
Tenant's expense, in settings sufficient, in Landlord's judgment, to absorb and
prevent vibration, noise and annoyance to occupants of the Building, the
Project, if applicable, or any adjacent property.
ARTICLE XXX - LANDLORD'S LIEN
30.01 LANDLORD'S LIEN. As security for Tenant's payment of Rent, damages
and all other payments required to be made by this Lease, Tenant hereby grants
to Landlord a lien upon all property of Tenant now or subsequently located upon
the Premises. If Lessee abandons or vacates any substantial portion of the
Premises or is in default in the payment of any rentals, damage or other
payments required to be made by this Lease, Landlord may take any action it
deems necessary and may be available to it under the laws of the State of
California. The proceeds of the sale of the personal property shall be applied
by Landlord toward the cost of the sale and then toward the payment of all sums
then due by Tenant to Landlord under the terms of this Lease.
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NOTE: Need to file UCC-I Financing Statement describing such collateral in
Secretary of State's office and county recorder
IN WITNESS WHEREOF, the parties hereto have executed this lease as of
the date first above written.
TENANT: LANDLORD:
Q.E.P. Company, Inc., a New York JMB/PENNSYLVANIA ASSOCIATES-IV, L.P.,
corporation a Delaware limited partnership
By: ▇▇▇▇▇▇▇/JMB INSTITUTIONAL REALTY ADVISORS L.P.,
an Illinois limited partnership,
general partner
By:/s/ ILLEGIBLE
---------------- By: ▇▇▇▇▇▇▇/JMB INSTITUTIONAL REALTY ADVISORS, INC.,
Its: President an Illinois limited corporation,
general partner
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ [SEAL] By: /s/ ILLEGIBLE
------------------- -------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Its: Vice President
WITNESSES
/s/ H. ▇▇▇▇▇▇▇ SARL
-------------------
H. ▇▇▇▇▇▇▇ Sarl
/s/ ILLEGIBLE
------------------- WITNESSES:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
21