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LEASE AGREEMENT
(NNN R&D)
Basic Lease Information
Lease Date: February 11, 1997
Landlord: WHLNF REAL ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership
Landlord's Address: c/o Lincoln Property Company Management Services,
Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404-1167
Tenant: InVision Technologies, Inc., a Delaware
corporation
Tenant's Address: 7151 Gateway Boulevard
Newark, California 94560
Premises: Approximately 95,245 rentable square feet as shown
on Exhibit A
Premises Address: 7151 Gateway Boulevard
Newark, California 94560
Building II: Approximately 95,245 rentable square feet
Lot (Building's tax parcel): 092A-2500-006, 537-0460-021,537-0460-022,
537-0460-023, 537-0460-024 and 537-0460-025
Park: Lincoln Bridgeway
Technology Center: Approximately 170,675 rentable square feet
Term: May 20, 1997 ("Commencement Date"), through
May 19, 2007 ("Expiration Date")
Base Rent (Section 3): Zero Dollars ($0.00) per month. (Months 1-2)
Adjustments to Base Rent: July 20, 1997 $50,151.00 (Months 3-4)
Sept. 20, 1997 $71,433.75 (Months 5-12)
May 20, 1998 $80,958.25 (Months 13-24)
May 20, 1999 $83,815.60 (Months 25-36)
May 20, 2000 $87,625.40 (Months 37-48)
May 20, 2001 $91,435.20 (Months 49-60)
May 20, 2002 $95,245.00 (Months 61-72)
May 20, 2003 $99,054.80 (Months 73-84)
May 20, 2004 $102,864.60 (Months 85-96)
May 20, 2005 $106,674.40 (Months 97-108)
May 20, 2006 $110,484.20 (Months 109-120)
Security Deposit
(Section 4): One hundred ten thousand four hundred eighty-four
and 00/100 Dollars($I 10,484.00) ("First Security
Deposit"), plus a eighthundred thousand and 00/100
Dollars ($800,000.00) standby Letter of Credit
("Second Security Deposit").
*Tenant's Share of Operating Expenses (Section 6.1): 55.81% of the Park
*Tenant's Share of Tax Expenses (Section 6.2): 55.81% of the Lot
*Tenant's Share of Common Area Utility Costs (Section 7): 55.81% of the Park
*Tenant's Share of Utility Expenses (Section 7): 55.81% of the Park
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth
in this Lease.
Permitted Uses (Section 9): General office use, research and development,
light assembly, distribution and storage of
explosive devices and other associated uses for
aviation security products, but only to the extent
permitted by the City of Newark and all agencies
and governmental authorities having jurisdiction
thereof.
Unreserved
Parking Spaces: Three hundred thirty-three (333) nonexclusive and
undesignated spaces
Broker (Section 38): Cornish & Carey for Tenant
Bishop Hawk for Landlord
Exhibits: EXHIBIT A - PREMISES, BUILDING, LOT AND/OR PARK
EXHIBIT B - TENANT IMPROVEMENTS
EXHIBIT C - RULES AND REGULATIONS
EXHIBIT D - COVENANTS, CONDITIONS AND RESTRICTIONS
(INTENTIONALLY OMITTED)
EXHIBIT E - HAZARDOUS MATERIALS DISCLOSURE
CERTIFICATE - EXAMPLE
EXHIBIT F - CHANGE OF COMMENCEMENT DATE - EXAMPLE
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EXHIBIT G - TENANT'S INITIAL HAZARDOUS MATERIALS
DISCLOSURE CERTIFICATE
EXHIBIT H - SIGN CRITERIA (INTENTIONALLY OMITTED)
Addenda: ADDENDUM 1: OPTION TO EXTEND
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TABLE OF CONTENTS
SECTION PAGE
------- ----
1. PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES . . . . 4
3. RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. TENANT IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 6
6. ADDITIONAL RENT . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7. UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. LATE CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9. USE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . .10
10. ALTERATIONS AND ADDITIONS AND SURRENDER OF PREMISES . . . . . . . .11
11. REPAIRS AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . . .11
12. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
13. WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . . . . . . . .14
14. LIMITATION OF LIABILITY AND INDEMNITY . . . . . . . . . . . . . . .14
15. ASSIGNMENT AND SUBLEASING . . . . . . . . . . . . . . . . . . . . .14
16. AD VALOREM TAXES. . . . . . . . . . . . . . . . . . . . . . . . . .16
17. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . .16
18. RIGHT OF ENTRY. . . . . . . . . . . . . . . . . . . . . . . . . . .16
19. ESTOPPEL CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . .16
20. TENANT'S DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . .17
21. REMEDIES FOR TENANT'S DEFAULT . . . . . . . . . . . . . . . . . . .17
22. HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . .18
23. LANDLORD'S DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . .18
24. PARKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
25. SALE OF PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . .19
26. WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
27. CASUALTY DAMAGE . . . . . . . . . . . . . . . . . . . . . . . . . .19
28. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS . . . . . . . . . . . . .20
30. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . .22
31. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .22
32. SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
33. MORTGAGEE PROTECTION. . . . . . . . . . . . . . . . . . . . . . . .24
34. QUITCLAIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
35. MODIFICATIONS FOR LENDER. . . . . . . . . . . . . . . . . . . . . .24
36. WARRANTIES OF TENANT. . . . . . . . . . . . . . . . . . . . . . . .24
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT . . . . . . . . . .24
38. BROKERAGE COMMISSION. . . . . . . . . . . . . . . . . . . . . . . .25
39. QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . .25
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS. . .25
41. LANDLORD'S WAIVER . . . . . . . . . . . . . . . . . . . . . . . . .25
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LEASE AGREEMENT
DATE:This Lease is made and entered into as of the Lease Date set forth on Page
1. The Basic Lease, Information set forth on Page 1 and this Lease are and
shall be construed as a single instrument.
1. PREMISES: Landlord hereby leases the Premises to Tenant upon the terms and
conditions contained herein. Landlord hereby grants to Tenant a license for the
right to use, on a non-exclusive basis, parking areas and ancillary facilities
located within the Common Areas of the Park, subject to the terms of this Lease.
Landlord and Tenant hereby agree that for purposes of this Lease, as of the
Lease Date, the rentable square footage area of the Premises, the Building, the
Lot and the Park shall be deemed to be the number of rentable square feet as set
forth in the Basic Lease Information on Page 1. Tenant hereby acknowledges that
the rentable square footage of the Premises may include a proportionate share of
certain areas used in common by all of the Building and/or the Park (for example
an electrical room or telephone room). Tenant further agrees that the number of
rentable square feet of the Building, the Lot and the Park may subsequently
change after the Lease Date commensurate with any modifications to any of the
foregoing by Landlord, and Tenant's Share shall accordingly change.
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES:
2.1 If Landlord cannot deliver possession of the Premises on the
Commencement Date, Landlord shall not be subject to any liability nor shall
the validity of the Lease be affected; provided, the Lease Term and the
obligation to pay Rent shall commence on the date possession is tendered and
the Expiration Date shall be extended commensurately. In the event the
commencement date and/or the expiration date of this Lease is other than the
Commencement Date and/or Expiration Date provided on Page 1, as the case may
be, Landlord and Tenant shall execute a written amendment to this Lease,
substantially in the form of Exhibit F hereto, wherein the parties shall
specify the actual commencement date, expiration date and the date on which
Tenant is to commence paying Rent. The word "Term" whenever used herein
refers to the initial term of this Lease and any extension thereof. Except
as otherwise provided herein, by taking possession of the Premises, Tenant
shall be deemed to have accepted the Premises in good, condition and state of
repair, subject to punchlist items. Landlord shall repair, at its sole cost
and expense, after receipt of Tenant's written notice thereof, which notice
must be delivered to Landlord within the first one hundred-eighty (180) days
of the term of this Lease, any (i) latent defects in the Premises, and (ii)
any mechanical HVAC, roof and electrical systems serving the Premises which
are not in good working order to the extent Tenant has not caused such
systems to not be in good working order. If Tenant fails to timely deliver
to Landlord any such written notice of the aforementioned defects or
deficiencies within said one hundred-eighty (180) days period, Landlord shall
have no obligation to perform any such work thereafter, except as
specifically provided in this Lease. Landlord shall allow Tenant to,
concurrently with Landlord (if Landlord so desires, otherwise separately),
make a claim against Landlord's general contractor for any patent or latent
defects in the initial design or construction of the Tenant Improvements for
a period of five (5) years after the date on which the Tenant Improvements
are Substantially Completed. In addition to the foregoing, Tenant shall be
entitled to enforce, concurrently with Landlord, any warranties made or given
to Landlord from the general contractor and any major subcontractors with
respect to the Tenant Improvements. Tenant shall be a third party
beneficiary of Landlord's construction agreement, and accordingly, Landlord
agrees to include a provision in Landlord's construction contract to
effectuate same. Tenant hereby acknowledges and agrees that neither Landlord
nor Landlord's agents or representatives has made any representations or
warranties as to the suitability, safety or fitness of the Premises for the
conduct of Tenant's business, Tenant's intended use of the Premises or for
any other purpose. The Building shell construction shall include all items
listed on Exhibit B-1.
Landlord and Tenant hereby acknowledge and agree that as of the Lease
Date the Building construction has not been completed on the Lot.
Notwithstanding the foregoing to the contrary, (A) in the event that for
reasons other than the occurrence of a Force Majeure Delay (as hereinafter
defined) or a Tenant Delay (as hereinafter defined) the Commencement Date has
not occurred by the date which is ninety (90) days after the Commencement
Date stated on Page 1, ("Last Occupancy Date"), Tenant may elect to terminate
the Lease. Termination of the Lease by Tenant as provided for herein shall be
the sole and exclusive remedy of Tenant for Landlord's failure to deliver the
Premises. Tenant shall exercise the right to terminate provided for herein
by giving Landlord written notice of its intent to so terminate ("Termination
Notice"). The Termination Notice shall be given, if at all, on or before the
date which is five (5) days after the Last Occupancy Date. Termination of the
Lease shall be effective fifteen (15) days after Landlord's receipt of the
Termination Notice. In the event that Tenant gives the Termination Notice,
and in the further event that during such fifteen (15) day period, the
Commencement Date occurs, the Tenant shall not be entitled to terminate the
Lease as provided for herein. For purposes of this paragraph the term "Force
Majeure Delay" shall mean any actual delay beyond the reasonable control of
Landlord in completion of the Tenant Improvements which is not a Tenant Delay
and which is caused by, with limitation, any one or more of the following:
(a) wars; (b) fire; (c) earthquake, flood or other natural disaster, (d)
unusual and unforeseeable delay not within the reasonable control of
Landlord; (e) casualties; (f) other acts of God; or (g) governmental action
or inaction (including failure, refusal or delay in issuing permits,
approvals and/or authorizations), or injunction, permit appeal or court order
requiring cessation of construction taking place in the Premises. The Term
"Tenant Delay" shall mean any delay in completion of the Tenant Improvements
resulting from any or all of the following: (i) Tenant's failure to timely
perform any of its obligations under the Lease, including any failure to
complete on or before the date due thereof, any actual item which is Tenant's
responsibility to complete or perform; (ii) Tenant's delay in approving
plans, specifications, drawings, and any other documents setting forth and/or
describing the Tenant Improvements, including, without limitation, the Final
Drawings, beyond those periods of time permitted by the terms of the Lease;
(iii) Tenant's changes to Landlord and Tenant approved plans, specifications,
drawings or any other documents describing and/or depicting the Tenant
Improvements; (iv) Tenant's request for
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materials, finishes, or installations which are not readily available or
which are incompatible with Landlord's standard materials, finishes or
installations for the Premises; (v) Tenant's use or occupancy of the Premises
during the construction of the Tenant Improvements or any act or failure to
act by Tenant in connection with its use or occupancy of the Premises during
the construction of the Tenant Improvements. Upon termination of the Lease
by Tenant pursuant to the terms of this paragraph, Landlord shall promptly
return all prepaid Rent to Tenant.
2.2 In the event Landlord permits Tenant to occupy the Premises prior
to the Commencement Date, for purposes other than those permitted pursuant to
Paragraph 13 of Exhibit B of the Lease, such occupancy shall be at Tenant's
sole risk and subject to all the provisions of this Lease, including, but not
limited to, the requirement to pay Rent and the Security Deposit, and to
obtain the insurance required pursuant to this Lease and to deliver insurance
certificates as required herein. In addition to the foregoing, Landlord
shall have the right to impose such additional conditions on Tenant's early
entry as Landlord shall deem appropriate. If, at any time, Tenant is in
default of any term, condition or provision of this Lease, any such waiver by
Landlord of Tenant's requirement to pay rental payments shall be null and
void and Tenant shall immediately pay to Landlord all rental payments so
waived by Landlord.
3. RENT: On the date that Tenant executes this Lease, Tenant shall deliver
to Landlord the original executed Lease, the Base Rent (which shall be
applied against the Rent payable for the first month Tenant is required to
pay Base Rent), the Security Deposit, and all insurance certificates
evidencing the insurance required to be obtained by Tenant under Section 12
of this Lease. Tenant agrees to pay Landlord, without prior notice or
demand, or abatement, offset, deduction or claim, except as otherwise
provided herein, the Base Rent described on Page I, payable in advance at
Landlord's address shown on Page I on the first day of each month throughout
the Term of the Lease. In addition to the Base Rent set forth on Page i,
Tenant shall pay Landlord in advance and on the first (lst) day of each month
throughout the Term of this Lease, as Additional Rent, Tenant's Share of
Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses. Tenant shall also pay to Landlord as Additional Rent hereunder,
immediately) on Landlord's demand therefor, any and all reasonable costs and
expenses incurred by Landlord to enforce the provisions of this Lease,
including, but not limited to, costs associated with the delivery of notices,
delivery and recordation of notice(s) of default, reasonable attorneys' fees,
expert fees, court costs and filing fees (collectively, the "Enforcement
Expenses"). The term "Rent" whenever used herein refers to the aggregate of
all these amounts. If Landlord permits Tenant to occupy the Premises without
requiring Tenant to pay rental payments for a period of time, the waiver of
the requirement to pay rental payments shall only apply to waiver of the Base
Rent and Tenant shall otherwise perform all other obligations of Tenant
required hereunder. The Rent for any fractional part of a calendar month at
the commencement or termination of the Lease term shall be a prorated amount
of the Rent for a full calendar month based upon a thirty (30) day month.
The prorated Rent shall be paid on the Commencement Date and the first day of
the calendar month in which the date of termination occurs, as the case may
be.
4. SECURITY DEPOSIT:
4.1 FIRST SECURITY DEPOSIT: Upon Tenant's execution of this Lease,
Tenant shall deliver to Landlord, as a First Security Deposit for the
performance by Tenant of its obligations under this Lease, the amount
described on Page 1. If Tenant is in default, Landlord may, but without
obligation to do so, use the First Security Deposit, or any portion thereof,
to cure the default or to compensate Landlord for all damages sustained by
Landlord resulting from Tenant's default, including, but not limited to the
Enforcement Expenses. Tenant shall, immediately on demand, pay to Landlord a
sum equal to the portion of the First Security Deposit so applied or used so
as to replenish the amount of the First Security Deposit held to increase
such deposit to the amount initially deposited with Landlord. Within thirty
(30) days after the termination of this Lease, if possible Landlord shall
return the First Security Deposit to Tenant, less such amounts as are
reasonably necessary, as determined reasonably by Landlord, to remedy
Tenant's default(s) hereunder or to otherwise restore the Premises to a clean
and safe condition, reasonable wear and tear excepted. If the cost to
restore the Premises exceeds the amount of the First Security Deposit, Tenant
shall promptly deliver to Landlord any and all of such excess sums as
reasonably determined by Landlord. Landlord shall not be required to keep
the First Security Deposit separate from other finds, and, unless otherwise
required by law, Tenant shall not be entitled to interest on the First
Security Deposit. In no event or circumstance shall Tenant have the right to
any use of the First Security Deposit and, specifically, Tenant may not use
the First Security Deposit as a credit or to otherwise offset any payments
required hereunder, including, but not limited to, Rent or any portion
thereof.
4.2 SECOND SECURITY DEPOSIT: For purposes of this Section 4.2 any and
all references herein to Tenant shall alternatively mean and refer to a
Permitted Transferee(hereafter defined in Section 15}if Tenant assigns the
Premises to a Permitted Transferee in accordance with the provisions of
Section 15 of this Lease. On or before full Lease execution, Tenant shall
deliver to Landlord, as a second security deposit (the "Second Security
Deposit") for the full and faithful performance by Tenant of all of its
obligations under this Lease, an irrevocable negotiable letter of credit, in
the form and containing the terms required herein, payable in the City of
Foster City, California running in favor of Landlord issued by a solvent bank
under the supervision of the Superintendent of Banks of the State of
California, or a National Banking Association, in the amount of eight hundred
thousand and 00/100 dollars ($800,000.00) (the "Letter of Credit"). The
Letter of Credit shall be (a) at sight and irrevocable (b) maintained in
declining amounts stated below, whether through replacement, renewal or
extension, until the eighth anniversary of the Lease or until Tenant has
achieved two consecutive years of profitability in either of which cases,
Tenant shall 'no longer by required to maintain the Second Security Deposit.
Provided, however if Tenant is or has been in default of any provision of the
Lease beyond any applicable cure period set forth in the Lease at the time of
the eighth anniversary of the Lease, the Second
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Security Deposit shall be maintained as described herein throughout the Term
of the Lease (the "Letter of Credit Expiration Date"), and Tenant shall
deliver a new Letter of Credit or certificate of renewal or extension to
Landlord at least thirty (30) days prior to the expiration of the Letter of
Credit, without any action whatsoever on the part of Landlord, (c) subject to
the Uniform Customs and Practices for Documentary Credits (1983-Rev)
International Chamber of Commerce Publication//400, and (d) acceptable to
Landlord in its sole discretion. The Letter of Credit amount shall decline
and be renewed or extended as follows:
Origination or
Renewal/Extension Date Expiration Date Amount
--------------- ------
Lease Execution May 20, 2000 $800,000.00
April 20, 2000 May 20, 2001 $775,020.00
April 20, 2001 May 20, 2002 $566,265.00
April 20, 2002 May 20, 2003 $377,510.00
April 20, 2003 May 20, 2004 $188,755.00
The above Letter of Credit amounts include the full amount of the amortized
excess Tenant Improvement costs as defined in paragraph 10 of Exhibit B of
the Lease. In the event that the full amount of the Excess Tenant
Improvement costs are not provided by Landlord then the original Letter of
Credit amounts shall be reduced by the amount of the Excess Tenant
Improvement Costs that are not provided by Landlord. The subsequent Letter
of Credit amounts shall be reduced by twenty (20) percent for each
renewal/extension period as outlined above.
In addition to the foregoing, the form and terms of the Letter of Credit (and
the bank issuing the same) shall be acceptable to Landlord, in Landlord's
sole discretion, and shall provide, among other things, in effect that: (1)
Landlord, or its then managing agent, shall have the right to draw down an
amount up to the face amount of the Letter of Credit upon the presentation to
the issuing bank of Landlord's (or Landlord's then managing agent's)
statement that such amount is due to Landlord under the terms and conditions
of this Lease, it being understood that if Landlord or its managing agent be
a corporation, partnership or other entity, then such statement shall be
signed by an officer (if a corporation), a general partner (if a
partnership), or any authorized party (if another entity); (2) the Letter of
Credit will be honored by the issuing bank without inquiry as to the accuracy
thereof and regardless of whether the Tenant disputes the content of such
statement; (3) in the event of a transfer of Landlord's interest in any of
the Buildings of which the Premises are a part, Landlord shall have the right
to transfer the Letter of Credit, in whole or in part (or cause a substitute
letter of credit to be delivered, as applicable), to the transferee and upon
such transferee's assumption of Landlord's obligations under the Lease, the
Landlord shall, without any further agreement between the parties, be
released by Tenant from all liability therefor, and it is agreed that the
provisions hereof shall apply to every transfer or assignment of the whole or
any portion of said Letter of Credit to a new Landlord. If, as a result of
any such application of all or any part of such security, the amount secured
by the Letter of Credit shall be less than two hundred fifty-two thousand two
hundred eighty-eight and 00/100 dollars ($252,288.00) or the required Letter
of Credit amount for the corresponding dates above, Tenant shall forthwith
provide Landlord with additional letter(s) of credit or cash in an amount
equal to the deficiency and each such additional letter of credit shall
comply with all of the provisions of this Section 4.2. Tenant further
covenants and warrants that it will not assign nor encumber the Letter of
Credit or any part thereof and that neither Landlord nor its successors or
assigns will be bound by any such assignment, encumbrance, attempted
assignment or attempted encumbrance. Without limiting the generality of the
foregoing, if the Letter of Credit expires earlier than the Letter of Credit
Expiration Date, Landlord will accept a renewal thereof or substitute letter
of credit (such renewal or substitute letter of credit to be in effect not
later than thirty (30) days prior to the expiration thereof), irrevocable and
automatically renewable as above provided through the Letter of Credit
Expiration Date upon the same terms as the expiring letter of credit or such
other terms as may be acceptable to Landlord. However, if the Letter of
Credit is not timely renewed or a substitute letter of credit or cash is not
timely received, or if Tenant fails to maintain the Letter of Credit in the
amount and terms set forth in this Section 4.2, Tenant, at least thirty (30)
days prior to the expiration of the Letter of Credit, or immediately upon its
failure to comply with each and every term of this Section 4.2, must deposit
with Landlord cash security in the amounts required by, and to be held
subject to and in accordance with, all of the terms and conditions set forth
this Section 4.2 and all other applicable provisions of this Lease, failing
which the Landlord may present such Letter of Credit to the bank in
accordance with the terms of this Section 4.2, and the entire sum secured
thereby shall be paid to Landlord, to be held by Landlord as provided in this
Section 4.2. If Tenant is in default after the expiration of any applicable
cure period, Landlord may, but without obligation to do so, use the Second
Security Deposit, or any portion thereof, to cure the default or to
compensate Landlord for all reasonable damages sustained by Landlord
resulting from Tenant's default, including, but not limited to the
Enforcement Expenses. Tenant shall, within ten (10) business days after the
expiration of any applicable cure period on demand, pay to Landlord a sum
equal to the portion of the Second Security Deposit so applied or used so as
to replenish the amount of the Second Security Deposit held to increase such
deposit to the amount initially deposited with Landlord.
5. TENANT IMPROVEMENTS: Tenant hereby accepts the Premises in the
condition in EXHIBIT B attached hereto. If so specified in EXHIBIT B hereto,
Landlord or Tenant, as the case may be, shall install the improvements
("Tenant Improvements") in the Premises in accordance with the terms,
conditions, criteria and provisions set forth in EXHIBIT B hereto. Tenant
acknowledges that neither Landlord nor any of Landlord's agents,
representatives or employees has made any representations as to the
suitability or fitness of the Premises for the conduct of Tenant's business,
including without limitation, any storage incidental thereto, or for any
other purpose, and that neither Landlord nor any of Landlord's agents,
representatives or employees has agreed to undertake any alterations or
construct any Tenant Improvements to the Premises except as expressly
provided in EXHIBIT B to this Lease.
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6. ADDITIONAL RENT: It is intended by Landlord and Tenant that this Lease
be a "triple net lease". The costs and expenses described in this Section 6
and all other sums, charges, costs and expenses specified in this Lease other
than Base Rent are to be paid by Tenant to Landlord as additional rent
(collectively, "Additional Rent").
6.1 OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay Tenant's Share, which is defined on Page 1, of
all Operating Expenses as Additional Rent. The term "Operating Expenses" as
used herein shall mean the total amounts paid or payable by Landlord in
connection with the ownership, maintenance, repair and operation of the
Premises, the Building and the Lot, and where applicable, of the Park
referred to on Page 1. The amount of Tenant's Share of Operating Expenses
shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord if there is a change in the rentable square footage
of the Premises, the Building and/or the Park. These Operating Expenses may
include, but are not limited to:
6.1.1 Landlord's cost of repairs to, and maintenance of, the
roof, the roof membrane and the exterior walls of the Building;
6.1.2 Landlord's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Areas"
shall mean all areas and facilities within the Park exclusive of the Premises
and the other portions of the Park leased exclusively to other tenants. The
Common Areas include, but are not limited to, interior lobbies, mezzanines,
parking areas, access and perimeter roads, sidewalks, rail spurs, landscaped
areas and similar areas and facilities;
6.1.3 Landlord's annual cost of insurance insuring against fire
and extended coverage (including, if Landlord elects, "all risk" coverage)
and all other insurance, including, but not limited to, earthquake, flood
and/or surface water endorsements for the Building, the Lot and the Park
(including the Common Areas), rental value insurance against loss of Rent in
an amount equal to the amount of Rent for a period of at least six (6) months
commencing on the date of loss, and subject to the provisions of Section 27
below, any deductible;
With respect to property insurance maintained by Landlord
hereunder, except as set forth below, Tenant shall not be
required to reimburse Landlord for any premiums paid by Landlord
for insurance covering loss due to earthquake in excess of the
Base Amount. For purposes of the foregoing, the term "Base
Amount" shall mean (i) with respect to the first twelve (12)
months of the term of this Lease following the Commencement Date,
a sum equal to only the portion of the insurance premium
attributable to insurance covering loss due to earthquake, and
(ii) with respect to each twelve (12) month period thereafter, a
sum equal to the amount included in Operating Expenses during
the immediately preceding twelve (12) month period with respect
to such premiums, with actual increase not to exceed ten percent
(10%). However, (a) if any mortgagee of Landlord requires
Landlord to maintain earthquake insurance, then Landlord shall
pay the excess premium costs over the Base Amount, and (b) if
all mortgagees of Landlord do not require Landlord to maintain
earthquake insurance and the premiums paid for earthquake
insurance exceed the Base Amount, then if Tenant does not elect
to pay such excess premium costs, Landlord may elect not to
maintain such earthquake insurance.
6.1.4 Landlord's cost of modifications to the Building, the
Common Areas and/or the Park occasioned by any rules, laws or regulations
effective subsequent to the date on which the Building was originally
constructed;
6.1.5 If Landlord elects to so procure, Landlord's cost of
preventative maintenance, and repair contracts including, but not limited to,
contracts for elevator systems and heating, ventilation and air conditioning
systems, lifts for disabled persons, and trash or refuse collection;
6.1.6 Landlord's cost of security and fire protection services
for the Building and/or the Park, as the case may be, if in Landlord's sole
discretion such services are provided;
6.1.7 Landlord's establishment of reasonable reserves for
replacements and/or repairs of Common Area improvements, equipment and
supplies;
6.1.8 Landlord's cost of supplies, equipment, rental equipment
and other similar items used in the operation and/or maintenance of the Park;
6.1.9 Landlord's cost for the repairs and maintenance items set
forth in Section 11.2 below; and
6.1.10 Landlord's cost for the management and administration of
the Premises, the Building, the Common Areas and the Park, including without
limitation, a property management fee, accounting, auditing, billing,
salaries for clerical and supervisory employees (whether located within the
Park or off-site) and all fees, licenses and permits related to the
ownership, operation and management of any portion of the Park in an amount
not to exceed three percent (3 %) of the Rent, excluding for purposes of
calculating this sum, the costs described in this Section 6.1.11.
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Notwithstanding anything to the contrary contained in this Lease,
in no event shall Operating Expenses include the following (collectively
"Costs"):
(a) Costs relating to repairs, alterations, improvements,
equipment and tools which would be property capitalized under generally
accepted accounting principles, except to the extent of Lessee's share
of such costs of the capital items in question;
(b) Costs incurred by Lessor to the extent that Lessor is
reimbursed by insurance proceeds or otherwise;
(c) Costs, including permit, license and inspecting costs,
incurred with respect to the installation of improvements made for
tenants or other occupants in the Building or incurred with respect to
the installation of improvements made for tenants or other occupants in
the Building or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other
occupants of the Building;
(d) Depreciation, amortization and interest payments, except
to the extent provided herein pursuant to paragraph (b) above, and
except on materials, tools, supplies and vendor-type equipment purchased
by Lessor to enable Lessor to supply services Lessor might otherwise
contract for with a third party where such depreciation, amortization
and interest payments would otherwise have been included in the charge
for such third party's services, all as determined in accordance with
generally accepted accounting principles, consistently applied (as
applied to commercial real estate), and when depreciation or
amortization is permitted or required, the item shall be amortized over
its reasonably anticipated useful life (as reasonably determined by
Lessor):
(e) Leasing commissions, attorneys' fees, space planning
costs, and other costs and expenses in connection with negotiations with
present or prospective tenants or other occupants of the Building;
(f) Expenses in connection with serves or other benefits
which are not offered to Lessee or for which Lessee is charged directly
but which are provided to another tenant or occupant of the Building;
(g) Overhead and profit increments paid to Lessor or to
subsidiaries or affiliates of Lessor for goods and/or services to the
extent the same exceed the costs of such goods and/or services rendered
by unaffiliated third parties on a competitive basis;
(h) Costs (including in connection therewith all attorneys'
fees and costs of settlement, judgments and payments in lieu thereof)
arising from claims, disputes or potential disputes (other than claims
or disputes, including, but not limited to, tax disputes where the
tenants of the Building would receive benefits if Lessor prevails) in
connection with potential or actual claims, litigation or arbitrations
pertaining to Lessor and/or the Building; and
(i) Any expense not an Operating Expense as defined under GAAP.
6.2 TAX EXPENSES: In addition to the Base Rent set forth in Section
3, Tenant shall pay its share, which is defined on Page l, of all real
property taxes applicable to the land and improvements included within the
Lot on which the Premises are situated and one hundred percent (100%) of all
personal property taxes now or hereafter assessed or levied against the
Premises or Tenant's personal property. The amount of Tenant's Share of Tax
Expenses shall be reviewed from time to time by Landlord and shall be subject
to modification by Landlord if there is a change in the rentable square
footage of the Premises, the Building and/or the Park. Tenant shall also pay
one hundred percent (100 %) of any increase in real property taxes
attributable, in Landlord's sole but reasonable discretion, to any and all
alterations, Tenant Improvements or other improvements of any kind, which are
above standard improvements customarily installed for similar buildings
located within the Building or the Park (as applicable), whatsoever placed
in, on or about the Premises for the benefit of, at the request of, or by
Tenant. The term "Tax Expenses" shall mean and include, without limitation,
any form of tax and assessment (general, special, supplemental, ordinary or
extraordinary), commercial rental tax, payments under any improvement bond or
bonds, license fees, license tax, business license fee, rental tax,
transaction tax, levy, or penalty imposed by authority having the direct or
indirect power of tax (including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other
improvement district thereof) as against any legal or equitable interest of
Landlord in the Premises, the Building, the Lot or the Park, as against
Landlord's right to rent, or as against Landlord's business of leasing the
Premises or the occupancy of Tenant or any other tax, fee, or excise, however
described, including, but not limited to, any value added tax, or any tax
imposed in substitution (partially or totally) of any tax previously included
within the definition of real property taxes, or any additional tax the
nature of which was previously included within the definition of real
property taxes. The term "Tax Expenses" shall not include any franchise,
estate, inheritance, net income, or excess profits tax imposed upon Landlord.
6.3 PAYMENT OF EXPENSES: Landlord shall estimate Tenant's Share of
the Operating Expenses and Tax Expenses for the calendar year in which the
Lease commences. Commencing on the Commencement Date, one-twelfth (1/12th)
of this estimated amount shall be paid by Tenant to Landlord, as Additional
Rent, on the first (lst) day of each month and throughout the remaining
months of such calendar year. Thereafter, Landlord may estimate such
expenses as of the beginning of each calendar year and Tenant shall pay
one-twelfth (1/12th) of such estimated amount as Additional Rent hereunder on
the first day of each month during such calendar year
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and for each ensuing calendar year throughout the Term of this Lease.
Tenant's obligation to pay its Tenant's Share of Operating Expenses and Tax
Expenses shall survive the expiration or earlier termination of this Lease.
6.4 ANNUAL RECONCILIATION: By June 30th of each calendar year, or as
soon thereafter as reasonably possible, Landlord shall endeavor to furnish
Tenant with an accounting of actual Operating Expenses and Tax Expenses.
Within thirty (30) days of Landlord's delivery.of such accounting, Tenant
shall pay to Landlord the amount of any underpayment. Notwithstanding the
foregoing, failure by Landlord to give such accounting by such date shall not
constitute a waiver by Landlord of its right to collect any of Tenant's
underpayment at any time. Landlord shall credit the amount of any
overpayment by Tenant toward the next estimated monthly installment(s)
falling due, or where the Term of the Lease has expired, refund the amount of
overpayment to Tenant within thirty (30) days of such accounting. If the
Term of the Lease expires prior to the annual reconciliation of expenses
Landlord shall have the right to reasonably estimate Tenant's Share of such
expenses, and if Landlord determines that an underpayment is due, Tenant
hereby agrees that Landlord shall be entitled to deduct such underpayment
from Tenant's Security Deposit. If Landlord reasonably determines that an
overpayment has been made by Tenant, Landlord shall refund said overpayment
to Tenant as soon as practicable thereafter. Notwithstanding the foregoing,
failure of Landlord to accurately estimate Tenant's Share of such expenses or
to otherwise perform such reconciliation of expenses, including without
limitation, Landlord's failure to deduct any portion of any underpayment from
Tenant's Security Deposit, shall not constitute a waiver of Landlord's right
to collect any of Tenant's underpayment at any time during the Term of the
Lease or at any time after the expiration or earlier termination of this
Lease.
6.5 AUDIT: After delivery to Landlord of at least five (5) business
days prior written notice, Tenant, at its sole cost and expense through any
accountant designated by it, shall have the right to examine and/or audit the
books and records evidencing such costs and expenses for the previous one (1)
calendar year, during Landlord's reasonable business hours but not more
frequently than once during any calendar year. Any such accounting firm
designated by Tenant may not be compensated on a contingency fee basis. The
results of any such audit (and any negotiations between the parties related
thereto) shall be maintained strictly confidential by Tenant and its
accounting firm and shall not be disclosed, published or otherwise
disseminated to any other party other than to Landlord and its authorized
agents. Landlord and Tenant shall use its best efforts to cooperate in such
negotiations and to promptly resolve any discrepancies between Landlord and
Tenant in the accounting of such costs and expenses. In the event that a
refund is determined by Landlord and Tenant or Tenant's accounting firm, to
be due to Tenant, then such refund amount shall be paid, together with
interest thereupon at ten percent (10%) per annum from the date of Landlord's
delivery of its accounting until the payment of such refund.
7. UTILITIES: Utility Expenses, Common Area Utility Costs and all other
sums or charges set forth in this Section 7 are considered part of Additional
Rent. Tenant shall pay the cost of all water, sewer use, sewer discharge
fees and sewer connection fees, gas, heat, electricity, refuse pickup,
janitorial service, telephone and other utilities billed or metered
separately to the Premises and/or Tenant. Tenant shall also pay its share of
any assessments or charges for utility or similar purposes included within
any tax bill for the Lot on which the Premises are situated, including,
without limitation, entitlement fees, allocation unit fees, and/or any
similar fees or charges, and any penalties related thereto. For any such
utility fees or use charges that are not billed or metered separately to
Tenant, Tenant shall pay to Landlord, as Additional Rent, without prior
notice or demand, on the first (lst) day of each month throughout the Term of
this Lease the amount which is attributable to Tenant's use of the utilities
or similar services, as reasonably estimated and determined by Landlord based
upon factors such as size of the Premises and intensity of use of such
utilities by Tenant such that Tenant shall pay the portion of such charges
reasonably consistent with Tenant's use of such utilities and similar
services ("Utility Expenses"). If Tenant disputes any such estimate or
determination, then Tenant shall either pay the estimated amount or cause the
Premises to be separately metered at Tenant's sole expense. In addition,
Tenant shall pay to Landlord Tenant's Share, which is set forth on Page 1, as
Additional Rent, without prior notice or demand, on the first (lst) day of
each month throughout the Term of this Lease, of any Common Area utility
costs, fees, charges or expenses ("Common Area Utility Costs"). Tenant shall
pay to Landlord one-twelfth (1/12th) of the estimated amount of Tenant's
Share of the Common Area Utility Costs in the same manner and time periods as
specified in Section 6.3 above and any reconciliation thereof shall also be
in the same manner as specified in Sections 6.3 and 6.4 above. The amount of
Tenant's Share of Common Area Utility Costs shall be reviewed from time to
time by Landlord and shall be subject to modification by Landlord if there is
a change in the rentable square footage of the Premises, the Building and/or
the Park. Tenant acknowledges that the Premises may become subject to the
rationing of utility services or restrictions on utility use as required by a
public utility company, governmental agency or other similar entity having
jurisdiction thereof. Notwithstanding any such rationing or restrictions on
use of any such utility services, Tenant acknowledges and agrees that its
tenancy and occupancy hereunder shall be subject to such rationing
restrictions as may be imposed upon Landlord, Tenant, the Premises, the
Building or the Park, and Tenant shall in no event be excused or relieved
from any covenant or obligation to be kept or performed by Tenant by reason
of any such rationing or restrictions. Tenant further agrees to timely and
faithfully pay, prior to delinquency, any amount, tax, charge, surcharge,
assessment or imposition levied, assessed or imposed upon the Premises, or
Tenant's use and occupancy thereof.
8. LATE CHARGES: Any and all sums or charges set forth in this Section 8
are considered part of Additional Rent. Tenant acknowledges that late
payment (the sixth day of each month or any time thereafter) by Tenant to
Landlord of Base Rent, Tenant's Share of Operating Expenses, Tax Expenses,
Common Area Utility Costs, and Utility Expenses or other sums due hereunder,
will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of such costs being extremely difficult and impracticable to fix.
Such costs include, without limitation, processing and accounting charges,
and late charges that may be imposed on Landlord by the terms of any note
secured by any encumbrance against the Premises, and late charges and
penalties due to
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the late payment of real property taxes on the Premises. Therefore, if any
installment of Rent or any other sum due from Tenant is not received by
Landlord when due or by the expiration of any applicable grace period
provided for herein, Tenant shall promptly pay to Landlord all of the
following, as applicable: (a) an additional sum equal to ten percent (10%) of
such delinquent amount plus interest on such delinquent amount at the rate
equal to the prime rate plus three percent (3 %) for the time period such
payments are delinquent as a late charge for every month or portion thereof
that such sums remain unpaid, (b) the amount of seventy-five dollars ($75)
for each three-day notice prepared for, or served on, Tenant, (c) the amount
of fifty dollars ($50) relating to checks for which there are not sufficient
funds. If Tenant delivers to Landlord a check for which there are not
sufficient funds, Landlord may, at its sole option, require Tenant to replace
such check with a cashier's check for the amount of such check and all other
charges payable hereunder. The parties agree that this late charge and the
other charges referenced above represent a fair and reasonable estimate of
the costs that Landlord will incur by reason of late payment by Tenant.
Acceptance of any late charge or other charges shall not constitute a waiver
by Landlord of Tenant's default with respect to the delinquent amount, nor
prevent Landlord from exercising any of the other rights and remedies
available to Landlord for any other breach of Tenant under this Lease. If a
late charge or other charge becomes payable for any three (3) installments of
Rent within any twelve (12) month period, then Landlord, can require the Rent
be paid monthly in advance by cashier's check or by electronic funds
transfer. Notwithstanding anything to the contrary contained within this
Lease. Landlord shall reduce the late charge to seven (7%) percent, but not
more than twice during any Lease year. If Tenant pays Rent late more than
twice per Lease year as provided above, Landlord shall be free to impose the
ten (10%) percent late charge.
9. USE OF PREMISES:
9.1 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND
REGULATIONS: The Premises are to be used solely for the uses stated on Page 1
and for no other uses or purposes without Landlord's prior written consent,
which consent shall not be unreasonably withheld or delayed, but, may be
given or withheld in Landlord's sole discretion. The use of the Premises by
Tenant and its employees, representatives, agents, invitees, licensees,
subtenants, customers or contractors (collectively, "Tenant's
Representatives") shall be subject to, and at all times in compliance with,
(a) any and all applicable laws, ordinances, statutes, orders and regulations
as same exist from time to time (collectively, the "Laws"), (b) any and all
documents, matters or instruments, including without limitation, any
declarations of covenants, conditions and restrictions, and any supplements
thereto, each of which has been or hereafter is recorded in any official or
public records with respect to the Premises, the Building, the Lot and/or the
Park, or any portion thereof (collectively, the "Recorded Matters"), and (c)
any and all rules and regulations set forth in Exhibit C, attached to and
made a part of this Lease, and any other reasonable rules and regulations
promulgated by Landlord now or hereafter enacted relating to parking and the
operation of the Premises, the Building and the Park (collectively, the
"Rules and Regulations"), provided that any Rules and Regulations hereafter
enacted solely by Landlord shall not unreasonably interfere with Tenant's use
of, or access to the Premises. Tenant agrees to, and does hereby, assume
full and complete responsibility to ensure that the Premises are adequate to
fully meet the needs and requirements of Tenant's intended operations of its
business within the Premises, and Tenant's use of the Premises and that same
are in compliance with all applicable Laws throughout the Term of this Lease.
Additionally, Tenant shall be solely responsible for the payment of all
costs, fees and expenses associated with any modifications to the Premises,
Building, the Common Areas and/or the Park occasioned by the enactment of, or
changes to, any Laws arising from Tenant's particular use of the Premises
regardless of when such Laws become effective.
Tenant shall not be responsible for making any structural changes to
the Premises in order to bring the Premises into compliance with any laws,
codes, ordinances, orders or regulations in effect as of the date of this
Lease, unless (i) such structural changes are necessitated as a result of
Tenant's particular use of the Premises or (ii) the requirements for such
changes are triggered as a result of any action by Tenant or Tenant's
representatives on or about the Premises.
9.2 PROHIBITION ON USE: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything
therein which will in any way conflict with any of the requirements of the
Board of Fire Underwriters or similar body now or hereafter constituted or in
any way increase the existing rate of or affect any policy of fire or other
insurance upon the Building or any of its contents, or cause a cancellation
of any insurance policy. No auctions may be held or otherwise conducted in,
on or about the Premises, the Building, the Lot or the Park without
Landlord's written consent thereto, which consent may be given or withheld in
Landlord's sole discretion. Tenant shall not do or permit anything to be
done in or about the Premises which will in any way obstruct or interfere
with the rights of Landlord, other tenants or occupants of the Building,
other buildings in the Park, or other persons or businesses in the area, or
injure or annoy other tenants or use or allow the Premises to be used for any
unlawful or objectionable purpose, as determined by Landlord, in its
reasonable discretion, for the benefit, quiet enjoyment and use by Landlord
and all other tenants or occupants of the Building or other buildings in the
Park; nor shall Tenant cause, maintain or permit any private or public
nuisance in, on or about the Premises, Building, Park and/or the Common
Areas, including, but not limited to, any offensive odors, noises, fumes or
vibrations. Tenant shall not damage or deface or otherwise commit or suffer
to be committed any waste in, upon or about the Premises. Tenant shall not
place or store, nor permit any other person or entity to place or store, any
property, equipment, materials, supplies, personal property or any other
items or goods outside of the Premises for any period of time. Tenant shall
not permit any animals, including, but not limited to, any household pets, to
be brought or kept in or about the Premises. Tenant shall place no loads
upon the floors, walls, or ceilings in excess of the maximum designed load
permitted by the applicable Uniform Building Code or which may damage the
Building or outside areas; nor place any harmful liquids in the drainage
systems; nor dump or store waste materials, refuse or other such materials,
or allow such to remain outside the Building area, except in refuse
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dumpsters or in any enclosed trash areas provided. Tenant shall honor the
terms of all Recorded Matters relating to the Premises, the Building, the Lot
and/or the Park. Tenant shall honor the Rules and Regulations. If Tenant
fails to comply with such Laws, Recorded Matters, Rules and Regulations or
the provisions of this Lease, Landlord shall have the right to collect from
Tenant all rights and remedies of Landlord hereunder including, but not
limited to, the payment by Tenant to Landlord of all Enforcement Expenses and
Landlord's reasonable costs and expenses, if any, to cure any of such
failures of Tenant, if Landlord, at its sole option, elects to undertake such
cure.
10. ALTERATIONS AND ADDITIONS AND SURRENDER OF PREMISES:
10.1 ALTERATIONS AND ADDITIONS: Tenant shall not install any signs?
fixtures, improvements, nor make or permit any other alterations or additions
to the Premises without the prior written consent of Landlord which shall not
be unreasonably withheld. If any such alteration or addition is expressly
permitted by Landlord, Tenant shall deliver at least twenty (20) days prior
notice to Landlord, from the date Tenant intends to commence construction,
sufficient to enable Landlord to post a Notice of Non-Responsibility. In all
events, Tenant shall obtain all required permits or other governmental
approvals prior to commencing any of such work and deliver a copy of same to
Landlord. All alterations and additions shall be installed by a licensed
contractor approved by Landlord, in its reasonable discretion, at Tenant's
sole expense in compliance with all applicable Laws (including, but not
limited to, the ADA as defined herein), Recorded Matters, and Rules and
Regulations. Tenant shall keep the Premises and the property on which the
Premises are situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by or on behalf of Tenant. As a
condition to Landlord's consent to the installation of any fixtures,
additions or other improvements, excluding the original Tenant Improvements,
Landlord may require Tenant to post and obtain a completion and indemnity
bond for up to one hundred percent (100%) of the cost of the work.
Notwithstanding anything to the contrary contained herein, Tenant may
install, make and permit to be made improvements, alterations and additions
to the Premises without first obtaining Landlord's written consent thereto,
provided that such improvements, alterations or additions to the Premises (a)
are not structural and do not affect the structural integrity of the Premises
and/or the Building, and/or (b) do not requires the issuance of a building
permit by the City of Newark, and/or (c) do not involve electrical and/or
plumbing improvements, additions or alterations, and/or (d) do not require
penetrations to the roof of the Building, and provided further that the
cumulative cost of all such improvements, alterations and additions does not
exceed ten thousand and 00/100 dollars ($10,000.00) in the aggregate over
each twelve month period of the Term ("Permitted Improvements"). In all
events, Tenant shall be required to submit to Landlord, at least ten (10)
business days prior to commencement of any improvements, written notification
of Tenant's intention to complete improvements along with all plans,
specifications, or construction drawings of such improvements or alterations,
Tenant shall cause all Permitted Improvements to be installed by a licensed
contractor and Tenant shall keep the Premises and the property on which the
Premises are situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by or on behalf of Tenant. Upon
Landlord's request, at Tenant's sole expense, all such Permitted Improvements
installed by Tenant shall be removed and the Premises shall be restored to
its original condition at the expiration or earlier termination of this Lease.
10.2 SURRENDER OF PREMISES: Upon the termination of this Lease,
whether by forfeiture, lapse of time or otherwise, or upon the termination of
Tenant's right to possession of the Premises, Tenant will at once surrender
and deliver up the Premises, together with the fixtures, additions and
improvements which Landlord has notified Tenant, in writing, that Landlord
will require Tenant not to remove, to Landlord in good condition and repair
including, but not limited to, replacing all light bulbs and ballasts not in
good working condition, excepting for reasonable wear and tear and damage
caused by an event of casualty. Reasonable wear and tear shall not include
any damage or deterioration to the floors of the Premises arising from the
use of forklifts in, on or about the Premises (including, without limitation,
any marks or stains of any portion of the floors), and any damage or
deterioration that would have been prevented by proper maintenance by Tenant
or Tenant otherwise performing all of its obligations under this Lease. Upon
such termination of this Lease, Tenant shall remove all tenant signage, trade
fixtures, furniture, furnishings, personal property, additions, and other
improvements unless Landlord requests, in writing, that Tenant not remove
some or all of such trade fixtures, additions or improvements installed by,
or on behalf of Tenant not including the Tenant Improvements as described in
Exhibit B, or situated in or about the Premises. By the date which is twenty
(20) days prior to such termination of this Lease, Landlord shall notify
Tenant in writing of those fixtures, alterations, additions and other
improvements which Landlord shall require Tenant not to remove from the
Premises unless Landlord shall have notified Tenant of such non removal
obligation at the time of granting approval for the same. Tenant shall
repair any damage caused by the installation or removal of such signs, trade
fixtures, furniture, furnishings, fixtures, additions and improvements which
are to be removed from the Premises by Tenant hereunder. If Landlord fails
to so notify Tenant at least twenty (20) days prior to such termination of
this Lease, then Tenant shall remove all tenant signage, fixtures,
alterations, furniture, furnishings, trade fixtures, additions and other
improvements installed in or about the Premises by, or on behalf of Tenant.
Tenant shall ensure that the removal of such items and the repair of the
Premises will be completed prior to such termination of this Lease.
Notwithstanding anything to the contrary herein, Tenant shall not be required
to remove the Tenant Improvements installed at the commencement of the term
of this Lease in accordance with Exhibit B.
11. REPAIRS AND MAINTENANCE:
11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Section
11.2 below, Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises and the adjacent areas (including, without limitation,
any portion of the Common Areas used by Tenant or Tenant's Representatives)
in good, clean and safe condition and repair
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to the satisfaction of Landlord including, but not limited to, repairing any
damage caused by Tenant or Tenant's Representatives and replacing any
property so damaged by Tenant or Tenant's Representatives. Without limiting
the generality of the foregoing, Tenant shall be solely responsible for
maintaining, repairing and replacing (a) all mechanical systems, heating,
ventilation and air conditioning systems, (b) all plumbing, electrical wiring
and equipment serving the Premises, (c) all interior lighting (including,
without limitation, light bulbs and/or ballasts) and exterior lighting
serving the Premises or adjacent to the Premises, (d) all glass, windows,
window frames, window casements, skylights; interior and exterior doors, door
frames and door closers, (e) all roll-up doors, ramps and dock equipment,
including without limitation, dock bumpers, dock plates, dock seals, dock
levelers and dock lights, (f) all tenant signage, (g) lifts for disabled
persons serving the Premises, (h) sprinkler systems, fire protection systems
and security systems, (i) all partitions, fixtures, equipment, interior
painting, and interior walls and floors of the Premises and every part
thereof (including, without limitation, any demising walls contiguous to any
portion of the Premises). Tenant's obligation to keep, maintain, preserve
and repair the Premises and the adjacent area shall specifically extend to
the cleanup and removal of any and all Hazardous Materials (hereafter
defined) occurring in, on or about the Premises.
11.2 REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the
obligations of Tenant set forth in Section 11.1 above, and (ii) the repairs
rendered necessary by the intentional or negligent acts or omissions of
Tenant or Tenant's Representatives, Landlord agrees, at Landlord's expense,
subject to reimbursement pursuant to Section 6 above, to keep in good repair
the plumbing and mechanical systems exterior to the Premises, any rail spur
and rail crossing, the roof, roof membranes, exterior walls of the Building,
signage (exclusive of tenant signage), and exterior electrical wiring and
equipment, exterior lighting, exterior glass, exterior doors/entrances and
door closers, exterior window casements, exterior painting of the Building
(exclusive of the Premises), and underground utility and sewer pipes outside
the exterior walls of the Building. For purposes of this Section 11.2, the
term "exterior" shall mean exterior to, and not serving the Premises. Unless
otherwise notified by Landlord, in writing, that Landlord has elected to
procure and maintain the following described contract(s), Tenant shall
procure and maintain (a) the heating, ventilation and air conditioning
systems preventative maintenance and repair contract(s); such contract(s) to
be on a bi-monthly or quarterly basis, as reasonably determined by Landlord,
and (b) the fire and sprinkler protection services and preventative
maintenance and repair contract(s) (including, without limitation, monitoring
services); such contract(s) to be on a bi-monthly or quarterly basis, as
reasonably determined by Landlord. Landlord reserves the right, but without
the obligation to do so, to procure and maintain (i) the heating, ventilation
and air conditioning systems preventative maintenance and repair contract(s),
and/or (ii) the fire and sprinkler protection services and preventative
maintenance and repair contract(s) (including, without limitation, monitoring
services). If Landlord so elects to procure and maintain any such
contract(s), Tenant will reimburse Landlord for the cost thereof in
accordance with the provisions of Section 6 above. If Tenant procures and
maintains any of such contract(s), Tenant will promptly deliver to Landlord a
true and complete copy of each such contract and any and all renewals or
extensions thereof, and each service report or other summary received by
Tenant pursuant to or in connection with such contract(s). Notwithstanding
anything to the contrary herein, capital expenditures incurred by Landlord
shall be amortized according to standard commercial real estate accounting
practices, but in no event over a period in excess of fifteen (15) years.
11.3 LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for
repairs rendered necessary by the intentional or negligent acts or omissions
of Tenant or Tenant's Representatives, Landlord agrees, at Landlord's sole
cost and expense, to (a) keep in good repair the structural portions of the
floors, foundations and exterior perimeter walls of the Building (exclusive
of glass and exterior doors), and (b) replace the structural portions of the
roof of the Building (excluding the roof membrane) as, and when, Landlord
determines such replacement to be necessary in Landlord's sole but reasonable
discretion.
11.4 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof
of the Building nor make any penetrations of the roof of the Building without
the express prior written consent of Landlord which consent shall not be
unreasonably withheld or delayed. If Tenant refuses or neglects to repair
and maintain the Premises and the adjacent areas properly as required herein
and to the reasonable satisfaction of Landlord, Landlord may, but without
obligation to do so, with five (5) business days prior notice to Tenant,
unless, (in Landlord's discretion,) the nature of the repair can not be
delayed five (5) business days, at any time make such repairs and/or
maintenance without Landlord having any liability to Tenant for any loss or
damage that may accrue to Tenant's merchandise, fixtures or other property,
or to Tenant's business by reason thereof, except to the extent any damage is
caused by the willful misconduct or gross negligence of Landlord or its
authorized agents and representatives. In the event Landlord makes such
repairs and/or maintenance, upon completion thereof Tenant shall pay to
Landlord, as additional rent, the Landlord's costs for making such repairs
and/or maintenance, plus the greater of one hundred and 00/100 dollars
($100.00) or five percent (5%) of the cost of the repair and/or maintenance
for overhead, upon presentation of a bill therefor, plus any Enforcement
Expenses. The obligations of Tenant hereunder shall survive the expiration
of the Term of this Lease or the earlier termination thereof. Tenant hereby
waives any right to repair at the expense of Landlord under any applicable
Laws now or hereafter in effect respecting the Premises.
12. INSURANCE:
12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and
effect at all times during the Term of this Lease, at Tenant's sole cost and
expense, for the protection of Tenant and Landlord, as their interests may
appear, policies of insurance issued by a carrier or carriers reasonably
acceptable to Landlord and its lender(s) which afford the following
coverages: (i) worker's compensation: statutory limits; (ii) employer's
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liability, as required by law, with a minimum limit of $100,000 per employee
and $500,000 per claim; (iii) primary commercial general liability insurance
(occurrence form) providing coverage against any and all claims for bodily
injury and property damage occurring in, on or about the Premises arising out
of Tenant's and Tenant's Representatives' use and/or occupancy of the
Premises. Such insurance shall include coverage for blanket contractual
liability, fire damage, premises, personal injury, completed operations,
products liability, personal and advertising. Such insurance shall have a
combined single limit of not less than One Million Dollars ($1,000,000) per
occurrence with a Two Million Dollar ($2,000,000) aggregate limit and excess
umbrella insurance in the amount of Two Million Dollars ($2,000,000). If
Tenant has other locations which it owns or leases, the policy shall include
an aggregate limit per location endorsement. If necessary, as reasonably
determined by Landlord, Tenant shall provide for restoration of the aggregate
limit; (iv) comprehensive automobile liability insurance: a combined single
limit of not less than $2,000,000 per occurrence and insuring Tenant against
liability for claims arising out of the ownership, maintenance, or use of any
owned, hired or non-owned automobiles; (v) "all risk" property insurance,
including without limitation, sprinkler leakage, boiler and machinery
comprehensive form, if applicable, covering damage to or loss of any personal
property, trade fixtures, inventory, fixtures and equipment located in, on or
about the Premises, and in addition, coverage for flood, earthquake if
available at commercially reasonable rates, and business interruption of
Tenant, together with, if the property of Tenant's invitees is to be kept in
the Premises, warehouser's legal liability or bailee customers insurance for
the full replacement cost of the property belonging to invitees and located
in the Premises to the extent required by such customers pursuant to the
terms of the contract of carriage. Such insurance shall be written on a
replacement cost basis (without deduction for depreciation) in an amount
equal to one hundred percent (100%) of the full replacement value of the
aggregate of the items referred to in this subparagraph (v); and (vi) such
other insurance as Landlord deems reasonably necessary and prudent or as may
otherwise be required by any of Landlord's lenders or joint venture partners.
12.2 INSURANCE POLICIES: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having
a "General Policyholders Rating" of at least A:X (or such higher rating as
may be required by a lender having a lien on the Premises) as set forth in
the most current issue of "Best's Insurance Reports." Any deductible amounts
under any of the insurance policies required hereunder shall not exceed
commercially reasonable deductible amounts and shall be subject to Landlord's
reasonable approval, except that the deductible amounts for Tenant's property
damage insurance for Tenant's personal property, trade fixtures and inventory
described in Section 12.1(v) above shall be in such amounts as Tenant shall
determine in accordance with its standard corporate policies, it being
acknowledged, however, by Tenant that all such deductible amounts and self
insurance shall be deemed self-insured with full waiver of subrogation as set
forth below in Section 12.3. Tenant shall deliver to Landlord certificates of
insurance and true and complete copies of any and all endorsements required
herein for all insurance required to be maintained by Tenant hereunder at the
time of execution of this Lease by Tenant. Tenant shall, at least thirty (30)
days prior to expiration of each policy, furnish Landlord with certificates
of renewal or "binders" thereof. Each certificate shall expressly provide
that such policies shall not be cancelable or otherwise subject to
modification except after thirty (30) days prior written notice to the
parties named as additional insureds as required in this Lease (except for
cancellation for nonpayment of premium, in which event cancellation shall not
take effect until at least ten (10) days' notice has been given to Landlord).
Tenant shall have the right to provide insurance coverage which it is
obligated to carry pursuant to the terms of this Lease under a blanket
insurance policy, provided such blanket policy expressly affords coverage for
the Premises and for Landlord as required by this Lease.
12.3 ADDITIONAL INSUREDS AND COVERAGE: Landlord, any property
management company and/or agent of Landlord for the Premises, the Building,
the Lot or the Park, any lender(s) of Landlord having a lien against the
Premises, the Building, the Lot or the Park, and any joint venture partners
of Landlord shall be named as additional insureds under all of the policies
required in Section 12. l(iii) above. Additionally, such policies shall
provide for severability of interest. All insurance to be maintained by
Tenant shall, except for workers' compensation and employer's liability
insurance, be Primary, without right of contribution from insurance
maintained by Landlord. Any umbrella liability policy or excess liability
policy (which shall be in "following form") shall provide that if the
underlying aggregate is exhausted, the excess coverage will drop down as
primary insurance. The limits of insurance maintained by Tenant shall not
limit Tenant's liability under this Lease. It is the parties' intention that
the insurance to be procured and maintained by Tenant as required herein
shall provide coverage for any and all damage or injury arising from or
related to Tenant's operations of its business and/or Tenant's or Tenant's
Representatives' use of the Premises and/or any of the areas within the Park,
whether such events occur within the Premises (as described in Exhibit A
hereto) or in any other areas of the Park. It is not contemplated or
anticipated by the parties that the aforementioned risks of loss be borne by
Landlord's insurance carriers, rather it is contemplated and anticipated by
Landlord and Tenant that such risks of loss be borne by Tenant's insurance
carriers pursuant to the insurance policies procured and maintained by Tenant
as required herein.
12.4 FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the
event Tenant does not purchase the insurance required in this Lease or keep
the same in full force and effect throughout the Term of this Lease
(including any renewals or extensions), Landlord may, but without obligation
to do so, purchase the necessary insurance and pay the premiums therefor. If
Landlord so elects to purchase such insurance, Tenant shall promptly pay to
Landlord as Additional Rent, the amount so paid by Landlord, upon Landlord's
demand therefor. In addition, Landlord may recover from Tenant and Tenant
agrees to pay, as Additional Rent, any and all Enforcement Expenses and
damages which Landlord may sustain by reason of Tenant's failure to obtain
and maintain such insurance. If Tenant fails to maintain any insurance
required in this Lease, Tenant shall be liable for all losses, damages and
costs resulting from such failure.
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12.5 LANDLORD'S INSURANCE: The initial Landlord shall obtain and keep
in force during the term of this Lease a policy of combined single limit
bodily injury and property damage insurance, insuring Landlord, against
liability for bodily injury and property damage. Landlord shall obtain and
keep in force during the term of this Lease a policy or policies of insurance
covering loss or damage to the Building, and the Tenant Improvements to the
extent of Landlord's actual interest therein, but not including Tenant's
Property or alterations or improvements made to the Premises by or on behalf
of Tenant (excluding the Tenant Improvements as limited above), in an amount
of eighty percent (80%) of the full replacement value thereof excluding land
costs, excavation costs, footings and foundations. The foregoing insurance
shall provide protection against all perils within the classification of
fire, extended coverage (as such term is used in the insurance industry),
vandalism, malicious mischief, and to the extent available at commercially
reasonable rates (as solely determined by Landlord), flood and/or earthquake
insurance. The foregoing insurance policies may be procured and carried
pursuant to a blanket policy of insurance covering additional properties
other than the Building. Landlord's cost of obtaining and maintaining such
insurance policies are included as one of the items comprising the Operating
Expenses.
13. WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage
to, either parties' property to the extent that such loss or damage is
insured by an insurance policy required to be in effect at the time of such
loss or damage. Each party,shall obtain any special endorsements, if
required by its insurer whereby the insurer waives its rights of subrogation
against the other party. This provision is intended to waive fully, and for
the benefit of the parties hereto, any rights and/or claims which might give
rise to a right of subrogation in favor of any insurance carrier. The
coverage obtained by Tenant pursuant to Section 12 of this Lease shall
include, without limitation, a waiver of subrogation endorsement attached to
the certificate of insurance. The provisions of this Section 13 shall not
apply in those instances in which such waiver of subrogation would invalidate
such insurance coverage or would cause either party's insurance coverage to
be voided or otherwise uncollectible.
14. LIMITATION OF LIABILITY AND INDEMNITY: Except for damage resulting from
the sole gross negligence or willful misconduct of Landlord or its authorized
representatives, Tenant agrees to protect, defend (with counsel reasonably
acceptable to Landlord) and hold Landlord and Landlord's lender(s), partners,
employees, representatives, legal representatives, successors and assigns
(collectively, the "Indemnitees") harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, judgments, charges and
expenses (including reasonable attorneys' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to,
directly or indirectly, Tenant's or Tenant's Representatives' use of the
Premises, Building and/or the Park, or the conduct of Tenant's business, or
from any activity, work or thing done, permitted or suffered by Tenant in or
about the Premises, or in any way connected with the Premises or with the
improvements or personal property therein, including, but not limited to, any
liability for injury to person or property of Tenant, Tenant's
Representatives, or third party persons. Tenant agrees that the obligations
of Tenant herein shall survive the expiration or earlier termination of this
Lease.
Except for damage resulting from the sole active gross negligence or
willful misconduct of Landlord or its authorized representatives, Landlord
shall not be liable to Tenant for any loss or damage to Tenant or Tenant's
property, for any injury to or loss of Tenant's business or for any damage or
injury to any person from any cause whatsoever, including, but not limited
to, any acts, errors or omissions by or on behalf of any other tenants or
occupants of the Building and/or the Park. Tenant shall not, in any event or
circumstance, be permitted to offset or otherwise credit against any payments
of Rent required herein for matters for which Landlord may be liable
hereunder. Landlord and its authorized representatives shall not be liable
for any interference with light or air, or for any latent defect in the
Premises or the Building. To the fullest extent permitted by law except for
damage resulting from the sole active gross negligence or willful misconduct
of Landlord or its authorized representatives, Tenant agrees that neither
Landlord nor any of Landlord's lender(s), partners, employees,
representatives, legal representatives, successors and assigns shall at any
time or to any extent whatsoever be liable, responsible or in any way
accountable for any loss, liability, injury, death or damage to persons or
property which at any time may be suffered or sustained by Tenant or by any
person(s) whomsoever who may at any time be using, occupying or visiting the
Premises, the Building or the Park.
15. ASSIGNMENT AND SUBLEASING:
15.1 PROHIBITION: Except as expressly set forth herein with respect to
a Permitted Transferee, Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily
or involuntarily or by operation of law, nor sublet or permit occupancy by
any person other than Tenant of all or any portion of the Premises without
first obtaining the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed. Tenant hereby agrees that Landlord
may withhold its consent to any proposed sublease or assignment if the
proposed sublessee or assignee or its business is subject to compliance with
additional requirements of the ADA (defined below) beyond those requirements
which are applicable to Tenant, unless the proposed sublessee or assignee
shall (a) first deliver plans and specifications for complying with such
additional requirements and obtain Landlord's written consent thereto, which
consent shall not be unreasonably withheld or delayed and (b) comply with all
Landlord's conditions for or contained in such consent, including without
limitation, requirements for security to assure the lien-free completion of
such improvements. If Tenant seeks to sublet or assign all or any portion of
the Premises, Tenant shall deliver to Landlord at least twenty (20) days
prior to the proposed commencement of the sublease or assignment (the
"Proposed Effective Date") the following: (i) the name of the proposed
assignee or sublessee; (ii) such information as to such assignee's or
sublessee's financial responsibility and standing as Landlord may reasonably
require; and (iii) the aforementioned plans and specifications, if any.
Within ten (10) days after Landlord's receipt of a written
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request from Tenant that Tenant seeks to sublet or assign all or any portion
of the Premises, Landlord shall deliver to Tenant a copy of Landlord's
standard form of sublease or assignment agreement (as applicable), which
instrument shall be utilized for each proposed sublease or assignment (as
applicable) or another form acceptable to Landlord, and such instrument shall
include a provision whereby the assignee or sublessee assumes all of Tenant's
obligations hereunder and agrees to be bound by the terms hereof. As
Additional Rent hereunder, Tenant shall pay to Landlord a fee in the amount
of five hundred dollars ($500) plus Tenant shall reimburse Landlord for
actual legal and other expenses incurred by Landlord in connection with any
actual or proposed assignment or subletting. In the event the sublease (1)
by itself or taken together with prior sublease(s) except with respect to a
Permitted Transferee is for a term which by itself or taken together with
prior or other subleases is for the period remaining in the term of this
Lease as of the time of the Proposed Effective Date, then Landlord shall have
the right, to be exercised by giving written notice to Tenant, to recapture
the space described in the sublease. If such recapture notice is given, it
shall serve to terminate this Lease with respect to the proposed sublease
space, or, if the proposed sublease space covers all the Premises, it shall
serve to terminate the entire term of this Lease in either case, as of the
Proposed Effective Date. However, no termination of this Lease with respect
to part or all of the Premises shall become effective without the prior
written consent, where necessary, of the holder of each deed of trust
encumbering the Premises or any part thereof. If this Lease is terminated
pursuant to the foregoing with respect to less than the entire Premises, the
Rent shall be adjusted on the basis of the proportion of square feet retained
by Tenant to the square feet originally demised and this Lease as so amended
shall continue thereafter in full force and effect. Each permitted assignee
or sublessee, including without limitation, a Permitted Transferee shall
assume and be deemed to assume this Lease and shall be and remain liable
jointly and severally with Tenant for payment of Rent and for the due
performance of, and compliance with all the terms, covenants, conditions and
agreements 'herein contained on Tenant's part to be performed or complied
with, for the term of this Lease. Notwithstanding the preceding sentence, in
the event only a portion of the Premises is subleased, each sublessee shall
assume the Lease and shall be and remain liable, jointly and severally with
Tenant for the payment of Rent on that portion of the Premises subleased. No
assignment or subletting shall affect the continuing primary liability of
Tenant (which, following assignment, shall be joint and several with the
assignee), and Tenant shall not be released from performing any of the terms,
covenants and conditions of this Lease. Tenant hereby acknowledges and
agrees that it understands that Landlord's accounting department may process
and accept Rent payments without verifying that such payments are being made
by Tenant, a permitted sublessee or a permitted assignee in accordance with
the provisions of this Lease. Although such payments may be processed and
accepted by such accounting department personnel, any and all actions or
omissions by the personnel of Landlord's accounting department shall not be
considered as acceptance by Landlord of any proposed assignee or sublessee
nor shall such actions or omissions be deemed to be a substitute for the
requirement that Tenant obtain Landlords prior written consent to any such
subletting or assignment, and any such actions or omissions by the personnel
of Landlord's accounting department shall not be considered as a voluntary
relinquishment by Landlord of any of its rights hereunder nor shall any
voluntary relinquishment of such rights be inferred therefrom. For purposes
hereof, in the event Tenant is a corporation, partnership, joint venture,
trust or other entity other than a natural person, any change in the direct
or indirect ownership of Tenant (whether pursuant to one or more transfers
other than any public trading of the outstanding shares (stock) of Tenant
which does not result in a change of the management and control of Tenant)
which results in a change of more than fifty percent (50%) in the direct or
indirect ownership of Tenant shall be deemed to be an assignment within the
meaning of this Section 15 and shall be subject to all the provisions hereof.
Except for a permissible assignment to a Permitted Transferee, any and all
options, first rights of refusal, tenant improvement allowances and other
similar rights granted to Tenant in this Lease, if any, shall not be
assignable by Tenant unless expressly authorized in writing by Landlord.
Notwithstanding anything to the contrary contained herein, so long as Tenant
delivers to Landlord (1) at least fifteen (15) business days after written
notice of its intention to assign or sublease the Premises to any Permitted
Transferee, which notice shall set forth the name of the Permitted
Transferee, (2) a copy of the proposed agreement pursuant to which such
assignment or sublease shall be effectuated, and (3) such other information
concerning the Permitted Transferee as Landlord may reasonably require,
including without limitation, information regarding any change in the
proposed use of any portion of the Premises and any financial information
with respect to such Permitted Transferee, and so long as Landlord approves,
in writing, of any change in the proposed use of the subject portion of the
Premises, then Tenant may assign this Lease or sublease any portion of the
Premises (X) to any Permitted Transferee, or (Y) in connection with any
merger, consolidation or sale of substantially all of the assets of Tenant,
(collectively "Permitted Transferee") without having to obtain the prior
written consent of Landlord thereto. For purposes of this Lease the term
"Permitted Transferee" shall mean and refer to any corporation or entity
which controls, is controlled by or is under common control with Tenant, the
event of any transfer of more than 50% of the stock of Tenant over a publicly
traded stock exchange since Tenant is a publicly traded company, as all of
such terms are customarily used in the industry, and with an equal or greater
net worth as Tenant has as of the proposed transfer date. Any assignment to
a Permitted Transferee shall in no way relieve Tenant of any liability Tenant
may have under this Lease and such assignee or sublessee shall be jointly and
severally liable with Tenant hereunder.
15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the event
of any sublease or assignment of all or any portion of the Premises, except
for Permitted Transferee, where the rent or other consideration provided for
in the sublease or assignment either initially or over the term of the
sublease or assignment exceeds the Rent or pro rata portion of the Rent, as
the case may be, for such space reserved in the Lease, Tenant shall pay the
Landlord monthly, as Additional Rent, at the same time as the monthly
installments of Rent are payable hereunder, fifty percent (50%) of the excess
of each such payment of rent or other consideration in excess of the Rent
called for hereunder, after deducting all cost incurred by Tenant in
obtaining such assignee or sublessee, including, without limitation,
brokerage commission, attorney's fees, advertising expenses and rental
concessions.
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15.3 WAIVER: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any
assignee or sublessee, or failure by Landlord to take action against any
assignee or sublessee, Tenant waives notice of any default of any assignee or
sublessee and agrees that Landlord may, at its option, proceed against Tenant
without having taken action against or joined such assignee or sublessee,
except that Tenant shall have the benefit of any indulgences, waivers and
extensions of time granted to any such assignee or sublessee.
16. AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes and
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the
Premises by, or on behalf of, Tenant; and if requested by Landlord, Tenant
shall promptly deliver to Landlord copies of receipts for payment of all such
taxes and assessments. To the extent any such taxes are not separately
assessed or billed to Tenant, Tenant shall pay the amount thereof as invoiced
by Landlord.
17. SUBORDINATION: Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any bona fide mortgagee or deed of trust beneficiary
with a lien on all or any portion of the Premises or any ground lessor with
respect to the land of which the Premises are a part, the rights of Tenant
under this Lease and this Lease shall be subject and subordinate at all times
to: (i) all ground leases or underlying leases which may now exist or
hereafter be executed affecting the Building or the land upon which the
Building is situated or both, and (ii) the lien of any mortgage or deed of
trust which may now exist or hereafter be executed in any amount for which
the Building, the Lot, ground leases or underlying leases, or Landlord's
interest or estate in any of said items is specified as security.
Notwithstanding the foregoing, Landlord or any such ground lessor, mortgagee,
or any beneficiary shall have the right to subordinate or cause to be
subordinated any such ground leases or underlying leases or any such liens to
this Lease. If any ground lease or underlying lease terminates for any
reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu
of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor to Landlord, attorn to
and become the Tenant of the successor in interest to Landlord, provided such
successor in interest will not disturb Tenant's use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of the terms
and provisions of this Lease. The successor in interest to Landlord
following foreclosure, sale or deed in lieu thereof shall not be (a) liable
for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership; (b) subject to any offsets or
defenses which Tenant might have against any prior lessor; (c) bound by
prepayment of more than one (1) month's Rent; or (d) liable to Tenant for any
Security Deposit not actually received by such successor in interest to the
extent any portion or all of such Security Deposit has not already been
forfeited by, or refunded to, Tenant. Landlord shall be liable to Tenant for
all or any portion of the Security Deposit not forfeited by, or refunded to
Tenant, until and unless Landlord transfers such Security Deposit to the
successor in interest. Tenant covenants and agrees to execute (and
acknowledge if required by Landlord, any lender or ground lessor) and
deliver, within ten (10) days of a demand or request by Landlord and in the
form requested by Landlord, ground lessor, mortgagee or beneficiary, any
additional documents evidencing the priority or subordination of this Lease
with respect to any such ground leases or underlying leases or the lien of
any such mortgage or deed of trust. Tenant's failure to timely execute and
deliver such additional documents shall, at Landlord's option, constitute a
material default hereunder. It is further agreed that Tenant shall indemnify
Landlord from and against any loss, cost, damage or expense, arising
directly, from any failure of Tenant to execute or deliver to Landlord any
such additional documents, together with any and all Enforcement Expenses.
Tenant's agreement to subordinate this Lease to any future ground or
underlying lease or any future deed of trust or mortgage pursuant to the
foregoing provisions of the Section 17 is conditioned upon Landlord
delivering to Tenant from the lessor under such future ground or underlying
lease or the holder of any such mortgage or deed of trust, a non-disturbance
agreement agreeing, among other things, that Tenant's right to possession of
the Premises pursuant to the terms and conditions of this Lease shall not be
disturbed provided Tenant is not in default under this Lease beyond the
applicable notice and cure periods hereunder. Landlord has advised Tenant
that at sometime after the date on which this Lease is executed by the
parties Landlord will obtain a permanent loan which will be secured by a lien
of a deed of trust against the Premises, the Building and/or the Lot.
Landlord and Tenant agree that if Landlord at any time during the term of the
Lease causes the Premises, the Building and/or the Lot to be encumbered by a
mortgage, deed of trust or similar security instrument and the Lease is
subordinate to such encumbrance or the beneficiary thereof requires this
Lease and Tenant's rights and interest in this Lease to be subordinate to
such encumbrance or lien, Landlord will provide to Tenant a subordination,
nondisturbance and_attornment agreement from such beneficiary or lien-holder
in form reasonably acceptable to Landlord, the subject beneficiary and Tenant.
18. RIGHT OF ENTRY: Tenant grants Landlord or its agents the right to enter
the Premises at all reasonable times with forty-eight (48) hours prior
written notice, if possible, for purposes of inspection, exhibition, posting
of notices, repair or alteration. At Landlord's option, Landlord shall at
all times have and retain a key with which to unlock all the doors in, upon
and about the Premises, excluding Tenant's vaults and safes. It is further
agreed that Landlord shall have the right to use any and all means Landlord
deems necessary to enter the Premises in an emergency. Landlord shall also
have the right to,place "for rent" and/or "for sale" signs on the outside of
the Premises during the last twelve (12) months of the lease term. Tenant
hereby waives any claim from damages or for any injury or inconvenience to or
interference with Tenant's business, or any other loss occasioned thereby
except for any claim for any of the foregoing arising out of the sole gross
negligence or willful misconduct of Landlord or its authorized
representatives.
19. ESTOPPEL CERTIFICATE: Landlord and Tenant shall execute (and
acknowledge if required by any lender, ground lessor, or Other third party)
and deliver to the other party, within not less than ten (10) days after
Landlord or Tenant, as applicable, provides such to the other party, a
statement in writing certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification),
the
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date to which the Rent and other charges are paid in advance, if any,
acknowledging that there are not, to such party's knowledge, any uncured
defaults on the part of the other party hereunder or specifying such defaults
as are claimed, and such other matters as Landlord or Tenant, as applicable,
may reasonably require. Any such statement may be conclusively relied upon
by the party requesting such statement and any prospective purchaser or
encumbrancer of the Premises or other third party. Landlord or Tenant's, as
applicable, failure to deliver such statement within such time shall be
conclusive upon the party which failed to deliver the certificate that (a)
this Lease is in full force and effect, without modification except as may be
represented by such party; (b) there are no uncured defaults in the other
party's performance; and (c) not more than one month's Rent has been paid in
advance. Failure by Tenant to so deliver such certified estoppel certificate
shall be a default of the provisions of this Lease. Tenant shall indemnify
Landlord from and against any loss, cost, damage or expense, arising
directly, from any failure of Tenant to execute or deliver to Landlord any
such certified estoppel certificate, together with any and all Enforcement
Expenses.
20. TENANT'S DEFAULT: The occurrence of any one or more of the following
events shall, at Landlord's option, constitute a default and breach of this
Lease by Tenant:
20.1 The vacation or abandonment of the Premises by Tenant for a
period of ten (10) consecutive days in combination with Tenant's failure to
pay Rent or any other sum due to Landlord, or the vacation of the Premises by
Tenant which would cause any insurance policy to be invalidated or otherwise
lapse. Tenant agrees to notice and service of notice as provided for in this
Lease and waives any right to any other or further notice or service of
notice which Tenant. may have under any statute or law now or hereafter in
effect;
20.2 The failure by Tenant to make any payment of Rent, Additional
Rent or any other payment required hereunder within five (5) days after the
delivery by Landlord of written notice that such payment is past due. Tenant
agrees that such written notice by Landlord shall serve as the statutorily
required notice under the Law (including without limitation, any unlawful
detainer statutes), and Tenant further agrees to notice and service of notice
as provided for in this Lease and waives any right to any other or further
notice or service of notice which Tenant may have under any statute or law
now or hereafter in effect;
20.3 The failure by Tenant to observe, perform or comply with any of
the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured
within the time period required under the provisions of this Lease. If such
failure is susceptible of cure but cannot reasonably be cured within the
aforementioned time period (if any), as determined solely but reasonably by
Landlord, Tenant shall promptly commence the cure of such failure and
thereafter diligently prosecute such cure to completion within the time
period specified by Landlord in any written notice regarding such failure as
may be delivered to Tenant by Landlord. In no event or circumstance shall
Tenant have more than fifteen (15) days to complete any such cure, unless
otherwise expressly agreed to in writing by Landlord (in Landlord's sole
discretion), or the nature of such default shall require more than fifteen
(15) days to cure;
20.4 The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to
bankruptcy, insolvency or other relief of debtors and, in the case of an
involuntary action, the failure to remove or discharge the same within sixty
(60) days of such filing, the appointment of a receiver or other custodian to
take possession of substantially all of Tenant's assets or this leasehold,
Tenant's insolvency or inability to pay Tenant's debts or failure generally
to pay Tenant's debts when due, any court entering a decree or order
directing the winding up or liquidation of Tenant or of substantially all of
Tenant's assets, Tenant taking any action toward the dissolution or winding
up of Tenant's affairs, the cessation or suspension of Tenant's use of the
Premises, or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets or this leasehold (or any involuntary
action against Tenant, Tenant shall have sixty (60) days to discharge such
action);
20.5 Tenant's use or storage of Hazardous Materials in, on or about
the Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below;
20.6 The making of any material misrepresentation or omission by
Tenant in any materials delivered by or on behalf of Tenant to Landlord
pursuant to this Lease; or
21. REMEDIES FOR TENANT'S DEFAULT:
21.1 LANDLORD'S RIGHTS: In the event of Tenant's default or breach of
the Lease, which default or breach is not cured within the applicable cure
period, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord
this Lease shall terminate on the date specified by Landlord in such notice
and Tenant shall immediately surrender possession of the Premises to
Landlord. In addition, the Landlord shall have the immediate right of
re-entry whether or not this Lease is terminated, and if this right of
re-entry is exercised following abandonment of the Premises by Tenant,
Landlord may consider any personal property belonging to Tenant and left on
the Premises to also have been abandoned. No re-entry or taking possession
of the Premises by Landlord pursuant to this Section 21 shall be construed as
an election to terminate this Lease unless a written notice of such intention
is given to Tenant. If Landlord relets the Premises or any portion thereof,
(i) Tenant shall be liable immediately to Landlord for all reasonable costs
Landlord incurs in reletting the Premises or any part thereof, including,
without limitation, broker's commissions, expenses of cleaning, and repairing
the Premises and other similar costs (collectively, the "Reletting Costs"),
and (ii) the rent received by Landlord from such reletting shall be applied
to the payment of, first, any indebtedness from Tenant to Landlord other than
Base Rent, Operating
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Expenses, Tax Expenses, Common Area Utility Costs, and Utility Expenses;
second, all reasonable costs including maintenance, incurred by Landlord in
reletting; and, third, Base Rent, Operating Expenses, Tax Expenses, Common
Area Utility Costs, Utility Expenses, and all other sums due under this
Lease. Any and all of the Reletting Costs shall be fully chargeable to
Tenant and shall not be prorated or otherwise amortized in relation to any
new lease for the Premises or any portion thereof. After deducting the
payments referred to above, any sum remaining from the rental Landlord
receives from reletting shall be held by Landlord and applied in payment of
future Rent as Rent becomes due under this Lease. In no event shall Tenant
be entitled to any excess rent received by Landlord. Reletting may be for a
period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice to Tenant shall terminate this
Lease. Acts of maintenance, efforts to relet the Premises or the appointment
of a receiver on Landlord's initiative to protect Landlord's interest under
this Lease shall not constitute a termination of Tenant's right to
possession. So long as this Lease is not terminated, Landlord shall have the
right to remedy any default of Tenant, to maintain or repair the Premises, to
cause a receiver to be appointed to administer the Premises and new or
existing subleases and to add to the Rent payable hereunder all of Landlord's
reasonable costs in so doing, with interest at the maximum rate permitted by
law from the date of such expenditure.
21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and abandons
the Premises before the end of the Term, or if Tenant's right to possession
is terminated by Landlord because of a breach or default of the Lease, then
in either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations
hereunder, including, but not limited to, the cost of any unamortized Tenant
Improvements constructed by or on behalf of Tenant pursuant to Exhibit B
hereto, the portion of any broker's or leasing agent's commission incurred
with respect to the leasing of the Premises to Tenant for the balance of the
Term of the Lease remaining after the date on which Tenant is in default of
its obligations hereunder, and all Reletting Costs, and the worth at the time
of the award (computed in accordance with paragraph (3) of Subdivision (a) of
Section 1951.2 of the California Civil Code) of the amount by which the Rent
then unpaid hereunder for the balance of the Lease Term exceeds the amount of
such loss of Rent for the same period which Tenant proves could be reasonably
avoided by Landlord and in such case, Landlord prior to the award, may relet
the Premises for the purpose of mitigating damages suffered by Landlord
because of Tenant's failure to perform its obligations hereunder; provided,
however, that even though Tenant has abandoned the Premises following such
breach, this Lease shall nevertheless continue in full force and effect for
as long as Landlord does not terminate Tenant's right of possession, and
until such termination, Landlord shall have the remedy described in Section
1951.4 of the California Civil Code (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 sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due
hereunder. The "worth at the time of the award" within the meaning of
Subparagraphs (a)(1) and (a)(2) of Section 1951.2 of the California Civil
Code shall be computed by allowing interest at the rate of ten percent (10%)
per annum. Tenant waives redemption or relief from forfeiture under
California Code of Civil Procedure Sections 1174 and 1179, or under any other
present or future law, in the event Tenant is evicted or Landlord takes
possession of the Premises by reason of any default of Tenant hereunder.
21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and remedies
of Landlord are not exclusive; they are cumulative in addition to any rights
and remedies now or hereafter existing at law, in equity by statute or
otherwise, or to any equitable remedies Landlord may have, and to any
remedies Landlord may have under bankruptcy laws or laws affecting creditor's
rights generally. In addition to all remedies set forth above, if Tenant
defaults or otherwise breaches this Lease, any and all Base Rent waived by
Landlord under Section 3 above, prorated for the remaining portion of the
Lease shall be immediately due and payable to Landlord and all options
granted to Tenant hereunder shall automatically terminate, unless otherwise
expressly agreed to in writing by Landlord.
21.4 WAIVER OF A DEFAULT: The waiver by Landlord or Tenant of any
default or breach of any provision of this Lease shall not be deemed or
construed a waiver of any other breach or default by Tenant or Landlord
respectively, hereunder or of any subsequent breach or default of this Lease,
except for the default specified in the waiver.
22. HOLDING OVER: If Tenant holds possession of the Premises after the
expiration of the Term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this
Lease, provided the monthly Base Rent during such hold over period shall be
150% of the Base Rent due on the last month of the Lease Term, payable in
advance on or before the first day of each month. Acceptance by Landlord of
the monthly Base Rent without the additional .fifty percent (50%) increase of
Base Rent shall not be deemed or construed as a waiver by Landlord of any of
its rights to collect the increased amount of the Base Rent as provided
herein at any time. Such month-to-month tenancy shall not constitute a
renewal or extension for any further term. All options, if any, granted
under the terms of this Lease shall be deemed automatically terminated and be
of no force or effect during said month-to-month tenancy. Tenant shall
continue in possession until such tenancy shall be terminated by either
Landlord or Tenant giving written notice of termination to the other party at
least thirty (30) days prior to the effective date of termination. This
paragraph shall not be construed as Landlord's permission for Tenant to hold
over. Acceptance of Base Rent by Landlord following expiration or termination
of this Lease shall not constitute a renewal of this Lease.
23. LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or default
of this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of
this provision, a reasonable time shall not be less than thirty (30) days
after receipt by Landlord of written notice specifying the nature of the
obligation Landlord has not performed; provided, however, that
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if the nature of Landlord's obligation is such that more than thirty (30)
days, after receipt of written notice, is reasonably necessary for its
performance, then Landlord shall not be in breach or default of this Lease if
performance of such obligation is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.
24. PARKING: Tenant shall have a license to use the number of undesignated
and nonexclusive parking spaces set forth on Page 1. Landlord shall exercise
reasonable efforts to insure that such spaces are available to Tenant for its
use, but Landlord shall not be required to enforce Tenant's right to use the
same. So long as Tenant does not disrupt other tenants' conduct of their
business within the Park and Tenant does not otherwise breach the quiet
enjoyment of such other tenants. Tenant may take such reasonable measures to
enforce its license to use such undesignated parking spaces.
25. SALE OF PREMISES: In the event of any sale of the Premises by Landlord
or the cessation otherwise of Landlord's interest therein, Landlord shall be
and is hereby entirely released from any and all of its obligations to
perform or further perform under this Lease and from all liability hereunder
as of the date of such sale except for obligations of Landlord under this
Lease arising prior to any such sale or transfer or the Premises;
and.the.purchaser, at such sale or any subsequent sale of the Premises shall
be deemed, without any further agreement between the parties or their
successors in interest or between the parties and any such purchaser, to have
assumed and agreed to carry out any and all of the covenants and obligations
of the Landlord under this Lease. For purposes of this Section 25, the term
"Landlord" means only the owner and/or agent of the owner as such parties
exist as of the date on which Tenant executes this Lease. A ground lease or
similar long term lease by Landlord of the entire Building, of which the
Premises are a part, shall be deemed a sale within the meaning of this
Section 25. Tenant agrees to attorn to such new owner provided such new
owner does not disturb Tenant's use, occupancy or quiet enjoyment of the
Premises so long as Tenant is not in default of any of the provisions of this
Lease.
26. WAIVER: No delay or omission in the exercise of any right or remedy of
either party hereto on any default by the other party shall impair such a
right or remedy or be construed as a waiver. The subsequent acceptance of
Rent by Landlord after breach by Tenant of any covenant or term of this Lease
shall not be deemed a waiver of such breach, other than a waiver of timely
payment for the particular Rent payment involved, and shall not prevent
Landlord from maintaining an unlawful detainer or other action based on such
breach. No payment by Tenant or receipt by Landlord of a lesser amount than
the monthly Rent and other sums due hereunder shall be deemed to be other
than on account of the earliest Rent or other sums due, nor shall any
endorsement or statement on any check or accompanying any check or payment 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
Rent or other sum or pursue any other remedy provided in this Lease. No
failure, partial exercise or delay on the part of the either party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
27. CASUALTY DAMAGE:
27.1 CASUALTY. If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant) shall
be damaged or destroyed by fire or other casualty, Tenant shall give
immediate written notice thereof to Landlord. Within thirty (30) days after
receipt by Landlord of such notice, Landlord shall notify Tenant, in writing,
whether the necessary repairs can reasonably be made: (a) within one hundred
eighty (180) days; or (b) in more than one hundred eighty (180) days, from
the date of destruction.
27.1.1 MINOR INSURED DAMAGE. If the Premises are damaged only to
such extent that repairs, rebuilding and/or restoration can be reasonably
completed within one hundred eighty (180) days from the date of destruction,
this Lease shall not terminate and, provided that insurance proceeds are
available to fully repair the damage, Landlord shall repair the Premises to
substantially the same condition that existed prior to the occurrence of such
casualty, except Landlord shall not be required to rebuild, repair, or
replace any alterations or improvements installed by or for the benefit of
Tenant or any part of Tenant's furniture, furnishings or fixtures and
equipment removable by Tenant. The Rent payable hereunder, from the date of
destruction until the Premises are fully restored, shall be abated
proportionately to the extent that Tenant's use of the Premises is impaired.
27.1.2 MAJOR INSURED DAMAGE. If the Premises are damaged to such
extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days, then either Landlord or
Tenant may terminate this Lease by giving written notice within twenty (20)
days after notice from Landlord regarding the time period of repair. If
either party notifies the other of its intention to so terminate the Lease,
then this Lease shall terminate and the Rent shall be abated from the date
Tenant vacates the Premises. If neither party elects to terminate this
Lease, Landlord shall promptly commence and diligently prosecute to
completion the repairs to the Premises, provided insurance proceeds are
available '_o fully repair the damage (except that Landlord shall not be
required to rebuild, repair, or replace any alterations or improvements
installed by or for the benefit of Tenant or any part of Tenant's furniture,
furnishings or fixtures and equipment removable by Tenant). During the time
when Landlord is prosecuting such repairs to completion, the Rent payable
hereunder, from the date of destruction until the Premises are fully
restored, shall be abated proportionately to the extent that Tenant's use of
the Premises is impaired.
27.1.3 DAMAGE NEAR END OF TERM. Notwithstanding anything to the
contrary contained in this Lease except for the provisions of Section 27.2
below, if the Premises are damaged or destroyed during the last year of then
applicable term of this Lease, Landlord or Tenant may, at its option, cancel
and terminate
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this Lease by giving written notice to the other party of its election to do
so within thirty (30) days after receipt by Landlord of notice from Tenant of
the occurrence of such casualty. If Landlord or Tenant so elects to
terminate this Lease, all rights of Tenant hereunder shall cease and
terminate ten (10) days after the other party's receipt of such notice.
27.2 TENANT'S OR TENANT'S REPRESENTATIVE'S FAULT. If any portion of
the Premises is damaged or destroyed due to the fault, negligence (active or
passive) or breach of this Lease by Tenant or any of Tenant's
Representatives, Rent shall not be diminished during the repair of such
damage and Tenant shall be liable to Landlord for the cost of the repair
caused thereby to the extent such cost is not covered by Tenant's insurance
proceeds.
27.3 UNINSURED CASUALTY. Tenant shall be responsible for and shall
pay to Landlord, as Additional Rent, any of Tenant's deductibles amount under
the property insurance for the Premises and/or the Building. If any portion
of the Premises is damaged and is not fully covered by insurance proceeds
received by Landlord (and Tenant elects not to pay any such difference) or if
the holder of any indebtedness secured by the Premises requires that the
insurance proceeds be applied to such indebtedness, then Landlord shall have
the right to terminate this Lease by delivering written notice of termination
to the other party within thirty (30) days after the date of notice to Tenant
of any such event, whereupon all rights and obligations shall cease and
terminate hereunder, except for those obligations expressly provided for in
this Lease to survive such termination of the Lease.
27.4 TENANT'S WAIVER. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss
of use of any part of the Premises by Tenant or loss of Tenant's personal
property', resulting in any way from such damage, destruction or the repair
thereof, except that, Rent shall abate in proportion to the damage to the
Premises as specifically provided above in this Section 27. With respect to
any damage or destruction which Landlord is obligated to repair or may elect
to repair, Tenant hereby waives all rights to terminate this Lease or offset
any amounts against Rent pursuant to rights accorded Tenant by any law
currently existing or hereafter enacted, including but not limited to, all
rights pursuant to the provisions of Sections 1932(2.), 1933(4.), 1941 and
1942 of the California Civil Code, as the same may be amended or supplemented
from time to time."
28. CONDEMNATION: If the Premises or twenty-five percent (25%) or more of
Tenant's portion of parking spaces is condemned by eminent domain, inversely
condemned or sold in lieu of condemnation for any public or quasi-public use
or purpose ("Condemned"), then Tenant or Landlord may terminate this Lease as
of the date when physical possession of the Premises is taken and title vests
in such condemning authority, and Rent shall be adjusted to the date of
termination. Tenant shall not because of such condemnation assert any claim
against Landlord or the condemning authority for any compensation because of
such condemnation, and Landlord shall be entitled to receive the entire
amount of any award without deduction for any estate of interest or other
interest of Tenant except for any award for Tenant's relocation expenses,
loss of personal property and fixtures installed by Tenant or unamortized
tenant improvements paid by Tenant. If a substantial portion of the
Premises, Building or the Lot is so Condemned, Landlord at its option may
terminate this Lease. If Landlord does not elect to terminate this Lease,
Landlord shall, if necessary, promptly proceed to restore the Premises or the
Building to substantially its same condition prior to such partial
condemnation, allowing for the reasonable effects of such partial
condemnation, and a proportionate allowance shall be made to Tenant, as
reasonably determined by Landlord, for the Rent corresponding to the time
during which, and to the part of the Premises of which, Tenant is deprived on
account of such partial condemnation and restoration. Landlord shall not be
required to spend funds for restoration in excess of the amount received by
Landlord as compensation awarded.
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:
29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing
this Lease, Tenant has completed, executed and delivered to Landlord Tenant's
initial Hazardous Materials Disclosure Certificate (the "Initial HazMat
Certificate"), a copy of which is attached hereto as Exhibit G and
incorporated herein by this reference. Tenant covenants, represents and
warrants to Landlord that the information on the Initial HazMat Certificate
is true and correct and accurately describes the use(s) of Hazardous
Materials which will be made and/or used on the Premises by Tenant. Tenant
shall commencing with the date which is one year from the Commencement Date
and continuing every year ther