ASSIGNMENT OF LEASE
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This Assignment of Lease ("Assignment") is made as of July ___, 1997,
between Source Scientific, Inc., a California corporation ("Assignor") and
BBI-Source Scientific, Inc.
RECITALS
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A. TR Brell, Cal Corp., an Illinois corporation("Landlord"), as
Landlord, and Assignor, as Tenant, executed a lease dated as of January 30, 1995
(the "Lease"), a copy of which is attached and incorporated herein by reference
as Exhibit "A." Pursuant to the Lease, Landlord leased to Tenant and Tenant
leased from Landlord that certain property described within the Lease attached
hereto as exhibit," for a term of seven(7) years, commencing on February 1, 1995
and ending on January 31, 2002, subject to earlier termination as provided in
the Lease.
Assignor desires to assign the Lease to Assignee, and Assignee
desires to accept the assignment of the Lease from Assignor and assume the
Lease, and all other obligations under the Lease.
THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy
of which are hereby acknowledged, Assignor and Assignee agree as follows:
1. Assignment:
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Assignor assigns and transfers to Assignee all right, title, and
interest in the Lease, and Assignee accepts from Assignor, all right, title and
interest in the Lease. This Assignment shall have the effect and be construed
as though the Assignee was the original Tenant under the Lease.
2. Assumption of Lease Obligations:
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Assignee assumes and agrees to perform and fulfill all of the terms,
covenants, conditions and obligations required to be performed and fulfilled by
Assignor as Lessee under the Lease and/or that certain Settlement Agreement
between Landlord and Assignor with the Effective Date of February 15, 1996
("Agreement"), including the making of all payments due to or payable on behalf
of Lessor under the Lease and/or Agreement as they become due and payable.
Notwithstanding the foregoing, the Assignment of the Lease to Assignee
shall not affect the liability of Assignor under the Lease, and Assignor shall
continue to be responsible for the performance of all provisions and conditions
thereof.
This Assignment shall neither operate nor be construed as a notation by
Landlord in favor of Assignor, and Landlord shall retain all rights and remedies
under the Lease against Assignor as if the Lease had not been assigned.
744.101/alease.mgd 1 of 2
3. Interpretation and Governing Law:
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This Assignment shall be governed by and construed in accordance with
California law in effect as of the date of the Assignment and according to its
fair meaning as if prepared jointly and equally by Assignor, Assignee and
Landlord.
It shall be deemed that, for the purpose of enforcement by Landlord of
any term, covenant, condition, restriction and/or obligation provided by the
Lease against Assignee, privity of estate and privity of contract exists between
Landlord and Assignee with respect to any such enforcement.
ASSIGNOR:
__________________________________________
Authorized representative of
Source Scientific, Inc.
ASSIGNEE:
__________________________________________
Authorized representative of
BBI-Source Scientific, Inc.
CONSENT AND APPROVAL:
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The undersigned, on behalf of and as Landlord's authorized
representative, consents to this Assignment of the Lease to Assignee, provided
however that notwithstanding this Assignment and the Landlord's consent to this
Assignment, Landlord does not in whole or in part waive or relinquish any rights
under the Lease against Assignor or Assignee. Landlord consents to this
Assignment without waiving its rights with respect to future assignments.
LANDLORD:
__________________________________________
Authorized representative of Koll
the Real Estate Services Company,
as authorized representative of
TR Brell, Cal Corp., an Illinois Corporation
744.101/alease.mgd 2 of 2
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET
(Do not use this form for Multi-Tenant Property)
1. Basic Provisions ("Basic Provisions")
1.1 Parties: This Lease ("Lease"), dated for reference purposes only,
January 30, 1995, is made by and between TR BRELL.,CAL CORP, an Illinois
corporation ("Lessor") and SOURCE SCIENTIFIC, INC., a California
corporation ("Lessee"), (collectively the "Parties," or individually a
"Party").
1.2 Premises: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of the Lease, and commonly
known by the street address of 7390 Lincoln Way located in the County of
Orange State of California and generally described as (describe briefly
the nature of the property) Approximately 41,184 square feet of space
commonly known as 7390 Lincoln Way, garden Grove, California, as shown by
diagonal lines on exhibit "A" attached hereto. ("Premises"). (See Paragraph
2 for further provisions.)
1.3 Term: SEVEN (7) years and 0 months ("Original Term")
commencing February 1, 1995 ("Commencement Date") and ending January 31,
2002 ("Expiration Date"). (See Paragraph 3 for future provisions.)
1.4 Early Possession ----------------------------------- ("Early Possession
Date").(See Paragraphs 3.2 and 3.3 for future provisions.)
1.5 Base Rent: $26,185 per month ("Base Rent"), payable on the FIRST
day of each month commencing FEBRUARY 1, 1995 (See Addendum, Paragraph 49
and 50) (See Paragraph 4 for further provisions.) X if this box is
checked, there are provisions in this Lease for the Base Rent to be adjusted.
1.6 Base Rent Paid Upon Execution: $ N/A as base rent for the period
1.7 Security Deposit: $ 29,678 ("Security Deposit"). (See Paragraph 5
for further provisions.)
1.8 Permitted Use: MANUFACTURE OF MEDICAL., DIAGNOSTIC EQUIPMENT AND RELATED
OFFICE PURPOSES. (See Paragraph 6 for further provisions.)
1.9 Insuring Party: Lessor is the "Insuring Party" unless otherwise stated
herein. (See Paragraph 8 for further provisions.)
1.10 Real Estate Brokers: The following real estate brokers (collectively,
the "Brokers") and brokerage relationships exist in this transaction and are
consented to by the Parties (check applicable boxes):
_____________________________________________________ represents Lessor
exclusively ("Lessor's Broker"); both Lessor and lessee, and
____________________VOIT COMMERCIAL____ represents Lessee exclusively ("Lessee's
Broker"); both Lessee and Lessor. (See Paragraph 15 for further
provisions)
1.11 Guarantor. the obligations of the Lessee under this Lease are to be
guaranteed by N/A ("Guarantor"). (See Paragraph 37 for further
provisions.)
1.12 Addenda. Attached hereto is an Addendum or Addenda consisting of
Paragraphs 48(a) through 64 and Exhibits A, B, C and D all of which
constitute a part of this Lease.
2. Premises:
2.1 Letting, Lessor hereby leases to Lessee , and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this lease. Unless otherwise provided
herein, any statement of square footage set forth in this lease, or that may
have been used in calculating rental, is an approximation which Lessor and
lessee agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual square footage is more or less.
2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it has
been advised by the Brokers to satisfy itself with respect to the condition of
the Premises including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, compliance with Applicable law, as
defined in paragraph 6.3) and the present and future suitability of the Premises
for Lessee's intended use. (b) that Lessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to Lessee's occupancy of the Premises and/or the
term of this lease, and (c) that neither Lessor, nor any of Lessor's agents, has
made any oral or written representations or warranties with respect to the said
matters other than as set forth in this Lease.
2.5 lessee prior Owner/Occupant. the warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises in such
event. Lessee shall, at Lessee's sole cost and expense, correct any
non-compliance of the Premises with said warranties.
3. Term.
3.1 Term. The Commencement Date, Expiration date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 Early Possession. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession, All other terms of this Lease, however,
(including but not limited to the obligations to pay Real Property Taxes and
insurance premiums and to maintain the Premise s shall be in effect during such
period Any such early possession shall not affect nor advance the Expiration
Date of the Original Term.
1 (a) that it presently is in occupancy of the Premises, is familiar
with the Premises and
NET PAGE 1 Initials _______
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1990-American Idustrial Real Estate Association FORM 204NJ/90
4. Rent.
4.1 Base Rent. Lessee shall cause payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time, to be received by Lessor
in lawful money of the United States, without offset or deduction, on or before
the day on which it is due under the terms of this Lease. Base Rent and all
other rend and charges for any period during the term hereof which is for less
than one (1) full calendar month shall be prorated based upon the actual number
of days of the calendar month, involved. Payment of Base Rent and other charges
shall be made to Lessor at its address stated herein or to such other persons or
at such other addresses as Lessor may from time to time designate in writing to
Lessee.
5. Security Deposit, Lessee shall deposit with Lessor upon execution hereof the
security Deposit set forth in Paragraph 1.7 as security for Lessee's faithful
performance of Lessee's obligations under this lease. If Lessee fails to pay
Base Rent or other rent or charges due hereunder, or otherwise Defaults under
this Lease (as defined in Paragraph 13.1), Lessor may use, apply or retain all
or any portion of said Security Deposit for the payment of any amount due Lessor
or to reimburse or compensate Lessor for any liability, cost, expense, loss or
damage (including attorneys' fees) which Lessor may suffer or incur by reason
thereof. If Lessor uses or applies all or any portion of said Security Deposit,
Lessee shall within ten (10) days after written request therefor deposit moneys
with Lessor sufficient to restore said Security Deposit to the full amount
required by this Lease. Any time the Base Rent increases during the term of
this Lease, Lessee shall, upon written request from Lessor, deposit additional
moneys with Lessor sufficient to maintain the same ratio between the Security
Deposit and the Base Rent as those amounts are specified in the Basic
Provisions. Lessor shall not be required to keep all or part of the Security
Deposit separate from its general accounts. Lessor shall, at the expiration or
earlier termination of the term hereof and after Lessee has vacated the Premises
and performed all of its obligations hereunder through to and including with
respect to Lessee's surrender of the Premises, return to Lessee (or, at
Lessor's option, to the last assignee, if any, of Lessee's interest herein),
that portion of the Security Deposit not used or applied by Lessor. Unless
otherwise expressly agreed in writing by Lessor, no part of the Security Deposit
shall be considered to be held in trust, to bear interest or other increment for
its use, or to be prepayment for any moneys to be paid by Lessee under this
Lease.
6. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the purposes set
forth in Paragraph 1.8, and for no other purpose. Lessee shall not use or
permit the use of the Premises in a manner that creates waste or a nuisance, or
that disturbs owners and/or occupants or, or causes damage to, neighboring
premises or properties.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance " as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity or existence, use
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for liability of Lessor to any governmental agency
or third party under any applicable statute or common law theory. Hazardous
Substance shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil or any products, by-products or fractions thereof. Lessee
shall not engage in any activity in, on or about the Premises which constitutes
a Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Law (as defined in Paragraph
6.3) "Reportable Use" shall mean (i)the installation or use of any above or
below ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority. Reportable Use shall
also include Lessee's being responsible for the presence in, on or about the
Premises of a Hazardous Substance with respect to which any Applicable Law
requires that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Lessee may, without
Lessor's prior consent, but in compliance with all Applicable Law, use any
ordinary and customary materials reasonably required to be used by Lessee in the
normal course ee's business permitted on the Premises, so long as such use is
not a Reportable Use and does not expose the Premises or neighboring properties
to any meaningful risk of contamination or damage or expose Lessor to any
liability therefor. in addition, Lessor may (but without any obligation to do
so) condition its consent to the use or presence of any Hazardous Substance,
activity or storage tank by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, In its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefrom or therefor, including, but
not limited to, the installation (and removal on or before Lease expiration or
earlier termination) of reasonably necessary protective modifications to the
Premises (such as concrete encasements) and/or the deposit of an additional
Security Deposit under Paragraph 5 hereof.
(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance, or a condition involving or resulting from
same, has come to be located in, on, under or about the Premises, other than as
previously consented to by Lessor, Lessee shall immediately give written notice
of such fact to Lessor, Lessee shall also immediately give Lessor a copy of any
statement, report, notice, registration, application, permit, business plan,
license, claim, action or proceeding given to, or received from, any
governmental authority or private party, or persons entering or occupying the
Premises, concerning the presence, spill, release, discharge of, or exposure to,
any Hazardous Substance or contamination in, on, or about the Premises,
including but not limited to all such documents as may be involved in any
Reportable Uses involving the Premises.
(c) Indemnification, Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, costs, claims, liens, expense, penalties, permits and
attorney's and consultant's fees arising out of or involving any Hazardous
Substance or storage tank brought onto the Premises by or for Lessee or under
Lessee's control. Lessee's obligations under this Paragraph 6 shall include,
but not be limited to, the effects of any contamination or injury to person,
property or the environment created or suffered by Lessee, and the cost of
investigation (including consultant's and attorney's fees and testing), removal,
remediation, restoration and/or abatement thereof, or of any contamination
therein involved, and shall survive the expiration or earlier termination of
this Lease. No termination, cancellation or release agreement entered into by
Lessor and Lessee shall release Lessee from its obligations under this Lease
with respect to Hazardous Substances or storage tanks, unless specifically so
agreed by Lessor in writing at the time of such agreement.
6.3 Lessee's Compliance with Law. Except as otherwise provided in this
Lease, Lessee, shall, at Lessee's sole cost and expense, fully, diligently and
in a timely manner, comply with all "Applicable Law." which term is used in this
Lease to include all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating in any manner
to the Premises (including but not limited to matters pertaining to (i)
industrial hygiene, (ii) environmental conditions on, in, under or about the
Premises, including soil and groundwater condition, and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance or storage
tank), now in effect or which may hereafter come into effect, and whether or not
reflecting a change in policy from any previously existing policy. Lessee
shall, within five (5) days after receipt of Lessor's written request, provide
Lessor with copies of all documents and information, including, but not limited
to, permits, registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with any Applicable Law specified by Lessor, and
shall immediately upon receipt, notify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving failure by Lessee or the
Premises to comply with any Applicable Law.
6.4 Inspection; Compliance,. Lessor and Lessor's Lender(s) (as defined in
Paragraph 8.3 (a))shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times, for the purpose of
inspecting the condition of the Premises and for verifying compliance by Lessee
with this Lease and all Applicable Laws (as defined in Paragraph 6.3), and to
employ experts and/or consultants in connection therewith and/or to advise
Lessor with respect to Lessee's activities, including but not limited to the
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance or storage tank on or from the Premises. The costs and
expenses of any such inspections shall be paid by the party requesting same,
unless a Default or Breach of this Lease, violation of Applicable Law, or a
contamination, caused or materially contributed to by Lessee is found to exist
or be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination, in any such case, Lessee shall upon request reimburse Lessor
or Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.
7. Maintenance; Repairs; Utility installations; Trade Fixtures and Alterations.
7.1 Lessee's Obligations. (a) Subject to Addendum Paragraph 52,
Initials _______
NET PAGE 2
7.2 (Lessor's obligations to repair), 9 (damage and destruction), and 14
(condemnation), Lessee shall be Lessee's sole cost and expense and at all
times, keep the Premises and every part thereof in good order, condition and
repair, structural and non-structural whether or not such portion of the
Premises requiring repairs, or the means of repairing the same, are
reasonably or readily accessible to Lessee, and whether or not the need for
such repairs occurs as a result of Lessee's use, any prior use, the elements
or the age of such portion of the Premises), including, without limiting the
generality of the foregoing, all equipment or facilities serving the
Premises, such as plumbing, heating, air conditioning, ventilating,
electrical, lighting facilities, boilers, fired or unfired pressure vessels,
fire sprinkler and/or standpipe and hose or other automatic fire
extinguishing system, including fire alarm and/or smoke detection systems
and equipment, fire hydrants, fixtures, walls (interior and exterior),
foundations, ceilings, roofs, floors, windows, doors, plate glass, skylights
landscaping, driveways, parking lots, fences, retaining walls, signs,
sidewalks and parkways located in, on, about, or adjacent to the Premises,
Lessee shall not cause or permit any Hazardous Substance to be spilled or
released in, on, under or about the Premises (including through the plumbing
or sanitary sewer system) and shall promptly, at Lessee's expense, take all
investigatory and/or remedial action reasonably (recommended, whether or not
formally ordered or required, for the cleanup of any contamination of, and
for the maintenance, security and/or monitoring of the Premises, the
elements surrounding same, or neighboring properties, that was caused or
materially contributed to by Lessee, or pertaining to or involving any
Hazardous Substance and/or storage tank brought onto the Premises by or for
Lessee or under its control Lessee, in keeping the Premises in good order,
condition and repair, shall exercise and per form good maintenance
practices. Lessee's obligations shall include restoration, replacements or
renewals when necessary to keep the Premises and all improvements thereon or
a part thereof in good order, condition and state of repair. If Lessee
occupies the Premises for seven (7) years or more, Lessor may require Lessee
to repaint the exterior of the buildings on the Premises as reasonably
required, but not more frequently than once ever seven (7) years.
(b) Lease shall, at Lessee's sole cost and expense, procure and maintain
contracts, with copies to Lessor, in customary form and substance for, and
with contractors specializing and experienced in, the inspection,
maintenance and service of the following equipment and improvements, if any.
located on the Premises: (i) heating, air conditioning and ventilation
equipment, (ii) boiler, fired or unfired pressure vessels, (iii) fire
sprinkler and/or standpipe and hose or other automatic fire extinguishing
systems, including fire alarm and/or smoke detection, (iv) landscaping and
irrigation systems. (v) roof covering and drain maintenance and (vi) asphalt
and parking lot maintenance. Addendum Paragraph 52 and Paragraphs
7.2 Lessor's Obligations. Except for the agreements of Lessor contained in 9
(relating to destruction of the Premises) and 14 (relating to condemnation
of the Premises), it is intended by the Parties hereto that Lessor have no
obligation, in any manner whatsoever, to repair and maintain the Premises,
the improvements located thereon, of the equipment therein, whether
structural or non structural, all of which obligations are intended to be
that of the Lessee under Paragraph 7.1 hereof. It is the intention of the
Parties that the terms of this Lease govern the respective obligations of
the Parties as to maintenance and repair of the Premises. lessee and Lessor
expressly waive the benefit of any statute now or hereafter in effect to the
extent it is inconsistent with the terms of this Lease with respect to, or
which affords Lessee the right to make repairs at the expense of Lessor or
to terminate this Lease by reason of any needed repairs.
7.3 Utility installations; Trade Fixtures; Alterations.
(a) Definitions; Consent Required. The term "Utility installations " is
used in this Lease to refer to all carpeting, window coverings, air lines,
power panels, electrical distribution, security, fire protection systems,
communication systems, lighting fixtures, heating, ventilating, and air
conditioning equipment, plumbing, and fencing in, on or about the Premises.
The term "Trade Fixtures" shall mean Lessee's Machinery and equipment that
can be removed without doing material damage to the Premises. The term
"Alterations" shall mean any modification of the improvements on the
Premises from that which are provided by Lessor under the terms of this
Lease, other than Utility installations or Trade Fixtures, whether by
addition or deletion. "Lessee Owned Alterations and/or Utility
Installations" are defined as Alterations and/or Utility installations made
by lessee that are not yet owned by Lessor as defined in Paragraph 7.4 (a).
Lessee shall not make any Alterations or Utility installations in, on, under
or about the Premises without Lessor's prior written consent, Lessee may,
however, make non-structural Utility installations to the interior of the
Premises (excluding the roof), as long as they are not visible from the
outside, do not involve puncturing, relocating or removing the roof or any
existing walls, and the cumulative cost thereof during the term of this
Lease as extended does not exceed $25,000.
(b)Consent. Any Alterations or Utility Installations that Lessee shall
desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with proposed detailed plans. All
consents given by Lessor, whether by virtue of Paragraph 7.3(a) or by
subsequent specific consent, shall be deemed conditioned upon: (i) Lessee's
acquiring all applicable permits required by governmental authorities, (ii)
the furnishing of copies of such permits together with a copy of the plans
and specifications for the Alteration or Utility Installation to Lessor
prior to commencement of the work thereon, and (iii) the compliance by
Lessee with all conditions of said permits in a prompt and expeditious
manner. Any Alterations or Utility installations by Lessee during the term
of this Lease shall be done in a good and workmanlike manner, with good and
sufficient materials, and in compliance with all Applicable Law. Lessee
shall promptly upon completion thereof furnish Lessor with as-built plans
and specifications therefor. Lessor may (but without obligation to do so)
condition its consent to any requested Alteration or Utility installation
that costs $10,000 or more upon Lessee's providing Lessor with a lien and
completion bond in an amount equal to one and one-half times the estimated
cost of such Alteration or Utility installation and/or upon Lessee's posting
an additional Security Deposit with Lessor under Paragraph 36 hereof.
(c) Indemnification. lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any
mechanics' or materialmen's lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (10) days' notice prior
to the commencement of any work in, on or about the Premises, and Lessor
shall have the right to post notices of non-responsibility in or on the
Premises as provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend and protect itself, Lessor and the Premises against the same
and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof against the Lessor or the Premises.
If Lessor shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount5 equal to one and one-half times the
amount of such contested lien claim or demand, indemnifying Lessor against
liability for the same, as required by law for the holding of the Premises
free from the effect of such lien or claim. In addition, Lessor may require
Lessee to pay Lessor's attorney's fees and costs in participating in such
action if Lessor shall decide it is to its best interest to do so.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require their removal or
become the owner thereof as hereinafter provided in this Paragraph 7.4, all
Alterations and Utility Additions made to the Premises by Lessee shall be
the property of and owned by Lessee, but considered a part of the Premises,
Lessor may, at any time and at its option, elect in writing to Lessee to be
the owner of all or any specified part of the Lessee Owned Alteration and
Utility installations. Unless otherwise instructed per subparagraph 7.4(b)
hereof, all Lessee Owned Alterations and Utility installations shall, at the
expiration or earlier termination of this Lease, become the property of
Lessor and remain upon and be surrendered by Lessee with the Premises.
(b) Removal. Unless otherwise agreed in writing, Lessor may require that
any or all Lessee Owned Alterations or Utility Installations be removed by
the expiration or earlier termination of this Lease, notwithstanding their
installation may have been consented to by Lessor, Lessor may require the
removal at any time of all or any part of any Lessee Owned Alterations or
Utility Installations made without the required consent of Lessor.
(c) Surrender/Restoration. Lessee shall surrender the Premises by the
end of the last day of the Lease term or any earlier termination date, with
all of the improvements, parts and surfaces thereof clean and free of debris
and in good operating order, condition and state of repair, ordinary wear
and tear excepted. "Ordinary wear and tear" shall not include any damage or
deterioration that would have been prevented by good maintenance practice or
by Lessee performing all of its obligations under this Lease. Except as
otherwise agreed or specified in writing by Lessor, the Premises, as
surrendered, shall include the Alterations and Utility Installations. The
obligation of Lessee shall include the repair of any damage occasioned by
the installation, maintenance or removal of Lessee's Trade Fixtures,
furnishings, equipment, and Alterations and/or Utility Installations, as
well as the removal of any storage tank installed by or for Lessee, and the
removal, replacement, or remediation of any soil, material or ground water
contaminated by Lessee, all as may then be required by Applicable Law and/or
good service practice. Lessee's Trade Fixtures shall remain the property of
Lessee and shall be removed by Lessee subject to its obligation to repair
and restore the Premises per this Lease.
8. Insurance; Indemnity.
8.1 Payment For insurance. Regardless of whether the Lessor or Lessee is the
insuring Party, Lessee shall pay, as additional rent, for all insurance required
under this Paragraph 8 except tot he extent of the cost attributable to
liability insurance carried by Lessor in excess of $3,000,000 per occurrence.
Premiums for policy periods commencing prior to or extending beyond the Lease
term shall be prorated to correspond to the Lease term. Payment shall be made by
Lessee to Lessor within ten (10) days following receipt of an invoice for any
amount due.
8.2 Liability Insurance.
(a) Carried by Lessee. See Addendum Paragraph 54.
(b) Carried By Lessor. In the event Lessor is the Insuring Party, Lessor
shall also maintain liability insurance described in Paragraph 8.2(a), above, in
addition to, and not in lieu of, the insurance required to be maintained by
Lessee. Lessee shall not be named as an additional insured therein.
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8.3 Property Insurance--Building, Improvements and Rental Value.
(a) Building and improvements. The insuring Party shall obtain and keep
in force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and to the holders of any mortgages, deeds
of trust or ground leases on the Premises ("Lender(s)"), Insuring loss or
damage to the Premises. The amount of such insurance shall be equal to the full
replacement cost of the Premises, as the same shall exist from time to time, or
the amount required by Lenders, but in no event more than the commercially
reasonable and available insurable value thereof if, by reason of the unique
nature or age of the improvements involved, such latter amount is less than
full replacement cost. If lessor is the Insuring Party, however, Lessee Owned
Alteration and Utility Installations shall be insured by Lessee under Paragraph
8.4 rather than by Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct
physical loss or damage, including, coverage for any additional costs resulting
from debris removal and reasonable amounts of coverage for the enforcement of
any ordinance or law regulating the reconstruction or replacement of any
undamaged sections of the Premises required to be demolished or removed by
reason of the enforcement of any building, zoning, safety or land use laws as
the result of a covered cause of loss. Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance clause, waiver
of subrogation, and inflation guard protection causing an increase in the
annual property Insurance coverage amount by a factor of not less than the
adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers
for the city nearest to where the Premises are located. If such insurance
coverage has a deductible clause, the deductible amount shall not exceed $1,000
per occurrence, and Lessee shall be liable for such deductible amount in the
event of an insured Loss, as in Paragraph 9.11(c).
(b) Rental Value. The Insuring Party shall, in addition, obtain and keep
in force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and Lender(s), Insuring the loss of the full
rental and other charges payable by Lessee to Lessor under this Lease for one
(1) year (including all real estate taxes, insurance costs, and any scheduled
rental increases). Said insurance shall provide that in the event the Lease is
terminated by reason of an insured loss, the period of indemnity for such
coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one full year's loss of rental
revenues from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental income,
property taxes, insurance premium costs and other expenses, if any. otherwise
payable by Lessee, for the next twelve (12) month period. Lessee shall be liable
for any deductible amount in the event of such loss.
(c) Adjacent Premises, if the Premises are part of a larger building, or
if the Premises are part of a group of buildings owned by Lessor which are
adjacent to the premises, the Lessee shall pay for any increase in the premiums
for the property insurance of such building or buildings if said increase is
caused by Lessee's acts, omissions, use or occupancy of the Premises.
(d) Tenant's improvements. If the Lessor is the Insuring party, the
Lessor shall not be required to insure Lessee Owned Alterations and Utility
Installations if Lessee is the Insuring Party, the policy carried by Lessee
under this Paragraph 8.3 shall insure Lessee Owned Alterations and Utility
Installations. See Addendum Paragraph 54.
8.4 Lessee's Property Insurance.
8.5 Insurance Policies, Insurance required hereunder shall be in companies
duly licensed to transact business in the state where the Premises are located,
and maintaining during the policy term a "General Policyholders Rating" of at
least A:X or such other rating as may be required by a Lender having a lien on
the Premises, as set forth in the most current issue of "Best's Insurance guide.
Lessee shall not due or permit to be done anything which shall invalidate the
Insurance policies referred to in this Paragraph 8. Lessee shall cause to be
delivered to Lessor certified copies of policies of such insurance or
certificates evidencing the existence and amounts of such insurance with the
insureds and loss payable clauses as required by this Lease. No such policy
shall be cancelable or subject to modification except after thirty (30) days
prior written notice to Lessor. Lessee shall at least thirty (30) days prior to
the expiration of such policies, furnish Lessor with evidence of renewals or
"insurance binders" evidencing renewal thereof, or Lessor may order such
Insurance and charge the cost thereof to Lessee, which amount shall be payable
by Lessee to Lessor upon demand. If the Insuring Party shall fail to procure and
maintain the insurance required to be carried by the insuring Party under this
Paragraph 8, the other Party may, but shall not be required to, procure and
maintain the same, but at Lessee's expense.
8.6 Waiver of Subrogation. Without affecting any other rights or remedies,
Lessee and Lessor ("Waiving Party") each hereby release and relieve the other,
and waive their entire right to recover damages (whether in contract or in tort)
against the other, for loss of or damage to the Waiving Party's property arising
out of or incident to the perils required to be insured against under Paragraph
8. The effect of such releases and waivers of the right to recover damages shall
not be limited by the amount of insurance carried or required, or by any
deductibles applicable thereto.
8.7 Indemnity. Except for Lessor's gross negligence and/or breach or express
warranties, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders (collectively, "Lessor Parties") from and against any and all claims,
loss of rents and/or damages, costs, liens, judgments, penalties, permits,
attorney's and consultant's fees, expenses and/or liabilities arising out of,
involving, or in dealing with, the occupancy of the Premises by Lessee, the
conduct of Lessee's business, any ace, omission or neglect or Lessee, its
agents, contractors, employees or invitees, and out of any Default of Breach by
lessee in the performance in a timely manner of any obligation on lessee's part
to be performed under this Lease. The foregoing shall include, but not be
limited to, the defense or pursuit of any claim or any action or proceeding
involved therein, and whether or not (in the case of claims made against Lessor)
litigated and/or reduced to judgment, and whether well founded or not. In case
any action or proceeding be brought against Lessor by reason of any of the
foregoing matters, Lessee upon notice from Lessor shall defend the same at
Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall
cooperated with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified.
8.8 Exemption of Lessor from Liability, Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether the said injury or damage results from conditions arising upon
the Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
Lessor shall not be liable for any damages arising from any act or neglect of
any other tenant of Lessor. notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to Lessee's
business or for any loss of income or profit therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" See Addendum Paragraph 56.
(c) "Insured Loss" shall mean damage or destruction the Premises, other
than Lessee Owned Alterations and Utility Installations, which was caused by an
event required to be covered by the insurance described in Paragraph 8.3(a),
Irrespective of any deductible amounts.
9.2 Partial Damage--Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense (except as to the
deductible which is Lessee's responsibility), repair such damage (but not
Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations as
soon as reasonably possible and this Lease shall continue in full force and
effect; provided, however, that Lessee shall, at Lessor's election, make the
repair of any damage or destruction the total cost to repair of which is $10,000
or less, and, in such event, Lessor shall make the insurance proceeds available
to Lessee on a reasonable basis for that purpose. Unless otherwise agreed,
Lessee shall in no event have any right to reimbursement from Lessor for
(except as to deductible which is Lessee's responsability),
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(Exclusive of Lessee's trade fixtures (except as to the deductable which
or Leese Owned Alterations and is Lessee's responsability)
Utility Installations)
any funds contributed by Lessee to repair any such damage or destruction
9.3 Partial Damage--Uninsured Loss. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option, either: (i) repair
such damage (exclusive of Lessee's Trade Fixtures, or Lessee Owned Alterations
and Utility Installations), as soon as reasonably possible at Lessor's expense
(except as to the deductible which is Lessee's responsibility), in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in lessor's damages from Lessee except as
released and waived in Paragraph 8.6.
9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 8.6.
9.5 Damage near End of Term. if at any time during the last six (6) months
of the term of this Lease there is damage for which the cost to repair exceeds
one (1) month's Base Rent, whether or not an Insured Loss, Lessor may, at
Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage, Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by, within twenty (20) days following the occurrence of the damage, or
before the expiration of the time provided in such option for its exercise,
whichever is earlier ("Exercise Period"), (i) exercising such option and (ii)
providing Lessor with any shortage in Insurance proceeds for adequate assurance
thereof), needed to make the repairs, If Lessee duly exercises such option
during said Exercise Period and provides Lessor with funds (or adequate
assurance thereof) to cover any shortage in Insurance proceeds, Lessor shall, at
Lessor's expense repair such damage as soon as reasonably possible and this
Lease shall continue in full force and effect. If Lessee fails to exercise such
option and provide such funds or assurance during said Exercise Period, then
Lessor may at Lessor's option terminate this lease as of the expiration of said
sixty (60) day period following the occurrence of such damage by giving written
notice to Lessee of Lessor's election to do so within ten (10) days after the
expiration of the Exercise Period, notwithstanding any term or provision in the
grant of option to the contrary.
9.8 Abatement of Rent; lessee's Remedies.
(a) In the event of damage described in Paragraph 9.2 (Partial
Damage--Insured), whether or not Lessor or Lessee repairs or restores the
Premises, the Base Rent, Real Property Taxes, Insurance Premiums, and other
charges, if any, payable by lessee hereunder for the period during which such
damage, its repair or the restoration continues (not to exceed the period for
which rental value insurance is required under Paragraph 8.3(b)), shall be
abated in proportion to the degree to which Lessee's use of the Premises is
Impaired. Except for abatement of Base Rent, Real Property Taxes, Insurance
premiums, and other charges, if any, as aforesaid, all other obligations of
Lessee hereunder shall be performed by Lessee, and Lessee shall have no claim
against Lessor for any damage suffered by reason of any such repair or
restoration.
(b) If Lessor shall be obligated to repair or restore the premises under
the provisions of this Paragraph 9 and shall not commence, in a substantial and
meaningful way, the repair or restoration of the Premises within ninety (90)
days after such obligation shall accrue, Lessee may, at any time prior to the
commencement of such repair or restoration, give written notice to Lessor and to
any Lenders of which Lessee has actual notice of Lessee's election to terminate
this Lease on a date not less than sixty (60) days following the giving of such
notice. If Lessee gives such notice to Lessor and such Lenders and such repair
or restoration is not commenced within thirty (30) days after receipt of such
notice, this Lease shall terminate as of the date specified in said notice. If
Lessor or a Lender commences the repair or restoration of the Premises within
thirty (30) days after receipt of such notice, this Lease shall continue in full
force and effect. "Commence" as used in this Paragraph shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.
9.8 Termination--Advance Payments. upon termination of this Lease pursuant
to this Paragraph 9, an equitable adjustment shall be made concerning advance
Base Rent and any other advance payments made by Lessee to Lessor, Lessor shall,
in addition, return to Lessee so much of Lessee's Security Deposit as has not
been, or is not then required to be, used by Lessor under the terms of this
Lease.
9.9 Waive Statutes. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.
10. Real Property Taxes.
10.1 (a)Payment of Taxes. Lessee shall pay, as additional rent, the real
Property Taxes, as defined in Paragraph 10.2, applicable to the Premises during
the term of this Lease. Subject to Paragraph 10.1(b), all such payments shall be
made at least ten (10) days prior to the delinquency date of the applicable
installment. Lessee shall promptly furnish Lessor with satisfactory evidence
that such taxes have been paid. if any such taxes to be paid by Lessee shall
cover any period of time prior to or after the expiration of earlier termination
of the term hereof, Lessee's share of such taxes shall be equitably prorated to
cover only the period of time prior to or after the expiration or earlier
termination of the term hereof, Lessee's share of such taxes shall be equitably
prorated to cover only the period of time within the tax fiscal year this Lease
is in effect, and Lessor shall reimburse Lessee for any overpayment after such
proration. If Lessee shall fail to pay any Real Property Taxes required by this
Lease to be paid by Lessee. Lessor shall have the right to pay the same, and
Lessee shall reimburse Lessor therefor upon demand.
(b) Advance Payment. In order to insure payment when due and before
delinquency of any or all Real Property Taxes, Lessor reserves the right, at
Lessor's option, to estimate the current Real Property Taxes applicable to the
Premises, and to require such current year's Real Property Taxes to be paid in
advance to Lessor by Lessee, either; (i) in a lump sum amount equal to the
installment due, at least twenty (20) days prior to the applicable delinquency
date, or (ii) monthly in advance with the payment of the Base Rent. If Lessor
elects to require payment monthly in advance, the monthly payment shall be that
equal monthly amount which, over the number of months remaining before the month
in which the applicable tax installment would become delinquent (and without
interest thereon), would provide a fund large enough to fully discharge before
delinquency the estimated installment of taxes to be paid. When the actual
amount of the applicable tax bill is known, the amount of such equal monthly
advance payment shall be adjusted as required to provide the fund needed to pay
the applicable taxes before delinquency. If the amounts paid to Lessor by
Lessee under the provisions of this Paragraph are insufficient to discharge the
obligations of Lessee to pay such Real Property Taxes as the same become due,
Lessee shall pay to Lessor, upon Lessor's demand, such additional sums as are
necessary to pay such obligations. All moneys paid to Lessor under this
Paragraph may be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a Breach by Lessee in the performance of the
obligations of Lessee under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may, subject to proration as provided in
Paragraph 10.1(a), at the option of Lessor, be treated as an additional Security
Deposit Under Paragraph 5.
10.2 Definition of "Real Property Taxes." As used herein, the term "Real
Property Taxes" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed upon the Premises by any authority
having the direct or indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage or
other improvement district thereof, levied against any legal or equitable
interest of Lessor in the Premises or in the real property of which the Premises
are a part, Lessor's right to rent or other income therefrom, and/or Lessor's
business of leasing the Premises. The term "Real Property Taxes" shall also
include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring, or changes in applicable law taking
effect, during the term of this Lease. Including but not limited to a change in
the ownership of the Premises or in the Improvements thereon, the execution of
this Lease, or any modification, amendment or transfer thereof, and whether or
not contemplated by the Parties.
10.3 Joint Assessment. if the Premises are not separately assessed. Lessee's
liability shall be an equitable proportion or the Real Property Taxes for all of
the land and improvements included within the tax parcel assessed, such
proportion to be determined by Lessor from the respective valuations
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assigned in the assessor's work sheets or such other information as may be
reasonably available. reasonable determination thereof, in good faith,
shall be conclusive.
10.4 Personal Property Taxes, Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere. When possible,
Lessee shall cause its Trade Fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property of
Lessor. If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee
within ten (10) days after receipt of a written statement setting forth the
taxes applicable to Lessee's property or, at Lessor's option, as provided in
Paragraph 10.1(b).
11. Utilities. lessee shall contract and pay for all water, gas, heat, light,
power, telephone, trash disposal and other utilities and services supplied to
the Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered with other premises.
12. Lessor's Consent required.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively.
"assignment") or sublet all or any part of Lessee's interest in this Lease or in
the Premises without Lessor's prior written consent given under and subject to
the terms of Paragraph 38.
(b) A change in the control of Lessee shall constitute an assignment
requiring Lessor's consent. The transfer, on a cumulative basis, of twenty-five
percent (25%) or more of the voting control of Lessee shall constitute a change
in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise). whether or not a formal
assignment or hypothecation of this Lease or Lessee's assets occurs, which
results or will result in a reduction of the New Worth of Lessee, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such
New Worth of Lessee as it was represented to Lessor at the time of the execution
by Lessor of this Lease or at the time of the most recent assignment to which
Lessor has consented, or as it exists immediately prior to said Lessor has
consented, or as it exists immediately prior to said transaction or transactions
consulting such reduction, at whichever time said New Worth of Lessee was or is
greater, shall be considered an assignment of this Lease by Lessee to which
Lessor may reasonably withhold its consent. "New Worth of Lessee" for purposes
of this Lease shall be the net worth of Lessee (excluding any guarantors)
established under generally accepted accounting principles consistently applied.
(d) An assignment or subletting of Lessee's Interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unconsented to assignment or subletting as a noncurable Breach, Lessor
shall have the right to either: (i) terminate this Lease, or (ii) upon thirty
(30) days written notice ("Lessor's Notice"). Increase the monthly Base Rent to
fair market rental value or one hundred ten percent (110%) of the Base Rent then
in effect, whichever is greater, Pending determination of the new fair market
rental value, if disputed by Lessee, Lessee shall pay the amount set forth in
Lessor's Notice, with any overpayment credited against the next installment(s)
of Base Rent coming due, and any underpayment for the period retroactively to
the effective date of the adjustment being due and payable immediately upon the
determination thereof. Further, in the event of such Breach and market value
adjustment, (i) the purchase price of any option to purchase the Premises held
by Lessee shall be subject to similar adjustment to the then fair market value
(without the Lease being considered an encumbrance or any deduction for
depreciation or obsolescence, and considering the Premises at its highest and
best use and in good condition), or one hundred ten percent (110%) of the price
previously in effect, whichever is greater, (ii) any index-oriented rental or
price adjustment formulas contained in this Lease shall be adjusted to require
that the base index be determined with reference to the index applicable to the
time of such adjustment, and (iii) any fixed rental adjustments scheduled during
the remainder of the Lease term shall be increased in the same ratio as the new
market rental bears to the Base Rent in effect immediately prior to the market
value adjustment.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, any assignment or subletting shall
not: (i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, or (iii) alter the primary liability of Lessee for
the payment of Base Rent and other sums due Lessor hereunder or for the
performance of any other obligations to be performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
lessee of any of the terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent, and such
action shall not relieve such persons from liability under this Lease or
sublease.
(d) In the event of any Default or Breach of Lessee's obligations under
this lease, Lessor may proceed directly against Lessee, any Guarantors or any
one else responsible for the performance of the Lessee's obligations under this
Lease, including the t, without first exhausting Lessor's remedies against any
other person or entity responsible therefor to Lessor, or any security held by
Lessor or Lessee.
(e) Each request for consent to an assignment or subletting shall be in
writing, accompanied by information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a non-refundable
deposit of $1,000 or ten percent (10%) of the current monthly Base Rent,
whichever is greater, as reasonable consideration for Lessor's considering and
processing the request for consent, Lessee agrees to provide Lessor with such
other or additional information and/or documentation as may be reasonably
requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by reason of
acception such assignment or entering into such sublease, be deemed, for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.
(g) The occurrence of a transaction described in Paragraph 12.1(c) shall
give Lessor the right (but not the obligation) to require that the Security
Deposit be increased to an amount equal to six(6) times the ten monthly Base
Rent, and Lessor may make the actual receipt by Lessor of the amount required to
establish such Security Deposit a condition to Lessor's consent to such
transaction.
(h) Lessor, as a condition to giving its consent to any assignment or
subletting, may require that the amount and adjustment structure of the rent
payable under this Lease be adjusted to what is then the market value and/or
adjustment structure for property similar to the Premises as then constituted.
12.3 Additional Terms and Conditions Applicable to subletting. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a portion
of the Premises heretofore or hereafter made by Lessee, and Lessor may collect
such rent and income and apply same toward Lessee's obligations under this
Lease; provided, however, that until a Breach (as defined in Paragraph 13.1)
shall occur in the performance of Lessee's obligations under this Lease. Lessee
may, except as otherwise provided in this Lease, receive, collect and enjoy the
rents accruing under such sublease. Lessor shall not, by reason of this or any
other assignment of such sublease to Lessor, nor by reason of the collection of
the rents from a sublessee, be deemed liable tot he sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such sublessee
under such sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a Breach
Exists in the performance of Lessee's obligations under this Lease, to pay to
Lessor the rents and other charges due and to become due under the sublease.
Sublessee shall rely upon any such statement and request from Lessor and shall
pay such rents and other charges to Lessor without any obligation or fright to
inquire as to whether such Breach exists and notwithstanding any notice from or
claim from Lessee to the contrary. Lessee shall have no right or claim against
said sublessee, or, until the Breach has been cured, against Lessor, for any
such rents and other charges so paid by said sublessee to Lessor.
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior Defaults
or Breaches or such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor herein.
(d) no sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach, Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $1,000.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said Default. A "Default" is defined as a
failure by the Lessee to observe, comply with or perform any of the terms,
covenants, conditions or rules applicable to Lessee under this Lease. A "Breach"
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is defined as the occurrence of any one or more of the following Defaults, and,
where a grace period to cure after notice is specified herein, the failure by
Lessee to cure such Default prior to the expiration of the applicable grace
period, shall entitle Lessor to pursue the remedies set forth in Paragraphs 13.2
and/or 13.3:
(a) The vacating of the Premises without the intention to reoccupy same,
or the abandonment of the Premises.
(b) Except as expressly otherwise provided in this Lease, the failure by
Lessee to make any payment of Base Rent or any other monetary payment required
to be made by Lessee hereunder, whether to Lessor or to a third party, as and
when due, the failure by Lessee to provide Lessor with reasonable evidence of
insurance or surety bond required under this Lease, or the failure of Lessee to
fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of three (3) days following
written notice thereof by or on behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the failure by
Lessee to provide Lessor with reasonable written evidence (in duly executed
original form, if applicable) of (i) compliance with Applicable Law per
Paragraph 6.3 (ii) the inspection, maintenance and service contracts required
under Paragraph 7.1(b), (iii) the recission of an unauthorized assignment or
subletting per Paragraph 12.1(b), (iv) a Tenancy Statement per Paragraphs 16 or
37, (v) the subordination or non-subordination of this Lease per Paragraph 30,
(vi) the guaranty of the performance of Lessee's obligations under this Lease if
required under Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of
this Lease, where any such failure continues for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
that are to be observed, complied with or performed by Lessee, other than those
described in subparagraphs (a), (b) or (c) above, where such Default continues
for a period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee; provided, however, that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably required for its cure, then
it shall not be deemed to be a Breach of this Lease by Lessee if Lessee
commences such cure within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion. (a) The occurrence of any of the following
events: (i) the making by lessee of any general arrangement or assignment for
the benefit of creditors; (ii) Lessee's becoming a "debtor" as defined in
11.U.S.C. $101 or any successor statute thereto (unless, in the case of a
petition filed against Lessee, the same is dismissed within sixty (60) days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located a the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days; provided, however, in the event that any provision of this subparagraph
(e) is contrary to any applicable law, such provision shall be of no
force or effect, and not effect the validity of the remaining provisions.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee or any Guarantor of Lessee's obligations hereunder was
materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a guarantor, (ii) the termination of a guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty. (iii) a guarantor's becoming insolvent or the subject of a
bankruptcy filing, (iv) a guarantor's refusal to honor the guaranty, or (v) a
guarantor's breach of its guaranty obligation on an anticipatory breach basis,
and Lessee's failure, within sixty (60) days following written notice by or on
behalf of Lessor to Lessee of any such event, to provide Lessor with written
alternative assurance or security, which when coupled with the then existing
resources of Lessee, equals or exceeds the combined financial resources of
Lessee and the guarantors that existed at the time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any affirmative duty or obligation
of Lessee under this Lease, within ten (10) days after written notice to Lessee
(or in case of an emergency, without notice), Lessor may at its option (but
without obligation to do so), perform such duty or obligation on Lessee's
behalf, including but not limited to the obtaining of reasonably required
bonds, insurance policies, or governmental licenses, permits or approvals. The
costs and expenses of any such performance by Lessor shall be due and payable
by Lessee to Lessor upon invoice therefor, if any check given to lessor by
Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its
option, may require all future payments to be made under this Lease by Lessee
to be made only by cashier's check. In the event of a breach of this Lease by
Lessee, as defined in Paragraph 13.1, with or without further notice or demand,
and without limiting Lessor in the exercise of any right or remedy which Lessor
may have by reason of such Breach, Lessor may:
(a)Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor. In such event
Lessor shall be entitled to recover from Lessee; (i) the worth at the time of
the award of the unpaid rent which had been earned at the time of termination;
(ii) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that the Lessee proves could have been reasonably
avoided; (ii) the worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by the Lessee's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including but not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys' fees, and that portion of the leasing
commission paid by Lessor applicable to the unexpired term of this Lease. The
worth at the time of award of the amount referred to in provision (iii) of the
prior sentence shall be computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time award plus one percent
(1%) Efforts by Lessor to mitigate damages caused by lessee's Default or Breach
of this lease shall not waive Lessor's right to recover damages under this
Paragraph. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein, or Lesso
eserve therein the right to recover all or any part thereof in a separate suite
for such rent and/or damages. If a notice and grace period required under
subparagraphs 13.1,(b), (c) or (d). was not previously given, a notice to pay
rent or quit, or to perform or quit, as the case may be, given to Lessee under
any statute authorizing the forfeiture of leases for unlawful detainer shall
also constitute the applicable notice for grace period purposes required by
subparagraphs 13.1(b), (c) or (d), in such case, the applicable grace period
under subparagraphs 13.1(b), (c) or (d) and under the unlawful detainer statute
shall run concurrently after the one such statutory notice, and the failure of
Lessee to cure the Default within the greater of the two such grace periods
shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment and recover the rent as it becomes due, provided Lessee has the
right to sublet or assign, subject only to reasonable limitations. See
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not constitute a
termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premises are located.
(d) The expiration or termination of this Lease and/or the termination
of Lessee's right to possession shall not relieve Less from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture in Event Of Breach. Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of such
concessions are hereinafter referred to as "Inducement Provisions." shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of a Breach of this Lease by Lessee, as defined in Paragraph 13.1, any such
inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration therefore abated, given or paid by Lessor under such an Inducement
Provision shall be immediately due and payable by Lessee to Lessor, and
recoverable by Lessor as additional rent due under this Lease, notwithstanding
any subsequent cure of said Breach by Lessee. the acceptance by Lessor of rent
or the cure of the Breach which initiated the operation of this Paragraph shall
not be deemed a waiver by Lessor of the provisions of this Paragraph unless
specifically so stated in writing by Lessor at the time of such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to
lessor of rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within five (5) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to six percent (6%) of such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of base rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.
13.5 Breach by Lessor. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in no event be less than thirty (30) days after receipt by Lessor,
and by the holders of any ground lease, mortgage or deed of trust covering the
Premises whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor has
not been performed, provided, however, that if the nature of Lessor's obligation
is such that more than thirty (30) days after such notice are reasonably
required for its performance, then Lessor shall not be in breach of this Lease
if performance is commenced within such thirty (30) day period and thereafter
diligently pursued to completion.
14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes
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all or a portion of the Premises are taken by condemnation and Lessee is
therefore unable to continue to operate Lessee's business from the Premises
title or possession, whichever first occurs. - Lessee may, at Lessee's option,
to be exercised in writing within ten (10) days after Lessor shall have given
Lessee written notice of such taking (or in the absence of such notice, within
ten (10) days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Leases in accordance with the
forgoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in the same
proportion as the rentable floor area of the Premises taken bears to the total
rentable floor area of the building located on the Premises. No reduction of
Base Rent shall occur if the only portion of the Premises taken is land on which
there is no building. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Lessor, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that Lessee
shall be entitled to any compensation separately awarded to Lessee for Lessee's
relocation expenses and/or loss of Lessee's Trade Fixtures. in the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above the legal and other
expenses incurred by Lessor in the condemnation matter, repair any damage to the
Premises caused by such condemnation, except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall be responsible
for the payment of any amount in excess of such net severance damages required
to complete such repair. Lessee waives any and all rights it might otherwise
have under Section 1265.130 of the California Code of Civil Procedure to
terminate this Lease as a result of any taking.
15. Broker's Fee.
15.1 The Brokers named in Paragraph 1.10 are the procuring causes of
this Lease.
15.5 Lessee and Lessor each represent and warrant to the other that it
has had no dealings with any person firm, broker or finder (other than the
Brokers, if any named in Paragraph 1.10) in connection with the negotiation of
this Lease and/or the consummation of the transaction contemplated hereby, and
that no broker or other person, firm or entity other than said named Brokers is
entitled to any commission or finder's fee in connection with said transaction.
Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold
the other harmless from and against liability for compensation or charges which
may be claimed by any such unnamed broker, finder or other similar party by
reason of any dealings or actions of the indemnifying Party, including any
costs, expenses, attorneys' fees reasonably incurred with respect thereto.
15.6 Lessor and Lessee hereby consent to approve all agency
relationships, including any dual agencies, indicated in Paragraph 1.10.
16. Tenancy Statement.
16.1 Each Party (as "Responding Party") shall within ten (10) day after
written notice from the other Party (the "Requesting Party") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
attached hereto as Exhibit "D" plus such additional information, confirmation
and/or statements as may be reasonably requested by the Requesting Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises, any
part thereof, or the building of which the Premises are a part, Lessee and all
Guarantors of Lessee's performance hereunder shall deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such Guarantors as may be reasonably required by such lender or purchaser,
including but not limited to Lessee's financial statements for the past three
(3) years. All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
17. Lessor's Liability. The term "Lessor" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease , of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or in this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor at the time of such transfer or assignment.
Except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.
18. Severability. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. Interest on Past-Due Obligations. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within thirty (30)
days following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per annum, but not
exceeding the maximum rate allowed by law, in addition to the late charge
provided for in Paragraph 13.4.
20. Time of Essence. Time is of the essence with respect to the performance or
observed by the Parties under this Lease.
21. Rent Defined. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party.
23. Notices.
23.1 All notices required or permitted by this Lease shall be in
writing and may be delivered in person (by hand or by messenger or courier
service) or may be sent by regular, certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid, or by facsimile transmission, and
shall be deemed sufficiently given if served in a manner specified in this
Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease
shall be that Party's address for delivery or mailing of notice purposes. Either
Party may by written notice to the other specify a different address for notice
purposes, except that upon Lessee's taking possession of the Premises, the
Premises shall constitute Lessee's address for the purpose of mailing or
delivering notices to Lessee. A copy of all notices required or permitted to be
given to Lessor hereunder shall be concurrently transmitted to such party or
parties at such addresses as Lessor may from time to time hereafter designate by
written notice to Lessee.
23.2 Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier. If any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served or
delivered upon telephone confirmation of receipt of the transmission thereof,
provided a copy is also delivered via delivery or mail. If notice is received
on a Sunday or legal holiday, it shall be deemed received on the next business
day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or of any other term, covenant or condition hereof, Lessor's
consent to, or approval of, any act shall not be deemed to render unnecessary
the obtaining of Lessor's consent to, or approval of, any subsequent or similar
act by Lessee, or be construed as the basis of an estoppel to enforce the
provision or provisions of this Lease required such consent. Regardless of
Lessor's knowledge of Default or Breach at the time of accepting rent, the
acceptance of rent by Lessor shall not be a waiver of any preceding Default or
Breach by Lessee of any provision hereof, other than the failure of Lessee to
pay the particular rent so accepted. Any payment given Lessor by Lessee may be
accepted by Lessor on account of moneys or damages due Lessor, notwithstanding
any qualify statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.
25. Recording. Neither Lessor nor Lessee shall record this Lease or a short
form memorandum of this Lease.
26. No Right to Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. See Addendum.
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27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever feasible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This lease shall be binding upon the
parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease, but that in the event of Lessor's default with respect to any such
obligation. Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default and
allow such Lender thirty (30) days following receipt of such notice for the cure
of said default before invoking any remedies Lessee may have by reason thereof.
If any Lender shall elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device and shall give written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.
30.2 Attornment. Subject to the non-disturbance provisions of
Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party who
acquires ownership of the Premises by reason of a foreclosure of a Security
Device, and that in the event of such foreclosure, such new owner shall not: (i)
be liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership, (ii) be subject to any offsets or
defenses which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one (1) month's rent.
30.3 Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's possession and this Lease, including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.
30.4 Self-Executing. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents; provided,
however, that, upon written request from Lessor or a Lender in connection with a
sale, financing or refinancing of the Premises, Lessee and Lessor shall execute
such further writings as may be reasonably required to separately document any
such subordination or non-subordination, attornment and/or non-disturbance
agreement as is provided for herein.
31. Attorney's Fees. If any Party brings an action or proceeding to enforce
the terms hereof or declare rights hereunder, the Prevailing Party (as hereafter
defined) in any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorney's fees. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding is
pursued to decision or judgment. The term, "Prevailing Party" shall include,
without limitation, a Party who substantially obtains or defeats the relief
sought, as the case may be, whether by compromise, settlement, judgment, or the
abandonment by the other Party of its claim or defense. The attorney's fees
award shall not be computed in accordance with any court fee schedule, but shall
be such as to fully reimburse all attorney's fees reasonably incurred. Lessor
shall be entitled to attorney's fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the building of which
they are a part, as Lessor may reasonably deem necessary . Lessor may at any
time place on or about the Premises or building any ordinary "For Sale" signs
and Lessor may at any time during the last one hundred twenty (120) days of the
term hereof place on or about the Premises any ordinary "For Lease" signs. All
such activities of Lessor shall be without abatement of rent or liability to
Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. Signs. See addendum.
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of the
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. Consents.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by
or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor's actual reasonable costs and expenses (including but not
limited to architects', attorneys', engineers' or other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, practice or storage tank, shall be paid by Lessee to Lessor
upon receipt of an invoice and supporting documentation therefor. Subject to
Paragraph 12.2(e) (applicable to assignment or subletting). Lessor may, as a
condition to considering any such request by Lessee, require that Lessee deposit
with Lessor an amount of money (in addition to the Security Deposit held under
Paragraph 5) reasonably calculated by Lessor to represent the cost Lessor will
incur in considering and responding to Lessee's request. Except as otherwise
provided, any unused portion of said deposit shall be refunded to Lessee without
interest. Lessor's consent to any act, assignment of this Lease or subletting
of the Premises by Lessee shall not constitute an acknowledgment that no Default
or Breach by Lessee of this Lease exists, nor shall such consent be deemed a
waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the imposition by
Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
37. Guarantor.
37.1 If there are to be any Guarantors of this Lease per Paragraph .11,
the form of the guaranty to be executed by each such Guarantor shall be in the
form provided by Lessor and each said Guarantor shall have the same obligations
as Lessee under this Lease, including but not limited to the obligation to
provide the Tenancy Statement and information called for by Paragraph 16.
37.2 It shall constitute a Default of the Lessee under this Lease if
any such Guarantor fails or refuses, upon reasonable request by Lessor to give:
(a) evidence of the due execution of the guaranty called for by this Lease,
including the authority of the Guarantor (and of the party signing on
Guarantor's behalf) to obligate such Guarantor on said guaranty, and including
in the case of a corporate Guarantor, a certified copy of a resolution of its
boar do directors authorizing the making of such guaranty, together with a
certificate of incumbency showing the signature of the persons authorized to
sign on its behalf, (b) current financial statements of Guarantor as may from
time to time be requested by Lessor, (c) a Tenancy Statement, or (d) written
confirmation that the guaranty is still in effect.
38. Quiet Possession. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.
39. Options.
39.1 Definition. As used in this Paragraph 39 the word "Option" has
the following meaning: (a) the right to extend the term of this Lease or to
renew this Lease of to extend or renew any lease that Lessee has on other
property of Lessor; (b) the right of first refusal to lease the Premises or the
right of first offer to lease the Premises or the right of first refusal to
lease other property of Lessor or the right of first offer to lease other
property of Lessor; (c) the right to purchase the Premises, or the right of
first refusal to purchase the Premises, or the right of first offer to purchase
the Premises, or the right to purchase other property of Lessor, or the right of
first refusal to purchase other property of Lessor, or the right of first offer
to purchase other property of Lessor.
39.2. Options Personal To Original Lessee. Each Option granted to
Lessee in this Lease is personal to the original Lessee named in Paragraph 1.1
hereof, and cannot be voluntarily or involuntarily assigned or exercised by any
person or entity other than said original Lessee while the original Lessee is in
full and actual possession of the Premises and without the intention or
thereafter assigning or subletting. The Options, if any, herein granted to
Lessee are not assignable, either as a part of an assignment of this Lease or
separately or apart therefrom, and no Option may be separated from this Lease in
any manner, by reservation or otherwise.
39.3 Multiple Options. In the event that Lessee has any Multiple
Options to extend or renew this Lease a later Option cannot be exercised unless
prior Options to extend or renew this Lease have been validly exercised.
39.4 Effect of Default on Options
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary: (i) during the period
commencing with the giving of any notice of Default under Paragraph 13.1 and
continuing until the noticed Default is cured, or (ii) during the period of time
any monetary obligation due Lessor from Lessee is unpaid (without regard to
whether notice thereof is given Lessee), or (iii) during the time Lessee is in
Breach of this Lease, or (iv) in the event that Lessor have given to Lessee
three (3) or more notices of Default under Paragraph 13.1 during any twelve (12)
month period, whether or not the Defaults are cured, during the twelve (12)
month period immediately preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee'' inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessor gives to
Lessee three (3) or more notices of Default under Paragraph 13.1 during any
twelve (12) month period, whether or not the Defaults are cured, or (iii) if
Lessee commits a Breach of this Lease.
40. Multiple Buildings. If the Premises are part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for the
management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenant of such other buildings and their
invitees, and that Lessee will pay its fair share of common expenses incurred in
connection therewith.
41. Security Measures. Lessee hereby acknowledges that the rental payable
hereunder does not include the cost of guard service or other security measures,
and that Lessor shall have no obligation whatsoever to provide same. Lessee
assumes all responsibility for the protection of the Premises, Lessee, its
agents and invitees and their property from the acts of third parties.
42. Reservations. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights,
dedications, maps and restrictions do not unreasonably interfere with the use of
the Premises by Lessee and do not materially impede Lessee's access to and from
the Premises and do not reduce Lessee's parking capacity to less than four (4)
spaces per 1000 square feet of the Premises. Lessee agrees to sign within five
(5) days of request, any documents reasonably requested by Lessor to effectuate
any such easement rights, dedication, map or restrictions.
43. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this
Lease.
44. Authority. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust of
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
45. Conflict. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46. Offer. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer of lease to Lessee.
This Lease is not intended to be binding until executed by all Parties hereto.
47. Amendments. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. The parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional, insurance company, or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.
48. Multiple Parties. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such Multiple Parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO
EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE OF
ASBESTOS. STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES AS TO THE
LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE
ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE. IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN
CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED
SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place on the dates specified
above to their respective signatures.
Executed at Garden Grove Executed at Garden Grove, CA
on 7/11/95 on 5/26/95
by LESSOR: by LESSEE:
TR BRELL CAL CORP, SOURCE SCIENTIFIC, INC.
An Illinois corporation A California corporation
By: KOLL MANAGEMENT SERVICES, INC.
A Delaware corporation, its agent
By: /s/ By: /s/
Name Printed: Julie Groot Name Printed: Richard A. Sullivan
Title: Senior Manager Title: President and CEO
By: /s/ By:
Name Printed: Michael E. Meyer Name Printed:
Title: Vice President Title:
Address: 12832 Valley View Street, Address: 7390 Lincoln Way
Suite 106
Garden Grove, CA 92645 Garden Grove, CA 92641
Tel. No. (714)891-0707 Tel. No.(714)898-9001
Fax No. (714)895-5553 Fax No. (714)891-1229
NET PAGE 10
NOTICE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the
most current form: American Industrial Real Estate Association, 345
South Figueroa Street, Suite M-1, Los Angeles, CA 90071.
(213)687-8777. Fax No. (213)687-8616.
(Copyright 1990 - by American Industrial Real Estate Association. All Rights
Reserved. No part of these works may be reproduced in any form without
permission in writing. FORM 204N-R-12/91
ADDENDUM TO STANDARD
INDUSTRIAL/COMMERICAL SINGLE-TENANT LEASE (NET)
BY AND BETWEEN
TR BRELL, CAL CORP, AN ILLINOIS CORPORATION ("LESSOR"),
AND
SOURCE SCIENTIFIC SYSTEMS, INC., A DELAWARE CORPORATION ("LESSEE")
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The promises, convenants agreements and declarations made and set forth
herein are intended to and shall have the same force and effect as if set forth
at length in the body of the Lease to which this Addendum is attached (the
"Lease"). To the extent that the provisions of this Addendum are inconsistent
with the terms and conditions of the Lease, the terms of this Addendum shall
control.
48(a). Paragraph 1.7 (Security Deposit). Lessor acknowledges that
Lessor presently holds the Security Deposit referenced in Paragraph 1.7 under
Lessee's existing lease which wil continue to be held by Lessor pursuant to the
terms of this Lease.
49. Paragraph 4.1(Base Rent). The Base Rent shall be increased
effective as of August 1, 1997 to $29,131 per month and increased again
effective as of February 1, 2000 to $32,460.00. Lessor hereby grants Lessee six
(6) months of one-half (1/2) rent for the months of February through July of
1995.
50. Paragraph 6.1(Use). The following is hereby added to paragraph
6.1.
"Lessee shall not do anything or suffer anything to be done in or about
the Premises which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in
force or which may hereafter be enacted or promulgated. Should any
standard or regulation now or hereafter be imposed on Lessor or Lessee
by a State, federal or local governmental body charged with the
establishment, regulation and enforcement of occupational, health or
safety standards for employers, employees, lessors or lessees, then,
except as otherwise specifically set forth in the Lease, Lessee agrees,
at its sole cost and expense, to comply promptly with such standards or
regulations."
51. Paragraph 6.3(Lessee's Compliance with Law). The following
language is hereby added to Paragraph 6.3:
"In addition to the general obligation of Lessee to comply with laws and
without limitation thereof, Lessee shall comply in all respects with the
Title III of the Americans with Disabilities Act of 1990 (the "ADA") as
respects Lessee's use of, or alteration to, the Premises and Lessor
shall not be liable to Lessee, nor shall this Lease be affected in any
way, by reason of any moratorium, initiative, referendum, statute,
regulation or other governmental decree or action which could in any
manner prevent or limit the parking rights of Lessee hereunder. Any
governmental charges or surcharges or other monetary obligations imposed
relative to parking rights with respect to the Premises shall be
considered assessments and shall be responsible for compliance with the
ADA if it is required with respect to the exterior of the Premises or
the structure of the Building, and such compliance does not relate to
Lessee's specific use of the Premises."
52. Paragraph 7.1(Lessee's Obligations);Paragraph 7.2(Lessor's
Obligations). In connection with Paragraph 7.1 of the Lease, all repairs and
maintenance of the Premises by Lessee as required under the Lease shall be
performed in a first class manner by contractors and other personnel reasonably
approved by Lessor, shall be performed in accordance with a repair and
maintenance plan reasonably approved by Lessor, and shall comply with guidelines
and shall meet such standards of quality as may be reasonably established by
Lessor from time to time during the Term of the Lease, including, without
limitation, providing Lessor with copies of all permits obtained by Lessee and
"as-built" drawings of such work performed by Lessee. In the
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event Lessor determines, at any time during the term of the Lease, that Lessee's
repair and maintenance of the Premises is not meeting the standards therefor
established by Lessor, then Lessor may, but shall not be obligated to, undertake
such repair and maintenance obligations of Lessee on behalf of Lessee, and all
costs and expenses incurred by Lessor in the performance of such repair and
maintenance shall constitute additional rent under this Lease, and shall be
payable by Lessee to Lessor within five (5) days of demand.
Notwithstanding anything to the contrary contained in Paragraphs 7.1 or
7.2, in addition to Monthly Base Rent, throughout the Term of this Lease, Lessee
agrees to pay Lessor as additional rent in accordance with the terms of this
Paragraph certain operating expenses of the Building ("Operating Expenses")
consisting of all Real Property Taxes pursuant to Paragraph 10 of the Lease, the
cost of all insurance premiums for property and liability insurance maintained
by Lessor pursuant to Paragraph 8 of the Lease, and costs and expenses incurred
by Lessor with respect to landscaping, repair and maintenance of the Building
exterior, and other exterior portions of the Premises, parking areas, including
resurfacing, repairing and restriping, walkways, sanitary sewer costs, and trash
disposal, including costs and maintenance of refuse receptacles, costs of
repair and replacement of directional signs and markers, car stops, exterior
lighting and other utilities, reasonable depreciation on improvements,
machinery, and equipment used in connection with such maintenance and any other
costs and expenses incurred by Lessor with respect to the maintenance and repair
of the Building and exterior portions of the Premises.
(a) Estimate Statement. On or about March 1st of each
calendar year during the Term of this Lease, Lessor will endeavor to
deliver to Lessee a statement ("Estimate Statement") wherein Lessor will
estimate the Operating Expenses of the then current calendar year.
Lessee agrees to pay Lessor, as "Additional Rent", one-twelfth (1/12th)
of such Operating Expenses each month thereafter, beginning with the
next installment of rent due, until such time as Lessor issues a revised
Estimate Statement or the Estimate Statement for the succeeding calendar
year, except that, concurrently with the regular monthly rent payments
next due following the receipt of each such Estimate Statement, Lessee
agrees to pay Lessor an amount equal to one monthly installment of such
Operating Expenses (less any applicable Operating Expenses already paid)
multiplied by the number of months from January, in the current calendar
year, to the month of such rent payment next due, all months inclusive.
If at any time during the Term of the Lease, but not more often than
quarterly, Lessor reasonably determines that Operating Expenses for the
current calendar year will be greater than the amount set forth in the
then current Estimate Statement, Lessor may issue a revised Estimate
Statement and Lessee agrees to pay Lessor, within ten (10) days of
receipt of the revised Estimate Statement, the difference between the
amount owed by Lessee under such revised Estimate Statement and the
amount owed by Lessee under the original Estimate Statement for the
portion of the then current calendar year which has expired. Thereafter
Lessee agrees to pay Operating Expenses based on such revised Estimate
Statement until Lessee receives the next calendar year's Estimate
Statement or a new revised Estimate Statement for the current calendar
year.
(b) Actual Statement. By March 1st of each calendar year
during the Term of this Lease, Lessor will also endeavor to deliver to
Lessee a statement ("Actual Statement") which states the actual
Operating Expenses for the preceding calendar year. If the Actual
Statement reveals that actual Operating Expenses are more than the total
Additional Rent paid by Lessee for Operating Expenses on account of the
preceding calendar year, Lessee agrees to pay Lessor the difference in a
lump sum within ten (10) days of receipt of the Actual Statement. If
the Actual Statement reveals that actual Operating Expenses are less
than the Additional Rent paid by Lessee for Operating Expenses on
account of the preceding calendar year, Lessor will credit any
overpayment toward the next monthly installment(s) of Operating Expenses
due under this Lease.
Notwithstanding anything to the contrary contained in Paragraphs
7.1 or 7.2, Lessee agrees to maintain and repair the roof of the Building, at
Lessee's sole cost and expense. If the roof needs to be replaced (as determined
below), Lessor shall cause such work to be performed, but Lessee shall be
responsible for reimbursing Lessor for a portion of the cost ("Replacement
Cost") incurred by Lessor for replacing the roof with a roof of a quality
consistent with the structure and quality of the Building and which is full
warranted for a minimum of 15
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9504800R.OC1/DWW/K4933-002/05-17-95/meg
years, based on the following schedule: (i) if the roof is replaced during
months 1 through 28 of the new Term, then Lessee shall be responsible for 25% of
the Replacement Cost, or (ii) if the roof is replaced during 29 through 56 of
the new Term, then Lessee shall be responsible for 45% of the Replacement Cost,
or (iii) if the roof is replaced during months 57 through 84 of the new Term,
then Lessee shall be responsible for 65% of the Replacement Cost. The roof will
"need" to be replaced if two independent roofing consultants, one selected by
Lessor and the other selected by Lessee, advise Lessor that replacement of the
roof is recommended over further repair in order for the roof to function
properly. If a third roofing consultant is necessary because of disagreement in
the need for roof replacement between the first two consultants, then Lessor and
Lessee shall cause their respective consultants to agree upon and mutually
select a third roofing consultant whose determination shall be conclusive. If
the roof needs to be replaced because of damage caused by Lessee or its agents,
employees, contractors or invitees, then Lessee will be responsible for the
entire Replacement Cost. Lessee shall pay its share of the Replacement Cost
concurrently with Lessor's payment of the balance of the Replacement Cost in
accordance with the terms of Lessor's contract with the roof installation
company.
53. Paragraph 7.3(Utility Installations; Trade Fixtures;
Alterations). The following is added to Paragraph 7.3 of the Lease.
"(d) Security. In connection with Paragraph 7.3 of the
Lease, Lessee shall, at Lessee's sole cost and expense, take such
security measures as Lessee deems appropriate or necessary in order to
secure the Premises and portions thereof in accordance with such
requirements as may be imposed by contractors of Lessee; provided,
however, in the event any such security measures require any alterations
of or additions to the Premises, any such alterations and/or additions
shall be subject to the terms of Paragraphs 7.3 and 7.4 of the Lease."
54. Paragraph 8.2(Liability Insurance). Paragraph 8.2(a) of the
Lease has been intentionally omitted, and is hereby replaced with the following:
"(a) Carried by Lessee. Lessee agrees, at its own expense,
to maintain in full force and effect at all times during the term of
this Lease, as it may be extended for the protection of Lessee and
Lessor, as their interests may appear, policies of insurance issued by a
carrier or carriers acceptable to Lessor and with a rating consistent
with the requirements of Paragraph 8.5 of the Lease, which afford the
following coverages: (i) Worker's compensation: statutory limits; (ii)
Employer's liability: not less than Five Hundred Thousand Dollars
($500,000.00); (iii) Comprehensive general liability insurance including
blanket contractual liability, broad form property damage, personal
injury (including employees), owned/non-owned auto liability, pollution
and hazardous materials liability, completed operations, products
liability, and fire damage: not less than Three Million Dollars
($3,000,000.00) with a combined single limit for both bodily injury and
property damage and naming Lessor, Lessor's agents and Lessor's
mortgagees as additional insureds as their respective interests may
appear; (iv) except to the extent covered by the insurance for the
Premises and leasehold improvements required to be carried by the
Insuring Party under Paragraph 8.3(a) of the Lease, "All Risk" property
insurance (including, without limitation, vandalism, malicious mischief,
water damage, earthquake, damage from pollution and hazardous materials,
course of construction endorsement, sprinkler leakage endorsement,
debris removal and demolition coverage, and boiler and machinery
coverage) on the Premises and the leasehold improvements, Utility
Installations, Alterations, Trade Fixtures, and Lessee's personal
property located on or in the Premises, which shall be in a form
providing coverage comparable to the coverage provided in the standard
ISO All-Risk form and in an amount equal to the full amount of the
replacement cost of the insured items, as the same may from time to time
increase as a result of inflation or and (v) boiler and machinery
insurance, including, but not limited to, steam pipes, pressure pipes,
condensation return pipes and other pressure vessels and HVAC equipment,
with limits per accident of not less than the replacement cost of all
leasehold improvements, Utility Installments (except to the extent
covered by the insurance for the Premises and leasehold improvements
required to be carried by the Insuring Party under
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9504800R.OC1/DWW/K4933-002/05-17-95/meg
Paragraph 8.3(a) of the Lease), Alterations, Trade Fixtures, and
Lessee's personal property and all boilers, pressure valves, HVAC
equipment and miscellaneous electrical and mechanical equipment in the
Premises, all with deductibles not to exceed $1,000.00 per occurrence.
The insurance policies set forth above shall not contain any
intra-insured exclusions as between insured persons or organizations,
but shall include coverage for liability assumed under Lease as in
"insured contract" for the performance of Lessee's indemnity obligations
under the Lease. The limits of said insurance required by the Lease or
as carried by Lessee shall, not however, limit the liability of Lessee
nor relieve Lessee of any obligation hereunder. All insurance to be
carried by Lessee shall be primary to and not contributory with any
similar insurance carried by Lessor whose insurance shall be considered
excess insurance only."
55. Paragraph 9 (Damage or Destruction). The following
definitions shall apply for purposes of Paragraph 9.1(a) and 9.1(b).
(a) "Premises Partial Damage" shall mean damage or
destruction to the Premises, other than Lessee Owned Alterations and Utility
Installations, the repair time for which, as reasonably determined by Lessor,
will not exceed one hundred eighty (180) days
(b) "Premises Total Destruction" shall mean damage or
destruction to the Premises, other than Lessee Owned Alterations and Utility
Installations, the repair time for which, as reasonably determined by Lessor,
will not exceed one hundred eighty (180) days.
Notwithstanding anything to the contrary set forth in Paragraph
9 of the Lease, Lessee hereby waives the provisions of California Civil Code
Sections 1932 and 1933, and any successor sections and any other statues which
are inconsistent with the provisions of Lease and which relate to the
termination of leases when leased property is destroyed, and agree that such
event shall be governed by the terms of the Lease.
56. Paragraph 13.2 (Remedies). The following language is hereby
added to Paragraph 13.2:
"(e) Re-enter the Premises at its option without declaring
the Lease term ended, and re-let the whole or any part thereof for the
account of Lessee, on such terms and conditions and at such rent as
Lessor may deem proper, collecting such rent and applying it on the
amount due from Lessee hereunder and on the expense of such relating and
on any other damage or expense so sustained by Lessor, or on any such
item or items, recovering from Lessee the difference between the
proceeds of such re-letting and the amount of the rentals reserved
hereunder, and any such damage or expense from time to time, which said
sum Lessee agrees to pay upon demand. Lessor shall not, by any re-entry
or other act, be deemed to have terminated this Lease or the liability
of Lessee for the total rental hereunder(net of re-let recovery as
specified above), or any installment thereof then due or thereafter
accruing, or for damages, unless Lessor shall notify Lessee, in writing,
that Lessor has so elected to terminate the Lease."
57. Paragraph 17 (Lessor's Liability). The following is
added to Paragraph 17:
"Lessee acknowledges and agrees that the obligations of Lessor
under this Lease do not constitute personal obligations of the
individual partners, directors, officers or shareholders of Lessor, and
Lessee shall look to the real estate that is the subject of this Lease
and to any insurance proceeds received from insurance policies required
to be carried under this Lease, and to no other assets of Lessor for the
satisfaction of any liability with respect to this Lease, and will not
seek recourse against the individual partners, directors, officers or
shareholders of Lessor or any of their personal assets for such
satisfaction."
58. Paragraph 24 (Waivers). The following language is hereby added to
Paragraph 24:
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"No payment by Lessee or receipt by Lessor of a lesser amount
than the fixed rent payment herein stipulated shall be deemed to be
other than on account of the earliest stipulated rent, nor shall any
endorsement or statement on any check or any letter accompanying any
check or any payment as rent be deemed an accord and satisfaction, and
Lessor may accept such check or payment without prejudice to Lessor's
right to recover the balance of such rent or pursue any other remedy in
this Lease provided."
59. Paragraph 26 (Holding Over). The following language is
hereby added to Paragraph 26:
"If Lessee remains in possession of all or any part of the
Premises after the expiration of the Term of the Lease without Lessor's
written consent (which may be withheld at Lessor's sole and absolute
discretion), Lessee shall become a Lessee at sufferance only and such
tendency shall not constitute a renewal or extension for any further
term. In such event, Base Rent shall be increased to an amount equal to
one hundred fifty percent(150%) of the Base Rent payable during the last
month of the Term, and any other sums due hereunder shall be payable in
the amount of the terms specified in this Lease. Such tenancy shall be
subject to every other term, condition, and covenant contained herein.
The foregoing provisions of this Paragraph 26 are in addition to and do
not affect any rights of Lessor under the Lease or as otherwise
provided by law. If Lessee fails to surrender the Premises upon the
expiration of this Lease despite the demand to do so by Lessor, Lessee
shall indemnify and hold Lessor harmless from all loss or liability
including, without limitation, any claim made by any succeeding lessee
founded on or resulting from such failure to surrender."
60. Paragraph 30 (Subordination; Attornment ;
Non-Disbursement.) With respect to Paragraph 30 of the Lease, neither Lessor
nor Lessee shall unreasonably withold its consent to changes or amendments to
the Lease requested by any Lender of Lessor having a security interest in the
Premises or the Lease, so long as the changes do not alter the basic business
terms of the Lease or otherwise materially diminish any rights or materially
increase any obligation of the party from who consent to such change or
amendment is requested. Notwithstanding any contrary provision of Paragraph 30.1
of the Lease, Lessee agrees to send by certified mail to any Lender whose
address has been furnished to Lessee, a copy of any notice of default served by
Lessee on Lessor, and if Lessor fails to cure such default within the time
provided for in the Lease, such Lenders shall have an additional thirty (30)
days to cure such default; provided however, that if such default cannot
reasonably be cured within such thirty (30) day period, then such Lenders shall
have such additional time to cure the default as is reasonably necessary under
the circumstances, provided such Lenders commence the cure of such default
within said thirty (30) day period and diligently pursue the same to completion.
60(a.) Paragraph 34 (Signs). Lessee will have no right to
install or maintain any Lessee identification signs (or any other signs, banners
or other such displays) upon the Premises which may be visible from the exterior
of the Premises, except as (I) have been expressly approved by Lessor prior to
the installation thereof, and (ii) are consistent and compatible with (A) the
restrictions contained in this Paragraph 60(a), (B) all governmental regulations
and requirements, ( C ) rules and regulations from time to time promulgated by
Lessor with respect to the Building, a current copy of which is attached hereto
as Exhibit "B", and (D) all private covenants and restrictions now or hereafter
of record affecting the Premises. All approved signs (the "Building Sign") if
any must be maintained, at the sole cost and expense of Lessee, pursuant to a
maintenance program approved and supervised by Lessor. Upon expiration of
earlier termination of the Lease, Lessee, at Lessee's sole cost and expense
(subject to Lessor's supervision), will cause the Builiding Sign to be removed
and the Building to be restored to condition existing prior to the placement of
such sign. If Lessee fails to remove such sign and restore the Building as
provided above within thirty (30) days following Lessor's demand therefor, then
Lessor may perform such work and all costs and expenses incurred by Lessor in so
performing such work will be reimbursed by Lessee to L4essor within ten (10)
days following Lessor's delivery to Lessee of an invoice therefor. The sign
rights herein above provided are personal to the original Lessee executing this
Lease and may not be assigned or transferred to, or utilized by, any other
person or entity.
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61. Net Lease. This Lease shall be deemed and construed to
be a "net lease" and except as herein otherwise expressly set forth Lessee shall
pay to Lessor, absolutely net throughout the Term of this Lease, the Base Rent
(as adjusted persuant to Subparagraph 48(b) above), additional rent and other
payments hereunder, without abatement or set off.
62. Option to Extend Term: Lessor hereby grants to Lessee
one (1) option ("Option to Extend") to extend the Term of this Lease for a
period of five (5) years ('Option Term''). The Option must be exercised if at
all by written notice ("Option to Extend Notice") delivered by Lessee to Lessor
not earlier than one hundred eighty (180) days nor later than ninety (90) days
prior to the end of the initial five (5) year Term. Further, the Option to
Extend shall not be deemed to be properl7y exercised if, as of the date of the
Option Notice and at the end of the initial (5) year Term, Lessee is in default
under the Lease. In the event the initial five (5) year Term shall be extended
as provided in this Paragraph 62, then all of the terms, covenants and
conditions of the Lease shall remain unmodified and in full force and effect,
except for payment of Monthly Basic Rent. Monthly Basic Rent shall be adjusted
as of the commencement date of the Option Term in accordance with the "fair
market rental rate" for the Premises determined as follows.
(a) The term "fair market rental rate" as used
herein will mean the annual amount per rentable square foot, projected
during the relevant period, that a willing, comparable, non-equity
tenant (excluding sublease and assignment transactions) would pay, and a
willing comparable landlord of a comparable industrial building located
in the vicinity of the Building would accept, at arm's length (what
Lessor is accepting in current transactions for the Building may be
considered), for space of comparable size, quality and floor height as
the leased area at issue taking into account the age, quality and layout
of the existing improvements in the lease area at issue and taking into
account items that professional real estate brokers customarily
consider, including, but not limited to rental rates, space
availability, tenant size, tenant improvement allowances, operating
expenses, reduced rent, free rent and any other lease concessions, if
any, then being charged or granted by Lessor or the lessors of such
similar buildings. The fair market rental rate will be an effective
rate, not specifically including, but accounting for appropriate
economic concessions described above.
(b) If a determination of fair market rental rate is
required under this Lease, then Lessor will provide written notice of
Lessor's determination of the fair market rental rate not later than
thirty (30) days after the date upon which Lessee timely exercises the
right giving rise to necessity for such fair market rental rate
determination. Lessee will have thirty (30) days (Lessee's Review
Period") after receipt of Lessor's notice of the fair market rental rate
within which to accept such fair market rental rate or to reasonably
object thereto in writing. Lessee's failure to object to the fair
market rental rate submitted by Lessor in writing within Lessee's Review
Period, Lessor and Lessee will attempt in good faith to agree upon such
fair market rental rate using their best good faith efforts. If Lessor
and Lessee fail to reach an agreement on such fair market rental rate
within fifteen (15) days following the expiration of Lessee's Review
Period (the "Outside Agreement Date"), then each party's determination
will be submitted to appraisal in accordance with the provisions below.
(c) (i) Lessor and Lessee will each appoint one (1)
independent appraiser who by profession must be a real estate broker
who has been active over the five (5) year period ending on the date
of such appointment in the leasing of industrial properties located
in the vicinity of the Building. The determination of the appraisers
will be limited solely to the issue of whether Lessor's or Lessee's
submitted fair market rental rate for the leased area at issue is the
closest to the actual fair market rental rate for such area as
determined by appraisers, taking into account the requirements
specified in Subparagraphs (a) and (b) above. Each such appraiser
will be appointed within fifteen (15) days after the Outside
Agreement Date.
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(ii) The two (2) appraisers so appointed well within
fifteen (15) days of the date of the appointment of the last
appointed appraiser agree upon and appoint a third appraiser who
shall be qualified under the same criteria set forth hereinabove for
qualification of the initial two (2) appraisers.
(iii) The three (3) appraisers will within thirty
(30) days of the appointment of the third appraiser reach a decision
as to whether the parties will use Lessor's or Lessee's submitted
fair market rental rate, and will notify Lessor and Lessee thereof.
(iv) The decision of the majority of the three (3)
appraisers will be binding upon Lessor and Lessee. If either Lessor
or Lessee fails to appoint an appraiser within the time period
specified in Subparagraph (c)(I) hereinabove, the appraiser appointed
by one of them will, within thirty (30) days following the date on
which the party failing to appoint an appraiser could have last
appointed such appraiser, reach a decision based upon the procedures
set forth above (i.e., by selecting either Lessor's or Lessee's
submitted fair market rental rate) and notify Lessor and Lessee
thereof, and such appraiser's decision will be binding upon Lessor
and Lessee.
(v) If the two (2) appraisers fail to agree upon
and timely appoint a third appraiser, both appraisers will be
dismissed and the matter to be decided will be forthwith submitted to
arbitration under the provisions of the American Arbitration
Association based upon the procedures set forth above (i.e., by
selecting either Lessor's or Lessee's submitted fair market rental
rate).
(vi) The cost of appraisal (and, if necessary,
arbitration) will be shared by Lessor and Lessee equally.
(vii) If the process described in Subparagraph (b)
above and this Subparagraph (c) has not resulted in a selection of
Lessor's and Lessee's fair market rental rate by the commencement of
the applicable lease term, then the fair market rental rate estimated
by Lessor will be used until the appraiser(s) reach a decision, with
an appropriate rental credit and other adjustments for any
overpayments of Monthly Base Rent or other amounts if the appraisers
select Lessee's estimate of the fair market rental rate.
63. Tenant Improvements. Lessor shall install, at Lessor's
sole cost and expense. (i) one hundred and twenty (120) square yards of Oxford
Place carpet (with static control), over a new 3/8" commercial pad, throughout
the reception, stairway and top landing area only, and (ii) a 4" Roppe base.
64. Miscellaneous.
64.1 Waiver of Trial By Jury. IN ANY ACTION OR
PROCEEDING ARISING HEREFROM, LESSEE HERBY CONSENTS TO (I) THE
JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II)
SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III)
IN THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY.
64.2 Rules and Regulations. Lessee shall faithfully
observe and comply with the rules and regulations that Lessor shall from
time to time promulgate. Lessor reserves the right from time to time in
its discretion to make all reasonable additions and modifications to the
rules and regulations. Any additions and modifications to the rules and
regulations shall be binding on Lessee when delivered to Lessee.
Lessor's current rules and regulations are attached hereto as Exhibit B.
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IN WITNESS WHEREOF, the parties have executed this Addendum as of the
day and year of execution of the Lease.
"LESSOR" TR BRELL, CAL CORP,
an Illinois corporation
By: Koll Management Services, Inc.
a Delaware corporation, Its
authorized agent
By:_________________________
Name_______________________
Title________________________
"LESSEE" SOURCE SCIENTIFIC, INC.
a California corporation
By:________________________________
Its:_________________________