STANDARD SUBLEASE
(Short-form to be used with post 1995 AIR leases)
1. Parties. This Sublease, dated, for reference purposes only, June
16, 1998, is made by and between Q.E.P. Company, Inc., a New York corporation
("Sublessor") and Advanced Aerodynamics & Structures, Inc. ("Sublessee").
2. Premises. Sublessor hereby subleases to Sublessee and Sublessee
hereby subleases from Sublessor for the term, at the rental, and upon all of the
conditions set forth herein, that certain real property, including all
improvements therein, and commonly known by the street address of 20535 S.
Belshaw Av!. located in the County of Los Angeles, State of California and
generally described as (describe briefly the nature of the property)
approximately 16,000 square feet portion of a larger 29,227 square feet
freestanding C.T.U. industrial building as depicted in Exhibit "2" herein
("Premises").
3. Term.
3.1 Term. The term of this Sublease shall be for month-to-month
commencing on July 6, 1998 and ending on 90 days prior written notice by either
party unless sooner terminated pursuant to any provision hereof.
3.2 Delay in Commencement. Sublessor agrees to use its best
commercially reasonable efforts to deliver possession of the Premises by the
commencement date. If, despite said efforts, Sublessor is unable to deliver
possession as agreed, the rights and obligations of Sublessor and Sublessee
shall be as set forth in Paragraph 3.3 of the Master Lease (as modified by
Paragraph 7.3 of this Sublease).
4. Rent.
4.1 Base Rent. Sublessee shall pay to Sublessor as Base Rent for
the Premises equal monthly payments of $5,120.00 in advance, on the first (1st)
day of each month of the term hereof. Sublessee shall pay Sublessor upon the
execution hereof $7,339.00 as Base Rent for July 1998 rent of ($5,120.00)
starting on July 6, 1998. Base Rent for any period during the term hereof which
is for less than one month shall be a pro rata portion of the monthly
installment.
4.2 Rent Defined. All monetary obligations of Sublessee to
Sublessor under the terms of this Sublease (except for the Security Deposit) are
deemed to be rent ("Rent"). Rent shall be payable in lawful money of the United
States to Sublessor at the address stated herein or to such other persons or at
such other places as Sublessor may designate in writing.
5. Security Deposit. Sublessee shall deposit with Sublessor upon
execution hereof $5,120.00 as security for Sublessee's faithful performance of
Sublessee's obligations hereunder. The rights and obligations of Sublessor and
Sublessee as to said Security Deposit shall be as set forth in Paragraph 5 of
the Master Lease (as modified by Paragraph 7.3 of this Sublease).
6. Use.
6.1 Agreed Use. The Premises shall be used and occupied only for
warehousing and assembly of plaster molds, lay-up of small aircraft parts and
related lawful uses and for no other purpose.
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6.2 Compliance. Sublessor warrants that the improvements on the
Premises comply with all applicable covenants or restrictions of record and
applicable building codes, regulations and ordinances ("Applicable
Requirements") in effect on the commencement date. Said warranty does not apply
to the use to which Sublessee will put the Premises or to any alterations or
utility installations made or to be made by Sublessee. NOTE: Sublessee is
responsible for determining whether or not the zoning is appropriate for its
intended use, and acknowledges that past uses of the Premises may no longer be
allowed. If the Premises do not comply with said warranty, or in the event that
the Applicable Requirements are hereafter changed, the rights and obligations of
Sublessor and Sublessee shall be as provided in Paragraph 2.3 of the Master
Lease (as modified by Paragraph 7.3 of this Sublease).
6.3 Acceptance of Premises and Lessee. Sublessee acknowledges that:
(a) it has been advised by Brokers to satisfy itself with
respect to the condition of the Premises (including but not limited to the
electrical, HVAC and fire sprinkler systems, security, environmental aspects,
and compliance with Applicable Requirements), and their suitability for
Sublessee's intended use,
(b) Sublessee has made such investigation as it deems necessary
with reference to such matters and assumes all responsibility therefor as the
same relate to its occupancy of the Premises, and
(c) neither Sublessor, Sublessor's agents, nor any Broker has
made any oral or written representations or warranties with respect to said
matters other than as set forth in this Sublease.
In addition, Sublessor acknowledges that:
(a) Broker has made no representations, promises or warranties
concerning Sublessee's ability to honor the Sublease or suitability to occupy
the Premises, and
(b) it is Sublessor's sole responsibility to investigate the
financial capability and/or suitability of all proposed tenants.
7. Master Lease.
7.1 Sublessor is the lessee of the Premises by virtue of a lease,
hereinafter the "Master Lease", a copy of which is attached hereto marked
Exhibit 1, wherein JMB/Pennsylvania Associates - IV L.P., a Delaware Limited
Partnership is the lessor, hereinafter the "Master Lessor".
7.2 This Sublease is and shall be at all times subject and
subordinate to the Master Lease.
7.3 The terms, conditions and respective obligations of Sublessor
and Sublessee to each other under this Sublease shall be the terms and
conditions of the Master Lease except for those provisions of the Master Lease
which are directly contradicted by this Sublease in which event the terms of
this Sublease document shall control over the Master Lease. Therefore, for the
purposes of this Sublease, wherever in the Master Lease the word "Lessor" is
used it shall be deemed to mean the Sublessor herein and wherever in the Master
Lease the word "Lessee" is used it shall be deemed to mean the Sublessor herein.
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7.4 During the term of this Sublease and for all periods subsequent
for obligations which have arisen prior to the termination of this Sublease,
Sublessee does hereby expressly assume and agree to perform and comply with, for
the benefit of Sublessor and Master Lessor, each and every obligation of
Sublessor under the Master Lease except for the following paragraphs which are
excluded therefrom: ------------------------------------------------------------
- -------------------------------------------------.
7.5 The obligations that Sublessee has assumed under paragraph 7.4
hereof are hereinafter referred to as the "Sublessee's Assumed Obligations". The
obligations that Sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "Sublessor's Remaining Obligations".
7.6 Sublessee shall hold Sublessor free and harmless from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorneys fees, arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the entire
term of this Sublease, subject, however, to any earlier termination of the
Master Lease without the fault of the Sublessor, and to comply with or perform
Sublessor's Remaining Obligations and to hold Sublessee free and harmless from
all liability, judgments, costs, damages, claims or demands arising out of
Sublessor's failure to comply with or perform Sublessor's Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is in
full force and effect and that no default exists on the part of any Party to the
Master Lease.
8. Assignment of Sublease and Default.
8.1 Sublessor hereby assigns and transfers to Master Lessor the
Sublessor's interest in this Sublease, subject, however, to the provisions of
Paragraph 8.2 hereof.
8.2 Master Lessor, by executing this document, agrees that until a
Default shall occur in the performance of Sublessor's Obligations under the
Master Lease, that Sublessor may receive, collect and enjoy the Rent accruing
under this Sublease. However, if Sublessor shall Default in the performance of
its obligations to Master Lessor then Master Lessor may, at its option, receive
and collect, directly from Sublessee, all Rent owing and to be owed under this
Sublease. Master Lessor shall not, by reason of this assignment of the Sublease
nor by reason of the collection of the Rent from the Sublessee, be deemed liable
to Sublessee for any failure of the Sublessor to perform and comply with
Sublessor's Remaining Obligations.
8.3 Sublessor hereby irrevocably authorizes and directs Sublessee
upon receipt of any written notice from the Master Lessor stating that a Default
exists in the performance of Sublessor's obligations under the Master Lease, to
pay to Master Lessor in the Rent due and to become due under the Sublease.
Sublessor agrees that Sublessee shall have the right to rely upon any such
statement and request from Master Lessor, and that Sublessee shall pay such Rent
to Master Lessor without any obligation or right to inquire as to whether such
Default exists and notwithstanding any notice from or claim from Sublessor to
the contrary and Sublessor shall have no right or claim against Sublessee for
any such Rent so paid by Sublessee.
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8.4 No changes or modifications shall be made to this Sublease
without the consent of Master Lessor.
9. Consent of Master Lessor.
9.1 In the event that the Master Lease requires that Sublessor
obtain the consent of Master Lessor to any subletting by Sublessor then, this
Sublease shall not be effective unless, within ten days of the date hereof,
Master Lessor signs this Sublease thereby giving its consent to this Subletting.
9.2 In the event that the obligations of the Sublessor under the
Master Lease have been guaranteed by third parties then neither this Sublease,
nor the Master Lessor's consent, shall be effective unless, within 10 days of
the date hereof, said guarantors sign this Sublease thereby giving their consent
to this Sublease.
9.3 In the event that Master Lessor does give such consent then:
(a) Such consent shall not release Sublessor of its obligations
or alter the primary liability of Sublessor to pay the Rent and perform and
comply with all of the obligations of Sublessor to be performed under the Master
Lease.
(b) The acceptance of Rent by Master Lessor from Sublessee or
anyone else liable under the Master Lease shall not be deemed a waiver by Master
Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a consent
to any subsequent subletting or assignment.
(d) In the event of any Default of Sublessor under the Master
Lease, Master Lessor may proceed directly against Sublessor, any guarantors or
anyone else liable under the Master Lease or this Sublease without first
exhausting Master Lessor's remedies against any other person or entity liable
thereon to Master Lessor.
(e) Master Lessor may consent to subsequent sublettings and
assignments of the Master Lease or this sublease or any amendments or
modifications thereto without notifying Sublessor or any one else liable under
the Master Lease and without obtaining their consent and such action shall not
relieve such persons from liability.
(f) In the event that Sublessor shall Default in its obligations
under the Master Lease, then Master Lessor, at its option and without being
obligated to do so, may require Sublessee to attorn to Master Lessor in which
event Master Lessor shall undertake the obligations of Sublessor under this
Sublease from the time of the exercise of said option to termination of this
Sublease but Master Lessor shall not be liable for any prepaid Rent nor any
Security Deposit paid by Sublessee, nor shall Master Lessor be liable for any
other Defaults of the Sublessor under the Sublease.
9.4 The signatures of the Master Lessor and any Guarantors of
Sublessor at the end of this document shall constitute their consent to the
terms of this Sublease.
9.5 Master Lessor acknowledges that, to the best of Master Lessor's
knowledge, no Default presently exists under the Master Lease of obligations to
be performed by Sublessor and that the Master Lease is in full force and effect.
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9.6 In the event that Sublessor Defaults under its obligations to
be performed under the Master Lease by Sublessor, Master Lessor agrees to
deliver to Sublessee a copy of any such notice of default. Sublessee shall have
the right to cure any Default of Sublessor described in any notice of default
within ten days after service of such notice of default on Sublessee. If such
Default is cured by Sublessee then Sublessee shall have the right of
reimbursement and offset from and against Sublessor.
10. Brokers Fee.
10.1 Upon execution hereof by all parties, Sublessor shall pay to
DAUM Commercial Real Estate Services, a licensed real estate broker ("Broker"),
a fee as set forth in a separate agreement between Sublessor and Broker, or in
the event there is no such separate agreement, the sum of $_________ for
brokerage services rendered by Broker to Sublessor in this transaction.
10.2 Sublessor agrees that if Sublessee exercises any option or
right of first refusal as granted by Sublessor herein, or any option or right
substantially similar thereto, either to extend the term of this sublease, to
renew this Sublease, to purchase the Premises, or to lease or purchase adjacent
property which Sublessor may own or in which Sublessor has an interest, then
Sublessor shall pay to Broker a fee in accordance with the schedule of Broker in
effect at the time of the execution of this Sublease. Notwithstanding the
foregoing, Sublessor's obligation under this Paragraph 10.2 is limited to a
transaction in which Sublessor is acting as a Sublessor, lessor or seller.
10.3 Master Lessor agrees that if Sublessee shall exercise any
option or right of first refusal granted to Sublessee by Master Lessor in
connection with this Sublease, or any option or right substantially similar
thereto, either to extend or renew the Master Lease, to purchase the Premises or
any part thereof, or to lease or purchase adjacent property which Master Lessor
may own or in which Master Lessor has an interest, or if Broker is the procuring
cause of any other lease or sale entered into between Sublessee and Master
Lessor pertaining to the Premises, any part thereof, or any adjacent property
which Master Lessor owns or in which it has an interest, then as to any of said
transactions, Master Lessor shall pay to Broker a fee, in cash, in accordance
with the schedule of Broker in effect at the time of the execution of this
Sublease.
10.4 Any fee due from Sublessor or Master Lessor hereunder shall be
due and payable upon the exercise of any option to extend or renew, upon the
execution of any new lease, or, in the event of a purchase, at the close of
escrow.
10.5 Any transferee of Sublessor's interest in this Sublease, or of
Master Lessor's interest in the Master Lease, by accepting an assignment
thereof, shall be deemed to have assumed the respective obligations of Sublessor
or Master Lessor under this Paragraph 10. Broker shall be deemed to be a
third-party beneficiary of this paragraph 10.
11. Attorney's Fees. If any party or the Broker named herein brings an
action to enforce the terms hereof or to declare rights hereunder, the
prevailing party in any such action, on trial and appeal, shall be entitled to
his reasonable attorney's fees to be paid by the losing party as fixed by the
Court.
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12. Additional Provisions. [If there are no additional provisions, draw
a line from this point to the next printed word after the space left here. If
there are additional provisions place the same here.]
See attached Addendum for additional provisions #13 - 20.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
SUBLEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY
OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
WARNING: IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.
Executed at:_________________ Q.E.P. Company, Inc.
on:__________________________ By:_______________________________
Address:_____________________ By:_______________________________
"Sublessor" (Corporate Seal)
Executed at:_________________ Advanced Aerodynamics & Structures, Inc.
on:__________________________ By:_______________________________
Address:_____________________ By:_______________________________
"Sublessee" (Corporate Seal)
Executed at:_________________ JMB/Pennsylvania Asso.-IV-L.P. or Advisor
on:__________________________ By:_______________________________
Address:_____________________ By:_______________________________
"Master Lessor" (Corporate Seal)
NOTE: These forms are often modified to meet changing requirements of law and
needs of the Industry. Always write or call to make sure you are utilizing the
most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 South Flower
Street, Suite 600, Los Angeles, CA 90017. (213) 687-8777.
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ADDENDUM TO STANDARD SUBLEASE SHORT FORM BY AND BETWEEN Q.E.P.
COMPANY, INC. AND AASI FOR PROPERTY COMMONLY KNOWN AS
20535 S. BELSHAW AVENUE, LOS ANGELES DATED JUNE 16, 1998
13. Sublessor shall remove all racking and broom sweep the warehouse.
14. Sublessee shall not be responsible for real estate taxes or fire
insurance premiums unless Sublessee's use triggers an increase in said taxes or
premiums. In which case Sublessee shall pay to Sublessor the amount of the
increase.
15. Sublessee shall provide Sublessor with a 2 million Dollar per
occurrence General Commercial Liability Insurance Policy. With Sublessor as
additionally insured.
16. Sublessee hereby takes the Premises "AS-IS" with no representations
or warranties from Sublessor or Agents as to suitability of the Premises for
Sublessee's intended use, condition of the Premises operating systems, existence
of any known toxic or hazardous materials, or earthquake and ADA requirements.
Notwithstanding the foregoing sentence, paragraph 6.3 of this Sublease and/or
Articles VI and Viii for the Master Lease, Sublessee does not assume and shall
not be deemed to have responsibility or liability for any unknown conditions of
the Premises or for conditions that are not obvious from a routine visual
inspection at inception of the Sublease; nor shall Sublessee have any
responsibility or liability for removal, repairs or cleanup of the Premises
except as to conditions that are actually caused, and materials that are brought
onto the Premises by Sublessee, or that result from Sublessee's use of the
Premises, ordinary wear and tear excepted. In case of conflict with any other
provision of this Sublease or the Master Lease, this paragraph 16 shall be
controlling.
17. sublessee shall not bring any reportable hazardous materials onto,
into or around the Premises, other than the materials disclosed hereafter (see
MSDS).
18. Sublessor shall retain the utilities in Sublessor name, but
Sublessee shall reimburse Sublessor for 74% of said utilities within thirty (30)
days from receipt of an invoice from Sublessor. If Sublessor's utility usage is
higher than the previous tenants usage then the % may be adjusted to a mutually
agreeable percentage based upon actual usage so as to be mutually agreeable with
the existing subtenant West-Rep based upon West-Rep's proven historical usage.
Sublessor shall provide Sublessee with the last six (6) months' electrical
bills.
19. Sublessee shall not continuously block access between the buildings
loading doors and the employee car parking.
20. Sublessee shall not park trucks or cars in front of West-Reps
Premises.
21. Sublessee may, at Sublessee's sole cost and expense, install chain
link fencing for security reasons between their space and the common area of the
interior of the facility.
22. Sublessee may, at Sublessee's sole cost and expense, install
electrical conduit and outlets as deemed necessary for their business (up to
four (4) outlets).
23. Lessee's use shall be further described as:
1. Warehousing and assembly of aircraft parts and plaster mold
lay-ups. 2. Related sheet metal fabrication of light aluminum with some manual
drilling, sawing and cutting. 3. Composite lay-up of small aircraft parts with
use of resins and hardener compound used in small quantities (=1-3 gallons per
day)
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INDUSTRIAL LEASE
[FORM NET LEASE/MULTI-TENANT]
THIS LEASE ("Lease), dated August 1, 1996, is made and entered into by
and between JMB/PENNSYLVANIA ASSOCIATES - IV, L.P., a Delaware limited
partnership ("Landlord") and Q.E.P. Company, Inc., a New York corporation
("Tenant") upon the following terms and conditions:
ARTICLE I - DEFINITIONS
Unless the context otherwise specifies or requires, the following terms
shall have the meanings specified herein:
1.01 Building. The term "Building" shall mean that certain
office/warehouse building located at 20535 South Belshaw Avenue, Carson,
California, together with all related site land, improvements, parking
facilities, common areas, driveways, sidewalks and landscaping. If the Building
is in a development containing one or more other buildings, such buildings
together with all related site land, improvements, parking facilities, common
areas, driveways, sidewalks and landscaping, and together with the Building,
shall be referred to herein as the "Project".
1.02 Premises. The term "Premises" shall mean the space leased to
Tenant in the Building, as more particularly outlined on the drawing attached
hereto as Exhibit A and incorporated herein by reference.
1.03 Rentable Area of the Premises. The term "Rentable Area of the
Premises" shall mean 29,227 square feet, which Landlord and Tenant have
stipulated as the Rentable Area of the Premises. Tenant acknowledges that the
Rentable Area of the Premises includes the usable area, without deduction for
columns or projections, multiplied by a load factor to reflect a share of
certain areas, which may include lobbies, corridors, mechanical, utility,
janitorial, boiler and service rooms and closets, restrooms and other public,
common and service areas of the Building.
1.04 Lease Term. The terms "Lease Term" or "Term" shall mean the period
between the Commencement Date and the Expiration Date (as such terms are
hereinafter defined), unless sooner terminated or renewed as otherwise provided
in this Lease.
1.05 Commencement Date. Subject to adjustment as provided in Article 3,
the term "Commencement Date" shall mean August 15, 1999.
1.06 Expiration Date. Subject to adjustment as provided in Article 3,
the term "Expiration Date" shall mean August 14, 1999.
1.07 Base Rent. Subject to adjustment as provided in Article 4, the
term "Base Rent" shall mean Seven Thousand Eight Hundred Ninety One and 29/100
Dollars ($7,891.29) per month.
1.08 Tenant's Percentage Share. The term "Tenant's Percentage Share"
shall mean six and 5/100 percent (6.5%) with respect to Operating Expenses (as
hereinafter defined), One hundred percent (100%) with respect to Property Taxes
(as hereinafter defined,) six and 5/100 percent (6.5%) with respect to Insurance
Expenses (as hereinafter defined) and six and 5/100 percent (6.5%) with respect
to Tenant's law compliance obligations under Section 6.02(C) of this Lease and
for all other purposes under this Lease. Landlord may reasonably redetermine
Tenant's Percentage Share from time to time to reflect reconfigurations,
additions or modifications to the Building.
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1.09 Security Deposit. The term "Security Deposit" shall mean Ten
thousand five hundred thirty nine and 72/100 Dollars ($10,539.72).*/
1.10 Tenant's Permitted Use. The term "Tenant's Permitted Use" shall
mean general office and warehousing duties associated with the distribution of
contractor tools and manufacturing and assembly of tools and no other use.
1.11 Landlord's Address For Notices. The term "Landlord's Address for
Notices" shall mean Heitman Properties Ltd., 9601 Wilshire Boulevard, Suite 200,
Beverly Hills, California 90210, with a copy to Heitman Properties Ltd., 180
North LaSalle Street, Suite 3600, Chicago, Illinois 60601, Attn: Property
Management.
- -----------
*/ The Security Deposit of $10,539.72 has been previously paid by Tenant's
predecessor in Interest, O'Tool Company, Inc. to Landlord as a part of that
certain Lease dated January 3, 1991 between Landlord and O'Tool Company, Inc.
which was assigned to _____________________.
1.12 Tenant's Address For Notices. The term "Tenant's Address for
Notices" shall mean Q.E.P. Company, Inc., 575 Corporate Drive, Suite 410,
Mahwah, New Jersey 07430.
1.13 Broker. The term "Broker" shall mean Heitman Properties, Ltd.
1.14 Guarantor. The term "Guarantor" shall mean _____________
___________________________________.
ARTICLE II -PREMISES
2.01 Lease of Premises. Landlord hereby leases the Premises to Tenant,
and Tenant hereby leases the Premises from Landlord, upon all of the terms,
covenants and conditions contained in this Lease.
2.02 Acceptance of Premises. Tenant acknowledges that Landlord has not
made any representation or warranty with respect to the condition of the
Premises or the Building or with respect to the suitability or fitness of either
for the conduct of Tenant's Permitted Use or for any other purposes, Tenant
shall execute a Suite Acceptance Letter in the form and content of Exhibit C,
accepting the Premises. Tenant agrees to accept the Premises in its "as is"
physical condition without any agreements, representations, understandings or
obligations on the part of Landlord to perform any alterations, repair or
improvements (or to provide any allowance for same).
2.03 Common Areas. Tenant and Tenant's employees and invitees may use
the common areas of the Building, and the Project, if applicable, on a
non-exclusive basis in common with all other parties to whom the right to use
such common areas has been or is hereafter granted. Tenant shall not interfere
in any way with the use of the common areas by such other parties, and Tenant's
use of the common areas shall be subject to the other provisions of this Lease.
Landlord shall administer, operate, clean, maintain and repair the common areas
of the Building, and the Project, if applicable, and the costs and expenses
thereof shall be included in the definition of "Operating Expenses" set forth
below. If the Building is in a Project containing one or more other buildings,
Landlord may designate separate common areas for the Building, for the Project
as a whole ("Project Common Areas"), and for other portions of the Project
("Other Common Areas"). In such case, Tenant and Tenant's employees and invitees
shall not use the Other Common Areas.
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ARTICLE III - TERM
3.01 Except as otherwise provided in this Lease, the Lease Term shall
be for the period described in Section 1.04 of this Lease, commencing on the
Commencement Date described in Section 1.05 of this Lease and ending on the
Expiration Date described in Section 1.06 of this Lease; provided, however,
that, if, for any reason, Landlord is unable to deliver possession of the
Premises on he date described in Section 1.05 of this Lease, Landlord shall not
be liable for any damage caused thereby, nor shall the Lease be void or
voidable, but, rather, the Lease Term shall commence upon, and the Commencement
Date shall be, the date that possession of the Premises is so tendered to Tenant
(except for Tenant caused delays which shall not be deemed to delay commencement
of the Lease Term), and, unless Landlord elects otherwise, the Expiration Date
described in Section 1.06 of this Lease shall be extended by an equal number of
days.
ARTICLE IV - RENTAL; ADJUSTMENTS
4.01 Definitions. As used herein.
(A) "Property Taxes" shall mean the aggregate amount of all
real estate taxes, assessments (whether they be general or special),
sewer rents and charges, transit taxes, taxes based upon the receipt of
rent and any other federal, state or local governmental charge,
general, special, ordinary or extraordinary (but not including income
or franchise taxes, capital stock, inheritance, estate, gift, or any
other taxes imposed upon or measured by Landlord's gross income or
profits, unless the same shall be imposed in lieu of real estate taxes
or other ad valorem taxes), which Landlord shall pay or become
obligated to pay in connection with the Building or the Project, if
applicable, or any part thereof. Property Taxes shall also include all
fees and costs, including attorneys' fees, appraisals and consultants'
fees, incurred by Landlord in seeking to obtain a reassessment,
reduction of, or a limit on the increase in, any Property Taxes,
regardless of whether any reduction or limitation is obtained. Property
Taxes for any calendar year shall be Property Taxes which are due for
payment or are paid during such year. Property Taxes shall include any
tax assessment, levy, imposition or charge imposed upon Landlord, and
measured by or based in whole or in part upon the Building or the
Project, if applicable, or the rents or other income from the Building
or the Project, if applicable, to the extent that such items would be
payable if the Building or the Project, if applicable, was the only
property of Landlord subject to same and the income received by
Landlord from the Building or the Project, if applicable, was the only
income of Landlord. Property Taxes shall also include any personal
property taxes imposed upon the furniture, fixtures, machinery,
equipment, apparatus, systems and appurtenances of Landlord used in
connection with the Building or the Project, if applicable.
(B) "Operating Expenses" shall mean all costs, fees,
disbursements and expenses paid or incurred by or on behalf of Landlord
in the operation, ownership, maintenance, administration, insurance,
management, replacement and repair of the Building or the Project, if
applicable (excluding Property Taxes). If the Building is part of a
Project containing one or more buildings: (i) Landlord may reasonably
allocate expenses (or categories thereof) incurred in connection with
the Project Common Areas between such buildings (based on the relative
square footage thereof or such other factors as Landlord reasonably
deems appropriate), in which case the amount allocated to the Building
shall be added to "Operating Expenses" for the Building for such year,
or (ii) Landlord may determine expenses (or categories thereof)
incurred in connection with the Project Common Areas as a whole, in
which case Tenant's Percentage Share of "Operating Expenses" shall be
based on the Rental Area of the Premises as a percentage of the total
rentable area occupied by tenants in all buildings in the Project
(excluding single tenant buildings for which the tenants maintain the
Other Common Areas applicable thereto) and Tenant shall pay Tenant's
Percentage Share of Operating Expenses for the Project.
3
Operating Expenses shall not include costs of alteration of
the premises of tenants of the Building or the Project, if applicable,
depreciation charges, interest and principal payments on mortgages,
ground rental payments, real estate brokerage and leasing commissions,
expenses incurred in enforcing obligations of tenants of the Building
or the Project, if applicable, salaries and other compensation of
executive officers of the managing agent of the Building or the
Project, if applicable, senior to the Building manager, costs of any
special service provided to any one tenant of the Building or the
Project, if applicable, but not to tenants of the Building or the
Project, if applicable, generally, and costs of marketing or
advertising the Building or the Project, if applicable.
(C) "Insurance Expenses" shall mean all costs, fees,
disbursements and expenses paid or incurred by or on behalf of Landlord
for premiums for hazard, "all risk", casualty, rent interruption and
liability insurance and all other insurance, obtained by Landlord in
connection with or relating to the Building or the Project, if
applicable.
For purposes of calculating the Tax Adjustment, the Operating Expense
Adjustment, and the Insurance Adjustment (as such terms are defined in Sections
4.02, B, C and D hereof), Property Taxes, Operating Expenses and Insurance
Expenses hereinabove defined shall each be increased by ten (10%) percent to
cover Landlord's administrative costs in connection with the Building or the
Project, if applicable.
If the Building or the Project, if applicable, does not have one
hundred percent (100%) occupancy during an entire calendar year, then the
variable cost components of Property Taxes, Operating Expenses and Insurance
Expenses shall be adjusted so that the total amount of Property Taxes, Operating
Expenses and Insurance Expenses equals the total amount which would have been
paid or incurred by Landlord had the Building or the Project, if applicable,
been one hundred percent (100%) occupied for the entire calendar year.
4.02 Base Rent. During the Lease Term, Tenant shall pay to Landlord as
rental for the Premises the Base Rent described in Section 1.07 above, subject
to the following adjustments (herein collectively called the "Rent
Adjustments"):
(A) Effective the 19th month of the Lease term, the Base Rent
payable by Tenant to Landlord as described in Section 1.07 shall be
increased to the sum of (i) the amount contained in Section 1.07; plus
(ii) the product obtained by multiplying such amount by the percentage
increase in the Consumer Price Index (as defined below) from the second
calendar month preceding the calendar month containing the Commencement
Date to the second calendar month preceding the calendar month
containing the annual anniversary of the Commencement Date in the
applicable adjustment year in which the rental increase is to occur
(herein called the "CPI Adjustment"). As used herein, the term
"Consumer Price Index" shall mean the Consumer Price Index for All
Urban Consumers, U.S. City Average. All Items, (1982-84 = 100) issued
by the United States Department of Labor, Bureau of Labor Statistics;
provided, however, that if said Consumer Price Index shall cease to
exist, or her changed, the term "Consumer Price Index" shall mean such
other or similar index or formula as Landlord reasonably selects to
measure change in the purchasing power of the U.S. Dollar. Landlord
shall notify Tenant in writing when each adjustment under this Section
4.02(A) occurs. A decrease in the Consumer Price Index below the
Consumer Price Index below the Consumer Price Index for the second
calendar month preceding the calendar month containing the Commencement
Date shall not decrease the amount of the Base Rent due hereunder or
give rise to a credit in favor of Tenant. Notwithstanding the
foregoing, said increase shall not be less than 4.5%.
4
(B) During each calendar year during the Lease Term, the Base
Rent payable by Tenant to Landlord, as adjusted pursuant to Section
4.02(A) above, shall be increased by Tenant's Percentage Share of the
Property Taxes for such year (the "Tax Adjustment").
(C) During each calendar year during the Lease Term, the Base
Rent payable by Tenant to Landlord, as adjusted pursuant to Section
4.02(A) above, also shall be increased by Tenant's Percentage Share of
the Operating Expenses paid or incurred by Landlord during such year
(the "Operating Expense Adjustment").
(D) During each calendar year during the Lease Term, the Base
Rent payable by Tenant to Landlord, as adjusted pursuant to Section
4.02(A) above, also shall be increased by Tenant's Percentage Share of
the insurance Expenses for such year (the "Insurance Adjustment").
(E) The Tax Adjustment, the Operating Expense Adjustment dn
the Insurance Adjustment are hereinafter referred to collectively as
the "Tax, Operating Expense and Insurance Adjustments".)
4.03 Adjustment Procedure; Estimates. The Tax, Operating Expense and
Insurance Adjustments specified in Sections 4.02(B), 4.02(C) and 4.02(D) shall
be determined and paid as follows:
(A) During each calendar year during the Lease Term, Landlord
shall give Tenant written notice of Landlord's estimate of amounts
payable under Sections 4.02(B), 4.02(D) and 4.02(D) for that calendar
year. On or before the first day of each calendar month during the
calendar year. Tenant shall pay to Landlord one-twelfth (1/12/th) of
such estimated amounts; provided, however, that, not more often than
quarterly, Landlord may, by written notice to Tenant, revise its
estimate for such year, and subsequent payments by Tenant for such year
shall be based upon such revised estimate.
(B) Within one hundred twenty (120) days after the close of
each calendar year in which any Rent Adjustment is made or as soon
thereafter as is practicable, Landlord shall deliver to Tenant a
statement of that year's Property Taxes, Operating Expenses and
Insurance Expenses, and the actual Tax. Operating Expense and Insurance
Expense Adjustments to be made pursuant to Section 4.02(B), 4.02(C) and
4.02(D) for such calendar year, as determined and certified by Landlord
(the "Landlord's Statement") and such Landlord's Statement shall be
binding upon Tenant, except as provided in Section 4.04 below. If the
amount of the actual Tax Adjustment, Insurance Adjustment or Operating
Expense Adjustment is more than the estimated payments for the Tax
Adjustment, Insurance Adjustment or Operating Expense Adjustment for
such calendar year made by Tenant, Tenant shall pay the deficiency to
Landlord upon receipt of Landlord's Statement. If the amount of the
actual Tax Adjustment, Insurance Adjustment or Operating Expense
Adjustment is less than the estimated payments for such calendar year
made by Tenant, any excess shall be credited against Rent (as
hereinafter defined) next payable by Tenant under this Lease or, if the
Lease Term has expired, any excess thereof shall be paid to Tenant. No
delay in providing the statements described in this Section 4.03(B)
shall act as a waiver of Landlord's right to payment under Section
4.02(B), 4.02(C) or 4.02(D) above. Notwithstanding the foregoing,
Tenant's right to receive any credit or payment pursuant to the
preceding sentences of this Section 4.03(B) is conditioned on this
Lease being in full force and effect and Tenant not being in default
under this Lease on the date such credit or payment is due.
5
(C) If this Lease shall terminate on a day other than the end
of a calendar year, the amount of the Tax, Operating Expense and
Insurance Adjustments to be paid pursuant to Sections 4.02(B), 4.02(C)
and 4.02(D) that is applicable to the calendar year in which such
termination occurs shall be prorated on the basis of the number of days
from January 1 of the calendar year to the termination date bears to
365. The termination of this Lease shall not affect the objections of
Landlord and Tenant pursuant to Sections 4.03(B) and 4.03(C) to be
performed after such termination.
4.04 Review of Landlord's Statement. Provided this Lease is in full
force and effect and that Tenant is not then in default under this Lease and
provided further that Tenant strictly complies with the provisions of this
Section 4.04, Tenant shall have the right, once each calendar year, to
reasonably review supporting data for any portion of a Landlord's Statement that
Tenant claims is incorrect, in accordance with the following procedure:
(A) Tenant shall, within ten (10) business days after any such
Landlord's Statement is delivered, deliver a written notice to Landlord
specifying the portions of the Landlord's Statement that are claimed to
be incorrect, and Tenant shall simultaneously pay to Landlord all
amounts due from Tenant to Landlord as specified in the Landlord's
statement. Except as expressly set forth in subsection (C) below, in no
event shall Tenant be entitled to withhold, deduct, or offset any
monetary obligation of Tenant to Landlord under the Lease (including
without limitation, Tenant's obligation to make all payments of Base
Rent including the CPI Adjustment and all payments of Tenant's Tax,
Operating Expense and Insurance Adjustments) pending the completion of
and regardless of the results of any review of records under this
Section 4.04. The right of Tenant under this Section 4.04 may only be
exercised once for any Landlord's Statement, and if Tenant fails to
meet any of the above conditions as a prerequisite to the exercise of
such right, the right of Tenant under this Section 4.04 for a
particular Landlord's Statement shall be deemed waived.
(B) Tenant acknowledges that Landlord maintains its records
for the Building or the Project, if applicable, at Landlord's manager's
corporate offices and Tenant agrees that any review of records under
this Section 4.04 shall be at the sole expense of Tenant and shall be
conducted by an independent firm of certified public accountants of
national standing. Tenant acknowledges and agrees that any records
reviewed under this Section 4.04 constitute confidential information of
Landlord, which shall not be disclosed to anyone other than the
accountants performing the review and the principals of Tenant who
receive the results of the review. The disclosure of such information
to any other person, whether or not caused by the conduct of Tenant,
shall constitute a material breach of this Lease.
(C) Any errors disclosed by the review shall be promptly
corrected by Landlord, provided, however, that if Landlord disagrees
with any such claimed errors, Landlord shall have the right to cause
another review to be made by an independent firm of certified public
accountants of national standing. In the event of a disagreement
between the two accounting firms, the review that discloses the least
amount of deviation from the Landlord's Statement shall be deemed to be
correct. In the event that the results of the review of records (taking
into account, if applicable, the results of any additional review
caused by Landlord) reveal that Tenant has overpaid obligations for a
preceding period, the amount of such overpayment shall be credited
against Tenant's subsequent installment obligations to pay the
estimated Tax, Operating Expense and Insurance Adjustments. In the
event that such results show that Tenant has underpaid its obligations
for a preceding period, Tenant shall be liable for Landlord's actual
accounting fees, and the amount of such underpayment shall be paid by
Tenant to Landlord with the next succeeding installment obligation of
estimated Tax, Operating Expense and Insurance Adjustments.
6
4.05 Payment. Concurrently with the execution hereof, Tenant shall pay
Landlord Base Rent for the first calendar month of the Lease Term. Thereafter
the Base Rent described in Section 1.07, as adjusted in accordance with Section
4.02, shall be payable in advance on the first day of each calendar month. If
the Commencement Date is other than the first day of a calendar month, the
prepaid Base Rent for such partial month shall be prorated in the proportion
that the number of days this Lease is in effect during such partial month bears
to the total number of days in the calendar month. All Rent, and all other
amounts payable to Landlord by Tenant pursuant to the provisions of this Lease,
shall be paid to Landlord, without notice, demand, abatement, deduction or
offset, in lawful money of the United States at Landlord's office in the
Building or to such other person or any such other place as Landlord may
designate from time to time by written notice given to Tenant. No payment by
Tenant or receipt by Landlord of a lesser amount than the correct Rent due
hereunder shall be deemed to be other than a payment on account; nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment be deemed to effect or evidence any accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance or pursue any other remedy in this Lease or at law or in
equity provided.
4.06 Late Charge; Interest. Tenant acknowledges that the late payment
of Base Rent or any other amounts payable by Tenant to Landlord hereunder (al of
which shall constitute additional rent to the same extent as Base Rent) will
cause Landlord to incur administrative costs and other damages, the exact amount
of which would be impracticable or extremely difficult to ascertain. Landlord
and Tenant agree that if Landlord does not receive any such payment on or before
five (5) days after the day the payment is due, Tenant shall pay to Landlord, as
additional rental, (a) a late charge equal to five percent (5%) of the overdue
amount to cover such additional administrative costs; and (b) interest on the
delinquent amounts at the lesser of the maximum rate permitted by law if any or
twelve percent (12%) per annum from the date due to the date paid.
4.07 Additional Rent. For purposes of this Lease, all amounts payable
by Tenant to Landlord pursuant to this Lease, whether or not denominated as
such, shall constitute additional rental hereunder. Such additional rental,
together with the Base Rent and Rent Adjustments, shall sometimes be referred to
in this Lease as "Rent".
4.08 Additional Taxes. In addition to the Rent and other charges to be
paid by Tenant hereunder. Tenant shall reimburse Landlord upon demand for all
taxes payable by or imposed upon Landlord upon or with respect to: any fixtures
or personal property located in the Premises; any leasehold improvements made in
or to the Premises by or for Tenant; the Rent payable hereunder, including,
without limitation, any gross receipts tax, license fee or excise tax levied by
any governmental authority; the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy of any portion of the Premises
(including, without limitation, any applicable possessory interest taxes); or
this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises.
ARTICLE V -SECURITY DEPOSIT
5.01 Upon the execution of this Lease, Tenant shall deposit with
Landlord the Security Deposit described in Section 1.09 above. The Security
Deposit is made by Tenant to secure the faithful performance of all the terms,
covenants and conditions of this Lease to be performed by Tenant. If Tenant
shall default with respect to any covenant or provision hereof, Landlord may
use, apply or retain all or any portion of the Security Deposit to cure such
default or to compensate Landlord for any loss or damage which landlord may
suffer thereby. If Landlord so uses or applies all or any portion of the
Security Deposit, Tenant shall immediately upon written demand deposit cash with
landlord in an amount sufficient to restore the Security Deposit to the full
amount hereinabove stated. Landlord shall not be required to keep the Security
Deposit separate from its general accounts and Tenant shall not be entitled to
interest on the Security Deposit. Within thirty (30) days after the expiration
of the Lease Term and the vacation of the Premises by Tenant, the Security
Deposit, or such part as has not been applied to cure the default, shall be
returned to Tenant. In the event of any bankruptcy or other proceeding initiated
by or against Tenant, it is agreed that all such Security Deposit held hereunder
shall be deemed to be applied by Landlord to rent, sales tax and all other
charges due from Tenant to landlord for the last month of the Term and each
preceding month until such security Deposit is fully applied.
7
ARTICLE VI -USE OF PREMISES
6.01 Tenant's Permitted Use. Tenant shall use the Premises only for
Tenant's Permitted Use as set forth in Section 1.10 above and shall not use or
permit the Premises to be used for any other purpose. Tenant shall, at its sole
cost and expense, obtain all governmental licenses and permits required to allow
Tenant to conduct Tenant's Permitted Use. Landlord disclaims any warranty that
the Premises are suitable for Tenant's use and Tenant acknowledges that it has
had a full opportunity to make its own determination in this regard.
6.02 Compliance With Laws and Other Requirements.
(A) Tenant shall cause the Premises to comply in all material
respects with all laws, ordinances, regulations and directives of any
governmental authority having jurisdiction including without limitation
any certificate of occupancy and any law, ordinance, regulation,
covenant, condition or restriction affecting the Building or the
Premises which in the future may become applicable to the Premises
(collectively "Applicable Laws").
(B) Tenant shall not use the Premises, or permit the Premises
to be used, in any manner which: (a) violates any Applicable Law; (b)
causes or is reasonably likely to cause damage to the Building, the
Project, if applicable, or the Premises; (c) violates a requirement or
condition of any fire and extended insurance policy covering the
Building or the Project, if applicable, and/or the Premises, or
increases the cost of such policy; (d) constitutes or is reasonably
likely to constitute a nuisance, annoyance or inconvenience to other
tenants or occupants of the Building or the Project, if applicable, or
their equipment, facilities or systems; (e) interferes with, or is
reasonably likely to interfere with, the transmission or reception of
microwave, television, radio, telephone or other communication signals
by antennae or other facilities located in the Building or the Project,
if applicable; or (f) violates the Rules and Regulations described in
Article XX.
(C) In addition to any other amounts payable by Tenant to
Landlord hereunder, Tenant shall pay to Landlord, as and when billed to
Tenant and as additional rental, Tenant's Percentage Share of the cost
of any improvements, capital expenditures, repairs or replacements to
the Building or the Project, if applicable, or any equipment or
machinery used in connection with the Building or the Project, if
applicable, if any such item is required under any Applicable Law as of
the date of this Lease and throughout the Lease Term; provided,
however, that any such costs which are properly charged to a capital
throughout the Lease Term; provided, however, that any such costs which
are properly charged to a capital account (together with reasonable
financing charges) shall be amortized for purposes of this Lease over
the shorter of (i) their useful lives, or (ii) three (3) years and only
the annual amortization amount (prorated based on the number of days of
the Lease term in the calendar year) shall be payable by the Tenant
with respect to any calendar year.
6.03 Hazardous Materials.
(A) No Hazardous Materials (as defined herein) shall be
Handled (as defined herein) upon, about, above or beneath the Premises
or any portion of the Building or the Project, if applicable, by or on
8
behalf of a Responsible Party (as defined herein), unless the Hazardous
Materials are listed in Exhibit 1) hereto and then only the quantities
listed in the exhibit. Any such Hazardous Materials so Handled, or the
presence or migration of which is a result of the act or omission of a
Responsible Party, shall be known as Tenant's Hazardous Materials.
Notwithstanding the foregoing, Landlord acknowledges that, due to
Tenant's permitted use of the Premises, as indicated in Paragraph 6.01
of this Lease, Tenant will occasionally Handle Hazardous Materials on
the Premises which are in transit to their final destination; however,
such presence and Handling of Hazardous Materials shall be in
compliance with all applicable federal, state, local and environmental
laws and regulations and the following guidelines: (i) no nuclear or
explosive materials will be Handled by Tenant on the Premises, except
such radioactive isotopes as Tenant may Handle from time to time;
provided that such Handling shall be in accordance with the U.S.
Department of Transportation regulations and the International
Airtransport Association Dangerous Goods regulations; (ii) all
Hazardous Materials will be Handled in a well-marked area which is
segregated from other storage and handling areas and is used
exclusively for hazardous materials; (iii) Hazardous Materials will be
Handled in such a way that any such Materials which are incompatible or
reactive to each other shall be kept separate at all times such
Materials are on the Premises; (iv) Hazardous Materials shall only be
Handled on the Premises for a maximum period for twenty-four (24)
hours; (v) Tenant shall provide written documents or other written
evidence to Landlord upon execution of the Lease that all personnel who
are responsible for the Handling or other contact with Hazardous
Materials have been properly trained, in accordance with any applicable
laws and/or regulations, to handle spills of Hazardous Materials and
that the required, appropriate spill response equipment is maintained
on site; (vi) Tenant will provide Landlord with written evidence that
it is maintaining the appropriate insurance coverage for the occasional
presence of such hazardous Materials on the Premises upon execution of
this Lease; and (vii) Tenant will provide Landlord with written
evidence that all of its employees whose responsibilities include
driving Tenant's trucks or other vehicles are licensed in accordance
with state, federal and local laws and regulations to transport and
Handle Hazardous Materials. Also, notwithstanding the foregoing, normal
quantities of those Tenant Hazardous Materials customarily used int he
conduct of general administrative and executive office activities
(e.g., copier fluids and cleaning supplies) may be Handled at the
Premises without Landlord's prior written consent.
(B) Tenant's Hazardous materials shall be Handled at all times
in compliance with the manufacturer's instructions therefor and all
applicable Environmental Laws (as defined herein). Tenant's Hazardous
Materials shall not be disposed of, released, discharged or permitted
to spill, leak or migrate upon about, above or beneath the premises or
any portion of the Building.
(C) Tenant agrees to maintain only the Hazardous Materials
listed in Schedule 1 to Exhibit D in or at the Premises or the Building
and only in the quantities listed in Schedule 1 to Exhibit D. Tenant
further agrees that changes to the type and quantities of such Tenant's
Hazardous materials may be done only with the prior written consent of
the Landlord, which consent shall not be unreasonably withheld. Tenant
further agrees that Landlord shall have the right to inspect the
Building to verify the types and quantities of the materials stored
therein.
9
(D) Notwithstanding the obligation of Tenant to indemnify
Landlord pursuant to this Lease, Tenant shall, at its sole cost and
expense, promptly take all actions required by any Regulatory
Authority, or necessary for landlord to make full economic use of the
Premises or any portion of the Building, or the Project, if applicable,
which requirements or necessity arises from the Handling, presence or
migration of Tenant's Hazardous Materials upon, about, above or beneath
the Premises or any portion of the Building, or the Project, if
applicable. Such actions shall include, but not be limited to, the
investigation of the environmental condition of the Premises or any
portion of the Building, or the Project, if applicable, the preparation
of any feasibility studies or reports and the performance of any
cleanup, remedial, removal or restoration work. Tenant shall take all
actions necessary to restore the Premises or any portion of the
Building or Project, if applicable, to the condition existing prior to
the introduction of Tenant's Hazardous Materials, notwithstanding any
less stringent standards or remediation allowable under applicable
Environmental Laws. Tenant shall nevertheless obtain Landlord's written
approval prior to undertaking any actions required by this Section,
which approval shall not be unreasonably withheld so long as such
actions would not potentially have a material adverse long-term or
short-term effect on the Premises or any portion of the Building or the
Project, if applicable.
(E) Tenant shall immediately notify Landlord of : (i) its
knowledge of any disposal, release, discharge, spill, leak on, about,
above, o beneath, or any migration to or from the Premises or the
Building of Hazardous Materials, (ii) any inspection, enforcement,
cleanup or the other regulatory action taken or threatened by any
Regularly Authority with respect to any Hazardous Materials on, about,
above, beneath or from the Premises or the Building or the migration
thereof from or to other property, (iii) any demands or claims made or
threatened by any part relating to any loss or injury claimed to have
resulted from any Hazardous Materials on, about, above, beneath or from
the Building, and (iv) any matters where Tenant is required by Law to
give a notice to any Regulatory Authority concerning Hazardous
materials on or from the Premises or the Building. landlord shall have
the right but not the obligation to notify Regulatory Authorities
concerning actual and claimed violations of this Article.
(F) Tenant agrees to execute affidavits, representations and
the like from time to time at landlord's request stating Tenant's best
knowledge and belief regarding the presence of Hazardous Materials in
the Premises or in or at the Building.
(G) "Environmental Laws" means and includes all now and
hereafter existing statutes, laws, ordinances, codes, regulations,
rules, rulings, orders, decrees, directives, policies and requirements
by any federal, state or local governmental authority regulating,
relating to, or imposing liability or standards of conduct concerning
public health and safety or the environment.
(H) "Hazardous Materials" means: (a) any material or
substance: (i) which is defined or becomes defined as a "hazardous
substance", "hazardous waste," "infectious waste," "chemical mixture or
substance," or "air pollutant" under Environmental Laws; (ii)
containing petroleum, crude oil or any fraction thereof; (iii)
containing polychlorinated biphenyls (PCB's); (iv) containing asbestos;
(v) which is radioactive; (b) any other material or substance
displaying toxic, reactive, ignitable or corrosive characteristics, as
all such terms are used in their broadest sense, and are defined or
become defined by Environmental Laws, or (c) material s which cause a
nuisance upon or waste to the Premises or any portion of the Building
or the Project, if applicable.
(I) "Handle," "handle," "Handled," "handled," "Handling" or
"handling" shall mean any installation, handling, generation, storage,
treatment, use, disposal, discharge, release, manufacture, refinement,
emission, abatement, removal, transportation, or any other activity of
any type in connection with or involving Hazardous Materials.
(J) "Responsible Party" shall mean Tenant, its subtenants and
its assignees, and their respective contractors, clients, officers,
directors, employees, agents, and invitees, or any of them, as the case
may be.
(K) "Regulatory Authority" shall mean any federal, state or
local governmental agency, commission, board or political subdivision.
10
ARTICLE VII -UTILITIES AND SERVICES
7.01 Services. Landlord shall permit Tenant to use any existing utility
service connection into the Premises and Tenant, at its sole expense, shall
arrange with the appropriate utility company to install all necessary
connections and without fail to maintain in continuous operation during the
entire term of the Lease, all such utility service, whether or not Tenant is in
actual possession of the Premises. Tenant shall pay to the appropriate utility
company or other provider directly, or at Landlord's election as provided in
Section 7.02 below, to Landlord, for all water, gas, heat, electricity, light,
power, sweeping and other janitorial services, rubbish and trash disposal, pest
and rodent control, sewer, steam, fire protection, alarm or other security
services and any other utilities and services supplied in, about or related to
the Premises, together with any taxes thereon, connection charges and deposits,
and also shall pay for all electrical light bulbs, lamps and tubes in connection
therewith. landlord reserves the right during the Term of this Lease to grant
easements or public utility purposes on, over, or below the Premises without any
abatement in rent, provided that said easements do not unreasonably interfere
with the normal operation of the business conducted by Tenant in the Premises.
Landlord shall not be required to pay for any service, supplies or upkeep in
connection with the Premises. Landlord shall not be required to pay for any
service, supplies or upkeep in connection with the Premises. Tenant shall
arrange for and pay for all telephone and other communication services and
equipment, including any additions or alterations to the existing telephone
service boards and conduit, which shall be completed without interference to the
service and/or equipment of other tenants in the Building or the Project, if
applicable, and which shall be appropriately labeled upon the termination of
this Lease.
7.02 Separate Metering. If any utilities are not separately metered for
the Premises, Landlord may: (i) require that Tenant make reasonable arrangements
to share such utilities with the other parties whose premises are on such meter,
(ii) require that Tenant pay Landlord a share of such utilities based on the
Rentable Area of the Premises as a percentage of the total rentable area of
occupied space that is jointly metered, or (iii) require that Tenant pay
Landlord a share of such utilities based on consumption estimates of Landlord's
engineer or consultant (in which case, such engineer's or consultant's fees and
costs shall be added to the utility bills). In such case, either Landlord or
Tenant may elect to install separate meters (but the costs of installing,
maintaining and reading such meters shall be borne by Tenant). landlord may
reasonably estimate in advance any amounts payable by Tenant to Landlord
hereunder and Tenant shall pay such amounts within ten (10) days after the same
are billed, subject to periodic adjustment (and additional payment by Tenant or
credit or refund by landlord) after the actual amounts have been determined.
7.03 Installation, Connection and Use of Utility Equipment. Tenant
shall install and connect all equipment and lines required to supply such
utilities to the extent not already available at or serving the Premises, or at
Landlord's option shall repair, alter or replace any such existing items (or
Tenant shall share the costs thereof for any equipment shared with other
tenants), subject to the terms of Section 2.02 hereof. Tenant shall maintain,
repair and replace all such items, operate the same, and keep th same in good
working order, condition and repair, as provided in Section 8.02. Tenant shall
not install any equipment or fixtures, or use the same, so as to exceed the safe
and lawful capacity of any utility equipment or lines serving the same. The
installation, alteration, replacement or connection of any utility equipment and
lines shall be subject to the requirements for Alternations of the Premises set
forth in Article 9. Tenant shall ensure that any supplemental HVAC equipment is
installed and all HVAC equipment is operated at all times in a manner to prevent
roof leaks, damage or noise due to vibrations or improper installation,
maintenance or operation. Tenant shall at all times keep the Premises
sufficiently heated to avoid freezing of pipes.
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7.04 Interruption of Services. Landlord shall not be liable for any
failure to furnish, stoppage of, or interruption in furnishing any of the
services or utilities described in Section 7.01, when such failure is caused by
accident, breakage, repairs, strike, lockouts, labor disputes, labor
disturbances, governmental regulation, civil disturbances, acts of war,
moratorium or other governmental action, or any other cause beyond Landlord's
reasonable control, and, in such event, Tenant shall not be entitled to and
damages nor shall any failure or interruption abate or suspend Tenant's
obligation to pay Base Rent and additional rent required under this Lease or
constitute or be construed as a constructive or other eviction of Tenant.
Further, in the event any governmental authority or public utility promulgates
or revises any law, ordinance, rule or regulation, or issues mandatory controls
or voluntary controls relating to the use or conservation of energy, water, gas,
light or electricity, the reduction of automobile or other emissions, or the
provision or any other utility or service, Landlord may take any reasonably
appropriate action to comply with such law, ordinance, rule, regulation,
mandatory control or voluntary guideline and Tenant's obligations hereunder
shall not be affected by any such action of Landlord. The parties acknowledge
that safety and security devices, services and programs provided by landlord, if
any, while intended to deter crime and ensure safety, may not in given instances
prevent theft or other criminal acts, or ensure safety of persons or property.
The risk that any safety or security device, service or program may not be
effective, or may malfunction, or be circumvented by a criminal, is assumed by
Tenant with respect to Tenant's property and interests, and Tenant shall obtain
insurance coverage to the extent Tenant desires protection against such criminal
acts and other losses, as further described in this Lease. Tenant agrees to
cooperate in any reasonable safety or security program developed by Landlord or
required by Law.
Any amounts which Tenant is required to pay to Landlord pursuant to
this Article VII shall be payable upon demand by Landlord and shall constitute
additional rent or Rent under this Lease.
ARTICLE VIII -MAINTENANCE AND REPAIRS
8.01 Landlord's Obligations.
(A) During the Lease Term, Landlord shall, at its expense,
maintain only the foundation and the structural soundness of the
exterior walls (excluding all windows, plate glass, doors and pest
control and extermination) of the portion of the Building containing
the Premises in good working order, repair and condition except for
reasonable wear and tear. Landlord also shall maintain, at its expense,
subject to reimbursement as part of Operating Expenses, the roof,
downspouts and fire safety sprinkler system of the Building. If Tenant
determines that any such repair or maintenance by Landlord is required,
Tenant shall promptly give written notice to Landlord of the need for
such repair or maintenance and unless Landlord in good faith disagrees
with such determination by Tenant, Landlord shall proceed with
reasonable promptness to perform such maintenance. Landlord shall not
be liable to Tenant, except as otherwise expressly provided in this
Lease, for any damage or inconvenience. Tenant shall not be entitled to
any abatement or reduction of Rent by reason of any repairs,
alterations or additions made by landlord under this Lease.
(B) Tenant shall, at its sole cost, pay for any damage to the
foundation and/or external walls of the Building, or the Project, if
applicable, caused by any act, omission, negligence or fault of Tenant
or any employee, agent or contractor of Tenant.
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8.02 Tenant's Obligations. During the Lease Term, Tenant shall, at its
risk and at its own sole cost and expense, maintain all other parts of the
Building and other improvements in or on the Premises in good working order,
repair and condition (including all necessary replacements), including, but not
limited to, HVAC systems, all glass elements, doors (including dock doors), dock
bumpers, light bulbs, light fixtures, regular mowing of any grass, trimming,
weed removal, and regular removal of debris. However, in a multi-occupancy
Building, Landlord reserves the right to perform lawn and other common area
maintenance (including, without limitation, exterior painting and maintenance of
any HVAC system serving the common areas of the Building or serving the Premises
as well as other premises in the Building) and in such instance Tenant agrees to
pay Landlord for lawn and other common area maintenance (including, without
limitation, exterior painting and HVAC maintenance) based on Tenant's Percentage
Share with respect to Operating Expenses, as provided in Article IV hereof (or,
with respect to HVAC maintenance, based on the ratio of the Rentable Area of the
Premises to the rentable area of all premises served by said HVAC system).
Tenant shall take good care of all property and its fixtures, including all
landscaping, and suffer no waste. Tenant shall engage a certified pest control
firm to perform regular (not less frequent than monthly but more frequent if
Landlord determines the need therefor) extermination for pests including, but
not limited to, roaches, rodents and termites. Should Tenant neglect to keep and
maintain the Premises as required herein, the Landlord shall have the right, but
not the obligation, to have the work done and any reasonable costs plus a ten
percent (10%) overhead charge therefor shall be charged to tenant as additional
rental and shall become payable by tenant with the payment of the rental next
due under this Lease. In connection with Tenant's maintenance and repair of the
HVAC systems, Tenant shall provide Landlord during the Term of this Lease and
any renewal hereof with a duplicate original of a maintenance contract, in form
and substance acceptable to Landlord, with an HVAC maintenance firm acceptable
to Landlord. Further Tenant shall be responsible for, and upon demand by
landlord shall promptly reimburse Landlord for, any damage to any portion of the
Project, if applicable, the Building or the Premises caused by (a) Tenant's
activities in the Building or the Premises; (b) the performance or existence of
any alternations, additions or improvements made by Tenant in or to the
Premises; (c) the installation, use, operation or movement of Tenant's property
in or about the Building or the Premises; or (d) any act or omission by Tenant
or its officers, partners, employees, agents, contractors or invitees.
8.03 Repair Damage. Tenant shall, at its own cost and expense, repair
or replace any damage or injury to all or any part of the Premises, the Building
and the Project, if applicable, caused by Tenant or Tenant's agents, employees,
invitees, licensees or visitors; provided, however, if Tenant fails to make such
repairs or replacements promptly, Landlord may, at its option, make such repairs
or replacements and Tenant shall reimburse the cost, plus a ten percent (10%)
overhead charge therefor, to Landlord on demand.
8.04 No Waste. Tenant shall not commit or allow any waste or damage to
be committed on any portion of the Premises.
8.05 Landlord's Rights. Landlord and its contractors shall have the
right, at all reasonable times and upon prior oral or telephone notice to Tenant
at the Premises, other than in the case of any emergency in which case no notice
shall be required, to enter upon the Premises to make any repairs to the
Premises or the Building reasonably required or deemed reasonably necessary by
Landlord and to erect such equipment, including scaffolding, as is reasonably
necessary to effect such repairs. During the pendency of such repairs, Landlord
shall use reasonable efforts to minimize any material interruption of Tenant's
business; provided, that if such repairs by Landlord are required to remedy an
emergency situation or to cure a breach or default by Tenant under this Lease,
Landlord shall not be obligated to minimize such interference.
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ARTICLE IX -ALTERATIONS, ADDITIONS AND IMPROVEMENTS
9.01 Landlord's Consent; Conditions. Tenant shall not make or permit to
be made any alternations, additions, or improvements in or to the Premises
("Alterations") without the prior written consent of Landlord, which consent,
with respect to non-structural alterations, shall not be unreasonably withheld
or delayed. Landlord may impose as a condition to making any Alterations such
requirements as Landlord in its sole discretion deems necessary or desirable
including without limitation: Tenant's submission to Landlord, for Landlord's
prior written approval, of all plans and specifications relating to the
Alterations; Landlord's prior written approval of the time or times when the
Alterations are to be performed; Landlord's prior written approval of the
contractors and subcontractors performing work in connection with the
Alterations; employment only of union contractors and subcontractors who shall
not cause labor disharmony; Tenant's receipt of all necessary permits and
approvals from all governmental authorities having jurisdiction over the
Premises prior to the construction of the Alterations; Tenant's delivery to
Landlord of such bonds and insurance as Landlord shall reasonably require; and
Tenant's payment to Landlord of all costs and expenses incurred by Landlord
because of Tenant's Alterations, including but not limited to costs incurred in
reviewing the plans and specifications for, and the progress of, the
Alterations. Tenant is required to provide Landlord written notice of whether
the Alterations include the Handling of any Hazardous Materials and whether
these materials are of a customary and typical nature for industry practices.
upon completion of the Alterations, Tenant shall provide Landlord with copies of
as-built plans. Neither the approval by Landlord of plans and specifications
relating to any Alterations nor Landlord's supervision or monitoring of any
Alterations shall constitute any warranty by Landlord to Tenant of the adequacy
of the design for Tenant's intended use or the proper performance of the
Alterations.**/
9.02 Performance of Alterations Work. All work relating to the
Alterations shall be performed in compliance with the plans and specifications
approved by landlord, all applicable laws, ordinances, rules, regulations and
directives of all governmental authorities having jurisdiction (including
without limitation Title 24 of the California Administrative Code) and the
requirements of all carriers of insurance on the Premises and the Building, the
Board of Underwriters, Fire Rating Bureau, or similar organization. All work
shall be performed in a diligent, first class manner and so as not to
unreasonably interfere with any other tenants or occupants of the Building or
the Project, if applicable. All costs incurred by Landlord relating to the
Alterations shall be payable to Landlord by Tenant as additional rent upon
demand. No asbestos-containing materials shall be used or incorporated in the
Alterations. No lead-containing surfacing material, solder, or other
construction materials or fixtures where the presence of lead might create a
condition or exposure not in compliance with Environmental Laws shall be
incorporated in the Alterations.
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9.03 Liens. Tenant shall pay when due all costs for work performed and
material supplied to the Premises. Tenant shall keep Landlord, the Premises and
the Building free from all liens, stop notices and violation notices relating to
the Alterations or any other work performed for, materials furnished to or
obligations incurred by or for Tenant and Tenant shall protect, indemnify, hold
harmless and defend Landlord, the Premises and the Building of and from any and
all loss, cost, damage, liability and expense, including attorneys' fees,
arising out of or related to any such liens or notices. Further, Tenant shall
give Landlord not less than seven (7) business days prior written notice before
commencing any Alterations in or about the Premises to permit Landlord to post
appropriate notices of non-responsibility. Tenant shall also secure, prior to
commencing any Alternations, at Tenant's sole expense, a completion and lien
indemnity bond satisfactory to Landlord for such work. During the progress of
such work, Tenant shall, upon Landlord's request, furnish Landlord with sworn
contractor's statements and lien waivers covering all work theretofore
performed. Tenant shall satisfy or otherwise discharge all liens, stop notices
or other claims or encumbrances within ten (10) days after Landlord notifies
Tenant in writing that any such lien, stop notice, claim or encumbrance has been
filed. If Tenant fails to pay and remove such lien, claim or encumbrance within
such ten (10) days, Landlord, at its election, may pay and satisfy the same and
in such event the sums so paid by landlord, with interest from the date of
payment at the rate set forth in Section 4.06 hereof for amounts owed Landlord
by Tenant shall be deemed to be additional rent due and payable by Tenant at
once without notice or demand.
9.04 Removal of Alterations. All Alterations shall become a part of the
Premises and shall become the property of Landlord upon the expiration or
earlier termination of this Lease, unless Landlord shall, by written notice
given to Tenant, require Tenant to remove some or all of Tenant's Alterations,
(whether installed during the Term of this Lease or any previous occupancy of
the Premises by Tenant), in which event Tenant shall promptly remove the
designated Alterations and shall promptly repair any resulting damage, all at
Tenant's sole expense. All business and trade fixtures, machinery and equipment,
furniture, movable partitions and items of personal property owned by Tenant or
installed by Tenant at its expense in the Premises shall be and remain the
property of Tenant; upon the expiration or earlier termination of this Lease.
Tenant shall, at its sole expense, remove all such items and repair any damage
to the Premises or the Building caused by such removal. If Tenant fails to
remove any such items or repair such damage promptly after the expiration of
earlier termination of the Lease, Landlord may, but need not, do so with no
liability to Tenant, and Tenant shall pay Landlord the cost thereof upon demand.
notwithstanding the foregoing to the contrary, in the event Landlord gives its
consent, pursuant to the provisions of Section 9.01 of this Lease, to allow
Tenant to make an Alteration in the Premises, Landlord agrees, upon Tenant's
written request, to notify Tenant in writing at the time of the giving of such
consent whether Landlord will require Tenant, at Tenant's cost, to remove such
Alteration at the end of the Lease Term.
ARTICLE X -INDEMNIFICATION AND INSURANCE
10.01 Indemnification.
(A) Tenant agrees to protect, indemnify, hold harmless and
defend Landlord and any Mortgagee, as defined herein, and each of their
respective partners, directors, officers, agents and employees,
successors and assigns, regardless of any negligence of, or imputed to
Landlord as owner of the Building, Premises or underlying real
property, from and against:
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(i) any and all loss, cost, damage, liability or
expense as incurred (including but not limited to actual attorneys';
fees and legal costs) arising out of or related to any claim, suit or
judgment brought by or in favor of any person or persons for damage,
loss or expense due to, but not limited to, bodily injury, including
death, or property damage sustained by such person or persons which
arises out
- --------------
**/ Notwithstanding the foregoing and the provisions of Article 9.01 Tenant
may make non-structural alterations to the interior of the Premises costing less
than $5,000.00 without obtaining the Landlord's consent.
of, is occasioned by or is in any way attributable to the use or
occupancy of the Premises or any portion of the Building or the
Project, if applicable, by Tenant or the acts or omissions of Tenant or
its agents, employees, contractors, clients, invitees or subtenants
except that caused by the sole active negligence of Landlord or its
agents or employees. Such loss or damage shall include, but not be
limited to, any injury or damage to, or death of, Landlord's employees
or agents or damage to the Premises or any portion of the Building or
the Project, if applicable.
(ii) any and all environmental damages which arise
from: (i) the Handling, presence or migration of any Tenant's Hazardous
Materials, as defined in Section 6.03 or (ii) the breach of any of the
provisions of this Lease. For the purpose of this Lease, "environmental
damages" shall mean (a) all claims, judgments, damages, penalties,
fines, costs, liabilities, and losses (including without limitation,
diminution in the value of the premises or any portion of the Building
or the Project, if applicable, damages for the loss of or restriction
on the use of rentable or usable space or of any amenity of the
Premises or any portion of the Building or the Project, if applicable,
and from any adverse impact of Landlord's marketing of space); (b) all
reasonable sums paid for settlement of claims, attorneys' fees,
consultants' fees and experts' fees; and (c) all costs incurred by
Landlord in connection with investigation or remediation relating to
the Handling of Tenant's Hazardous Materials, whether or not required
by Environmental Laws, necessary for Landlord to make full economic use
of the Premises or any portion of the Building or the Project, if
applicable, or otherwise required under this Lease. To the extent that
Landlord is strictly liable under any Environmental Laws, Tenant's
obligation to Landlord and the other indemnities under the foregoing
indemnification shall likewise be without regard to fault on Tenant's
part with respect to the violation of any Environmental Law which
results in liability to the indemnitee. Tenant's obligations and
liabilities pursuant to this Section 10.01 shall survive the expiration
or earlier termination of this Lease.
(iii) any and all testing or investigation as may be
requested by any governmental agency or lender for the purpose of
investigating the presence of Tenant's Hazardous Materials that may not
be in compliance with Environmental Laws.
(B) Notwithstanding anything to the contrary contained herein,
nothing shall be interpreted or used to in any way affect, limit,
reduce or abrogate any insurance coverage provided by any insurers to
either Tenant or Landlord.
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(C) Notwithstanding anything to the contrary contained in this
Lease, nothing herein shall be construed to infer or imply that Tenant
is a partner, joint venturer, agent, employee, or otherwise acting by
or at the direction of Landlord.
10.02 Property Insurance.
(A) At all times during the Lease Term, Tenant shall procure
and maintain, at its sole expense, "all-risk" property insurance, for
damage or other loss caused by fire or other casualty or cause
including, but not limited to, vandalism and malicious mischief, theft,
water damage of any type, including sprinkler leakage, bursting of
pipes, explosion, in any amount not less than one hundred percent
(100%) of the replacement cost covering (a) all leasehold improvements
in and to the Premises and (b) Tenant's trade fixtures, equipment,
business records and other personal property from time to time situated
in the Premises, including, without limitation, all floor and wall
coverings. The proceeds of such insurance shall be used for the repair
or replacement of the property so insured, except that if not so
applied or if this Lease is terminated following a casualty, the
proceeds applicable to the leasehold improvements shall be paid to
Landlord and the proceeds applicable to Tenant's personal property
shall be paid to Tenant.
(B) At all times during the Lease Term, Tenant shall procure
and maintain business interruption insurance in such amount as will
reimburse Tenant for direct or indirect loss of earnings attributable
to all perils insured against in Section 10.02(A).
(C) Landlord shall at all times during the Lease Term procure
and maintain "all-risk" property insurance in the amount not less than
ninety percent (90%) of the insurable replacement cost covering the
Building in which the Premises are located and such other insurance as
may be required by a Mortgagee or otherwise desired by Landlord.
10.03 Liability Insurance.
(A) At all times during the Lease Term, Tenant shall procure
and maintain, at its sole expense, commercial general liability
insurance applying to the use and occupancy of the Premises and the
business operated by Tenant. Such insurance shall have a minimum
combined single limit of liability of at least Two Million Dollars
($2,000,000) per occurrence and a general aggregate limit of at least
Two Million Dollars, ($2,000,000). All such policies shall be written
to apply to all bodily injury, property damage, personal injury losses
and shall be endorsed to include Landlord and its agents,
beneficiaries, partners, employees, and any deed of trust holder or
mortgagee of Landlord or any ground lessor as additional insured. (A
list of the current persons and entities to be named as additional
insureds is attached hereto as Exhibit E.) Such liability insurance
shall be written as primary policies, not excess or contributing with
or secondary to any other insurance as may be available to the Landlord
or additional insured.
17
(B) Prior to the sale, storage, use or giving away of
alcoholic beverages on or from the Premises by Tenant or another
person, Tenant, at its own expense, shall obtain a policy or policies
of insurance issued by a responsible insurance company and in a form
acceptable to Landlord saving harmless and protecting Landlord and the
Premises against any and all damages, claims, liens, judgments,
expenses and costs, including actual attorney's fees, arising under any
present or future law, statute, or ordinance of the State of California
or other governmental authority having jurisdiction of the Premises, by
reason of any storage, sale, use or giving away of alcoholic beverages
on or from the Premises. Such policy or policies of insurance shall
have a minimum combined single limit of One Million Dollars
($1,000,000) per occurrence and shall apply to bodily injury, fatal or
nonfatal; injury to means of support; and injury to property of any
person. Such policy or policies of insurance shall name the Landlord
and its agents, beneficiaries, partners, employees and any mortgagee of
Landlord or any ground lessor of Landlord as additional insureds. (A
list of the current persons and entities to be named as additional
insureds is attached hereto as Exhibit E.)
(C) Landlord shall, at all times during the Lease Term,
procure and maintain commercial general liability insurance for the
Building and Common Area in which the Premises are located. Such
insurance shall have minimum combined single limit of liability of at
least Two Million Dollars ($2,000,000) per occurrence, and a general
aggregate limit of at least Two Million Dollars ($2,000,000).
10.04 Workers' Compensation Insurance. At all times during the Lease
Term, Tenant shall procure and maintain Workers' Compensation Insurance in
accordance with the laws of the State of California, and Employers' Liability
insurance with a limit not less than One Million Dollars ($1,000,000) Bodily
Injury Each Accident; One Million Dollars ($1,000,00) Bodily Injury By Disease -
Each Person; and One Million Dollars ($1,000,000) Bodily Injury by Disease -
Policy Limit.
10.05 Automobile Liability Insurance. At all times during the Lease
Term, Tenant shall provide and maintain at its sole expense, commercial
automobile liability insurance including owned, non-owned and hired vehicles,
applying to the use of any vehicles arising out of the operations of Tenant.
Such insurance shall apply to bodily injury and property damage in a combined
single limit of not less than One Million Dollars ($1,000,000) per accident.
10.06 Plate Glass Insurance. At any time during the Lease Term when
there is plate glass in or on the Premises, Tenant shall procure and maintain,
at its sole expense, plate glass insurance covering all the plate glass of the
Premises in amounts satisfactory to Landlord.
10.07 Warehouseman's Insurance. At any time during the Lease Term when
Tenant's use of the Premises includes or involves any activity as a bonded
agent, consignee or warehouseman, Tenant shall procure and maintain, at its sole
expense, insurance covering all goods and materials held at the Premises in such
capacity, providing protection against all damage, loss, theft, or other peril
which may occur in connection therewith in an amount not less than Five Million
Dollars ($5,000,000.00).
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10.08 Policy Requirements. All insurance required to be maintained by
Tenant shall be issued by insurance companies authorized to do insurance
business in the State of California and related not less than A-VIII in Best's
Insurance Guide or a Standard and Poor's claims paying ability rating of not
less than AA. A certificate of insurance (or, at Landlord's option, copies of
the applicable policies) evidencing the insurance required under this Article X
shall be delivered to landlord not less than thirty (30) days prior to the
Commencement Date. No such policy shall be subject to cancellation or
modification without thirty(30) days prior written notice to Landlord and to any
deed of trust holder, mortgagee or ground lessor designated by Landlord to
Tenant. Tenant shall furnish Landlord with a replacement certificate with
respect to any insurance not less than thirty (30) days prior to the expiration
of the current policy. Tenant shall have the right to provide the insurance
required by this Article X pursuant to blanket policies, but only if such
blanket policies expressly provide coverage to the Premises and the Landlord as
required by this Lease.
10.09 Waiver of Claims. Except for claims arising from Landlord's
intentional or grossly negligent acts that are not covered by Tenant's insurance
hereunder, Tenant waives all claims against Landlord of injury or death to
persons, damage to property or to any other interest of Tenant sustained by
Tenant or any party claiming through Tenant resulting from: (i) any occurrence
in or upon the Premises, (ii) leaking of roofs, bursting, stoppage or leaking of
water, gas, sewer or steam pipes or equipment, including sprinklers, (iii) wind,
rain, snow, ice, flooding, freezing, fire, explosion, earthquake, excessive heat
or cold, fire or other casualty, (iv) the Building, Premises, systems or
equipment therefor being defective, out of repair, or failing, and (v)
vandalism, malicious mischief, theft or other acts or omissions or any other
parties including, without limitation, other tenants, contractors and invitees.
To the extent that Tenant is required to or does carry insurance hereunder,
Tenant agrees that Tenant's property loss risks shall be borne by such
insurance, and Tenant agrees to look solely to and seek recovery only from its
insurance carriers in the event of such losses; for purposes hereof, any
deductible amount shall be treated as though it were recoverable under such
policies.
10.10 Waiver of Subrogation. Each party hereby waives any right of
recovery against the other for injury or loss covered by insurance or required
to be covered, to the extent of the injury or loss covered thereby. Any policy
of insurance to be provided by Tenant pursuant to this Article X shall contain a
clause denying the insurer any right of subrogation against Landlord.
10.11 Failure to Insure. If Tenant fails to maintain any insurance
which Tenant is required to maintain pursuant to this Article X, Tenant shall be
liable to Landlord for any loss of cost resulting from such failure to maintain.
Tenant may not self-insure against any risks required to be covered by insurance
without Landlord's prior written consent.
ARTICLE XI -DAMAGE OR DESTRUCTION
11.01 Total Destruction. Except as provided in Section 11.03 below,
this Lease shall automatically terminate if the Building is totally destroyed.
19
11.02 Partial Destruction of Premises. If the Premises are damaged by
any casualty and, in landlord's opinion, the Premises (exclusive of any
Alterations made to the Premises by Tenant) can be restored to its pre-existing
condition within one hundred eighty (180) days after the date of the damage or
destruction using only the insurance proceeds made available to Landlord,
Landlord shall, upon written notice from Tenant to Landlord of such damage,
except as provided in Section 11.03, promptly and with due diligence use
available insurance proceeds to repair any damage to the Premises (exclusive of
any Alterations to the Premises made by Tenant, which shall be promptly repaired
by Tenant at its sole expense) and, until such repairs are completed, the Rent
shall be abated from the date of damage or destruction in the same proportion
that the rentable area of the portion of the Premises which is unusable by
Tenant in the conduct of its business bears to the total rentable area of the
Premises. If such repairs cannot, in Landlord's opinion, either (i) be made
within said one hundred eighty (180) day period, or (ii) be completed using only
the insurance proceeds made available to Landlord, then Landlord may, at its
option, exercisable by written notice given to Tenant within thirty (30) days
after the date of the damage or destruction, elect to make the repairs within a
reasonable time after the damage or destruction, in which event this Lease shall
remain in full force and effect but the Rent shall be abated as provided in the
preceding sentence; if Landlord does not so elect to make the repairs, then
either Landlord or Tenant shall have the right, by written notice given to the
other within sixty (60) days after the date of the damage or destruction, to
terminate this Lease as of the date of the damage or destruction.
11.03 Exceptions to Landlord's Obligations. Notwithstanding anything to
the contrary contained in this Article XI, Landlord shall have no obligation to
repair the Premises if either: (a) the Building in which the Premises are
located is so damaged as to require repairs to the Building exceeding twenty
percent (20%) of the full insurable value of the Building; or (b) Landlord
elects to demolish the Building in which the Premises are located; or (c) the
damage or destruction occurs less than two (2) years prior to the Expiration
Date, exclusive of option periods. In addition, Landlord's obligation to repair
as set forth in this Article XI shall be limited to the extent of insurance
proceeds made available to Landlord. Further, Tenant's Rent shall not be abated
if either (i) the damage or destruction is repaired within five (5) business
days after Landlord receives written notice from Tenant of the casualty, or (ii)
Tenant, or any officers, partners, employees, agents or invitees of Tenant, or
any assignee or subtenant of Tenant, is, in whole or in part, responsible for
the damage or destruction.
11.04 Waiver. The provisions contained in this Lease shall supersede
any contrary laws (whether statutory, common law or otherwise) now or hereafter
in effect relating to damage, destruction, self-help or termination, including
California Civil Code Sections 1932 and 1933. Notwithstanding the provisions of
Article XI, in the event the Lease is terminated by either Landlord or Tenant
under Article XI the Security Deposit shall be returned to Tenant.
ARTICLE XII -CONDEMNATION
12.01 Taking. If the entire Premises or so much of the Premises as to
render the balance unusable by Tenant shall be taken by condemnation, sale in
lieu of condemnation or in any other manner for any public or quasi-public
purpose (collectively "Condemnation"), and if the Landlord, at its option, is
unable or unwilling to provide substitute premises containing at least as much
rentable area as described in Section 1.02 above, then this Lease shall
terminate on the date that title or possession to the Premises is taken by the
condemning authority, whichever is earlier.
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12.02 Award. In the event of any Condemnation, the entire aware for
such taking shall belong to Landlord. Tenant shall have no claim against
Landlord or the award of the value of any unexpired term of this Lease or
otherwise. Tenant shall be entitled to independently pursue a separate award in
a separate proceeding for Tenant's relocation costs directly associated with the
taking, provided such separate award does not diminish Landlord's award.
12.03 Temporary Taking. No temporary taking of the Premises shall
terminate this Lease or entitle Tenant to any abatement of the Rent payable to
Landlord under this Lease; provided, further, that any award for such temporary
taking shall belong to Tenant to the extent that the award applies to any time
period during the Lease Term and to Landlord to the extent that the award
applies to any time period outside the Lease Term.
ARTICLE XIII -ASSIGNMENT AND SUBLETTING
13.01 Restriction. Without the prior written consent of Landlord,
Tenant shall not, either voluntarily or by operation of law, assign encumber, or
otherwise transfer this Lease or any interest herein, or sublet the Premises or
any part thereof, or permit the Premises to be occupied by anyone other than
Tenant or Tenant's employees (any such assignment, encumbrance, subletting,
occupation or transfer is hereinafter referred to as a "Transfer"). For purposes
of this Lease, the term "Transfer" shall also include (as) if Tenant is a
partnership, the withdrawal or change, voluntary, involuntary or by operation of
law, or a majority of the partners, or a transfer of a majority of partnership
interest, within a twelve month period, or the dissolution of the partnership,
and (b) if Tenant is a closely held corporation (i.e., whose stock is not
publicly held and not traded through an exchange or over the counter), or a
limited liability company, the dissolution, merger, consolidation, division,
liquidation or other reorganization of Tenant, or within a twelve month period:
(i) the sale or other transfer of more than an aggregate of 50% of the voting
securities of Tenant (other than to immediate family members by reason of gift
or death) or (ii) the sale, mortgage, hypothecation or pledge of more than an
aggregate of 50% of Tenant's net assets. An assignment, subletting or other
action in violation of the foregoing shall be void and, at Landlord's option,
shall constitute a material breach of this Lease. notwithstanding anything
contained in this Article XIV to the contrary, Tenant shall have the right to
assign the Lease or sublease the Premises, or any part thereof, to an
"Affiliate" without the prior written consent of Landlord, but upon at least
twenty (20) days prior written notice to Landlord, provided that the use of the
Premises by said Affiliate is identical to the use in Section 1.10 of the Lease,
and provided further that said Affiliate is not in default under any other lease
for space in a property that is managed by Heitman Properties Ltd. or any of its
affiliates. For purposes of this provision, the term "Affiliate" shall mean any
corporation or other entity controlling, controlled by, or under common control
with (directly or indirectly) Tenant, including, without limitation, any parent
corporation controlling Tenant or any subsidiary that Tenant controls. The term
"control", as used herein, shall mean the power to direct or cause the direction
of the management and policies for the controlled entity through the ownership
of more than fifty percent (50%) of the voting securities in such controlled
entity. Notwithstanding anything contained in this Article XIV to the contrary,
Tenant expressly covenants and agrees not to enter into any lease, sublease,
license, concession or other agreement for use, occupancy or utilization of the
Premises which provides for rental or other payment for such use, occupancy or
utilization based in whole or in part on the net income or profits derived by
any person from the property leased, used, occupied or utilized (other than an
amount based on a fixed percentage or percentages of receipts or sales), and
that any such purported lease, sublease, license, concession or other agreement
shall be absolutely void and ineffective as a conveyance of any right or
interest in the possession, use, occupancy or utilization of any part of the
Premises.
13.02 Notice to Landlord. If Tenant desires to assign this Lease or any
interest herein, or to sublet all or any part of the Premises, then at least
thirty (30) days but not more than one hundred eighty (180) days prior to the
effective date of the proposed assignment or subletting, Tenant shall submit to
Landlord in connection with Tenant's request for Landlord's consent:
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(A) A statement containing (i) the name and address of the
proposed assignee or subtenant; (ii) such financial information with
respect to the proposed assignee or subtenant as Landlord shall
reasonably require; (iii) the type of use proposed of the Premises; and
(iv) all of the principal terms of the proposed assignment or
subletting; and
(B) Four (4) originals of the assignment or sublease on a form
approved by Landlord and four (4) originals of the Landlord's Consent
to Sublease or Assignment and Assumption of Lease and Consent.
13.03 Landlord's Recapture Rights. At any time within twenty(20)
business days after Landlord's receipt of all (but not less than all) of the
information and documents described in Section 14.02 above, Landlord may, at its
option by written notice to Tenant, elect to: (a) sublease the Premises or the
portion thereof proposed to be sublet by Tenant upon the same terms as those
offered to the proposed subtenant; (b) take an assignment of the Lease upon the
same terms as those offered to the proposed assignee; or (c) terminate the Lease
in its entirety or as to the portion of the Premises proposed to be assigned or
sublet, with a proportionate adjustment in the Rent payable hereunder if the
Lease is terminated as to less than all of the Premises. If Landlord does not
exercise any of the options described in the preceding sentence, then, during
the above described twenty (20) business day period, Landlord shall either
consent or deny its consent to the proposed assignment or subletting.***/
- ------------
***/ "Notwithstanding the foregoing, Landlord's termination right set forth
in this paragraph shall not apply to the extent of a sublease or assignment of
less than 25^ of the rentable square footage in the Premises. In addition, in
the event Landlord elects to terminate the Lease in accordance with the terms of
this article, such termination shall not be effective and the lease shall remain
in full force and effect if Tenant revokes in writing its prior request for
consent within 48 hours after receiving Landlord's termination notice".
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13.04 Landlord's Consent; Standards. Landlord's consent to a proposed
assignment or subletting shall not be unreasonably withheld; but, in addition to
any other grounds for denial, landlord's consent shall be deemed reasonably
withheld if, in Landlord's good faith judgment: (i) the proposed assignee or
subtenant does not have the financial strength to perform its obligations under
this Lease or any proposed sublease; (ii) the business and operations of the
proposed assignee or subtenant are not of comparable quality to the business and
operations being conducted by other tenants in the Building; (iii) the proposed
assignee or subtenant intends to use any part of the Premises for a purpose not
permitted under the Lease; (iv) either the proposed assignee or subtenant, or
any person which directly or indirectly controls, is controlled by, or is under
common control with the proposed assignee or subtenant occupies space in the
Building or the Project, if applicable, or is negotiating with Landlord to lease
space in the Building or the Project, if applicable; (v) the proposed assignee
or subtenant is disreputable; or (vi) the use impact the Building in a negative
manner including, but not limited to, significantly increasing the pedestrian
traffic, parking capacity and requirements, and truck traffic in and out of the
Building or requiring any alterations to the ingress and egress suitable for
normal renting purposes; (vii) the transferee is a government (or agency or
instrumentality thereof) or (ix) Tenant has failed to cure a default at the time
Tenant requests consent to the proposed Transfer.
13.05 Additional Rent. If Landlord consents to any such assignment or
subletting, all sums or other economic consideration received by Tenant in
connection with such assignment or subletting, whether denominated as rental or
otherwise, exceeds, in the aggregate, the total sum which Tenant is obligated to
pay Landlord under this Lease (prorated to reflect obligations allocable to less
than all of the Premises under a sublease) shall be paid to Landlord promptly
after receipt as additional Rent under the Lease without affecting or reducing
any other obligation of Tenant hereunder.
13.06 Landlord's Costs. If Tenant shall Transfer this Lease of all or
any part of the Premises or shall request the consent of Landlord to any
Transfer, Tenant shall pay to Landlord as additional rent Landlord's costs
related thereto, including Landlord's reasonable attorneys' fees and a minimum
fee to Landlord of Five Hundred Dollars ($500.00).
13.07 Continuing Liability of Tenant. Notwithstanding any Transfer,
including an assignment or sublease to an affiliate, Tenant shall remain as
fully and primarily liable for the payment of Rent and for the performance of
all other obligations of Tenant contained in this Lease to the same extent as if
the Transfer had not occurred; provided, however, that any act or omission of
any transferee that violates the terms of this Lease shall be deemed as
violation of this Lease by Tenant.
13.08 Non-Waiver. The consent by Landlord to any Transfer shall not
relieve Tenant, or any person claiming through or by Tenant, of the obligation
to obtain the consent of Landlord, pursuant to this Article XIV, to any further
Transfer. In the event of an assignment or subletting, Landlord may collect rent
from the assignee or the subtenant without waiving any rights hereunder and
collection of the rent from a person other than Tenant shall not be deemed as
waiver of any of Landlord's rights under this Article XIV, an acceptance of
assignee or subtenant as Tenant, or a release of Tenant from the performance of
Tenant's obligations under this Lease. If Tenant shall default under this Lease
and fail to cure within the time permitted, Landlord is irrevocably authorized,
as Tenant's agent and attorney-in-fact, to direct any assignee or subtenant to
make all payments under or in connection with he Transfer directly to Landlord
(which Landlord shall apply towards Tenant's obligations under the Lease) until
such default is cured.
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ARTICLE XIV - DEFINITIONS
14.01 Events of Default By Tenant. The occurrence of any of the
following shall constitute a material default and breach of this Lease by
Tenant:
(A) The failure by Tenant to pay Base Rent or make any other
payment required to be made by Tenant hereunder as and when due.
(B) The abandonment of the Premises by Tenant or the vacation
of the Premises by Tenant for fourteen (14) consecutive days (with or
without the payment of Rent).
(C) The making by Tenant of any assignment of this Lease or
any sublease of all or part of the Premises, except as expressly
permitted under Article XIV of this Lease.
(D) The failure by Tenant to observe or perform any other
provisions of this Lease to be observed or performed by Tenant, other
than those described in Sections 15.01(A), 15.01(B) or 15.01(C) above,
if such failure continues for thirty (30) days after written notice
thereof by Landlord to Tenant; provided, however, that if the nature of
the default is such that it cannot be cured within the thirty (30) day
period, no default shall be deemed to exist if Tenant commences the
curing of the default promptly within such thirty (30) day period and
thereafter diligently prosecutes the same to completion and achieves
the same within sixty (60) days after the occurrence of such default.
The thirty (30) day notice described herein shall be in lieu of, and
not in addition to, any notice required under Section 1161 of the
California Code of Civil Procedure or any other law now or hereafter in
effect requiring that notice of default be given prior to the
commencement of an unlawful detainer or other legal proceedings.
(E) The making by Tenant of any general assignment for the
benefit of creditors, the filing by or against Tenant or any one or
more of the Guarantors, if any, of a petition under any federal or
state bankruptcy or insolvency laws (unless, in the case of a petition
filed against Tenant or any one or more of the Guarantors, if any, the
same is dismissed within thirty (30) days after filing); the
appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets at the Premises or Tenant's
interest in this Lease or the Premises, when possession is not restored
to Tenant within thirty (30) days; the attachment, execution or other
seizure of substantially all of Tenant's assets located at the Premises
or Tenant's interest in this Lease or the Premises, if such seizure is
not discharged within thirty (30) days; or the death or the dissolution
of Tenant or any one or more of the Guarantors, if any.
(F) Any material misrepresentation herein, or material
misrepresentation or omission in any financial statements or other
materials provided by Tenant in connection with negotiating or entering
into this Lease or in connection with any Transfer under Section 14.01.
14.02 Landlord's Right to Terminate Upon Tenant Default. In the event
of any default by Tenant as provided in Section 15.01 above, Landlord shall have
the right to terminate this Lease and recover possession of the Premises by
giving written notice to Tenant of Landlord's election to terminate this Lease,
in which event Landlord shall be entitled to receive from Tenant:
24
(A) The worth at the time of award of any unpaid Rent which
had been earned at the time of such termination; plus
(B) The worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss Tenant proves
could have been reasonably avoided; plus
(C) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably
avoided; plus
(D) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which int he ordinary course of things
would be likely to result therefrom; and
(E) At Landlord's election, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time by
applicable law.
As used in subparagraphs (A) and (B) above, "worth at the time of
award" shall be computed by allowing interest on such amounts at the then
highest lawful rate of interest, but in no event to exceed one percent (1%) per
annum plus the rate established by the Federal Reserve Bank of San Francisco on
advances made to member banks under Section 13 and 13a of the Federal Reserve
Act ("discount rate") prevailing at the time of the award. As used in paragraph
(C) above, "worth at the time of award" shall be computed by discounting such
amount by (i) the discount rate of the Federal Reserve Bank of San Francisco
prevailing at the time of award plus (ii) one percent (1%).
14.03 Mitigation of Damages. If Landlord terminates this Lease or
Tenant's right to possession of the Premises, Landlord shall have no obligation
to mitigate Landlord's damages except to the extent required by applicable law.
If Landlord has not terminated this Lease or Tenant's right to possession of the
Premises, Landlord shall have no obligation to mitigate under any circumstances
and may permit the Premises to remain vacant or abandoned. If Landlord is
required to mitigate damages as provided herein: (i) Landlord shall be required
only to use reasonable efforts to mitigate, which shall not exceed such efforts
as Landlord generally uses to lease other space in the Building, (ii) Landlord
will not be deemed to have failed to mitigate if Landlord or its affiliates
lease any other portions of the Building, Project or other projects owned by
Landlord or its affiliates int he same geographic area, before reletting all or
any portion of the Premises, and (iii) any failure to mitigate as described
herein with respect to any period of time shall only reduce the Rent and other
amounts to which Landlord is entitled hereunder by the reasonable rental value
of the Premises during such period. In recognition that the value of the
Building depends on the rental rates and terms of leases therein, Landlord's
rejection of a prospective replacement tenant based on any offer or rentals
below Landlord's published rates for new leases of comparable space at the
Building at the time in question, or at Landlord's option, below the rates
provided in this Lease, or containing terms less favorable than those contained
herein, shall not give rise to a claim by Tenant that Landlord failed to
mitigate Landlord's damages.
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14.04 Landlord's Right To Continue Lease Upon Tenant Default. In the
event of a default of this Lease and abandonment of the Premises by Tenant, if
Landlord does not elect to terminate this Lease as provided in Section 15.02
above, Landlord may from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease. Without limiting the foregoing,
Landlord has the remedy described in California Civil Code Section 1951.4
(Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
Transfer, subject only to reasonable limitations). In the event Landlord re-lets
the Premises, to the fullest extent permitted by law, the proceeds of any
reletting shall be applied first to pay to Landlord all costs and expenses of
such reletting (including without limitation, costs and expenses of retaking or
repossessing the Premises, removing persons and property therefrom, securing new
tenants, including expenses for redecoration, alterations and other costs in
connection with preparing the Premises for the new tenant, and if Landlord shall
maintain and operate the Premises, the costs thereof) and receivers' fees
incurred in connection with the appointment of and performance by a receiver to
protect the Premises and Landlord's interest under this Lease and any necessary
or reasonable alterations; second, to the payment of any indebtedness of Tenant
to Landlord other than Rent due and unpaid hereunder; third, to the payment of
Rent due and unpaid hereunder; and the residue, if any, shall be held by
Landlord and applied in payment of other or future obligations of Tenant to
Landlord as the same may become due and payable, and Tenant shall not be
entitled to receive any portion of such revenue.
14.05 Right of Landlord to Perform. All covenants and agreements to bed
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense. If Tenant shall fail to pay any sum of money, other than
Rent, required to be paid by it hereunder or shall fail to perform any other act
on its part to be performed hereunder, Landlord may, but shall not be obligated
to, make any payment or perform any such other act on Tenant's part to be made
or performed, without waiving or releasing Tenant of its obligations under this
Lease. Any sums so paid by landlord and all necessary incidental costs, together
with interest thereon at the lesser of the maximum rate permitted by law if any
or twelve percent (12%) per annum from the date of such payment, shall be
payable to Landlord as additional rent on demand and Landlord shall have the
same rights and remedies in the event of nonpayment as in the case of default by
Tenant in the payment of Rent.
14.06 Default Under Other Leases. If the term of any lease, other than
this Lease, heretofore or hereafter made by Tenant for any space in the Building
or the Project, if applicable, shall be terminated or terminable after the
making of this Lease because of any default by Tenant under such other lease,
such fact shall empower Landlord, at Landlord's sole option, to terminate this
Lease by notice to Tenant or to exercise any of the rights or remedies set forth
in Section 14.02.
14.07 Non-Waiver. Nothing in this Article shall be deemed to affect
Landlord's rights to indemnification for liability or liabilities arising prior
to termination of this Lease or Tenant's right to possession of the Premises for
personal injury or property damages under the indemnification clause or clauses
contained in this Lease. No acceptance by Landlord of a lesser sum than the Rent
then due shall be deemed to be other than on account of the earliest installment
of such Rent due, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or pursue any other
remedy in the Lease provided. The delivery of keys to any employee of Landlord
or to Landlord's agent or any employee thereof shall not operate as a
termination of this Lease or a surrender of the Premises, unless Landlord in
writing both accepts such surrender and acknowledges such termination.
26
14.08 Cumulative Remedies. The specific remedies to which Landlord may
resort under the terms of the Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which it may be lawfully
entitle din case of any breach or threatened breach by Tenant of any provisions
of the Lease. In addition to the other remedies provided in the Lease, Landlord
shall be entitled to a restraint by injunction of the violation or attempted or
threatened violation of any of the covenants, conditions or provisions of the
Lease or to a decree compelling specific performance of any such covenants,
conditions or provisions.
14.09 Default by Landlord. Landlord's failure to perform or observe any
of its obligations under this Lease shall constitute a default by Landlord under
this Lease only if such failure shall continue for a period of thirty (30) days
for the additional time, if any, that is reasonably necessary to promptly and
diligently cure the failure after Landlord receives written notice from Tenant
specifying the default. The notice shall give in reasonable detail the nature
and extent of the failure and shall identify the Lease provision(s) containing
the obligation(s). If Landlord shall default in the performance of any of its
obligations under this Lease (after notice and opportunity to cure as provided
herein), Tenant may pursue any remedies available to it under the law and this
Lease, except that, in no event shall Landlord be liable for punitive damages,
lost profits, business interruption, speculative, consequential or other such
damages.
ARTICLE XV - ATTORNEYS FEES: COST OF SUIT
If either Landlord or Tenant shall commence any action or other
proceeding against the other arising out of, or relating to, this Lease or the
Premises, the prevailing party shall be entitled to recover from the losing
party, in addition to any other relief, its actual attorneys fees irrespective
of whether or not the action of other proceeding is prosecuted to judgment and
irrespective of any court schedule of reasonable attorneys' fees. In addition,
Tenant shall reimburse Landlord, upon demand, for all reasonable attorneys' fees
incurred in collecting Rent or otherwise seeking enforcement against Tenant, its
sublessees and assigns, of Tenant's obligations under this Lease.
Should Landlord be made a party to any litigation instituted by Tenant
against a party other than Landlord, or by a third party against Tenant, Tenant
shall indemnify, hold harmless and defend Landlord from any and all loss, cost,
liability, damage or expense incurred by Landlord, including attorneys' fees, in
connection with the litigation, unless a final non-appealable judgment is
rendered against Landlord in such litigation.
ARTICLE XVI - SUBORDINATION AND ATTORNMENT
16.01 Subordination. This Lease, and the right of Tenant hereunder, are
and shall be subject and subordinate to the interests of (i) all present and
future ground leases and master leases of all or any part of the Building; (ii)
present and future mortgages and deeds of trust encumbering all of any part of
the Building or the underlying real estate; (iii) all past and future advances
made under any such mortgages or deeds of trust; and (iv) all renewals,
modifications, replacements and extensions of any such ground leases, master
leases, mortgages and deeds of trust; provided, however, that any lessor under
any such ground lease or master lease or any mortgagee or beneficiary under any
such mortgage or deed of trust (any such lessor, mortgagee or beneficiary is
hereafter referred to as a "Mortgagee") shall have the right to elect, by
written notice given to Tenant, to have this Lease made superior in whole or in
pat to any such ground lease, master lease, mortgage or deed of trust (or
subject and subordinate to such ground lease, master lease, mortgage or deed of
trust but superior to any junior mortgage or junior deed of trust). Upon demand,
Tenant shall execute, acknowledge and deliver any instruments reasonably
27
requested by Landlord or any such Mortgagee to effect the purposes of this
Section 16.01. Such instruments may contain, among other things, provisions to
the effect that such Mortgagee (hereinafter, for the purposes of this Section
16.01, a "Successor Landlord") shall (i) not be liable for any act or omission
of Landlord or its predecessors, if any, prior to the date of such Successor
Landlord's succession to Landlord's interest under this lease; (ii) not be
subject to any offsets or defenses which Tenant might have been able to assert
against Landlord or its predecessors, if any, prior to the date of such
Successor Landlord's succession to Landlord's interest under this Lease; (iii)
not be liable for the return of any security deposit under the Lease unless the
same shall have actually been deposited with such Successor Landlord; and (iv)
be entitled to receive notice of any Landlord default under this Lease plus a
reasonable opportunity to cure such default prior to Tenant having any right or
ability to terminate this Lease as a result of such Landlord default; (v) not be
bound by any rent or additional rent which Tenant might have paid for more than
the current month to Landlord; (vi) not be bound by any amendment or
modification of the Lease or any cancellation or surrender of the same made
without Successor Landlord's prior written consent; (vii) not be bound by any
obligation to make any payment to Tenant which was required to be made prior to
the time such Successor Landlord succeeded to Landlord's interest and (viii) not
be bound by any obligation under the Lease to perform any work or to make any
improvements to the demised Premises. Any obligations of any Successor Landlord
under its respective lease shall be non-recourse as to any assets of such
Successor Landlord other than its interest in the Premises and improvements.
(See Supplemental Rider Insert #1).
16.02 Attornment. If requested to do so, Tenant shall attorn to and
recognize as Tenant's landlord under this Lease any superior Mortgagee or other
purchaser or person taking title to the Building by reason of the termination of
any superior lease or the foreclosure of any superior mortgage or deed of trust,
and Tenant shall, upon demand, execute any documents reasonably requested by any
such person to evidence the attornment described in this Section 16.02.
16.03 Mortgage and Ground Lessor Protection. Tenant agrees to give any
Mortgagee, by registered or certified mail, a copy of any notice of default
served upon the Landlord by Tenant, provided that prior to such notice Tenant
has been notified in writing (by way of service on Tenant of a copy of
Assignment of Rents and Leases, or otherwise) of the address o such Mortgagee
(hereinafter the "Notified Party"). Tenant further agrees that if Landlord shall
have failed to cure such default within twenty (20) days after such notice to
Landlord (or if such default cannot be cured or corrected within that time, then
such additional time as may be necessary if Landlord has commenced within such
twenty (20) days and is diligently pursuing the remedies or steps necessary to
cure or correct such default), then the Notified Party shall have an additional
thirty (30) days within which to cure or correct such default (or if such
default cannot be cured or corrected within that time, then such additional time
as may be necessary if the Notified Party has commenced within such thirty (30)
days and is diligently pursuing the remedies or steps necessary to cure or
correct such default). Until the time allowed, as aforesaid, for the Notified
Party to cure such default has expired without cure, Tenant shall have no right
to , and shall not, terminate this Lease on account of Landlord's default.
ARTICLE XVII - QUIET ENJOYMENT
17.01 Provided that Tenant performs all of its obligations hereunder,
Tenant shall have and peaceably enjoy the Premises during the Lease Term free of
claims by or through Landlord, subject to all of the terms and conditions
contained in this Lease.
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ARTICLE XVIII - PARKING
18.01 Tenant, its employees and invitees, are hereby granted the
non-exclusive privilege to use parking spaces adjacent to the Premises as
described in Exhibit A. Tenant shall abide by all rules and regulations
regarding the use of the parking area as may now exist or as may hereinafter be
promulgated by Landlord. Landlord reserve the right to modify, restripe and
otherwise change the location of drives, parking spaces and parking area
adjacent to the Premises as described in Exhibit A. Landlord may, but shall have
no obligation to, designate certain parking spaces for trucks, handicapped
persons or designated tenants as landlord, in its sole discretion, may deem
necessary for the professional and efficient operation of the parking area and
the Building or the Project, if applicable. Landlord shall have the right to
reasonably restrict the number and location of truck/tractor trailers for the
overall benefit of all tenants, if being agreed by Tenant that it is not the
intent of this Lease to provide unrestricted parking for truck/tractor trailers.
Tenant agrees not to overburden the parking facilities and agrees to cooperate
with Landlord and other tenants in the use of parking facilities. Tenant will
reimburse Landlord upon demand for any damage caused to the parking surfaces or
facilities caused by Tenant's or any of its employees', agents' or invitees'
trucks/tractor trailers or any other vehicles. Landlord reserves the right in
its absolute discretion to determine whether parking facilities are becoming
crowded and, in such event, to allocate parking spaces among Tenant and other
tenants. At no time shall the parking of any vehicle be permitted in the fire
lanes or handicapped parking areas servicing the Building or the Project, if
applicable.
ARTICLE XIX - RULES AND REGULATIONS
19.01 The Rules and Regulations attached hereto as Exhibit F are hereby
incorporated by reference herein and made a part hereof. Tenant shall abide by,
and faithfully observe and comply with the Rules and Regulations and any
reasonable and non-discriminatory amendments, modifications and/or additions
thereto as may hereafter be adopted and published by written notice to tenants
by Landlord for the safety, care, security, good order and/or cleanliness of the
Premises, the Building and/or the Project, if applicable. Landlord shall not be
liable to Tenant for any violation of such rules and regulations by any other
tenant or occupant of the Building or the Project, if applicable.
ARTICLE XX - ESTOPPEL CERTIFICATES
20.01 Tenant agrees at any time and from time to time upon not less
than ten (10) days' prior written notice from Landlord to execute, acknowledge
and deliver to Landlord a statement in writing addressed and certifying to
Landlord, to any current or prospective Mortgagee or any assignee thereof,
prospective purchaser of the land, improvements or both comprising the Building
and to any other party designated by Landlord, that this Lease is unmodified and
in full force and effect (or if there have been modifications, that the same is
in full force and effect as modified and stating the modifications); that Tenant
has accepted possession of the Premises, which are acceptable in all respects,
and that any improvements required by the terms of this Lease to be made by
Landlord have been completed to the satisfaction of Tenant; that Tenant is in
full occupancy of the premises; that no rent has been paid more than thirty (30)
days in advance; that the first month's Base Rent has been paid; that Tenant is
entitled to no free Rent or other concessions except as stated in this Lease;
that Tenant has not been notified of any previous assignment of Landlord's or
any predecessor landlord's interest under this Lease; the dates to which Base
Rent, additional rental and other charges have been paid; that Tenant, as of the
date of such certificate, has not charge, lien or claim of setoff under this
29
Lease or otherwise against Base Rent, additional rental or other charges due or
to become due under this Lease; that Landlord is not in default in performance
of any covenant, agreement or condition contained in this Lease; or any other
matter relating to this Lease or the Premises or, if so, specifying each such
default. If there is a Guaranty under this Lease, said Guarantor shall confirm
the validity of the Guaranty by joining in the execution of the Estoppel
Certificate or other documents so requested by Landlord or Mortgagee. In
addition, in the event that such certificate is being given to any Mortgagee,
such statement may contain certifications of such other matters, and any other
provisions, customarily required by such Mortgagee including, without
limitation, an agreement on the part of Tenant to furnish to such Mortgagee,
written notice of any landlord default and a reasonable opportunity for such
Mortgagee to cure such default prior to Tenant being able to terminate this
Lease. Any such statement delivered pursuant to this Section may be relied upon
by Landlord or any Mortgagee, or prospective purchaser to whom it is addressed
and such statement, if required by its addressee, may so specifically state. If
Tenant doe snot execute, acknowledge and deliver to Landlord the statement as
and when required herein, Landlord is hereby granted an irrevocable
power-of-attorney, coupled with an interest, to execute such statement on
Tenant's behalf, which statement shall be binding on Tenant to the same extent
as if executed by Tenant (and such grant shall not be in limitation of
Landlord's other remedies for such failure by Tenant).
ARTICLE XXI - ENTRY BY LANDLORD
21.01 Landlord may enter the Premises at all reasonable times to:
inspect the same; exhibit the same to prospective purchasers, Mortgages or
tenants; determine whether Tenant is complying with all of its obligations under
this Lease; supply janitorial and other services to be provided by Landlord to
Tenant under this Lease; post notices of non-responsibility; and make repairs or
improvements in or to the Building or the Premises; provided, however, that all
such work shall be done as promptly as reasonably possible and so as to cause as
little interference to Tenant as reasonably possible. Tenant hereby waives any
claim for damages for any injury or inconvenience to, or interference with,
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises or
any other loss occasioned by such entry. As provided for in clause (xiii) of
Section 27.19 of this Lease, Landlord shall at all times have the right, but not
the obligation, to obtain from Tenant and retain a key with which to unlock all
of the doors in, on or about the Premises (excluding Tenant's vaults, safes and
similar areas designated by Tenant in writing in advance), and Landlord shall
have the right o use any and all means by which Landlord may deem proper to open
such doors to obtain entry to the Premises, and any entry to the Premises
obtained by Landlord by any such means, or otherwise, shall not under any
circumstances be deemed or construed to be a forcible or unlawful entry into or
a detainer of the Premises or an eviction, actual or constructive, of Tenant
from any part of the Premises. Such entry by Landlord shall not act as a
termination of this Lease. If Landlord shall be required to obtain entry by
means other than a key provided by Tenant, the cost of such entry shall be
payable by Tenant to Landlord as additional rent.
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ARTICLE XXII -
LANDLORD'S LEASE UNDERTAKINGS - EXCULPATION
FROM PERSONAL LIABILITY;
TRANSFER OF LANDLORD'S INTEREST
22.01 Landlord's Lease Undertakings. Notwithstanding anything to the
contrary contained in this Lease or in any exhibits, Riders or addenda hereto
attached (collectively the "Lease Documents"), it is expressly understood an
agreed by and between the parties hereto that: (a) the recourse of Tenant or its
successors or assigns against Landlord with respect to the alleged breach by or
on the part of Landlord of any representation, warranty, covenant, undertaking
or agreement contained in any of the Lease Documents or otherwise arising out of
this transaction or Tenant's use of the Premises or the Building or the Project,
if applicable (collectively, "Landlord's Lease Undertakings") shall extend only
to Landlord's interest in the real estate of which the Premises demised under
the Lease Documents are a part ("Landlord's Real Estate"), and not to any other
assets of Landlord or its constituent partners; and (b) except to the extent of
Landlord's interest in Landlord's Real Estate, no personal liability or personal
responsibility of any sort with respect to any of Landlord's Lease Undertakings
or any alleged breach thereof is assumed by, or shall at any time be asserted or
enforceable against, Landlord, its constituent partners, Heitman Capital
Management Corporation, or Heitman Properties Ltd., or against any of their
respect directors, officers, shareholders, employees, agents, constituent
partners, beneficiaries, trustees or representatives.
22.02 Transfer of Landlord's Interest. In the event of any transfer of
Landlord's interest in the Building, Landlord shall be automatically freed and
relieved from all applicable liability with respect to performance of any
covenant or obligation on the part of Landlord, provided any deposits or advance
rents held by Landlord are turned over to the grantee and said grantee expressly
assumes, subject to the limitations of this Section 22, all the terms, covenants
and conditions of this Lease to be performed on the part of Landlord, it being
intended hereby that the covenants and obligations contained in this Lease on
the part of Landlord, it being intended hereby that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject to
all the provisions of this Section 22, be binding on Landlord, its successors
and assigns, only during their respective successive periods of ownership.
ARTICLE XXIII - SURRENDER; HOLDOVER TENANCY
23.01 Condition of Premises and Removal of Property. At the expiration
or earlier termination of this Lease or Tenant's right to possession of the
Premises, Tenant shall: (a) surrender possession of the premises in broom-clean
condition and good repair, fee of debris, and otherwise in the condition
required under Section 8.02, ordinary wear and tear excepted, (b) ensure that
all signs, movable trade fixtures and personal property (except items originally
provided by Landlord) have been removed from the Premises as required under
Section 9.04 hereof (subject to Article XXIX hereof), (c) ensure that all
Alterations required to be removed from the Premises pursuant to Section 9.04
have been removed rom the Premises, (d) ensure that any damage caused by such
removal has been repaired in a good and workmanlike manner as required under
Section 9.04 hereof (and Landlord may deny permission to remove items where such
removal may damage the structural integrity of the Building), and (c) ensure
that all actions required under the Rules and Regulations set forth in Exhibit F
to this Lease have been taken. Tenant understands that "ordinary wear and tear"
does not mean Tenant shall be relieved of performing its obligations under this
Lease relating to maintenance, repairs and replacements as provided for in the
Lease. The cost and expense of any repairs necessary to restore the condition of
the Premises shall be borne by Tenant, and if Landlord undertakes to restore the
Premises, it shall have a right of reimbursement against Tenant.
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23.02 Abandoned Property. If Tenant shall fail to perform any repairs
or restoration, or fail to remove any items from the Premises as required
hereunder, Landlord may do so at Tenant's expense as provided in Section 9.04
and 15.04 hereof and Tenant shall pay Landlord's charges therefor upon demand.
All property removed from the Premises by Landlord hereunder may be handled,
discarded or stored by landlord at Tenant's expense, and landlord shall in no
event be responsible for the value, preservation or safekeeping thereof. All
such property shall at Landlord's option be conclusively deemed to have been
conveyed by Tenant to landlord as if by bill of sale without payment by
Landlord. If Landlord arranges for storage of any such property, Landlord shall
have a lien against such property for costs incurred in removing and storing the
same.
23.03 Holdover Tenancy. If Tenant holds possession of the Premises
after the expiration or termination of the Lease term, by lapse of time or
otherwise, Tenant shall become a tenant at sufferance upon all of the terms
contained herein, except as to Lease Term and Rent. During such holdover period,
Tenant shall pay to Landlord a monthly rental equivalent to one hundred fifty
percent (150) of the Rent payable to Tenant to Landlord with respect to the last
month of the Lease Term for the first month of such holdover period and 200% of
said Rent payable for such holdover period. Term. The monthly rent payable for
such holdover period shall in no event be construed as a penalty or as
liquidated damages for such retention of possession. Without limiting the
foregoing, Tenant hereby agrees to indemnify, defend and hold harmless Landlord,
its beneficiary, and their respective agents, contractors and employees, from
and against any and all claims, liabilities, actions, losses, damages (including
without limitation, direct, indirect, incidental and consequential) and expenses
(including, without limitation, court costs and reasonable attorneys' fees)
asserted against or sustained by any such party and arising from or by reason of
such retention of possession, which obligations shall survive the expiration or
termination of the Lease Term.
ARTICLE XXIV - NOTICES
24.01 All notices which Landlord or Tenant may be required, or may
desire, to serve on the other may be served, as an alternative to personal
service, by mailing the same by registered or certified mail, postage prepaid,
or may be sent by overnight courier, addressed to the Landlord at the address
for Landlord set forth in Section 1.11 above and to Tenant at the address for
Tenant set forth in Section 1.12 above, or, from and after the Commencement
Date, to the Tenant at the Premises whether or no Tenant has departed rom,
abandoned or vacated the Premises, or addressed to such other address or
addresses as either Landlord or Tenant may from time to time designate to the
other in writing. Any notice shall be deemed to have been given and served when
delivered personally or otherwise at the time the same was posted, except that
any notice given by overnight courier shall be deemed given on the first
business day following the date such notice is delivered by such courier
provided such courier verifies delivery thereof.
ARTICLE XXV - BROKERS
25.01 The parties recognize as the Broker(s) who procured this Lease
the firms(s) specified in Section 1.13 and agree that Landlord shall be solely
responsible for the payment of any brokerage commissions to said Broker(s), and
that Tenant shall have no responsibility therefor unless written provision to
the contrary has been made a part of this Lease. If Tenant has dealt with any
other person or real estate broker in respect to leasing, subleasing or renting
space in the Building or the Project, if applicable, Tenant shall be solely
responsible for the payment of any fee due said person or firm and Tenant shall
protect, indemnify, hold harmless and defend Landlord from any liability in
respect thereto.
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ARTICLE XXVI - COMMUNICATIONS AND COMPUTER LINES
26.01 Tenant may, in a manner consistent with the provisions and
requirements of this Lease, install, maintain, replace, remove or use any
communications or computer wires, cables and related devices (collectively the
"Lines") at the Building in or serving the Premises, provided: (a) Tenant shall
obtain Landlord's prior written consent, which consent may be conditioned as
required by Landlord, (b) if Tenant at any time uses any equipment that may
create an electromagnetic field exceeding the normal insulation ratings of
ordinary twisted pair riser cable or cause radiation higher than normal
background radiation, the Liens therefor (including riser cables) shall be
appropriately insulated to prevent such excessive electromagnetic fields or
radiation, and (c) Tenant shall pay all costs in connection therewith. Landlord
reserves the right to require that Tenant remove any Lines which are installed
in violation of these provisions.
Landlord may (but shall not have the obligation to): (i) install new
Lines at the Property, and (ii) create additional space for Lines at the
Property, and adopt reasonable and uniform rules and regulations with respect to
the Lines.
Notwithstanding anything to the contrary contained in Article IX,
Landlord reserves the right to require that Tenant remove any or all Lines
installed by or for Tenant within or serving the Premises upon termination of
this Lease. Tenant shall not, without the prior written consent of Landlord in
each instance, grant to any third party a security interest or lien in or on the
Lines, and any such security interest or lien granted without Landlord's written
consent shall be null and void. Except to the extent arising from the
intentional or negligent acts of Landlord or Landlord's agents or employees.
Landlord shall have no liability for damages arising from, and Landlord does not
warrant that the Tenant's use of any Lines will be free from the following
(collectively called "Line Problems"): (x)
any eavesdropping or wire-tapping by unauthorized parties, (y) any failure of
any Liens to satisfy Tenant's requirements, or (z) any shortages, failures,
variations, interruptions, disconnections, loss or damage caused by the
installation, maintenance, replacement use or removal of Liens by or for other
tenants or occupants at the Property. Under no circumstances shall any Line
Problems or deemed an actual or constructive eviction of Tenant, render Landlord
liable to Tenant for abatement of Rent, or relieve Tenant from performance of
Tenant's obligations under this Lease. Landlord in no event shall be liable for
damages by reason of loss of profits, business interruption or other
consequential damage arising from any Line Problems.
ARTICLE XXVII -MISCELLANEOUS
27.01 Entire Agreement. This Lease contains all of the agreements and
understanding relating to the leasing of the Premises and the obligations of
Landlord and Tenant in connection with such leasing. Landlord has not made, and
Tenant is not relying upon, any warranties, or representations, promises or
statements made by Landlord or any agent of Landlord, except as expressly set
froth herein. This Lease supersedes any and all prior agreements and
understandings between Landlord and Tenant and alone expresses the agreement of
the parties.
27.02 Amendments. This Lease shall not be amended, changed or modified
in any way unless in writing executed by Landlord and Tenant. Landlord shall not
have waived or released any of its rights hereunder unless in writing and
executed by the Landlord.
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27.03 Successors. Except as expressly provided herein, this Lease and
the obligations of Landlord and Tenant contained herein shall bind and benefit
the successors and assigns of the parties hereto.
27.04 Force Majeure. Landlord shall incur no liability to Tenant with
respect to, and shall not be responsible for any failure to perform, any of
Landlord's obligations hereunder if such failure is caused by any reason beyond
the control of Landlord including, but not limited to strike, labor trouble,
governmental rule, regulations, ordinance, statute or interpretation, fire,
earthquake, civil commotion, or failure or disruption of utility services. The
amount of time for Landlord to perform any of Landlord's obligations shall be
extended by the amount of time Landlord is delayed in performing such obligation
by reason of any force majeure occurrence whether similar to or different from
the foregoing types of occurrences.
27.05 Survival of Obligations. Any obligations of Tenant accruing prior
to the expiration of the Lease shall survive the expiration or earlier
termination of the Lease, and Tenant shall promptly perform all such obligations
whether or not this Lease has expired or been terminated.
27.06 Light and Air. No diminution or shutting off of any light, air or
view by an structure now or hereafter erected shall in any manner affect this
Lease or the obligations of Tenant hereunder, or increase any of the obligations
of Landlord hereunder.
27.07 Governing Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.
27.08 Severability. In the event any provision of this Lease in found
to be unenforceable, the remainder of this Lease shall not be affected, and any
provision found to be invalid shall be enforceable to the extent permitted by
law. The parties agree that, in the event two different interpretations may be
given to any provisions hereunder, one of which will render the provision
unenforceable, and one of which will render the provision enforceable, the
interpretation rendering the provision enforceable shall be adopted.
27.09 Captions. All captions, headings, titles, numerical references
and computer highlighting are for convenience only and shall have no effect on
the interpretation of this Lease.
27.10 Interpretation. Tenant acknowledges that it has read and reviewed
this Lease and that it has had the opportunity to confer with counsel in the
negotiation of this Lease. Accordingly, this Lease shall be construed neither
for nor against Landlord or Tenant, but shall be given a fair and reasonable
interpretation in accordance with the meaning of its terms and the intent of the
parties.
27.11 Independent Covenants. Each covenant, agreement, obligation or
other provision of this Lease to be performed by Tenant are separate and
independent covenants of Tenant, and not dependent on any other provision of the
Lease.
27.12 Number and Gender. All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include the appropriate number and gender, as the context may require.
27.13 Time is of the Essence. Time is of the essence of this Lease and
the performance of all obligations hereunder.
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27.14 Joint and Several Liability. If Tenant comprises more than one
person or entity, or if this Lease is guaranteed by any party, all such persons
shall be jointly and severally liable for payment of rents and the performance
of Tenant's obligations hereunder.
27.15 Exhibits and Schedules. Exhibits A (Outline of Premises), B (Work
Letter Agreement), C (Suite Acceptance Letter), D (Tenant Operations Inquiry), E
(List of Additional Insureds), F (Rules and Regulations) and G (Guaranty), and
Schedule 1 to Exhibit D (List of Permissible Hazardous Materials and Quantities)
are incorporated into this Lease by reference and made a part hereof.
27.16 Offer to Lease. The submission of this Lease to Tenant or its
broker or other agent, does not constitute an offer to Tenant to lease the
Premises. This Lease shall have no force and effect until (a) it is executed and
delivered by Tenant to Landlord and (b) it is fully reviewed and executed by
Landlord; provided, however, that, upon execution of this Lease by Tenant and
delivery to Landlord, such execution and delivery by Tenant shall, in
consideration of the time and expense incurred by Landlord in reviewing the
Lease and Tenant's credit, constitute an offer by Tenant to Lease the Premises
upon the terms an conditions set forth herein (which offer to Lease shall be
irrevocable for twenty (20) business days following the date of delivery).
27.17 Waiver; No Counterclaim; Choice of Laws. To the extent permitted
by applicable law, Tenant hereby waives the right to a jury trial in any action
or proceeding regarding this Lease and the tenancy created by this Lease. It is
mutually agreed that in the event Landlord commences any summary proceeding for
non-payment of Rent. Tenant will not interpose any counterclaim of whatever
nature or description in any such proceeding. In addition, Tenant hereby submits
to local jurisdiction in the State of California and agrees that any action by
Tenant against Landlord shall be instituted in the State of California and that
Landlord shall have personal jurisdiction over Tenant for any action brought by
Landlord against Tenant in the State of California. To the extent permitted by
applicable law, Tenant hereby waives any and all rights of redemption granted by
any present or future laws.
27.18 Electrical Service to the Premises. Anything set forth in Section
7.01 or elsewhere in this Lease to the contrary notwithstanding, electricity to
the Premises shall not be furnished by Landlord, but shall be furnished by the
approved electric utility company serving the Building. Landlord shall permit
Tenant to receive such service directly from such utility company at Tenant's
cost (except as otherwise provided herein) and shall permit Landlord's wire and
conduits, to the extent available, suitable and safety capable, to be used for
such purposes.
27.19 Rights Reserved by Landlord. Landlord reserves the following
rights exercisable without notice (except as otherwise expressly provided to the
contrary in this Lease) and without being deemed an eviction or disturbance of
Tenant's use or possession of the Premises or giving rise to any claim for
set-off or abatement of Rent: (i) to change the name or street address of the
Building; (ii) to install, affix and maintain all signs on the exterior and/or
interior of the Building; (iii) to designate and/or approve prior to
installation, all types of signs, window shades, blinds, drapes, awnings or
other similar items, and all internal lighting that may be visible from the
exterior of the Premises; (iv) to change the arrangement of entrances, doors,
corridors, elevators and /or stairs in the Building, provided no such change
shall materially adversely affect access to the Premises; (v) to grant any party
the exclusive right to conduct any business or render any service in the
Building, provided such exclusive right shall not operate to prohibit Tenant
from using the Premises for the purposes permitted under this Lease; (vi) to
prohibit the placement of vending or dispensing machines of any kind in or about
the Premises other than for use by Tenant's employees; (vii) to prohibit the
placement of video or other electronic games int he Premises; (viii) to have
access for Landlord and other tenants of the Building to any mail chutes and
boxes located in or on the Premises according to the rules of the United States
Post Office; (ix) to close the Building after normal business hours, except that
Tenant and its employees and invitees shall be entitled to admission at all
times under such rules and regulations as Landlord prescribes for security
purposes; (x) to install, operate and maintain security systems which monitor,
by close circuit television or otherwise, all persons entering or leaving the
Building; (xi) to install and maintain pipes, ducts, conduits, wires and
structural elements located in the Premises which serve other parts or other
tenants of the Building; and (xii) to retain at all times master keys or pass
keys to the Premises.
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27.20 Tenant Operations Inquiry. As a material inducement to Landlord
to enter into this Lease (i) Tenant has completed Exhibit D hereto, and (ii)
Tenant represents and warrants to Landlord that Exhibit D is true and correct in
all material respects and is not misleading.
ARTICLE XXVIII - FLOOR LOAD LIMITS
28.01 Floor Load Limits. Tenant shall not place a load upon any floor
of the Premises exceeding the floor load per square foot area which it was
designed to carry and which is allowed by law. Landlord reserves the right to
prescribe the weight and position of all safes, business machines and mechanical
equipment in the Building. Such installations shall be placed and maintained by
Tenant, at Tenant's expense, in settings sufficient, in Landlord's judgment, to
absorb and prevent vibration, noise and annoyance to occupants of the Building,
the Project, if applicable, or any adjacent property.
ARTICLE XXIX - LANDLORD'S LIEN
29.01 Landlord's Lien. As security for Tenant's payment of Rent,
damages and all other payments required to be made by this Lease. Tenant hereby
grants to Landlord a lien upon all property of Tenant now or subsequently
located upon the Premises. If Lessee abandons or vacates any substantial portion
of the Premises or is in default in the payment of any rentals, damage or other
payments required to be made by this Lease, Landlord may take any action it
deems necessary and may be available to it under the laws of the State of
California. The proceeds of the sale of the personal property shall be applied
by Landlord toward the cost of the sale and then toward the payment of all sums
then due by Tenant to Landlord under the terms of this Lease.
NOTE: Need to file UCC-1 Financing Statement describing such collateral in
Secretary of State's office and county recorder.
IN WITNESS WHEREOF, the parties hereto have executed this lease as of
the date first above written.
TENANT: LANDLORD:
Q.E.P. Company, Inc., JMB/PENNSYLVANIA ASSOCIATES-IV, L.P.,
a New York corporation a Delaware limited partnership
By:___________________________ By: HEITMAN/JMB INSTITUTIONAL REALTY
ADVISORS L.P., an Illinois
Its:__________________________ limited partnership, general
partner
ATTEST: By: HEITMAN/JMB INTERNATIONAL
REALTY ADVISORS, INC., an
______________________________ Illinois corporation,
general partner
______________________________
By:__________________________
WITNESSES: By:__________________________
______________________________ WITNESS:
______________________________ _______________________________________
_______________________________________
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