1
STANDARD TRIPLE NET INDUSTRIAL LEASE
BETWEEN
PACTEL PROPERTIES, AS Landlord
AND
TELCO SYSTEMS, INC., as Tenant
FOR
NORTHPORT Business Park
DATED
3 MAY 1990
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SCHEDULE A
BASIC LEASE INFORMATION
PARAGRAPH
REFERENCE
Preamble LANDLORD: PacTel Properties, a California
corporation
Preamble TENANT: Telco Systems, Inc., a
___________ corporation
1.3 BUILDING: Building known as Building 10
located at the corner of
Cushing Parkway and Northport
Loop East within the project
commonly known as Northport
Business Park, Fremont,
California, as shown on the
site plan attached as Exhibit
A.
1.4; 2.1 PREMISES: The Building.
1.5 NET RENTABLE AREA
OF PREMISES; approximately 62,261 rentable
square feet
1.6 TENANT'S PERCENTAGE
SHARE: 100%
1.7 ESTIMATED OPERATING
EXPENSES for calendar 1990: $1,500
ESTIMATED REAL PROPERTY
TAX for calendar 1990: $63,000
3.1 TERM: 5 years
3.1 ESTIMATED August 1, 1990
COMMENCEMENT DATE:
3.1 ESTIMATED
EXPIRATION DATE: July 30, 1995
4.1 BASE MONTHLY RENT:
Month of Term monthly Base Rent
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1 through 5 Free
6 through 36 $46,073 ($.74
per rentable
sq.ft.)
37 through 60 $49,186 ($.79
per rentable
sq.ft.)
20 SECURITY DEPOSIT: S 49,186
5. 1 PERMITTED USE: general office, research and
development and light assembly
5.2 CC&R's:
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Estate
22 LANDLORD'S ADDRESS PacTel Properties
FOR NOTICES: 111 Pine Street
Suite 1700
San Francisco, CA 94111
Attn: Asset Manager
with a copy to:
Jane Greenwald, Esq.
PacTel Corporation
Legal Department
130 Kearny Street
Suite 2759
San Francisco, CA 94108
22 TENANT'S ADDRESS
FOR NOTICES:
prior to occupancy:
--------------------------------
--------------------------------
--------------------------------
after occupancy:
to the Premises
24 PARKING: 242 spaces
45 OPTION: one 5-year option at 95% of
fair market rent
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Table of Contents
Page
----
1. Definitions .........................................
2. Premises ............................................
3. Term 3.1 Term. ......................................
3.1 Term ..........................................
3.2 Delay in Commencement .........................
3.3 Early Possession ..............................
4. Rent ................................................
4.1 Base Rent .......................................
4.2 Additional Rent ...............................
4.3 Operating Expenses ............................
5. Use .................................................
5.1 Use .............................................
5.2 Compliance with Law ...........................
5.3 Condition of Premises .........................
5.4 Hazardous Substances ..........................
6. Maintenance, Repairs and Alterations ................
6.1 Landlord's obligations ........................
6.2 Tenant's Obligations ..........................
6.3 Alterations ...................................
7. Indemnity; Insurance ................................
7.1 Indemnity .....................................
7.2 Tenant's Insurance ............................
7.3 Landlord's Insurance ..........................
7.4 Payment of Premiums ...........................
7.5 Waiver of Subrogation .........................
8. Damage or Destruction ...............................
8.1 Definitions ...................................
8.2 Partial Damage - Insured Loss .................
8.3 Partial Damage - Uninsured Loss ...............
8.4 Total Destruction .............................
8.5 Damage Neat End of Term .......................
8.6 Abatement of Rent: Tenant's ...................
Remedies ....................................
8.7 Termination - Advance Payments ................
8.8 Waiver ........................................
9. Real Property Taxes .................................
9.1 Payment of Tax ................................
9.2 Additional Improvements .......................
9.3 Definition of Real Property Tax ...............
9.4 Personal Property Taxes .......................
10. Utilities ...........................................
11. Assignment and Subletting ...........................
11.1 Landlord's Consent Required ...................
11.2 Tenant Affiliate ..............................
11.3 No Release of Tenant ..........................
11.4 Notice of Assignment or .......................
Subletting ..................................
11.5 Condition to Landlord's .......................
Consent .....................................
11.6 Landlord's Expenses ...........................
12. Defaults; Remedies ..................................
12.1 Defaults ......................................
12.2 Remedies ......................................
12.3 Default by Landlord ...........................
12.4 Late Charges ..................................
12.5 Landlord's Right to ...........................
Cure Defaults ...............................
13. Condemnation ........................................
14. Real Estate Brokers .................................
15. Estoppel Certificate ................................
16. Landlord's Liability ................................
17. Severability ........................................
18. Interest on Past-due Obligations ....................
19. Time of Essence .....................................
20. Security Deposit ....................................
21. Incorporation of Prior Agreements; ..................
Amendments ........................................
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22. Notices .............................................
23. Waivers ..............................................
24. Parking ..............................................
25. Holding Over .........................................
26. Cumulative Remedies ..................................
27. Convenants and Conditions ............................
28. Binding Effect; Choice of Law ........................
29. Subordination ........................................
30. Attornment ...........................................
31. Landlord's Access ....................................
32. Signs ................................................
33. merger ...............................................
34. No Light, Air or View Easement .......................
35. Guarantor; Co-Tenants ................................
36. Quiet Possession .....................................
37. Landlord's Rules and Regulations .....................
38. Security Measures ....................................
39. Landlord's Reservation of Rights .....................
41.1 Easements .......................................
41.2 Building Rights .................................
40. Authority ............................................
41. Conflict .............................................
42. Attorneys' Fees ......................................
43. Exhibits .............................................
44. Lender Provisions ....................................
45. Extension Option .....................................
46. Options ..............................................
EXHIBITS
--------
A Site Plan
B Premises
C Form of Estoppel Certificate
D Initial Improvements of Premises
E Rules and Regulations for Tenant Contractors
F Plans and Specifications
G Pension Plans
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THIS LEASE, dated as of _______________ 1990, is made by and between PacTel
Properties, a California corporation (herein called "Landlord') and Telco
Systems, Inc., a _____________ (herein called "Tenant").
1. Definitions.
-----------
1.1 BASE MONTHLY RENT: the amount specified on Schedule A which Tenant is
to pay each amount pursuant to Paragraph 4.1 and subject to adjustment
as provided on Schedule A.
1.2 COMMENCEMENT DATE: the date on which the term of this Lease is to
begin, which shall be the date specified in Schedule A, subject to
adjustment pursuant to Paragraphs 3.2 and 3.3.
1.3 BUILDING: the building indicated on Schedule A.
1.4 PREMISES: the Building and the land on which it is located.
1.5 NET RENTABLE AREA OF PREMISES: that area comprising the Premises which
is hereby stipulated for all purposes to contain the square footage
indicated on Schedule A.
1.6 TENANT'S PERCENTAGE SHARE: The percentage indicated on Schedule A.
Such Tenant's Percentage Share is derived by dividing the Net Rentable
Area of the Premises by the total rentable area of the Building.
Landlord reserves the right in the future to readjust Tenant's
Percentage Share to reflect the addition or removal of buildings or
improvements to the total space on which expenses passed through to
Tenant will be calculated. Any adjustments will be made on a
reasonable basis and so as not to prejudice Tenant.
1.7 The following terms shall have the meanings specified where indicated:
a. ADDITIONAL RENT: Paragraph 4.2
b. ALTERATIONS: Paragraph 6.3
C. (Intentionally deleted)
d. EXPIRATION DATE: Paragraph 3.1
e. INITIAL IMPROVEMENTS: Paragraph 6.1(b), Exhibit C
f. INSURED LOSS: Paragraph 8.1(c)
g. OPERATING EXPENSES: Paragraph 4.3(a). An estimate of Operating
Expenses (other than any Real Property Tax) for the year in which this
Lease commences is set forth in Schedule A.
h. PREMISES PARTIAL DAMAGE; PREMISES BUILDING PARTIAL DAMAGE: Paragraph
8.1(a)
i. PREMISES TOTAL DESTRUCTION; PREMISES BUILDING TOTAL DESTRUCTION:
Paragraph 8.1(b)
j. REAL PROPERTY TAX: Paragraph 9.1. An estimate of the Real Property Tax
for the year in which this Lease commences is set forth in Schedule A.
k. UTILITY INSTALLATIONS; Paragraph 6.3
2. PREMISES. Landlord hereby leases to Tenant and Tenant leases from Landlord
the Premises on the terms and conditions set forth herein.
3. TERM.
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3.1 TERM. This Lease shall be for the Term specified on Schedule A,
commencing on the Estimated Commencement Date specified on such Schedule A, or,
if later, the date upon which the initial Improvements to be installed by
Landlord are substantially completed and the Premises ready for occupancy or use
and expiring on the Estimated Expiration Date specified on such Schedule A (or
such later date as may result from a delayed Commencement Date), unless sooner
terminated pursuant to any provision hereof. The Initial Improvements shall be
deemed, to be substantially complete upon the earliest to occur of the
following: (a) the date on which all improvements to be constructed by Landlord
have been completed except for punch list items which do not prevent Tenant from
using the Premises for their intended use, (b) the date of issuance of a
temporary certificate of occupancy for the Premises, or (c) the date Tenant
opens for business in the Premises. The parties shall, after the Lease
Commencement Date has occurred, execute an instrument specifying the actual
Lease Commencement Date and Expiration Date.
3.2 DELAY IN POSSESSION. Notwithstanding said Commencement Date, if for any
reason Landlord cannot deliver possession of the Premises to Tenant on said
date, Landlord .shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease or the obligations of Tenant hereunder
:but in such case, Tenant shall not be obligated to pay rent until possession of
the Premises is tendered to Tenant and the Expiration Date shall be
automatically extended; provided, however, that if Landlord shall not have
delivered possession of the Premises within 60 days from said Commencement Date,
Tenant may, at Tenant's option, by notice in writing to Landlord within ten (10)
days thereafter, cancel this Lease, in which event the parties shall be
discharged from all obligations hereunder; provided that such 60-day period
shall be subject to extension for any delays (i) caused by Tenant requests for
changes in Landlord's construction, if any, or due to fault or neglect of Tenant
or Tenant's agents or contractors, or (ii) due to acts of God, strikes, fires,
weather, casualty, war, acts of governmental bodies, inability to obtain labor
or materials or other causes:beyond Landlord's reasonable control.
3.3 EARLY POSSESSION. If Tenant occupies the Premises prior to said
Commencement Date,. such occupancy shall be subject to all provisions hereof,
such occupancy shall not advance the Expiration Date, and Tenant shall pay rent
for such period at the initial Base Monthly Rent set forth in Schedule A for the
period following any free rent period.
4. Rent.
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4.1 BASE RENT. Tenant shall pay to Landlord as Base Monthly Rent for the
Premises, the amount specified on Schedule A. Rent shall be payable in advance,
on the first day of each month of the term hereof. Rent for any period during
the term hereof which is for less than one month shall be a pro rate portion of
the monthly installment. Rent shall be payable in lawful money of the United
States to Landlord without deduction, offset, prior notice or demand at the
address stated herein or to such other persons or at. such other places as
Landlord may designate in writing.
4.2 ADDITIONAL RENT. As rent for the Premises in addition to the Base
Monthly Rent, Tenant shall pay to Landlord, in the amounts and at the times
provided, all of the other charges and payments provided for in this Lease
("Additional Rent"), such as (but not limited to) Operating Expenses, late
charges, and interest ("Additional Rent") . Unless otherwise specified herein,
all payments of Additional Rent shall be payable in full on the date that the
next installment of Base Monthly Rent is payable.
4.3 OPERATING EXPENSES
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(a) Tenant shall pay to Landlord as Additional Rent Tenant's Percentage
Share (as specified on Schedule A) of all Operating Expenses as hereinafter
defined during each calendar year or part thereof during the term of this Lease,
in accordance with the following provisions. "Operating Expenses" shall mean the
total cost and expenses paid or incurred by Landlord in the exercise of its
discretion in connection with the management, operation, maintenance and repair
of the Building, and other costs of the project as allocated to the Building by
Landlord in its reasonable good faith determination. Such operating Expenses
shall include, without limitation, (1) the cost of air conditioning,
electricity, beating, mechanical, ventilating systems and all other utilities,
(to the extent not separately charged or metered to Tenant) and the cost of
supplies and equipment and maintenance and service contracts in connection
therewith (to the extent the HVAC systems in the Premises are not maintained by
Tenant at Tenant's sole cost); (ii) all costs, charges and fees associated with
all water and sewer service supplied but not separately metered to Tenant and
all costs of any other utility not separately assessed to Tenant; (iii) the cost
of assessments and other charges for which Landlord is obligated to the
Northport Business Park Owners' Association as owner of the Premises; (iv) the
cost of repairs (including, without limitation, roof repairs and maintenance and
repair of the structural components of the Building), general maintenance,
plumbing service, and fire protection systems; (v) the cost of fire, extended
coverage, boiler, sprinkler, public liability, property damage, rent,
earthquake, and other insurance paid by Landlord; (vi) fees, charges and other
costs, including management fees, consulting fees, legal fees and accounting
fees, of all independent contractors engaged by Landlord or reasonably charged
by Landlord if Landlord performs management services in connection with the
Building or project provided, however.. that if Landlord performs such
management services Landlord's management fee shall not exceed 3% of gross
revenues from the Building ; (vii) license, permit and inspection fees; (viii)
all costs and expenses of contesting by appropriate legal proceedings any matter
concerning operating or managing the Building; ( ix) all costs associated with
the operation, management, maintenance and repair of the common areas, including
landscaping and gardening, signs, maintenance, repairs, resurfacing, repaving,
painting, refinishing, lighting, cleaning, storm drainage and sanitary sewer
systems, refuse removal, snow, ice and ash removal; (x) the cost of any capital
improvements made to the Building or project after completion of its
construction as a labor-saving device or to effect other economies in the
operation or maintenance of the Building or project, or made to the Building or
project after the date of this Lease, that are required under any governmental
law or regulation that was not applicable to the Building or project at the time
that permits for the construction thereof were obtained, such cost to be
amortized over such reasonable period as Landlord shall determine, together with
interest on the unamortized balance a t the rate of ten percent (10%) per annum
or such higher rate as may have been-paid by Landlord on funds borrowed for the
purpose of constructing such capital improvements; (XI) the cost of all Real
Property Tax paid by Landlord pursuant to Paragraph 9; and (XI) any other
expense of any other kind whatsoever reasonably incurred in managing, operating,
maintaining and repairing the Building or project. The determination of
operating Expenses and their allocation shall be in accordance with generally
accepted accounting principles applied on a consistent basis. The specific
examples of operating Expenses stated in this Paragraph are in no way intended
to and shall not limit the costs comprising operating Expenses, nor shall such
examples be deemed to obligate Landlord to incur such costs or to provide such
services or to take such actions except as Landlord may be expressly required in
other portions of this Lease, or except as Landlord, in its sole discretion, may
elect.
(b) Tenant shall pay to Landlord as Additional Rent during each calendar
year or part thereof during the
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calendar year on or before the first day of each calendar month, in advance, in
an amount estimated by Landlord and billed by Landlord to Tenant; provided that
Landlord shall have the right initially to determine monthly estimates and to
revise such estimates from time to time. With reasonable promptness after the
expiration of each calendar year Landlord shall furnish Tenant with a statement
(herein called "Landlord's Expense Statement"), setting forth in reasonable
detail the Operating Expenses for such calendar year and Tenant's Percentage
Share, if any, of such Operating Expenses. If the actual Operating Expenses for
the Building for such calendar year exceed the estimated operating Expenses paid
by Tenant for such calendar year, Tenant shall pay to Landlord the difference
between the amount paid by Tenant land the actual Operating Expenses within
fifteen (15) days after the receipt of Landlord's Expense Statement, and if the
total amount paid by Tenant for any such calendar year shall exceed the actual
Operating Expenses for such calendar year, such excess shall be credited against
the next installment of the estimated increased Operating Expenses due from
Tenant to Landlord hereunder.
(c) As an alternative to the provisions of (b) above, Landlord may change
the method of Tenant's payment of Operating Expenses at any time and from time
to time to require Tenant to pay Operating Expenses actually incurred or paid by
Landlord but not previously billed to Tenant as invoiced by Landlord. Such
invoices shall be payable by Tenant within 10 days of receipt of Landlord's
invoice, but not more often than once each calendar month.
(d) If the expiration date fixed for this Lease shall occur on a date other
than the end of a calendar year, Tenant's Percentage Share of Operating Expenses
for the calendar year in which the expiration date falls shall be prorated on an
annual basis; provided, however, Landlord may, at its option, pending the
determination of the amount of Operating Expenses for such partial calendar
year, furnish Tenant with statements of estimated excess Operating Expenses, and
Tenant's Percentage Share thereof for such partial calendar year. Within fifteen
(15) days after receipt of such estimated statement, Tenant shall remit to
Landlord, as Additional Rent, the amount of Tenant's Percentage Share of such
increase in Operating Expenses. After such Operating Expenses have been finally
determined and Landlord's Expense Statement furnished to Tenant pursuant to this
Paragraph, if there has been an underpayment of Tenant's Percentage Share of
Operating Expenses, Tenant shall remit the amount of such underpayment to
Landlord within fifteen (15) days of receipt of such statements, and if there
has been an overpayment, Landlord shall remit the amount of any such overpayment
to Tenant within fifteen (15) days of the issuance of such statement.
5. Use.
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5.1 USE. The Premises shall be used and occupied only for the permitted use
stated on Schedule A and for related purposes.
5.2 Compliance with Law and Restrictions.
------------------------------------
(a) Tenant shall, at Tenant's expense, comply promptly with all
applicable statutes, ordinances, rules, regulations, orders, easements,
covenants and restrictions of record, and requirements in effect during the term
or any part of the term hereof, regulating the use by Tenant of the Premises,
including the Covenants, Conditions and Restrictions specified on Schedule A, a
copy of which Tenant acknowledges having received and read. Tenant shall not use
nor permit the use of the Premises in any manner that will tend to create waste
or a nuisance or result in any increase in any insurance premiums payable on
insurance carried on the Premises, or, if there shall be more than one tenant in
the Building containing the Premises, shall tend to disturb such other tenants.
Tenant shall not cause, maintain or permit any outside storage on or about the
Premises. Tenant shall
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5.3 Condition of Premises.
---------------------
(a) Landlord shall deliver the Premises to Tenant clean and free of
debris on the Lease Commencement Date (unless Tenant is already in possession).
Except as otherwise provided in this Lease, Tenant shall be deemed to have
accepted the Premises in their "as is" condition existing as of the Lease
Commencement Date or the date Tenant takes possession of the Premises, whichever
is earlier, subject to all applicable zoning, municipal, county and state laws,
ordinances and regulations governing the use of the Premises, and any covenants
or restrictions of record, and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto. Tenant
acknowledges that neither Landlord nor any real estate broker or other agent of
Landlord has made any representation or warranty as to the present or future
suitability of the Premises for the conduct of Tenant's business.
(b) Landlord shall have no obligation to construct or install in the
Premises any improvements, fixtures or equipment whatsoever, except to the
extent otherwise provided in Exhibit C attached hereto, if any. By taking
possession of the Premises, Tenant is deemed to have accepted Initial
improvements to be constructed by Landlord (if any) as being completed in
accordance with the plans and specifications for such improvements, subject only
to completion of items on Landlord's punch list.
5.4. HAZARDOUS SUBSTANCES. Except in strict compliance with all government
approvals, applicable Laws and regulations pertaining to Hazardous materials (as
defined below), and in accordance with the additional provisions of this
Paragraph 5.4, Tenant shall not cause or permit the presence, use, handling,
generation, emission, release, discharge, storage or disposal of any Hazardous
Materials on, under, in or about the Premises; and shall not cause or permit the
transportation of any Hazardous Materials to or from the Premises. Tenant shall
indemnify, protect, defend, and hold harmless Landlord from and against all
liability, and foreseeable consequential damages, penalties, expenses and costs
of any required or necessary remediation, repair, removal, cleanup or
detoxification, of the Premises and surrounding properties, and from and against
the preparation of any cleanup, remediation, closure or other required plans,
whether such action is required or necessary prior to or following the
termination of this Lease, to the full extent that the same is attributable to
the presence, use, handling, generation, emission, release, discharge, storage
or disposal of Hazardous Materials by Tenant, its agents, employees, or
contractors. Neither the written consent by Landlord to the handling, use,
presence, generation, emission, release, discharge, storage, or disposal of
Hazardous materials nor the strict compliance by Tenant with all Laws and
government approvals pertaining to Hazardous Materials shall excuse Tenant from
Tenant's obligations of indemnification pursuant to this Paragraph. Tenant shall
at all times notify Landlord of any Hazardous materials present, used,
generated, handled, emitted, released, discharged, stored or disposed of on or
from the Premises. Notwithstanding the foregoing, notice shall not be required
for Hazardous materials present on the Premises in reasonable quantities which
are commonly used in business offices including, but not limited to, cleaning
materials, correcting fluids, and toner used in photocopy machines, provided
such Hazardous Materials are used and disposed of in accordance with law. Tenant
shall also observe any additional requirements imposed by Landlord from time to
time in the presence, use, handling, generation, emission, release, discharge,
storage or disposal of Hazardous Materials, and shall institute operating
procedures designed to handle Hazardous Materials consistent with prudent
industry practice. Landlord shall have the right to inspect the Premises on
24-hours' prior notice for compliance with the provisions of this Paragraph. If
Landlord in its
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with the provisions of this Paragraph. If Landlord insists reasonable judgment
decides that the manner or extent'-of Tenant's activities Involving. Hazardous
Materials so require or that Tenant is violating its obligations under this
Paragraph in its handling of Hazardous Materials, Landlord may hire an
independent expert to develop a Hazardous Materials program for Tenant and
monitor Tenant's compliance therewith. Tenant shall reimburse, Landlord for the
cost of such independent consultant promptly upon demand.
The term "Hazardous Materials" shall mean any toxic substance, hazardous
substance, hazardous material, or hazardous waste, pollutant or contaminant
which is or becomes regulated by any local governmental authority, the State of
California, or the United States government, including, but not limited to, any
material: or substance which is (1) defined as a "hazardous waste", "extremely
hazardous waste" or "restricted hazardous waste" under Sections 25115, 25117 or
25122.7, or listed pursuant to Section 25140 of the California Health and Safety
Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a
"hazardous substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8 (Carpenter -Presley-Tanner Hazardous Substance
Account Act), (iii) listed as a chemical known to cause cancer or reproductive
toxicity pusuant to Section 25249.8 of the California Health and Safety Code,
Division 20 Chapter 6.6 (Safe Drinking Water and Toxic Enforcement Act), (iv)
designated as a "hazardous substance" pursuant to Section 6380 of the California
Labor Code, Division 5, Chapter 2.5 (Hazardous Substances information and
Training Act); (v) defined as a "hazardous waste" pursuant to Section 1104 of
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42
U.S.C. Section 6903) or (vi) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601).
6. Maintenance, Repairs and Alterations.
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6.1 Landlord's Obligations.
----------------------
(a) subject to the provisions of Paragraphs 5, 6.2 and 8 and except
for damage caused by any negligent or intentional act or omission of Tenant,
Tenant's agents, employees, or invitees in which event Tenant shall repair the
damage, Landlord, at Landlord's expense, shall keep in good order, condition and
repair (1) the gross structural components of the Premises and the Building,
namely the foundations, subflooring, exterior walls, bearing walls, and
structural roof components; (ii) the common areas, including landscaping,
driveways, parking lots, fences and signs located on the Building site and all
sidewalks and parkways adjacent to the Building, and (iii) Building systems and
utility installations, to the outlets; the expenses of which shall be recovered
from Tenant for Tenant's Percentage Share as specified on Schedule A in
accordance with Paragraph 4.3. Landlord shall have no obligation to make repairs
under this Paragraph 6.1 until a reasonable time after receipt of written notice
of the need for such repairs, but shall make diligent efforts to commence such
repairs within 3O days of receipt of such notice. Their shall be no abatement of
rent or liability of Landlord on account of any injury or interference with
Tenant's business with respect to any improvements, alterations or repairs made
by Landlord to any part of the Building or the Premises. Tenant expressly waives
the benefit of any statute now or hereafter in effect which would otherwise
afford Tenant the right to make repairs at Landlord's expense or to terminate
this Lease because of Landlord's failure to keep the Premises in good order,
condition and repair.
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and 8, Tenant, at Tenant's expense, shall keep in good order, condition and
repair the Premises and every part thereof (whether or not the damaged portion
of the Premises or the means of repairing the same are reasonably or readily
accessible to Tenant) including, without limiting the generality of the
foregoing, any and all telephone and telecommunications wiring and equipment,
fixtures, interior walls, and interior surface of exterior walls, roof surface,
ceilings, windows, doors, plate glass, showcases, skylights and entrances
located within the Premises, and the electrical, plumbing, lighting, heating and
air conditioning systems (unless Landlord has elected to keep and maintain the
HVAC systems pursuant to Paragraph 6.1). Tenant shall enter into a service
contract to maintain such HVAC systems and shall deliver to Landlord, every six
months during the Lease Term, a certificate of maintenance or its equivalent,
signed by a licensed HVAC repair and maintenance contractor and stating that the
heating and air conditioning systems servicing the Premises have been inspected,
serviced and are in good order, condition and repair.
(b) If Tenant fails to perform Tenant's obligations under this
Paragraph 6.2 or under any other Paragraph of this Lease, Landlord may, at
Landlord's option, enter upon the Premises after ten (10) days' prior written
notice to Tenant (except in the case of emergency, in which case no notice shall
be required), to perform such obligations on Tenant's behalf and put the
Premises in good order, condition and repair, and the cost thereof together with
interest thereon at the maximum rate then allowable by law shall be due and
payable as Additional Rent to Landlord together with Tenant's next rental
installment.
(c) On the Expiration Date of the term hereof, or on any earlier
termination, Tenant shall surrender the Premises to Landlord in the same
condition as received, clean and free of debris, ordinary wear and tear
excepted. Any damage or deterioration of the Premises shall not be deemed
ordinary wear and tear if the same could have been avoided by good maintenance
practices by Tenant. Tenant shall repair any damage to the Premises, occasioned
by the installation or removal of its trade fixtures, furnishings and equipment.
Notwithstanding anything to the contrary stated in this Lease, Tenant shall
leave the air lines, power panels, electrical distribution systems, lighting
fixtures, space heaters, heating and air conditioning systems, window coverings,
wall coverings, carpets, panelling, ceilings, and plumbing on the Premises in
good order and operating condition.
6.3 Alterations.
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(a) Tenant shall not, without Landlord's prior written consent, make
any Alterations or Utility Installations or repairs in, on or about the Premises
or attach any fixtures or equipment thereto, except for interior decorative and
nonstructural Alterations not exceeding $10,000 annually during the term of this
Lease. As used in this Paragraph 6.3, the term "Alterations" shall mean any
alterations, additions, improvements, construction, maintenance, repair,
replacement, installation, removal or decoration undertaken by Tenant in
connection with the Premises. The term "Utility Installations" shall mean
carpeting, window and wall coverings, air lines, power panels, electrical
distribution systems, lighting fixtures, space heaters, air conditioning,
plumbing, and telephone and telecommunications wiring and equipment and any
other system. Landlord may require that Tenant remove any or all of said
Alterations or Utility Installations at the expiration of the term, and restore
the Premises to their prior condition provided that Landlord has notified Tenant
that removal of such Alterations or Utility installations will be required at
the time Landlord approves the specific plans therefor. Landlord may require
Tenant to provide Landlord, at Tenant's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half times
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against any liability for mechanics' and materialmen's liens and to insure
completion of the work. Should Tenant make any Alterations or Utility
Installations without the prior approval of Landlord, Landlord may require that
Tenant remove any and all of the same.
(b) Any Alterations or Utility Installations in, on or about the
Premises that Tenant shall desire to make and which requires the consent of the
Landlord shall be presented to Landlord in written form, with complete plans and
specifications. If Landlord shall give its consent, the consent shall be deemed
conditioned upon Tenant acquiring a permit to do so from appropriate
governmental agencies, the furnishing of a copy thereof to Landlord prior to the
commencement of the work and the compliance by Tenant with all conditions of
said permit in a prompt and expeditious manner. The contractor or person
selected by Tenant to make such Alterations or Utility Installations must be
approved in writing by Landlord prior to commencement of any work and such
contractor or person shall at all times be subject to Landlord's control while
in the Building and shall comply with Landlord's Rules and Regulations for
Tenant Contractors, the current version of which is attached hereto as Exhibit
E. Tenant shall also require its contractor to maintain insurance in amounts and
in such form as Landlord may reasonably require and naming Landlord as an
additional insured. Any Alterations or Utility Installations shall be completed
in substantial accordance with the plans and specifications approved by
Landlord, shall be carried out in a good, workmanlike and prompt manner, shall
be of good and sufficient quality and materials, shall comply with all
applicable laws and shall be subject to reasonable supervision by Landlord or
its authorized representatives. Without Landlord's prior written consent, which
shall not be unreasonably withheld, Tenant shall not use any portion of the
common areas in connection with the making of any Alterations or Utility
Installations.
(c) Tenant shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant at or for use in
the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest therein. Tenant shall
give Landlord not less than fifteen (15) days' notice prior to the commencement
of any work in the Premises, and Landlord shall have the right to post notices
of non-responsibility in or on the Premises as provided by law. If Tenant shall,
in good faith, contest the validity of any such lien, claim or demand, then
Tenant shall, at its sole expense, defend itself and Landlord against the same
and shall pay and satisfy any adverse judgment that may be rendered thereon
before the enforcement thereof against the Landlord or the Premises, upon the
condition that if Landlord shall require, Tenant shall furnish to Landlord a
surety bond satisfactory to Landlord in an amount equal to such contested lien,
claim or demand indemnifying Tenant against liability for the same and holding
the Premises free from the effect of such lien or claim. In addition, Landlord
may require Tenant to pay Landlord's reasonable outside counsel attorneys' fees
and costs in participating in such action if Landlord shall decide it is to its
best interest to do so.
(d) Unless Landlord requires their removal, as set forth in Paragraph
6.3(a), all Alterations and Utility Installations (whether or not they
constitute trade fixtures of Tenant), which may be made on the Premises,
including but not limited to the floor coverings, panelings, doors, drapes,
built-ins, moldings, soundproofing and lighting and telephone or communications
systems, conduit, wiring and outlets, shall become the property of Landlord and
remain upon and be surrendered with the Premises at the expiration of the term.
Notwithstanding the provisions of this Paragraph 6.3(d), Tenant's machinery and
equipment, other than that which is affixed to the Premises so that it cannot be
removed without material damage to the Premises, shall
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subject to the provisions of Paragraph 6.2(a).
(e) Tenant shall provide Landlord with as-built plans and
specifications for any Alterations or Utility Installations.
7. Indemnity; Insurance.
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7.1 INDEMNITY. Tenant shall indemnify and hold harmless Landlord from and
against any and all claims arising from Tenant's use or occupancy of the
Premises, or from the conduct of Tenant's business or from any activity, work or
things done, permitted or suffered by Tenant in, on or about the Premises other
than claims arising solely by reason of negligence or wilful acts of Landlord,
its agent, employees or contractors, and shall further indemnify and hold
harmless Landlord from and against any and all claims arising from any breach or
default in the performance of any obligation on Tenant's part to be performed
under the terms of this Lease, or arising from the negligent or intentional acts
or omissions of the Tenant, or any of Tenant's agents, contractors, or
employees, and from and against all costs, attorneys' fees, expenses and
liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon; and in the case of any action or proceeding brought
against Landlord by reason of any such claim, Tenant upon notice from Landlord
shall defend the same at Tenant's expense by counsel satisfactory to Landlord.
Tenant, as a material part of the consideration to Landlord, hereby assumes all
risk of injury to Tenant's business, loss of income, damage to property or
injury to persons, in, on or about the Premises arising from any cause other
than Hazardous Materials existing in the soil on the Premises prior to the date
hereof and Tenant hereby waives all claims ,in respect thereof against Landlord.
7.2 TENANT'S INSURANCE. During the term of this Lease, Tenant shall at
Tenant's expense, obtain and keep in force the following policies of insurance:
(a) Comprehensive General Liability Insurance protecting Tenant
against any liability for injury or death to any person or persons or damage to
property arising out of Tenant's exclusive use, occupancy or maintenance of the
Premises. The limits of such liability insurance shall not be less than Two
million Dollars ($2,000,000.00) combined single limit per occurrence, such limit
to be increased upon Landlord's request whenever Landlord determines that such
an increase is required adequately to protect Landlord from the matters insured
against.
(b) All-Risk Property Insurance covering loss or damage to Tenant's
fixtures, equipment or tenant improvements.
All insurance required under this Paragraph 7.2 shall be written on an
occurrence basis and be (i) issued by such good and responsible companies
qualified to do and doing business in the state where the Premises are located
as may be approved by Landlord, which approval shall not be unreasonably
withheld, and (ii) name Landlord as a named additional insured by an additional
insured endorsement. Tenant shall deliver to Landlord certificates evidencing
the existence and amounts of insurance required above and, if requested by
Landlord, copies of the insurance policies. No such policy shall be cancellable
or subject to reduction of coverage except upon thirty (30) days' written notice
to Landlord. Tenant shall, within thirty (30) days of expiration of such
policies, furnish Landlord with certificates of renewal or "binders" therefor.
7.3 LANDLORD'S INSURANCE. Landlord shall, at Tenant's expense, obtain and
keep in force during the term of this Lease the following insurance:
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covering bodily injury and property damage liabilities arising out of the
Landlord's ownership, use, occupancy or maintenance of the Premises and all
areas appurtenant thereto in an amount not less than Two Million Dollars
($2,000,000.00) combined single limit per occurrence.
(b) Property Insurance covering loss or damage to the Building, but
not Tenant's fixtures, equipment or tenant improvements in an amount not to
exceed the full replacement value thereof, as the same may exist from time to
time, providing protection against all perils included within the classification
"all risk", as such term is used in the insurance industry, including vandalism
and malicious mischief, but excluding flood or earthquake coverage unless
required by a lender having a lien on the Premises. In addition, Landlord may
obtain and keep in force during the term of this Lease, a policy of rental value
insurance covering a period of one year, with loss payable to Landlord, which
insurance shall also cover all real estate taxes and insurance costs for said
period..
(c) Such other insurance (including flood or earthquake coverage) as
Landlord deems necessary and prudent.
Notwithstanding the foregoing, Landlord may at any time and from time to time as
an alternative to maintaining the insurance required in this Paragraph 7.3
itself, require Tenant to maintain the policies of insurance specified under (b)
and (c) above in accordance with the requirements of Paragraph 7.2.
7.4 PAYMENT OF PREMIUM. Tenant shall pay to Landlord during the term
hereof, as Additional Rent, Tenant's Percentage Share of the amount of premiums
for the insurance required under Paragraph 7.3, in accordance with Paragraph
4.3.
7.5 WAIVER OF SUBROGATION. Landlord and Tenant each hereby release and
relieve the other, and waive their entire right of recovery against the other
for loss or damage arising out of or incident to risks insured against under all
policies of fire and extended coverage, public liability, workers' compensation
and other insurance now or hereafter existing during the term hereof and
covering any portion of the Premises or any operations therein, regardless of
cause, including negligence of the other party, its agents, employees and
contractors. Landlord and Tenant shall, upon obtaining the policies of insurance
required hereunder advise each insurance carrier that the foregoing mutual
waiver of subrogation is contained herein, and each party covenants that no
insurer shall hold any right of subrogation against such other party.
8. Damage or Destruction.
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8.1 Definitions.
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(a) "Premises Partial Damage' shall herein mean damage or destruction
to the Premises to the extent that the cost of repair is less than fifty percent
(50%) of the fair market value of the Premises immediately prior to such damage
or destruction. 'Premises Building Partial Damage" shall herein mean damage or
destruction to the Building of which the Premises are a part to the extent that
the cost of repair is less than fifty percent (50%) of the fair market value of
such Building as a whole immediately prior to such damage or destruction.
(b) "Premises Total Destruction' shall herein mean damage or
destruction to the Premises to the extent that the cost of repair is fifty
percent (SO%) or-more of the fair market value of the Premises immediately prior
to such damage or destruction. "Premises Building Total Destruction" shall
herein mean damage or destruction to the Building of which the Premises are a
part to the extent that the cost of repair is fifty percent (50%) or more of the
fair market value of
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(c) "Insured Loss" shall herein mean damage or destruction which was
caused by an event required to be covered by the insurance described in
Paragraph 7.3(b).
8.2 PARTIAL DAMAGE - INSURED LOSS. Subject to the provisions or Paragraphs
8.4, 8.5 and 8.6, if at any time during the term of this Lease there is damage
which is an Insured Loss and which falls into the classification of Premises
Partial Damage or Premises Building Partial Damage, then Landlord shall, at
Landlord's sole cost, repair such damage to the Building, and Tenant, at
Tenant's sole cost, shall repair and restore Tenant's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect.
8.3 PARTIAL DAMAQE - UNINSURED LOSS. Subject to the provisions of
Paragraphs 8.4, 8.5, and 8.6, if at any time during the term of this Lease there
is damage which is not an Insured Loss and which falls within the classification
of Premises Partial Damage or Premises Building Partial Damage, unless caused by
a negligent or willful act of Tenant (in which event Tenant shall make the
repairs at Tenant's expense), Landlord may, at Landlord's option, either (i)
repair such damage as soon as reasonably possible at Landlord's expense, in
which event this Lease shall continue in full force and effect with rent
abatement during such repair period, or (ii) give written notice to Tenant
within sixty (60) days after the date of the occurrence of such damage of
Landlord's intention to cancel and terminate this Lease, as of the date of the
occurrence of such damage. In the event this Lease does not terminate, Landlord
shall repair and restore all portions of the Building and the Promises excluding
Tenant's fixtures, equipment and Tenant improvements, which Tenant shall repair
and restore at Tenant's sole cost. In the event Landlord elects to give such
notice of Landlord's intention to cancel and terminate this Lease, Tenant shall
have the right within ten (10) days after the receipt of such notice to give
written notice to Landlord of Tenant's intention to repair such damage at
Tenant's expense, without reimbursement from Landlord, in which event this Lease
shall continue in full force and effect, and Tenant shall proceed to make such
repair as soon as reasonably possible. If Tenant does not give such notice
within such ten (10) day period this Lease shall be cancelled and terminated as
of the date of the occurrence of such damage.
8.4 TOTAL DESTRUCTION. If at any time during the term of this Lease there
is damage, whether or not an Insured Loss (including destruction required by any
authorized public authority), which falls into the classification of Premises
Total Destruction or Premises Building Total Destruction, Landlord may, at
Landlord's option, either (i) repair such damage as soon as reasonably possible
at Landlord's expense, in which event this Lease shall continue in full force
and effect with rent abatement during such repair period, or (ii) give written
notice to Tenant within sixty (60) days after the date of the occurrence of such
damage of Landlord's intention to cancel and terminate this Lease, as of the
date of the occurrence of such damage. In the event this Lease does not
terminate, Landlord shall repair and restore all portions of the Building and
the Premises excluding Tenant's fixtures, equipment and Tenant improvements,
which Tenant shall repair and restore at Tenant's sole cost.
8. 5 Damage Near End of Term.
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(a) If at any time during the last six (6) months of the term of this
Lease there is damage, whether or not an Insured Loss, which falls within the
classification of Premises Partial Damage, Landlord may., at Landlord's option,
cancel and terminate this Lease as of the date of occurrence of such damage by
giving written notice to Tenant of
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the date of occurrence of such damage.
(b) Notwithstanding Paragraph 8.5(a), in the event that Tenant has an
option to extend or renew this Lease, and the time within which said option may
be exercised has not yet expired, Tenant shall exercise such option, if it is to
be exercised at all, no later than twenty (20) days after the occurrence of an
Insured Loss falling within the classification of Premises Partial Damage during
the last six (6) months of the term of this Lease. If Tenant duly exercises such
option during said twenty (20) day period, Landlord shall, at Landlord's
expense, repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Tenant fails to exercise such option
during said twenty (20) day period, then Landlord may at Landlord's option,
terminate and cancel this Lease as of the expiration of said twenty (20) day
period by giving written notice to Tenant of Landlord's election to do so within
ten (10) days after the expiration of said twenty (20) day period,
notwithstanding any term or provision in the grant of option to contrary.
8.6 Abatement of Rent; Tenant's Remedies.
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(a) In the event of damage described in Paragraphs 8.2 or 8.3, and
Landlord or Tenant repairs or restores the Premises pursuant to the provisions
of this Paragraph 8, the rent payable hereunder for the period during which such
damage, repair or restoration continues shall be abated in proportion to the
area of the Premises unusable during such period. Except for abatement of rent,
if any, Tenant shall have no claim against Landlord for any damage suffered by
reason of such damage, destruction, repair or restoration.
(b) If Landlord shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 8 and shall not commence preparations for
such repair or restoration within ninety (90) days after such obligations shall
accrue, Tenant may, at Tenant's option, cancel and terminate this Lease by
giving Landlord written notice of Tenant's election to do so at any time prior
to the commencement of such repair or restoration. in such event this Lease
shall terminate as of the date of such notice.
8.7 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to this Paragraph 8, an equitable adjustment shall be made concerning advance
rent and any advance payments made by Tenant to Landlord. Landlord shall, in
addition, return to Tenant so much of Tenant's security deposit as has not
theretofore been applied by Landlord.
8.8 WAIVER. Landlord and Tenant waive the provisions of any statutes which
relate to termination of leases when leased property is destroyed and agree that
such event shall be governed by the terms of this Lease.
9. Real Property Taxes.
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9.1 PAYMENT OF TAX. Landlord shall pay the Real Property Tax, as defined in
Paragraph 9.3, applicable to the Building and the land upon which it is located;
provided, however, that Tenant shall pay, as an item of operating Expenses
Tenant's Percentage Share of such Real Property Tax, in the manner provided for
Operating Expenses in Paragraph 4.3, or, at Landlord's election, within thirty
(30) days after receipt of Landlord's written statement setting forth the amount
of such pro rata share. If the term of this Lease shall not expire concurrently
with the expiration of the tax fiscal year, Tenant's liability for taxes for the
last partial lease year shall be prorated on an annual basis.
9.2 ADDITIONAL IMPROVEMENTS. Notwithstanding Paragraph 9.1 hereof , Tenant
shall pay to Landlord within thirty (30) days of receipt of Landlord's demand
therefor the entirety of any increase in Real Property Tax if assessed solely by
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Tenant or at Tenant's request.
9.3 DEFINITION OF REAL PROPERTY TAX. As used herein, the term "Real
Property Tax" shall include (to the extent any of the following are not paid by
Tenant pursuant to Paragraphs 9.2 and 9.5) any form of real estate tax or
assessment, general, special, ordinary or extraordinary, any service payments in
lieu of taxes, any personal property taxes, sales and/or use taxes, employee
taxes, and any excises, license fee, commercial rental tax, gross receipts t ax,
improvement bond or bonds, transit charges, housing fund assessments or other
housing charges, parking facilities assessments o r other parking charges,
environmental surcharges, levy or tax, foreseen or unforeseen (other than
inheritance, personal income or estate taxes) imposed on the Premises by any
authority having the direct or indirect power to tax, including any city, state
or federal government, or any school, agricultural, sanitary, fire, street,
drainage or other improvement district thereof, as against any legal or
equitable interest of Landlord in the Premises or in the real property of which
the Premises are a part, as against Landlord's right to rent or other income
therefrom, and as against Landlord's business of leasing the Premises. The term
"Real Property Tax" shall also include any tax, fee, levy, assessment or charge
(i) in substitution of, partially or totally, any tax, fee, levy, assessment or
charge hereinabove included within the definition of Real Property Tax, or (ii)
the nature of which was hereinbefore included within the definition of Real
Property Tax, or (iii) all other governmental, quasi-governmental or special
district impositions of any kind, present or future, whether or not customary or
within the contemplation of the parties hereto and regardless of whether
resulting from increased rate and/or valuation, or (iv) which is imposed as a
result of a transfer, either partial or total, of Landlord's interest in the
Premises or which is added to a tax or charge herinbefore e fore included within
the definition of Real Property Tax by reason of such transfer, or (v) which is
imposed by reason of this transaction, any modifications or changes hereto, or
any transfers hereof, and any interest or penalty charged on account of any such
Real Property Tax. Real Property Tax shall also include Landlord's cost of
contesting by appropriate proceedings the amount or validity of any such taxes.
9.4 Personal Property Taxes.
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(a) Tenant shall pay, prior to delinquency, all taxes assessed against
and levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant contained in the Premises. When possible, Tenant shall cause
said trade fixtures, furnishings, equipment and all other personal property to
be assessed and billed separately from the real property of Landlord.
(b) If any of Tenant's said personal property shall be assessed with
Tenant's real property, Tenant shall pay Landlord the taxes attributable to
Tenant within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Tenant's property.
10. UTILITIES. Tenant shall pay for all water, gas, heat, light, power,
telephone and other utilities and services supplied to the Premises, together
with any taxes thereon. Such services shall be separately metered to the
Premises.
11. Assignment and Subletting.
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11.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Tenant's interest in this Lease or in the Premises,
without Landlord's prior written consent, which shall not be unreasonably
withheld. Any attempted assignment, transfer, mortgage, encumbrance or
subletting
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Landlord's option constitute a breach of this Lease that entitles Landlord to
terminate this Lease. Tenant agrees that the instrument by which any assignment
or subletting consented to by Landlord is accomplished shall be in a form
satisfactory to Landlord and shall expressly provide that the assignee or
subtenant will perform and observe all the agreements, covenants, conditions and
provisions to be performed and observed by Tenant under this Lease as and when
performance and observance is due and that Landlord will have the right to
enforce such agreements, covenants, conditions and provisions directly against
such assignee or subtenant. Any subtenant shall, by reason of entering into a
sublease under this Lease, be deemed, for the benefit of Landlord, to have
assumed and agreed to conform and comply with each and every obligation of
Tenant hereunder other than such obligations as are contrary to provisions
contained in a subleas e to which Landlord has expressly consented in writing .
For purposes hereof, in the event Tenant is a partner ship, a withdrawal or
change of partners owning more than twenty-five percent (25%) of the general
partnership interests in the partnership, or, if Tenant is a corporation, any
transfertra of more than twenty-five percent (25%) of its voting stock shall
constitute a voluntary assignment of this Lease.
11.2 TENANT AFFILIATE. Notwithstanding the provisions of Paragraph 11.1
hereof, Tenant may assign or sublet the Premises, or any portion thereof ,
without Landlord's consent, to any corporation which wholly controls, is
controlled by or is under common control with Tenant, or to any corporation
resulting from the merger or consolidation with Tenant, or to any person or
entity which acquires all the assets of Tenant as a going concern of the
business that is being conducted on the Premises, provided that said assignee
assumes, in full, the obligations of Tenant under this Lease. Any such
assignment shall not, in any way, affect or limit the liability of Tenant under
the terms of this Lease.
11.3 NO RELEASE OF TENANT. Regardless of Landlord's consent, no subletting
or assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be
performed by Tenant hereunder, whether accruing before or after such subletting
or assignment, except as provided in Paragraph 11.6 below. The acceptance of
rent by Landlord from any other person shall not be deemed to be a waiver by
Landlord of any provision hereof. Consent to one assignment or subletting shall
not be deemed consent to any subsequent assignment or subletting. In the event
of default by any assignee of Tenant or any successor of Tenant in the
performance of any of the terms hereof, Landlord may proceed directly against
Tenant without the necessity of exhausting remedies against said assignee.
Landlord may consent to subsequent assignments or subletting of this Lease or
amendments or modifications to this Lease with assignees of Tenant without
notifying Tenant or any successor of Tenant, and without obtaining its or their
consent thereto and such action shall not relieve Tenant of liability under this
Lease.
11.4 NOTICE OF ASSIGNMENT OR SUBLETTING. Before entering into any
assignment of this Lease or into a sublease of all or a part of the Premises,
Tenant shall give written notice to Landlord (a) identifying the intended
assignee or subtenant by name and address, (b) describing the nature of the pro
posed business to be carried on in the Premises, (c) specifying the terms of the
intended assignment or sublease, and (d) providing such financial and other
business information as Landlord may reasonably request concerning the propose
assignee or subtenant (including, without limitation, a bank reference and
financial statements for the two most recently completed fiscal years). Landlord
shall respond to Tenant's request for consent within forty-five (45) clays of
submission of all requested information. For a period of forty-five (45) days
after such notice, accompanied by all supporting documents, is given, Landlord
shall have
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the right by written notice to Tenant to terminate this Lease as of the date
specified in such notice, which date shall not be less than thirty (30) days nor
more than sixty (60) days after such notice is given. If Landlord terminates
this Lease, Landlord may, if it elects, enter into a new lease covering the
Premises with the intended assignee or subtenant on such terms as Landlord and
such person may agree, or enter into a hew lease covering the Premises with any
other persons In such event Tenant shall not be entitled to any portion of
profit, if any, which Landlord may realize on account of such termination and
reletting. From and after the date of such termination of this Lease, Tenant
shall have no further obligation to Landlord hereunder, except for matters
occurring or obligations arising hereunder prior to the date of such
termination.
11.5 CONDITION TO LANDLORD'S CONSENT. As a condition to Landlord's consent
to any assignment or subletting, Landlord shall be entitled to receive, in the
case of a subletting, 50% of the rent (however denominated and paid) payable by
the subtenant to Tenant in excess of that payable by Tenant to Landlord
hereunder and, in the case of an assignment, all of the consideration given,
directly or indirectly, by the assignee to Tenant in connection with such
assignment, after Tenant has first recovered its unamortized costs of tenant
improvements in the Premises (based upon a five year amoritization on period)
and any direct costs incurred by it in such assignment or sublease such as
brokerage commissions and tenant improvements made for the sublessee or
assignee. For purposes of this Paragraph, the term "rent" shall mean all
consideration paid or given, directly or indirectly, for the use of the Premises
or any portion thereof. The term "consideration" shall mean and include money,
services, property or any other thing of value such as payment of costs,
cancellation of indebtedness, discounts, rebates and the like. The rent or other
consideration which is to be passed through to Landlord by Tenant pursuant to
this Paragraph shall be paid to Landlord promptly upon receipt by Tenant and
shall be paid in cash, irrespective of the form in which received by Tenant from
any subtenant or assignee. if any rent or other consideration received by Tenant
from a subtenant or assignee is in a form other than cash, Tenant shall pay to
Landlord in cash the fair value of such consideration.
11.6 LANDLORD'S EXPENSES. In the event Tenant shall assign or sublet the
Premises or request the consent of Landlord to any assignment or subletting or
if Tenant shall request the consent of Landlord for any act Tenant proposes t
do, then Tenant shall pay Landlord's reasonable costs and expenses incurred in
connection therewith, including, without limitation, attorneys' fees, and
Landlord may condition its consent on the payment thereof.
12. Defaults; Remedies.
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12.1 DEFAULTS. The occurrence of any one or more of the following events
shall constitute a material default and breach of this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant.
(b) The failure by Tenant to make payment of Base Monthly Rent,
Additional Rent, or any other payment required to be made by Tenant hereunder,
as and when due.
(c) The failure by Tenant to observe or perform any of the convenants,
conditions or provisions of this Lease to be observed or performed by Tenant,
other than described in Subparagraph (b) or (f), where such failure shall
continue for a period of ten (10) days after written notice thereof from
Landlord to Tenant; provided, however, that if the nature of Tenant's default is
such that more than ten (10) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure
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within said ten (10) day period and thereafter diligently prosecutes such cure
to completion.
(d) (i) The making by Tenant of any general arrangement or assignment
for the benefit of creditors; (ii) Tenant's becoming a "debtor" as defined in 11
U.S.C. Section 101 or any successor statute thereto (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
30 days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this lease, where such seizure is not discharged within thirty (30)
days. in the event that any provision of this Paragraph 12.1(d) is contrary to
any applicable law, such provision shall be of no force or effect.
(e) The discovery by Landlord that any financial statement given to
Landlord by Tenant, any assignee of Tenant, any subtenant of Tenant, any
successor in interest of Tenant or any guarantor of Tenant's obligations
hereunder, and any of them, was materially false.
(f) An assignment, subletting or other transfer or attempted transfer
in violation of Paragraph 11.
12.2 REMEDIES. in the event of any such material default or breach by
Tenant, Landlord may at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default or breach:
(a) Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession to the Premises to Landlord. In such event
Landlord shall be entitled to recover from Tenant all damages incurred by
Lanlord by reason of Tenant's default including, but not limited to, (i) the
cost of recovering possession of the Premises; (ii) expenses of reletting,
including necessary renovation and alteration of the Premises, reasonable
attorney , fees, and any real estate commission actually paid; ( i ii) the worth
at the time of the award by the court having jurisdiction thereof of the unpaid
rent earned at the time of termination of Tenant's right to possession of the
Premises; (iv) the worth at the time of the award of the amount by which the
unpaid rent that would have been earned after the date of termination of
Tenant's right to possession until the time of award exceeds the amount of the
loss of rent for the same period that Tenant proves could be reasonably avoided;
(v) 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 such award exceeds the amount of such
rental loss for the same period that Tenant proves could be reasonably avoided;
and (vi) that portion of any leasing commission paid by Landlord applicable to
the unexpired term of the Lease.
(b) Maintain Tenant's right to possession in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state wherein the Promises are
located- Unpaid installments of rent and other unpaid monetary obligations of
Tenant under the terms of this Lease shall bear interest from the date due at
the maximum rate then allowable by law.
12.3 DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required
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of Landlord within a reasonable time, but in no event later than thirty (30)
days after written notice by Tenant to Landlord, specifying where Landlord has
failed to perform such obligation; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
performance then Landlord shall not be in default if Landlord commences
performance within such thirty (30) day period and thereafter diligently
prosecutes the same to completion.
12.4 LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent and other sums due thereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or deed of trust covering the Premises.
Accordingly, if any installment of rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within ten (10) days after
such amount shall be due, Tenant shall pay to Landlord a late charge equal to
ten percent (10%) of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder. Any overdue rent and other payments due
from Tenant under this Lease and not paid when due shall bear interest at the
maximum rate per annum to which parties are permitted to agree under applicable
law on that due date.
12.5 LANDLORD'S RIGHT TO CURE DEFAULTS. All agreements, convenants,
conditions and provisions to be performed or observed by Tenant under this Lease
shall be at its sole cost and expense and without any abatement of rent. 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 do so, and
without having or releasing Tenant from any obligations of Tenant, make any such
payment or perform any such other act on Tenant's part to be male or performed
as provided in this Lease. All sums so paid by Landlord and all necessary
incidental costs shall be deemed Additional Rent hereunder and shall be payable
to Landlord on demand, together with interest thereon at the maximum rate per
annum to which parties are permitted to agree under applicable law at the time
of expenditure by Landlord from the date of expenditure to the date of repayment
by Tenant, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of the nonpayment thereof by
Tenant as in the case of default by Tenant in the payment of rent.
13. CONDEMNATION. If the Premises or any portion thereof or of the Building
are taken under the power of eminent domain, or sold under the threat of the
exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than
twenty-five percent (25%) of the floor area of the Premises is taken, or if so
much of the common areas of the Building is taken as would render the Premises
untenantable, as reasonably determined by Landlord, Tenant may, at Tenant's
option, to be exercised in writing only within tan (10) days after Landlord
shall have given Tenant written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession), terminate this Lease as of the date the condemning authority takes
such possession. If Tenant does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the the
portion of the Premises remaining, except that the rent shall be reduced in the
proportion that the floor area of the Premises taken bears to
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Premises, or areas not within the Building are taken. Any award for the taking
of all or any part of the Premises under the power of eminent domain or any
payment made under threat of the exercise of such power shall be the property of
Landlord, whether such award shall be made as compensation for diminution in
value of the leasehold or for the taking of the fee, or as severance damages;
provided, however, that Tenant shall be entitled to any award for loss of or
damage to Tenant's trade fixtures and removable personal property. In the event
that this Lease is not terminated by reason of such condemnation, Landlord
shall, to the extent of severance damages received by Landlord in connection
with such condemnation,-repair any damage to the Premises caused by such
condemnation except to the extent that Tenant has been reimbursed therefor by
the condemning authority. Tenant shall pay any amount in excess of such
severance damages required to complete such repair.
14. REAL ESTATE BROKERS. Tenant represents and warrants that it has not
authorized or employed, or acted by implication to authorize or to employ, any
real estate broker or salesman to act for Tenant in connection with this Lease
except as otherwise noted in Schedule A. Tenant shall hold Landlord harmless
from and indemnify and defend Landlord against any and all claims by any real
estate broker or salesman for a commission or finder's fee as a result of
Tenant's entering into this Lease.
15. Estoppel Certificate.
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(a) Tenant shall at any time upon not less than ten (I ) days' prior
written request from Landlord execute, acknowledge and deliver to Landlord a
statement in writing in the form of Exhibit C (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Lease, as so modified, is in full
force and effect) and the date to which the rent and other charges are paid in
advance, if any, (ii) acknowledging that there are not, to Tenant's knowledge,
any uncured defaults on the part of Landlord hereunder, or specifying such
defaults if any are claimed, and (iii) certifying or acknowledging facts as to
such other matters as Landlord may reasonably require. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises.
(b) At Landlord's option, Tenant's failure to deliver such statement
within such time shall be conclusive upon Tenant (i) that this Lease is in full
force and effect, without modification except as may be represented by Landlord,
(ii) that there are no uncured defaults in Landlord's performance, (iii) that
not more than one month's rent has been paid in advance, and (iv) that such
other matters as to which Landlord has requested information are as represented
by Landlord, or such failure may be considered by Landlord as a default by
Tenant under this Lease.
16. LANDLORD'S LIABILITY. The term "Landlord" as used herein shall mean only the
owner or owners at the time in question of the fee title or a tenant's interest
in a ground lease of the Premises, and in the event of any transfer of such
title or interest, Landlord herein named (and in case of any subsequent
transfers then the grantor) shall be relieved from and after the date of such
transfer of all liability as respects Landlord's obligations thereafter to be
performed, provided that any funds in the hands of Landlord or the then grantor
at the time of such transfer, in which Tenant has an interest, shall be
delivered to the grantee. The obligations contained in this Lease to be
performed by Landlord shall, subject as aforesaid, be binding on Landlord's
successors and assigns only during their respective periods of ownership.
17. SEVERABILITY. The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction,
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shall in no way affect the validity of any other provision hereof.
18. INTEREST ON PAST-DUE OBLIGATIONS. Except as otherwise expressly herein
provided, any amount due to Landlord not paid when due shall bear interest at
the maximum rate then allowable by law from the date due. Payment of such
interest shall hot excuse or cure any default by Tenant under this Lease,
provided, however, that interest shall not be payable on late charges incurred
by Tenant nor on any amounts upon which late charges are paid by Tenant.
19. TIME OF ESSENCE. Time is of the essence.
20. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit with
Landlord the sum specified on Schedule A, if any as security for Tenant's
faithful performance of Tenant s, if any, obligations hereunder. If Tenant fails
to make any payment when due hereunder, or otherwise defaults with respect to
any provisions of this Lease, Landlord may use, apply or retain all or any
portion of said deposit for the payment of such payment in default or for the
payment of any other sum to which Landlord may become obligated by reason of
Tenant's 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 said deposit, Tenant shall within ten (10) days after written demand therefor
deposit cash with Landlord in an amount sufficient to restore said deposit to
the full amount hereinabove stated and Tenant's failure to do so shall be a
breach of this Lease. If Tenant performs all of Tenant's obligations hereunder,
said deposit, or so much thereof as has not theretofore been applied by
Landlord, shall be returned to Tenant (or at Landlord's option, to the last
assignee, if any, of Tenant's interest hereunder) at the expiration of the term
hereof, and after Tenant has vacated the Premises. Landlord shall not be
required to keep this security deposit separate from its general funds, and
Tenant shall not be entitled to interest on such deposit. Upon terminatin of the
original Landlord's or any successor Landlord's interest in the Premises, the
original Landlord or such successor Landlord shall be relieved of further
liability with respect to the security deposit, provided that the amount thereof
in the hands of the original Landlord or such successor Landlord has been
delivered to the new owner of the Premises. No trust relationship is created
hereby between Landlord and Tenant with respect to said security deposit.
21. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all
agreements, oral or written, of the parties with respect to any matter mentioned
herein. No prior agreement or understanding pertaining to any such matter shall
be effective. There are no representations between Landlord and Tenant or
between any real estate broker and Tenant other than those contained in this
Lease. This Lease may be modified in writing only, signed by the parties in
interest at the time of the modification.
22. NOTICES. Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery, nationally-recognized overnight
delivery service, or by registered or certified mail, return receipt requested.
if given personally such notice shall be deemed sufficiently given it delivered
to any person apparently in charge or authorized to receive mail, or if given by
mail, shall be deemed sufficiently given if addressed to Tenant or to Landlord,
at the address noted in Schedule A or, if sent to Tenant subsequent to Tenant's
taking possession of the Premises, at the Premises. Any notice shall be deemed
to have been given upon the date of personal delivery or, if mailed, three (3)
days after the date of mailing as provided herein. Either party may by notice to
the other specify a different address for notice purposes. A copy of all notices
required or permitted to be given to Landlord hereunder shall be concurrently
transmitted to such party or parties at such
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addresses as Landlord and Tenant may from time to time hereafter designate by
notice to the other party.
23 WAIVERS. No waiver by Landlord or Tenant of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Landlord or Tenant of the same or any other provision. Landlord's consent to, or
approval of any act, shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.
24. PARKINQ. Tenant shall be entitled to park in common with other tenants of
Landlord and shall have the nonexclusive right to use of the number of parking
places set forth on Schedule A, or any lesser number which is now or hereafter
required under applicable laws or regulations affecting parking space
requirements. Tenant agrees not to overburdenden the parking facilities and
agrees to cooperate with Landlord and other tenants in the use of parking
facilities Landlord reserves the right in its absolute discretionto determine
whether parking facilities are becoming crowded and, in such event, to allocate
or reallocate parking spaces among Tenant and other tenants.
25. HOLDING OVER. if Tenant, with Landlord's consent, remains in possession of
the Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month at a rental in the amount of
twice the last Base Monthly Rent installment plus all other Additional Rent and
charges payable hereunder during the option term, and upon all the other
provisions of this Lease pertaining to the obligations of Tenant, but all
options and rights; of first refusal, if any, granted under the terms of this
Lease shall be deemed terminated and be of no further effect during said month
to month tenancy. Each party shall give t hi other written notice at least one
month prior to the date of termination of such monthly tenancy of its intention
to terminate.
26. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
27. COVENANTS AND CONDITIONS. Each provision of this Lease performable by Tenant
shall be deemed both a covenant and a condition.
28. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting
assignment or subletting by Tenant and subject to the provisions of Paragraph
16, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State of
California.
29. Subordination.
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(a) This Lease, at Landlord's option, shall be subordinate to any ground
lease, mortgage, deed of trust, or any other hypothecation for security now or
hereafter placed upon the real property of which the Premises are a part, or to
any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed so long as Tenant shall pay the rent and observe
and perform all the provisions of this Lease, unless this Lease is otherwise
terminated pursuant to its terms. If any mortgagee, trustee or ground lessor
shall elect to have this Lease prior to the lien of its mortgage, deed of trust
or ground lease, and shall give written notice thereof to Tenant, this Lease
shall be deemed prior to such mortgage, deed of trust, or ground lease, whether
this Lease is dated
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prior or subsequent to the date of said mortgage, deed of trust, or ground lease
or the date of recording thereof.
(b) Tenant agrees to execute any documents reasonably required to
acknowledge or effectuate an attornment, a subordination or to make this Lease
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be, and failing to do so within ten (10) days after written demand does
hereby make, constitute and irrevocably appoint Landlord as Tenant's attorney in
fact and in Tenant's name, place and stead, to do so.
30. ATTORNMENT. In the event of foreclosure or the exercise of the power of sale
under any deed of trust made by Landlord covering the Premises (or a transfer
under a deed in lieu of foreclosure), Tenant shall attorn to the purchaser upon
any such foreclosure or sale (or to the grantee of such deed in lieu of
foreclosure), and Tenant shall recognize such purchaser or grantee as Landlord
under this Lease, provided such purchaser or grantee agrees in writing to
recognize all of Tenant's rights hereunder and to perform all of Landlord's
obligations hereunder from the date of the attornment.
31. LANDLORD'S ACCESS. Landlord and Landlord's agents shall have the right to
enter the Premises at reasonable times (including, in an emergency, immediate
entry without notice) for the purpose of inspecting the same, showing the same
to prospective purchasers, lenders, or tenants, making such alterations,
repairs, improvements or additions to the Premises or to the Building as
Landlord may deem necessary or desirable, and the erecting, use and maintenance
of ut utilities, services, pipes and conduits through the Premises, as long as
there is no material adverse effect upon Tenant's use of the Premises. Landlord
may at any time place on or about the Premises any ordinary "For Sale" signs and
Landlord may at, any time during the last ninety (90) days of the term hereof
place on or about the Premises any ordinary "For Lease" signs, all without
rebate of rent or liability to Landlord. Landlord shall retain a key to all
locked portions of the Premises (except vaults and locked file or storage
cabinets) at all times and shall have the right to unlock all doors. Tenant may
not change locks upon the Premises unless Tenant furnishes Landlord with a key
thereto. Tenant waives any claim or charges for damages or interference with
Tenant's property or business, any loss of quiet enjoyment or other Is
occasioned by Landlord's entry.
32. SIGNS. Tenant may install on the Premises signs which identify Tenant and
the business Tenant conducts on the Premises, provided Tenant's signs comply
with (a) applicable requirements of governmental authorities, (b) applicable
recorded restrictions, and (c) Landlord's reasonable requirements, which may
included limitations on the number and placement of signs. Tenant shall not
install its signs without Landlord's prior written approval, which shall not be
unreasonably withheld. Tenant shall maintain its signs in neat condition and
repair throughout the Lease term. Tenant shall repair any damage which
maintenance, alterations or renovation of its signs may cause during or at the
expiration of the Lease term.
33. MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not work a
merger, and shall, at the option of Landlord, terminate all or any existing
subtenancies or may, at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.
34. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light, air
or view by any structure which may be erected on lands adjacent to the Premises
shall in no way affect this Lease or impose any liability on Landlord.
35. GUARANTOR; CO-TENANTS. In the event that there is a guarantor of this Lease,
said guarantor shall have the same obligations as Tenant under this Lease. If
there be more
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than one Tenant, the obligations herein imposed upon Tenant shall be joint and
several.
36. QUIET POSSESSION. Upon Tenant paying the rent for the Premises and observing
and performing all of the covenants, conditions and provisions on Tenant's part
to be observed and performed hereunder, Tenant shall have quiet possession of
the Premises for the entire term hereof subject to all of the provisions of this
Lease. The individuals executing this Lease on behalf of Landlord represent and
warrant to Tenant that they are fully authorized and legally capable of
executing this Lease on behalf of Landlord and that such execution is binding
upon all parties holding an ownership interest in the Premises.
37. LANDLORD'S RULES AND REGULATIONS. Tenant agrees that it will abide by, keep
and observe all reasonable rules and regulations which Landlord may make from
time to time for the management, safety, care and cleanliness of the Building
and grounds, the parking of vehicles and the preservation of good order therein
as well as for the convenience of other occupants and tenants of the Building.
Landlord's current Rules and Regulations, if any, are attached as Exhibit D to
this Lease and Tenant shall faithfully comply with all such rules and
regulations and all modifications thereof and additions thereto from time to
time promulgated in writing by Landlord. The violation of any such rules and
regulations by Tenant shall be deemed a material breach of this Lease. Landlord
shall not be responsible to Tenant for the nonperformance of any such rules and
regulations by any other tenant of the Building or another Building within the
same Complex.
38. SECURITY MEASURES. Tenant hereby acknowledges that the rental payable to
Landlord hereunder does not include the cost of guard service or other security
measures, and that Landlord shall have no obligation whatsoever to provide the
same. tenant assumes all responsibility for the protection of Tenant, its agents
and invitees from acts of third parties. Nothing contained herein shall prevent
Landlord, at Landlord's sole option, from providing security protection for the
Building or any part thereof, in which event the cost thereof shall be included
within the definition of Operating Expenses as set forth in Paragraph 4.3.
39. Landlord's Reservation of Rights.
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39.1 EASEMENTS. Landlord reserves to itself the right, from time to time,
to grant such easements, rights and dedications that Landlord deems necessary or
desirable and to cause the recordation of Parcel Maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign
any of the aforementioned documents upon request of Landlord and failure to do
so shall constitute a material breach of this Lease.
39.2 BUILDING RIGHTS. Landlord shall have the right (i) to permit any
tenant the exclusive right to conduct any business as long as such exclusive
right does not conflict with any rights expressly granted herein; and (ii) to
place such signs, notices or displays as Landlord deems appropriate upon or
about the exterior of the Building.
40. AUTHORITY. If Tenant is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of such entity.
41. CONFLICT. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
42. ATTORNEYS' FEES. In the event of any action or proceeding at law or in
equity between Landlord and Tenant to
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enforce any provision of this Lease or to protect or establish any right or
remedy of either Landlord or Tenant hereunder, the unsuccessful party to such
action or proceeding shall pay to the prevailing party all costs and expenses,
including reasonable attorneys' fees, incurred in such action or proceeding and
in any appeal in connection therewith, and if such prevailing party shall
recover judgment in any such action, proceeding or appeal, such costs, expenses
and attorneys' fees shall be included in and as part of such judgment.
43 EXHIBITS; The following exhibits are attached to this Lease and herein
incorporated by reference: Exhibit A (Site Plan); Exhibit B (Premises); Exhibit
C (Initial Improvements of Premises); Exhibit D (Rules and Regulations); Exhibit
E (Rules and Regulations for Tenant Contractors); and Exhibit F (Plans and
Specifications).
44. Lender Provisions.
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44.1 BACKGROUND. Tenant acknowledges that Landlord has agreed to sell the
Premises, Building and the land on which the Building is located to The National
Bank of Washington as trustee Of The National Bank of Washington MultiEmployer
Trust (the "Trust") and that the Trust (as landlord) will master lease the
Premises, Building and such land to Landlord (as tenant) for a period of time
following the sale (the "Master Lease").
44.2 ERISA. Tenant has received a current listing of the names of each
pension plan whose interest in the Trust, together with the interests of any
other pension plan maintained by the same employer or employee organization,
exceeds five percent (5%) of the total of all assets in the Trust. A copy of
that listing is attached as Exhibit G and is relied on by Tenant in providing
the certifications appearing in this subparagraph. Tenant certifies to the
Landlord and the Trust that no party-in-interest relationship exists between one
or more of the pension plans identified on Exhibit G and the tenant or any
person or entity so situated with respect to Tenant such that a non-exempt,
prohibited transaction under ERISA or the Code will result on purchase of the
Premises, Building, and the land on which the Building is located by the Trust.
Neither Tenant, nor any Tenant's affiliate, are employers in relation to any one
or more of the pension plans listed on Exhibit C. The terms "party-in-interest"
and "employer" shall have the meaning assigned to them in Sections (14) and (5)
respectively of ERISA. The term "affiliate" shall have the meaning assigned to
it in Section 407(a)(7) of ERISA. ERISA shall mean the Employee Retirement
Income Security Act of 1974, as amended. The Code shall mean the Internal
Revenue Code, as amended.
44.3 MASTER LEASE. Notwithstanding anything to the contrary contained in
this Lease, the Tenant and Landlord agree that (a) this Lease is subordinate to
the master Lease; (b) this Lease will not terminate upon expiration or
termination of the Master Lease but will automatically be converted into a
direct lease between the Trust (as landlord) and the Tenant (as tenant);
provided that the party executing this Lease as Landlord will remain responsible
for any breach or default of Landlord occurring prior to the expiration or
termination of the Master Lease; (c) on and after the expiration or termination
of the master Lease, the Tenant will attorn to the Trust and render all
performances required by this Lease to the Trust; and (d) Tenant agrees not to
prepay base rent or other sums due under this Lease more than one month in
advance; provided that Tenant may pay the last month's rent as a security
deposit.
44.4 DISCRIMINATION. The Tenant herein covenants by and for himself, his
heirs, executors, administrators, and assigns, and all persons claiming under or
through him that this Lease is made and accepted upon and subject to the
following conditions:
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That there shall be no discrimination against or segregation of any person
or group of persons, on account of race, color, creed, religion, sex,
marital status, national origin, or ancestry, in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the Premises, nor
shall the Tenant himself, or any person claiming under or through him,
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or
occupancy of tenants, sublessees, subtenants, or vendees in the Premises.
45. Extension Option.
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(a) Landlord hereby grants to Tenant the option to extend the term of this
Lease (the "Option") for one additional five-year period. Tenant shall exercise
such Option by giving written notice of exercise to Landlord at least six (6)
months prior to the Expiration Date; provided, however, that such Option shall
not be exercisable if Tenant is then in default hereunder or if the other
conditions set forth in the Lease have not been met. All of the terms and
conditions of this Lease shall govern such extended term insofar at applicable,
and all references in this Lease to the term hereof shall be deemed to include
such extended term unless the context clearly indicates to the contrary.
(b) The Base monthly Rent for the Option term shall be 95% of the fair
market rate as of the commencement of the Option term as determined by the
agreement of the parties or, if the parties are unable to agree on or before
ninety (90) days rior to the expiration of the term, then by an appraisal
conducted pursuant to Subparagraph (b) below. Notwithstanding the above, the
Base Monthly Rent for the no event less than the Base Monthly of the original
lease term. The Base into account the duration of the provide for reasonable
periodic such term.
(c) if it becomes necessary to determine the fair market rate for the
Premises by appraisal, then real estate appraisers), all of whom shall be
members of the American Institute of Real Estate Appraisers and each having at
least two years experience appraising commercial and industrial real property
located within the vicinity of the Premises, shall be appointed and shall act in
accordance with the following procedures:
(i) if Landlord and Tenant are unable to agree on the base rent for the
Option term, then either party may demand an appraisal by giving written notice
to the other party, which demand to be effective must state the name, address
and qualifications of an appraiser selected by the party demanding an appraisal
(the "Notifying Party"). Within ten (10) days following the Notifying Party's
appraisal demand, the other party (the "Non-Notifying Party") shall either
approve the appraiser selected by the Notifying Party or select a second
properly qualifled appraiser by giving written notice of the name, address and
qualifications of said appraiser to the Notifying Party. If the Non-Notifying
Party fails to select an appraiser within the ten (10) day period, then the
appraiser selected by the Notifying Party shall be deemed selected by both
parties and no other appraiser shall be selected. If two appraisers are
selected, they shall select a third appropriately qualified appraiser. If the
two appraisers fail to select a third qualified appraiser within ten (10) days,
then, upon application by either party, the third appraiser shall be appointed
by the President (or person serving in comparable position, if there is no
President) of the local Real Estate Board (or any successor entity or body of
comparable standing if such Board does not then exist) or the person to whom the
President may delegate that function.
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(ii) If only one appraiser is selected, then that appraiser shall notify
the parties in simple letter form of its determination of the fair market rate
for the Premises within thirty (30) days of his selection, which appraisal shall
be conclusively determinative and binding on the parties as the fair market rent
for the Premises.
(iii) If multiple appraisers are selected, then the appraisers shall meet
not later than ten (10) days following selection of the last appraiser. At such
meeting, the appraisers shall attempt to determine the fair market rate for the
Premises as of the commencement date of the Option period by the agreement of at
least two of the appraisers.
(iv) The appraisers' determination of the fair market rate shall be based
on a building of the same age, construction, size and location as the Premises
and shall take into account Tenant's obligation to pay additional rent under the
terms of this Lease. in determining the fair market rate, the appraisers shall
not consider any improvements, alterations, additions, fixtures or equipment
installed in the Premises at Tenant's expense but shall include improvements,
Alterations, additions, fixtures of equipment installed at Landlord's expense.
If two or more of the appraisers agree on the fair market rate for the Premises
at the ini t ial meeting, then such agreement shall be determinative and binding
on the parties hereto and the agreeing appraisers shall, in simple letter from
executed by the Agreeing appraisers, forthwith notify both Landlord and Tenant
of the amount set by such agreement.
(v) If multiple appraisers are selected and the agreement of at least two
appraisers cannot be obtained w ithin ten (10) days after the initial meeting,
then, within five (5) days after the expiration of said ten (10) day period, all
appraisers shall submit to Landlord and Tenant and independent appraisal, in
simple letter form, of the fair market rent for the Premises. The parties shall
then determine the appraised fair market rent for the Premises by averaging the
appraisals; provided, however, that (i) if the lowest appraisal is less than
eighty-five percent (85%) of the middle appraisal, then such lowest appraisal
shall be disregarded, and (ii) if the highest appraisal is greater than one
hundred fifteen percent (115%) of the middle appraisal, then such highest
appraisal shall be disregarded. If any appraisal is so disregarded, then the
average shall be determined by computing the average of the appraisals that have
not been disregarded.
(vi) Nothing contained herein shall prevent Landlord and Tenant from
jointly selecting a single appraiser to determine the fair market rate of the
Premises, in which event the determination of such appraisal shall be
conclusively deemed to be the fair market rate of the Premises for the option
term in question.
(vii) If only one appraiser is selected, then each party shall pay half of
the fees and expenses of that appraiser. If three appraisers are selected, then
each party shall bear the fees and expenses of the appraiser it selects, plus
half of the fees and expenses of the third appraiser.
46. Options.
-------
46.1 OPTIONS PERSONAL. Any Options granted to Tenant in this Lease are
personal to Tenant and may not be exercised or be assigned, voluntarily or
involuntarily, by or to any person or entity other than Tenant, provided,
however, the options may be exercised by or assigned to any Tenant Affiliate as
defined in Paragraph 11.2 of this Lease.
46.2 Effect of Default on Option.
---------------------------
(a) Tenant shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option -to the! contrary, (i) during the time
commencing from the date Landlord gives to Tenant a notice of default pursuant
to
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Paragraph 12.1(c) and continuing until the default alleged in said notice of
default is cured, or (ii) during the period of time commencing on the day after
a monetary obligation to Landlord is due from Tenant and unpaid (following 15
days' written notice thereof to Tenant) continuing until the obligation is paid,
or (iii) at any time after an event of default described in Paragraph 12.1(a),
12.1(d), or 12.1(e) (without any necessity of Landlord to give notice of such
default to Tenant).
(b) The period of time within which an option may be exercised shall
not be extended or enlarged by reason of Tenant's inability to exercise an
Option because of the provisions of Subparagraph (a) above.
(c) All rights of Tenant under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Tenant's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Tenant fails to pay to Landlord a monetary obligation of Tenant
for a period of fifteen (15) days after such obligation becomes due and fails to
cure same following 15 days written notice thereof from Landlord, or (ii) Tenant
fails to commence to cure a default specified in Paragraph 12.1(c) within thirty
(30) days after the date that Landlord gives notice to Tenant of such default
and/or Tenant fails thereafter to diligently prosecute said cure to completion,
or (iii) Tenant commits a default described in Paragraph 12.1(a), 12.1(d),
12.1(e), or 12.1(f) (without any necessity of Landlord to give notice of such
default to Tenant).
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
first above written.
LANDLORD:
PACTEL PROPERTIES
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
TENANT:
TELCO SYSTEMS, INC.
By: John C. Kempf
-----------------------------------
Title: Vice President- Controller, NAC
--------------------------------
Date: 3 May 1990
---------------------------------
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
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EXHIBIT "A"
[Diagram of premises on corner of Cushing Parkway and Northport Loop East]
33
PREMISES
--------
The Building and Improvements located on A.P. #525-1350-19
EXHIBIT "B"
34
EXHIBIT C
TENANT ESTOPPEL CERTIFICATE
---------------------------
THIS IS TO CERTIFY:
1. That the undersigned is the Tenant under that certain Lease dated
______________ and, if applicable, amended on _____________, by and between
PacTel Properties, a California corporation ("Landlord"), and the undersigned
("Tenant") covering those certain premises located as shown on the exhibit of
the premises made a part of the Lease (the "Premises").
2. That said Lease is in full force and effect and, except as noted in
paragraph 1 above, has not been modified, changed, altered or amended in any
respect, and is the only lease or agreement between the Tenant and the Landlord
affecting the Premises.
3. To the best of Tenant's knowledge, the information set forth below is
true and correct:
(a) Square footage of the Premises:
-------------------------
(b) Base rent as of the Commencement of Lease:
$____________ per month/year
(c) Current base rent (if different
than at Commencement): $____________ per month/year
(d) Lease term commenced:
-------------------------
(e) Lease termination date:
-------------------------
(f) Rent paid to and including:
-------------------------
(g) Security Deposit: $
-------------------------
(h) Prepaid rent for and in amount of: $
------------------------
(i) Amount of currently monthly estimated payment obligation with
respect to Operating Expenses under paragraph 4.3(b) of the Lease:
$
-----------------------------------------------------------------
(j) Date through which Tenant has paid monthly estimated
payments:
-------------------------
35
Exhibit D
Initial Improvements of Premises
1. LANDLORD'S WORK
---------------
1.1 Landlord, through its general contractor, shall furnish and
install within the Premises those items of general const - ruction Mandlord's
Work') shown on the plans and specifications finally approved by Landlord and
Tenant (the 'Final Plans and Specifications'), in compliance with all.
applicable codes and regulations.
2. COST OF LANDLORD'S WORK
-----------------------
2.1 As its contribution to the cost of Landlord's work, Landlord shall
provide to Tenant a tenant improvement allowance of up to a maximum of
$1,245,220.00 (based on $20.00 per rentable sq. ft. specified in the Lease
Provisions) as its contribution to the cost of Landlord's Work. Tenant shall pay
the cost of all Landlord's Work in excess of such tenant improvement allowance
as provided in this Article 2.
2.2 Prior to commencing Landlord's Work, Landlord shall submit to
Tenant a written estimate of the cost of Landlord's Work, including contractor's
overhead and profit and all fees. Tenant shall approve or disapprove such
estimate within 15 days. If Tenant shall fail to give written approval to any
such estimate within 15 days after submission thereof, such failure shall be
deemed disapproval thereof, and Landlord shall not be obligated to proceed with
Landlord's Work.
2.3 Tenant shall bear the cost of Landlord's work in excess of that
portion of Landlord's Work paid for by Landlord pursuant to paragraph 2.1 above,
and in addition a fee for Landlord's construction administration not to exceed
15% of such excess.
2.4 Tenant shall bear the cost of any changes requested by Tenant in
Landlord's work as shown on the Final Plans and Specifications and, in addition,
a fee for Landlord's construction administration in an amount not to exceed 1S%
of the cost of such changes.
2.5 Landlord's obligation to perform Landlord's Work shall not require
Landlord to incur overtime costs and expenses and shall be subject to
unavoidable delays due to acts of God, governmental restrictions, strikes, labor
disturbances, shortages of material or supplies and any other cause or event
beyond Landlord's reasonable control.
2.6 Tenant shall promptly pay Landlord during the course of
construction the cost of the work to be paid by Tenant under this Article 2,
based on invoices submitted by Landlord's contractor and certified by Landlord's
architect, so as to enable Landlord to pay Landlord's contractor without
advancing Landlord's funds for the cost of the work to be paid by Tenant.
2.7 it is understood and agreed by Tenant that any minor changes from
any plans and specifications that may be reasonably necessary during
construction of the Premises shall not affect, change or invalidate this Lease.
3. PLANS AND SPECIFICATIONS
------------------------
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3.1 Landlord, through its architect and engineer, shall furnish all
architectural and engineering plans and specifications ("Plans and
Specifications') required for the construction of Landlord's work. Tenant at its
own expense shall within 5 days of the date of Lease execution provide
instructions to Landlord's architect and engineer sufficient to enable
Landlord's architect and engineer to complete Plans, and Specifications.
3.2 All Plans and Specifications are subject to Tenant's and
Landlord's approval, which shall not be unreasonably withheld. Tenant shall
approve all Plans and Specifications, whether preliminary or Final, within 5
days of submission to Tenant by Landlord.
3.3 Landlord shall bear the cost of architectural and engineering
services for Landlord's Work to the extent to be constructed through the
expenditure of the Tenant improvement allowance specified in paragraph 2.1
above.
3.4 Tenant shall pay the cost of architectural and engineering
services for Landlord's work in excess of the Tenant improvement allowance not
borne by Landlord under paragraph 3.3 above. In addition, Tenant shall pay for
any revisions required by Tenant to Plans and Specifications previously approved
by Tenant.
4. TENANT'S WORK
-------------
4.1 Any items or work not shown in the approved Final Plans and
Specifications, such as telephone service, furnishings 0 r floor coverings, for
which Tenant contracts separately (hereinafter "Tenant's Work"), shall be
subject to Landlord's policies and schedules and shall be conducted in such as
way as not to hinder, cause any disharmony with, or delay work in the
Building(s). Tenant's suppliers, contractors, workmen and mechanics shall be
subject to pproval by Landlord prior to the commencement of their work :nd shall
be subject to Landlord's administrative control while performing their work. If
at any time any supplier, contractor, workman or mechanic performing Tenant's
Work hinders or delays any other work in the Building(s) or performs any work
which may or does impair the quality, integrity or performance of any portion of
the Building(s), Tenant shall cause such supplier, contractor, workman or
mechanic to leave the Building(s) and remove all his tools, equipment and
materials immediately upon Landlord's notice delivered to Tenant. Tenant shall
reimburse Landlord for any repairs or corrections of Landlord's work or of
Tenant's Work or of any portion of the Building(s) caused by or resulting from
the work of any supplier, contractor, workman or mechanic with whom Tenant
contracts. Tenant shall bear the cost of Landlord's expenses resulting from the
performance of Tenant's work, including without limitation the cost of hoisting,
cleaning, security, administration and coordination by Landlord or Landlord's
contractor. Tenant shall reimburse Landlord for Landlord's reasonable costs for
design reviews and approvals and reviews of construction progress, and for the
cost of all utilities and the services provided by Landlord to or for the
Premises during the performance of Tenant's Work. Landlord shall provide access
to Tenant's suppliers, contractors, workmen and mechanics so as to achieve
timely completion and occupancy of the Premises.
5. (RESERVED)
6. COMPLETION DATE
---------------
6.1 Landlord shall, when construction progress so permits, notify
Tenant in advance of the approximate date on
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which Landlord's Work will be substantially completed and will notify Tenant
when Landlord's Work is in fact substantially completed, which latter notice
shall constitute delivery of possession of the Premises to Tenant. If any
dispute shall arise as to whether the Premises are substantially completed and
ready for Tenant's occupancy, a certificate furnish d by anlindependent a
rchitect mutually agreed by Landlord :nd Tenant certifying the date of
substantial completion shall be conclusive. If Landlord shall be delayed in
substantially completing said work as a result of: -
(a) Tenant's failure to furnish complete and timely instructions
or approvals,
(b) Tenant's changes to any Plans and Specifications after
approval thereof,
(c) Tenant's request for materials, finishes or installations
other than Landlord's Building standard except as expressly provided in approved
Plans and Specifications, or
(d) Hindrance or disruption of the work of Landlord's contractor
resulting from Tenant's Work,
then the Commencement Date under the Lease shall be advanced by the number of
days of such delay.
6.2 Failure by Tenant to meet any of the time requirements specified
in this Exhibit D shall, at Landlord's option, constitute a a default under the
Lease. Tenant shall not be entitled to a cure period with respect to any such
default.
6.3 Except as expressly provided in the Lease, failure of Landlord to
deliver possession of the Premises within the time and in the condition provided
for in the Lease will not give rise to any claim for damages by Tenant against
Landlord or Landlord's contractor.
7. PAYMENT
-------
7.1 Tenant shall pay to Landlord all amounts due from or payable by
Tenant under the terms of this Exhibit D within 20 days following delivery of
Landlord's invoice therefor, and the provisions of Section 4 of the Lease with
respect to late charges and interest on late payments shall apply as to interest
payable on amounts not paid within such period.
8. TIME PERIODS
------------
8.1 All time periods referred to in this Exhibit D shall be computed
on a calendar basis with no allowance for holidays, weekends or other customs.
9. BASE BUILDING DESIGN
--------------------
9.1 Tenant may request changes to Base Building Design (as hereinafter
defined). Landlord shall have no obligation to make any such changes. If
Landlord in its sole discretion shall agree to any such chance, Landlord shall
prepare Plans and Spe c ifications and obtain an estimate of -the cost for
approval by Tenant. Tenant shall pay in advance Landlord's estimate of any and
all costs of such changes (including without limitation the costs of labor,
materials, ecuipment, supervision and a management fee) subject to adjustment of
costs upon completion.
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EXHIBIT E
RULE AND REGULATIONS
FOR TENANT'S CONTRACTOR(S)
1. Tenant's contractor will be responsible for making arrangements with
Landlord as to time for the use of and equipment such as elevators and
loading areas. The delivery of materials, equipment and supplies, to the
building or Premises must be coordinated with Landlord at least two (2)
business days prior to delivery. The building debris box is not to be used
for waste produced by Tenant's contractor.
2. Tenant's contractor shall not interfere with the Landlord's contractor and
sub-trades in any way and will cooperate fully with same.
3. All Tenant's contractor's waste and debris must be removed from the
Premisses and Building regularly and promptly. All combustible waste and
debris must be stored in a covered, fire-proof container prior to removal.
4. Tenant's contractor and sub-trades shall take all precautions to ensure the
security and the site condition of the Premises and Building in which the
work is being performed, including their own tools, equipment and
materials, and are responsible for any damage caused by employees and
sub-trades to any part of the Building or Premises.
5. (reserved)
6. (reserved)
7. Tenant's contractor shall remove and properly replace underfloor duct
access covers as required for Tenant's trades and services. Any damage to
underfloor duct access coverings shall be repaired or replaced by Tenant's
contractor to the satisfaction of Landlord.
8. Tenant's contractor must provide their own fire protection equipment, have
same on premises at all times and conform to any requirements of Landlord
or Landlord''s contractor regarding fire protection.
9. Tenant's contractor shall carry out all work in compliance with all
Federal, State, county and City Building codes and applicable Acts,
Ordinances and statutes.
10. Tenant's contractor shall provide all their own protective devices and
coverings, so as to protect the Building finishes provided by Landlord in
the Building.
11. No attachments to or use of window frames and mirrors, ceiling systems,
glass, ceiling frame or Building frame, will be permitted without the
expressed written consent of Landlord.
12. All Tenant's contractors, employees and trades must be confined to the area
in which work is being performed.
13. tenant or Tenant's contractor shall carry builder's risk insurance with
limits of not less than the amount requested by Landlord, insurance
covering loss or damage to the work during the course of construction;
worker's compensation, employer's liability insurance covering all
employees of contractor and subcontractor. all such policies shall name
Landlord and Tenant as additional insureds. A certificate of insurance must
be provided to Landlord prior to commencement of work.
14. Any construction, alteration, maintenance, repair, replacement, removal or
decoration undertaken by Tenant's contractor shall be carried out in a
good, workmanlike, and prompt manner, shall comply with all applicable
statutes, laws, ordinances, regulations, rules, orders and requirements of
the authorities having jurisdiction thereof, and shall be subject to
supervision by Landlord or its employees, agents, or contractors. all
constructions shall be performed in a timely manner without delays or
interruptions.
15. Tenant's contractor shall not use excessive quantities of electricity or
water and shall not shut off any water, electricity, sprinkler systems or
other services without first obtaining Landlord's express authorization.