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STANDARD INDUSTRIAL / COMMERCIAL MULTI-TENANT LEASE - GROSS AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

Industrial Lease Agreement

STANDARD INDUSTRIAL / COMMERCIAL MULTI-TENANT LEASE - GROSS AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION | Document Parties: AQUENTIUM INC | TENNANT PROPERTIES, LLC You are currently viewing:
This Industrial Lease Agreement involves

AQUENTIUM INC | TENNANT PROPERTIES, LLC

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Title: STANDARD INDUSTRIAL / COMMERCIAL MULTI-TENANT LEASE - GROSS AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
Governing Law: California     Date: 1/22/2004
Industry: Misc. Capital Goods     Sector: Capital Goods

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                  STANDARD INDUSTRIAL/COMMERCIAL

                    MULTI-TENANT LEASE - GROSS

           AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

 

1.    Basic Provisions ("Basic Provision").

     1.1     Parties: This Lease ("Lease") dated for _________ purposes only

December 19, 2003 made by and between TENNANT DESERT PROPERTIES, LLC

("Lessor") AND AQUENTIUM, INC. ("Lessee"), (collectively the "Parties", or

individually a "Party").

     1.2(a) Premises: That certain portion of the Project (as defined below),

including all improvements therein or to be provided by Lessor under the terms

of this Lease, commonly known by the street address of 19125 N. Indian Ave

located in the City of Palm Springs, County of Riverside, State of CA, with

zip code _______________, as outlined on Exhibit ____ attached hereto

("Premises") and generally described as (describe briefly the nature of the

Premises): 10,000 Sq. Ft. of warehouse space plus two (2) offices in the front

section of the subject bldg. (Part of an approx. 84,772 s.f. Ind. Bldg.) In

addition to Lessee's rights to use and occupy the Premises as hereinafter

specified, Lessee shall have non-exclusive rights to the Common Areas (as

defined in Paragraph 2.7 below) as hereinafter specified, but shall not have

any rights to the roof, exterior walls or utility raceways of the building

containing the Premises ("Building") or to any other buildings in the Project.

The Premises, the Building, the Common Areas, the land upon which they are

located, along with all other buildings and improvements thereon, are herein

collectively referred to as the "Project." (See also Paragraph 2.)

     1.2(b) Parking: ten (10 unreserved vehicle parking spaces ("Unreserved

Parking Spaces") and ________________ reserved vehicle parking spaces

("Reserved Parking Spaces"). (See also Paragraph 2.6.)

     1.3     Term: Ninety (90) days xxx and    -        months ("Original Term")

commencing Jan. 1, 2004 ("Commencement date") and ending March 31, 2004

("Expiration Date"). (See also Paragraph 3.)

      1.4     Early Possession: ___________________ ("Early Possession Date")

(See also Paragraphs 3.2 and 3.3.)

     1.5     Base Rent: $ 4,500.00 per month ("Base Rent"), payable on the See

Addendum day of each month commencing ______________________. (See also

Paragraph 4.)

[ ] If this box is checked, there are provisions in this Lease for the Base

rent   to be adjusted.

     1.6     Lessee's Share of Common Area Operating Expenses:   none   percent

(__%) ("Lessee's Share").

     1.7     Base Rent and Other Monies Paid Upon Execution:

            (a)   Base Rent: $ 4,500.00 for the period Jan. 1st thru Jan. 31st

                 2004             

            (b)   Common Area Operating Expenses: $ none for the period ______

            (c)   Security Deposit: $ 4,500.00 ("Security Deposit"). (See also

                 Paragraph 5.)

            (d)   Other: $__________ for _________________________________

            (e)   Total Due Upon Execution of this Lease: $ 18,000.00 (See

                 Addendum)

     1.8     Agreed Use: Administration offices, manufacturing and storage

(manufacturing and storage in conformity with city codes, septic system and

environmental laws and regulations) (See also Paragraph 6.)

     1.9     Insuring Party: Lessor is the "Insuring Party". (See also

Paragraph 8.)

     1.10    Real Estate Brokers: (See also Paragraph 15.)

            (a)   Representation: The following real estate brokers (the

"Brokers") and brokerage relationships exist in this transaction (check

applicable boxes):

[ ] __________________________________ represents Lessor exclusively

("Lessor's Broker");

[ ] __________________________________ represents Lessee exclusively

("Lessees's Broker"); or

[x]    ORR COMPANY    represents both Lessor and Lessee ("Dual Agency")

            (b)   Payment to Brokers: Upon execution and delivery of this Lease

by both Parties, Lessor shall pay to the Brokers the brokerage fee agreed to

in a separate written agreement (or if there is no such agreement, the sum of

___________________ or ____% of the total Base Rent for the brokerage services

rendered by the Brokers).

     1.11    Guarantor. The obligations of the Lessee under this Lease are to

be guaranteed by   ______________________________________________("Guarantor").

(See also Paragraph 37)

     1.12    Addenda and Exhibits. Attached hereto is an Addendum or Addenda

consisting of Paragraphs 50 through 52 and Exhibits ____ through ____, all of

which constitute a part of this Lease.

 

2.    Premises.

     2.1     Letting. Lessor hereby leases to Lessee, and Lessee hereby leases

from Lessor, the Premises, for the term, at the rental, and upon all of the

terms, covenants and conditions set forth in this Lease. Unless otherwise

provided herein, any statement of size set forth in this Lease, or that may

have been used in calculating Rent, is an approximation which the parties

agree is reasonable and any payments based thereon are not subject to revision

whether or not the actual size is more or less.

     2.2     Condition. Lessor shall deliver that portion of the Premises

contained within the building ("Unit") to Lessee broom clean and free of

debris on the Commencement Date or the Early Possession Date, whichever first

occurs ("Start Date"), and, so long as the required service contracts

described in Paragraph 7.1(b) below are obtained by Lessee and in effect

within thirty days following the Start Date, warrants that the existing

electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air

conditioning systems ("HVAC"), loading doors, if any, and all other such

elements in the Unit, other than those constructed by Lessee, shall be in good

operating condition on said date and that the structural elements in the Unit,

other than those constructed by Lessee, shall be in good operating condition

on said date and that the structural elements of the roof, bearing walls and

foundation of the Unit shall be free of material defects. If a non-compliance

with such warranty exists as of the Start Date, or if one of such systems or

elements should malfunction or fail within the appropriate warranty period,

Lessor shall, at Lessor's sole obligation with respect to such matter, except

as otherwise provided in this Lease, promptly after receipt of written notice

from Lessee setting forth with specialty the nature and extent of such

non-compliance, malfunction or failure, rectify same at Lessor's expense. The

warranty periods shall be as follows: (i) 6 months as to the HVAC systems; and

(ii) 30 days as to the remaining systems and other elements of the Unit. If

Lessee does not give Lessor the required notice within the appropriate

warranty period, correction of any such non-compliance, malfunction or failure

shall be the obligation of Lessee at Lessee's sole cost and expense (except

for the repairs to the fire sprinkler systems, roof, foundations, and/or

bearing walls - see Paragraph 7).

     2.3     Compliance. Lessor warrants that the improvements on the Premises

and the Common Areas comply with the building codes that were in effect at the

time that each such improvement, or portion thereof, was constructed, and also

with applicable laws, covenants or restrictions of record, regulations, and

ordinances in effect on the Start Date ("Applicable Requirements"). Said

warranty does not apply to the use to which Lessee will put the Premises or to

any Alterations or Utility Installations (as defined in Paragraph 7.3(a).)

Made or to be made by Lessee. NOTE: Lessee is responsible for determining

whether or not the zoning is appropriate

________                                                        ________

________                                                       ________

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for Lessee's intended use, and acknowledges that past uses of the Premises may

no longer be allowed. If the Premises do not comply with said warranty, Lessor

shall, except as otherwise provided, promptly alter receipt of written notice

from Lessee setting forth with specificity the nature ane extent of such

non-compliance, rectify the same at Lessors expense. If Lessee does not give

Lessor written notice of a non-compliance with this warranty within 6 months

following the start Date, correction of that non-compliance shall be the

obligation of the Lessee and Lessee's sole cost and expense. If the Applicable

Requirements are hereafter changed so as to require during the term of this

lease the construction of an addition to or an alteration of the Unit,

Premises and/or building, the remediation of any Hazardous Substance, or the

reinforcement or other physical modification of the Unit, Premises and/or

Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of

such work as follows:

            (a) Subject to Paragraph 2.3(c) below, if such Capital

Expenditures are required as a result of the specific and unique use of the

Premises by Lessee as compared with uses by tenants in general, Lessee shall

be fully responsible for the cost thereof, provided however, that if such

Capital Expenditure is required during the last 2 years of this Lease and the

cost thereof exceeds 6 months Base Rent. Lessee may instead terminate this

Lease unless Lessor notifies Lessee, in writing, within 10 days after receipt

of Lessee's termination notice that Lessor has elected to pay the difference

between the actual cost thereof and the amount equal to 6 months Base Rent. If

Lessee elects termination, Lessee shall immediately cease the use of the

Premises which requires such Capital Expenditure and deliver to Lessor written

notice specifying a termination date at least 90 days thereafter. Such

termination date shall, however, in no event be earlier than the last day that

Lessee could legally utilize the Premises without commencing such Capital

Expenditure.

            (b) If such Capital Expenditure is not the result of the specific

and unique use of the Premises by Lessee (such as, governmentally mandated

seismic modifications), then Lessor and Lessee shall allocate the obligation

to pay for the portion of such costs reasonably attributable to the Premises

pursuant to the formula set out in Paragraph 7.1(d); provided, however, that

if such Capital Expenditure is required during the last 2 years of this Lease

or if Lessor reasonably determines that it is not economically feasible to pay

its share hereof, Lessor shall have the option to terminate this Lease upon 90

days prior written notice to Lessee unless Lessee notifies Lessor, in writing,

within 10 days after the receipt of Lessor's termination notice that Lessee

will pay for such Capital Expenditure. If lessor does not elect to terminate,

and fails to tender its share of any such Capital Expenditure, Lessee may

advance such funds and deduct same, with interest, from Rent until Lessor's

share of such costs have been fully paid. Of Lessee is unable to finance

Lessor's share or if the balance of the Rent due and payable for the remainder

of this Lease is not sufficient to fully reimburse Lessee on an offset basis.

Lessee shall have the right to terminate this Lease upon 30 days written

notice to Lessor.

             (c) Notwithstanding the above, the provisions concerning Capital

Expenditures are intended to apply only to non-voluntary, unexpected, and new

Applicable Requirements. If the Capital Expenditures are instead triggered by

Lessee as a result of an actual or proposed change in use, change in intensity

of use, or modification to the Premises then, and in that event, Lessee shall

be fully responsible for the cost thereof, and Lessee shall not have any right

to terminate this Lease.

     2.4     Acknowledgments. Lessee acknowledges that: (a) it has been advised

by Lessor and/ or Brokers to satisfy itself with respect to the condition of

the Premises (including but not limited to the electrical, HVAC and fire

sprinkler systems, security environmental aspects, and compliance with

Applicable requirements and the Americans with Disabilities Act), and their

suitability for Lessee's intended use, (b) Lessee has made such investigation

as it deems necessary with reference to such matters and assumes all

responsibility therefor as the same relate to its occupancy of the Premises,

and (c) neither Lessor, Lessor's agents, nor brokers have made any oral or

written representations or warranties with respect to said matters other than

as set forth in this Lease. I addition, Lessor acknowledges that: (i) Brokers

have made no representations, promises or warranties concerning Lessee's

ability to honor the Lease or suitability to occupy the Premises, and (ii) it

is Lessor's sole responsibility to investigate the financial capability and/or

suitability of all proposed tenants.

     2.5     Lessee as Prior Owner/Occupant. The warranties made by Lessor in

Paragraph 2 shall be of no force or effect if immediately prior to the Start

Date Lessee was the owner or occupant of the Premises. In such event, Lessee

shall be responsible for any necessary corrective work.

     2.6     Vehicle Parking. Lessee shall be entitled to use the number of

Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph

1.2(b) on those portions of the Common Ares designated from time to time by

Lessor for parking Lessee shall not use more parking spaces than said number.

Said parking spaces shall be sued for parking by vehicles no larger than

full-sized passenger automobiles or pick-up trucks, herein called "Permitted

Size Vehicles." Lessor may regulate the loading and unloading of vehicles by

adopting Rules and Regulations as provided in Paragraph 2.9. No vehicles other

than Permitted Size Vehicles may be parked in the Common Area without the

prior written permission of Lessor.

            (a)   Lessee shall not permit or allow any vehicles that belong to

or are controlled by Lessee or Lessee's employees, suppliers, shippers,

customers, contractors or invitees to be loaded, unloaded, or parked in areas

other than those designated by Lessor for such activities.

             (b)   Lessee shall not service or store any vehicles in the Common

Areas.

            (c)   If Lessee permits or allows any of the prohibited activities

described in this Paragraph 2.6, then Lessor shall have the right, without

notice, in addition to such other rights and remedies that it may have, to

remove or tow away the vehicle involved and charge the cost to Lessee, which

cost shall be immediately payable upon demand by Lessor.

     2.7     Common Areas - Definition. The term "Common Areas' is defined as

all areas and facilities outside the Premises and within the exterior boundary

line of the Project and interior utility raceways and installations within the

Unit that are provided and designated by the Lessor from time to time for the

general non-exclusive use of Lessor, Lessee and other tenants of the Project

and their respective employees; suppliers, shippers, customers, contractors

and invitees, including parking areas, loading and unloading areas, trash

areas, roadways, walkways, driveways and landscaped areas.

     2.8     Common Areas - Lessee's Rights. Lessor grants to Lessee, for the

benefit of Lessee and its employees, suppliers, shippers, contractors,

customers and invitees, during the term of this Lease, the non-exclusive right

to use, in common with others entitled to such use, the Common Areas as they

exist from time to time, subject to any rights, powers, and privileges

reserved by Lessor under the terms hereof or under the terms of any rules and

regulations or restrictions governing the use of the Project. Under no

ci8rcumstances shall the right herein granted to use the Common Areas be

deemed to include the right to store any property, temporarily or permanently,

in the Common areas. Any such storage shall be permitted only by the prior

written consent of Lessor or Lessor's designated agent, which consent may be

revoked at any time. In the event that any unauthorized storage shall occur,

then Lessor shall have the right, without notice, in addition to such other

rights and remedies that it may have, to remove the property and charge the

cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

     2.9     Common Areas - Rules and Regulations. Lessor or such other

person(s) as Lessor may appoint shall have the exclusive control and

management of the Common Areas and shall have the right, from time to time, to

establish, modify, amend, and enforce reasonable rules and regulations ("Rules

and Regulations") for the management, safety , care, and cleanliness of the

grounds, the parking and unloading of vehicles and the preservation of good

order, as well as for the convenience of other occupants or tenants of the

Building and the Project and their invitees. Lessee agrees to abide by and

conform to all such Rules and Regulations, and to cause its employees,

suppliers, shippers, customers, contractors and invitees to so abide and

conform. Lessor shall not be responsible to Lessee for the non-compliance with

said Rules and Regulations by other tenants of the Project.

     2.10     Common Areas - Changes. Lessor shall have the right, in Lessor's

sole discretion, from time to time:

            (a)   To make changes to the common Areas, including, without

limitation, changes in the location, size, shape and number of driveways,

entrances, parking spaces, loading and unloading areas, ingress, egress,

direction of traffic, landscaped areas, walkways and utility raceways;

            (b)   To close temporarily any of the Common Areas for maintenance

purposes so long as reasonable access to the Premises remains available;

            (c)   To designate other land outside the boundaries of the Project

to be a part of the Common Areas;

            (d)   To add additional buildings and improvements to the Common

Areas;

            (e)   To use the Common Areas while engaged in making additional

improvements, repairs or alterations to the Project, or any portion thereof;

and

 

________                                                       _______

________                                                        _______

Initials                                                       Initials

 

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            (f)   To do and perform such other acts and make such other changes

in, to or with respect to the Common Areas and Project as Lessor may, in the

exercise of sound business judgement, deem to be appropriate.

 

3.    Term.

     3.1     Term, the Commencement Date, Expiration Date and Original Term of

this Lease are as specified in Paragraph 1.3.

     3.2     Early Possession. If lessee totally or partially occupies the

Premises prior to the Commencement Date, the obligation to bay Blase Rent

shall be abated for the period of such early possession. All other terms of

this Lease (including but not limited to the obligations to pay Lessee's Share

of Common Area Operating Expenses, Real Property Taxes and insurance premiums

and to maintain the Premises) shall, however be in effect during such period.

Any such early possession shall not affect the Expiration Date.

     3.3     Delay in Possession. Lessor agrees to use its best commercially

reasonable efforts to deliver possession of the Premises to Lessee by the

Commencement Date. If despite said efforts, Lessor is unable to deliver

possession as agrees. Lessor shall not be subject to any liability therefor,

not shall failure effect the validity of this Lease. Lessee shall not,

however, be obligated to pay Rent or perform its other obligations until it

receives possession of the Premises. If possession is not delivered within 60

days after the Commencement Date, Lessee may, at its option, by notice in

writing within 10 days after the end of such 60 day period, cancel this Lease

in which event the Parties shall be discharged from all obligations hereunder.

If such written notice is not received by Lessor by the Start Date and Lessee

does not terminate this Lease, as aforesaid, any period of rent abatement that

Lessee would otherwise have enjoyed shall run from the date of delivery of

possession and continue for a period equal to what Lessee would otherwise have

enjoyed under the terms hereof, but minus any days of delay caused by the acts

or omissions of Lessee. If possession of the Premises is not delivered with in

4 months after the Commencement Date, this Lease shall terminate unless other

agreements are reached between Lessor and Lessee, in writing.

     3.4    Lessee Compliance. Lessor shall not be required to tender

possession of the Premises to Lessee until Lessee complies with its obligation

to provide evidence of insurance (Paragraph 8.5). Pending delivery of such

evidence, Lessee shall be required to perform all of its obligations under

this Lease from and after the Start Date, including the payment of Rent,

notwithstanding Lessors election to withhold possession pending receipt of

such evidences of insurance. Further, if Lessee is required to perform any

other conditions prior to or concurrent with the Start Date, the Start Date

shall occur but Lessor may elect to withhold possession until such conditions

are satisfied.

 

4.    Rent.

     4.1     Rent Defined. All monetary obligations of Lessee to Lessor under

the terms of this Lease (except for the Security Deposit) are deemed to be

rent ("Rent").

     4.2     Common Area Operating Expenses. Lessee shall pay to Lessor during

the term hereof, in addition to the Base Rent Lessee's Share (as specified in

Paragraph 1.6.) Of all Common Area Operating Expenses, as hereinafter defined,

during each calendar year of the term of this Lease, in accordance with the

following provisions:

            (a)   "Common Area Operating Expenses" are defined, for purposes of

this Lease, as all costs incurred by Lessor relating to the ownership and

operation of the Project, including, but not limited to, the following:

                 (i)    The operation, repair and maintenance, in neat, clan,

good order and condition, but not the replacement (see subparagraph (e)), of

the following:

                       (aa) The Common Areas and Common Area improvements,

including parking areas, loading and unloading areas, trash areas, roadways,

parkways, walkways, driveways, landscaped areas, bumpers, irrigation systems,

Common Area lighting facilities, fences and gates, elevators, roofs and roof

drainage systems.

                       (bb)   Exterior signs and any tenant directories.

                       (cc)   Any fire sprinkler systems.

                 (ii)   The operation, repair and maintenance, in neat, clean,

good order and condition, but not the replacement (see subparagraph (e)). of

the following:

                 (iii) Trash disposal, pest control services, property

management, security services, and the costs of any environmental inspections.

                 (iv)   Reserves set aside for maintenance and repair of Common

Areas.

                 (v)    Any increase above the Base Real Property Taxes (as

defined in Paragraph 10).

                 (vi)   Any "Insurance Cost Increase" (as defined in Paragraph

8).

                 (vii) Any deductible portion of an insured loss concerning

the Building or the Common Areas.

                 (viii) The cost of any Capital Expenditure to the Building or

the Project not covered under the provisions of Paragraph 2.3 provided;

however, that Lessor shall allocate the cost of any such Capital Expenditure

over a 12 year period and Lessee shall not be required to pay more than

Lessee's Share of 1/144th of the cost of such Capital Expenditure in any given

month.

                 (ix)   Any other services to be provided by Lessor that are

stated elsewhere in this Lease to be a Common Area Operating Expense.

            (b)   Any Common Area Operating Expenses and Real Property Taxes

that are specifically attributable to the Unit, the building or to any other

building in the Project or to the operation, repair and maintenance thereof,

shall be allocated entirely to such Unit, Building, or other building.

However, any Common Area Operating Expenses and real Property Taxes that are

not specifically attributable to the Building or to any other building or to

the operation, repair and maintenance thereof, shall be equitably allocated by

Lessor to all buildings in the Project.

            (c)   The inclusion of the improvements, facilities and services

set forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation

upon Lessor to either have said improvements or facilities or to provide those

services unless the Project already has the same, Lessor already provides the

services, or Lessor has agreed elsewhere in this Lease to provide the same or

some of them.

            (d)   Lessee's Share of Common Area Operating Expenses shall be

payable by Lessee within 10 days after a reasonably detailed statement of

actual expenses is presented to Lessee. At Lessor's option, however, an amount

may be estimated by Lessor from time to time of Lessee's Share of annual

Common Area Operating Expenses and the same shall be payable monthly or

quarterly, as Lessor shall designate, during each 12 month period of the Lease

term, on the same day as the Base Rent is due hereunder. Lessor shall deliver

to Lessee within 60 days after the expiration of each calendar year a

reasonably detailed statement showing Lessee's Share of the actual Common Area

Operating Expenses incurred during the preceding year. If Lessee's payments

under this Paragraph 4.2(d) during the preceding year exceed Lessee's Share as

indicated on such statement, Lessor shall be credited the amount of such

over-payment against Lessee' Share of Common Area Operating Expenses next

becoming due. If Lessee's payments under this Paragraph 4.2(d) during the

preceding year were less than Lessee's Share as indicated on such statement,

Lessee shall pay to Lessor the amount of the deficiency within 10 days after

delivery by Lessor to Lessee of the statement.

            (e)    When a capital component such as the roof, foundations,

exterior walls or a Common Area capital improvement, such as the parking lot

paving, elevators, fences, etc. requires replacement, rather than repair or

maintenance, Lessor shall, at Lessor's expense. Be responsible for such

replacement. Such expenses and/or costs are not Common Area Operating

Expenses.

     4.3     Payment. Lessee shall cause payment of Rent to be received by

Lessor in lawful money of the United States, without offset or deduction

(except as specifically permitted in this Lease), on or before the day on

which it is due. Rent for any period during the term hereof which is for less

than one full calendar month shall be prorated based upon the actual number of

days of said month. Payment of Rent shall be made to Lessor at its address

stated herein or to such other persons or place as Lessor may from time to

time designate in writing. Acceptance of a payment which is less than the

amount then due shall not be a waiver of Lessor's rights to the balance of

such Rent, regardless of Lessor's endorsement of any check so stating. In the

event that any check, draft, or other instrument of payment being given by

Lessee to Lessor is dishonored for any reason, Lessee agrees to pay Lessor the

sum of $25.

 

5.      Security Deposit. Lessee shall deposit with Lessor upon execution

hereof the security Deposit as security for Lessee's faithful performance of

its obligations under this Lease. If Lessee fails to pay Rent, or otherwise

Defaults under this Lease, Lessor may use, apply or retain all or any portion

of said Security Deposit for the payment of any amount due Lessor or to

reimburse or compensate Lessor for any liability, expense, loss or damage

which Lessor may suffer or incur by reason thereof. If Lessor uses or applies

all or any portion of the Security Deposit, Lessee shall within 10 days after

written request therefor deposit monies with Lessor sufficient to restore.

 

 

 

________                                                       ________

________                                                       ________

Initials                                                       Initials

 

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said Security Deposit to the full amount required by this Lease. If the Base

Rent increases during the term of this Lease, Lessee shall, upon written

request from Lessor, deposit additional monies with Lessor so that the total

amount of the security Deposit shall at all times bear the same proportion to

the increased Base Rent as the initial Security Deposit bore to the initial

base Rent. Should the Agreed Use be amended to accommodate a material change

in the business of Lessee or to accommodate a sublessee or assignee, Lessor

shall have the right to increase the security Deposit to the extent necessary,

in Lessors reasonable judgment, to account for any increased wear and tear

that the Premises may suffer as a result thereof. If a change in control of

lessee occurs during this Lease and following such change the financial

condition of Lessee is, in Lessor's reasonable judgment, significantly

reduced, Lessee shall deposit such additional monies with Lessor as shall be

sufficient to cause the Security Deposit to be at a commercially reasonable

level based on such change in financial condition. Lessor shall not be

required to keep the Security deposit separate from its general accounts.

Within 14 days after the expiration or termination of this Lease, if Lessor

elects to apply the security Deposit only to unpaid Rent, and otherwise within

30 days after the Premises have been vacated pursuant to Paragraph 7.4(c)

below, Lessor shall return that portion of the Security Deposit not used or

applied by Lessor. No part of the Security Deposit shall be considered to be

held in trust, to bear interest or to be prepayment for any monies paid by

Lessee under this Lease.

 

6.    Use.

     6.1     Use. Lessee shall use and occupy the Premises only for the Agreed

Use, or any other legal use which is reasonably comparable thereto, and for no

other purpose. Lessee shall not use or permit the use of the Premises in a

manner that is unlawful, creates damage, waste or a nuisance, or that disturbs

occupants of or causes damage to neighboring premises or properties. Lessor

shall not unreasonably withhold or delay its consent to any written request

for a modification of the agreed Use, so long as the same will not impair the

structural integrity of the improvements on the Premises or the mechanical or

electrical systems therein, and/or is not significantly more burdensome to the

Premises. If Lessor elects to withhold consent, Lessor shall within 7 days

after such request give written notification of same, which   notice shall

include an explanation of Lessor's objections to the change in the Agreed Use.

     6.2     Hazardous Substances.

            (a)   Reportable Uses Require Consent. The term "Hazardous

Substance" as used in this Lease shall mean any product, substance, or waste

whose presence, use, manufacture, disposal, transportation, or release, either

by itself or in combination with other materials expected to be on the

Premises, is either: (i) potentially injurious to the public health, safety or

welfare, the environment or the Premises, (ii) regulated or monitored by any

governmental authority, or (iii)   a basis for potential liability of Lessor to

any governmental agency or third party under any applicable statute or common

law theory. Hazardous Substances shall include, but not be limited to,

hydrocarbons, petroleum, gasoline, and/or crude oil or any products,

by-products or fractions thereof. Lessee shall not engage in any activity in

or on the Premises which constitutes a Reportable Use of Hazardous Substances

without the express prior written consent of Lessor and timely compliance (at

Lessee's expense) with all Applicable requirements. "Reportable Use" shall

mean (i) the installation or use of any above or below ground storage tank,

(ii) the generation, possession, storage, use, transportation or disposal of a

Hazardous Substance that requires a permit from, or with respect to which a

report, notice, registration or business plan required to be filed with, any

governmental authority, and/or (iii) the presence at the Premises of a

Hazardous substance with respect to which any Applicable Requirements required

that a notice be given to persons entering or occupying the Premises or

neighboring properties. Notwithstanding the foregoing, Lessee may use any

ordinary and customary materials reasonably required to be used in normal

course of the Agreed Use, so long as such use is in compliance with all

Applicable Requirements, is not a Reportable Use, and does not expose the

Premises or neighboring property to any meaningful risk of contamination or

damage or expose Lessor to any liability therefor. In addition, Lessor may

condition its consent to any Reportable Use upon receiving such additional

assurances as Lessor reasonably deems necessary to protect itself, the public,

the Premises and/or the environment against damage, contamination injury

and/or liability including, but not limited ,to the installation (and removal

on or before Lease expiration or termination) of protective modifications

(such as concrete encasements) and/or increasing the Security Deposit.

            (b) Duty to Inform Lessor. If Lessee knows, or has reasonable

cause to believe, that a Hazardous Substance has come to be located in, on,

under or about the Premises, other than as previously consented to by Lessor,

lessee shall immediately give written notice of such fact to Lessor, and

provide Lessor with a copy of any report, notice, claim or other documentation

which it has concerning the presence of such Hazardous Substance.

            (c) Lessee Remediation. Lessee shall not cause or permit any

Hazardous Substance to be spilled or released in, on , under or about the

Premises (including through the plumbing or sanitary sewer system) and shall

promptly, at Lessee's expense, take all investigatory and/or remedial action

reasonably recommended, whether or not formally ordered or required, for the

cleanup of any contamination of, and for the maintenance, security and/ or

monitoring of the Premises or neighboring properties, that was caused or

materially contributed to by Lessee, or pertaining to or involving any

Hazardous Substance brought onto the Premises during the term of this Lease,

by or for Lessee, or any third party.

            (d) Lessee Indemnification. Lessee shall indemnify, defend and

hold Lessor, its agents, employees, lenders and ground lessor, if any,

harmless from and against any and all loss of rents and/or damages,

liabilities, judgments, claims, expenses, penalties and attorneys' and

consultants' fees arising out of or involving any Hazardous Substance brought

onto the Premises by or for Lessee, or any third party (provided, however,

that Lessee shall have o liability under this Lease with respect to

underground migration of any Hazardous Substance under the Premises from areas

outside of the Project). Lessee's obligations shall include, but not be

limited to the effects of any contamination or injury to person, property or

the environment created or suffered by Lessee, and the cost of investigation,

removal, remediation, restoration and/or abatement, and shall survive the

expiration or termination of this Lease. No termination, cancellation, or

release agreement entered into by Lessor and Lessee shall release Lessee from

its obligations under this Lease with respect to Hazardous Substances, unless

specifically so agreed by Lessor and Lessee shall release Lessee from its

obligations under this Lease with respect to Hazardous Substances, unless

specifically so agreed by Lessor in writing at the time of such agreement.

            (e)   Lessor Indemnification. Lessor and its successors and assigns

shall indemnify, defend, reimburse and hold Lessee, its employees and lenders,

harmless from and against any and all environmental damages, including the

cost of remediation, which existed as a result of Hazardous Substances on the

Premises prior to the Start Date or which are caused by the gross negligence

or willful misconduct of Lessor, its agents or employees. Lessor's

obligations, as and when required by the Applicable Requirements shall

include, but not be limited to, the cost of investigation, removal,

remediation, restoration and/or abatement, and shall survive the expiration or

termination of this Lease.

            (f) Investigations and remediations. Lessor shall retain the

responsibility and pay for any investigations or remediation measures required

by governmental entities having jurisdiction with respect to the existence of

Hazardous Substances on the Premises prior to the Start Date, unless such

remediation measure is required as a result of Lessee's use (including

"Alterations" as defined in paragraph 7.3(a) below) of the Premises, in which

event Lessee shall be responsible for such payment Lessee shall cooperate

fully in any such activities at the request of Lessor, including allowing

Lessor and Lessor's agents to have reasonable access to the Premises at

reasonable times in order to carry out Lessor's investigative and remedial

responsibilities.

            (g) Lessor Termination Option. If a Hazardous Substance Condition

(see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is

legally responsible therefor (in which case Lessee shall make the

investigation and remediation thereof required by the Applicable Requirements

and this Lease shall continue in full force and effect, but subject to

Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at

Lessor's option, either (i) investigate and remediate such Hazardous Substance

Condition, if required, as soon as reasonably possible at Lessor's expense, in

which event this Lease shall continue in full force and effect; or (ii) if the

estimated cost to remediate such condition exceeds 12 times then the monthly

Base Rent of $100,000, whichever is greater, give written notice to Lessee,

with 30 days after receipt by Lessor of knowledge of the occurrence of such

Hazardous Substance Condition, of Lessor's desire to terminate this Lease as

of the date 60 days following the date of such notice. In the event Lessor

elects to give a termination notice, Lessee may, within 10 days thereafter,

give written notice to Lessor of Lessee's commitment to pay the amount by

which the cost of the remediation of such Hazardous Substance Condition

exceeds an amount equal to 12 times the then monthly Base Rent or $100,000,

whichever is greater. Lessee shall provide Lessor with said funds or

satisfactory assurance thereof with 30 days following such commitment In such

event, this Lease shall continue in full force and effect, and Lessor shall

proceed to make such remediation as soon as reasonably possible after the

required funds are available If lessee does not give such notice and provide

the required funds or assurance thereof within the time provided, this Lease

shall terminate as of the date specified on Lessors notice of termination.

 

 

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     6.3     Lessee's Compliance with Applicable Requirements. Except as

otherwise provided in this Lease, Lessee shall, at Lessee's sole expense,

fully, diligently and in a timely manner, materially comply with all

Applicable Requirements, the requirements of any applicable fire insurance

underwriter or rating bureau, and the recommendations of Lessor's engineers

and/or consultants which relate in any manner to the Premises, without regard

to whether said requirements are now in effect or become effective after the

Start Date. Lessee shall, within 10 days alter receipt of Lessor's written

request, provide Lessor with copies of all permits and other documents, and

other information evidencing Lessee's compliance with any Applicable

Requirements specified by Lessor, and shall immediately upon receipt, notify

Lessor in writing (with copies of any documents involved) of any threatened or

actual claim, notice, citation, warning, complaint or report pertaining to or

involving the failure of Lessee or the Premises to comply with any Applicable

Requirements.      

     6.4     Inspection: Compliance. Lessor and Lessor's "Lender" (as defined

in Paragraph 30) and consultants shall have the right to enter into Premises

at any time, in the case of an emergency, and otherwise at reasonable times,

for the purpose of inspecting the condition of the Premises and for verifying

compliance by Lessee with this Lease. The cost of any such inspections shall

be paid by Lessor, unless a violation of Applicable Requirements, or a

contamination is found to exist or be imminent, or the inspection is requested

or ordered by a governmental authority. In such case, Lessee shall upon

request reimburse Lessor for the cost of such inspection, so long as such

inspection is reasonably related to the violation or contamination.

 

7.    Maintenance; Repairs; Utility Installations; Trade Fixtures and

Alterations.

     7.1     Lessee's Obligations.

            (a) In General. Subject to the provisions of Paragraph 2.2

(Condition), 2.3 (Compliance, 6.3 (Lessee's Compliance with Applicable

requirements), 7.2 (Lessor's Obligations) , 9 (Damage or Destruction and 14

(Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises,

Utility Installations (intended for Lessee's exclusive use, no matter where

located, and Alterations in good order, condition and repair (whether or not

the portion of the Premises requiring repairs, or the means of repairing the

same are reasonably or readily accessible to Lessee, and whether or not the

need for such repairs occurs as a result of Lessee's use, any prior use, the

elements or the age of such portion of the Premises), including, but not

limited to, all equipment or facilities, such as plumbing, HVAC equipment,

electrical, lighting facilities, boilers, pressure vessels, fixtures, interior

walls, interior surfaces of exterior walls, ceilings, floors, windows, doors,

plate glass and skylights but excluding any items which are the responsibility

of Lessor pursuant to Paragraph 7.2. Lessee, in keeping the Premises in good

order, condition and repair, shall exercise and perform good maintenance

practices, specifically including the procurement and maintenance of the

service contracts required by Paragraph 7.1(b) below. Lessee's obligations

shall include restorations, replacements or renewals when necessary to keep

the Premises and all improvements thereon or a part thereof in good order,

condition and state of repair.

            (b) Service Contracts. Lessee shall, at Lessee's sole expense,

procure and maintain contracts, with copies to Lessor, in customary form and

substance for, and with contractors specializing and experienced in the

maintenance of the following equipment and improvements, if any, if and when

installed on the Premises: (i) HVAC equipment, (ii) boiler and pressure

vessels, (iii) (illegible), and (iv) any other equipment, if reasonably

required by Lessor. However, Lessor reserves the right, upon notice to Lessee,

to procure and maintain any or all such service contracts, and if Lessor so

elects, Lessee shall reimburse Lessor, upon demand, for the cost thereof.

            (c) Failure to Perform. If Lessee fails to perform Lessee's

obligations under this Paragraph 7.1, Lessor may enter upon the Premises after

10 days' prior written notice to Lessee (except in the case of an emergency,

in which case no notice shall be required), perform such obligations on

Lessee's behalf, and put the Premises in good order, condition and repair, and

Lessee shall promptly reimburse Lessor for the cost thereof.

            (d) Replacement. Subject to Lessee's indemnification of Lessor as

set forth in Paragraph 8.7 below, and without relieving Lessor liability

resulting from Lessee's failure to exercise and perform good maintenance

practices, if an item described in Paragraph 7.4(b) cannot be repaired other

than at a cost which is in excess of 50% of the cost of replacing such item,

then such item shall be replaced by Lessor, and the cost thereof shall be

prorated between the Parties and Lessee shall only be obligated to pay, each

month during the remainder of the term of this Lease, on the date on which

Base Rent is due, an amount equal to the product of multiplying the cost of

such replacement by a fraction, the numerator of which is one, and the

denominator of which is 144 (ie. 1/144th of the cost per month). Lessee shall

pay interest on the unamortized balance at a rate that is commercially

reasonable in the judgement of Lessor's accountants. Lessee may, however,

repay its obligation at any time.

     7.2     Lessor's Obligations. Subject to the provisions of Paragraphs 2.2

(Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6. (Use,

7.1 (Lessee's Obligations), 9.(Damage or Destruction) and 14.(Condemnation),

Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good

order, condition and repair the foundations, exterior walls, structural

condition of interior bearing walls, exterior roof, fire sprinkler system,

Common Area fire alarm and/or smoke detection systems, fire hydrants, parking

lots, walkways, parkways, driveways, landscaping, fences, signs and utility

systems serving the Common Areas and all parts thereof, as well as providing

the services for which there is a common Area Operating Expense pursuant to

Paragraph 4.2. Lessor shall not be obligated to paint the exterior or interior

surfaces of exterior walls nor shall Lessor be obligated to maintain, repair

or replace windows, doors or plate glass of the Premises. Lessee expressly

waives the benefit of any statute now or hereafter in effect to the extent it

is inconsistent with the terms of this Lease.

     7.3     Utility Installations; Trade Fixtures; Alterations.

            (a) Definitions. The term "Utility Installations" refers to all

floor and window coverings, air lines, power panels, electrical distribution,

security and fire protection systems, communication systems, lighting

fixtures, HVAC equipment, plumbing, and fencing to or on the Premises. The

term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be

removed without doing material damage to the Premises. The term "Alterations"

shall mean any modification of the improvements, other than Utility

Installations or Trade Fixtures, whether by addition or deletion. "Lessee

Owned Alterations and/or Utility Installations" are defined as Alterations

and/or Utility Installations made by Lessee that are not yet owned by Lessor

pursuant to Paragraph 7.4(a).

            (b) Consent. Lessee shall not make any alterations or Utility

Installations to the Premises without Lessor's prior written consent. Lessee

may, however, make non-structural Utility Installations to the interior of the

Premises (excluding the roof) without such consent but upon notice to Lessor,

as long as they are not visible from the outside, do not involve puncturing,

relocating or removing the roof or any existing walls, and the cumulative cost

thereof during this Lease as extended does not exceed a sum equal to 3

months's Base Rent in the aggregate or a sum equal to one month's Base Rent in

any one year. Notwithstanding the foregoing Lessee shall not make or permit

any roof penetrations and/or install anything on the roof without the prior

written approval of Lessor. Lessor may, as a precondition of granting such

approval, require Lessee to utilize a contractor chosen and/or approved by

Lessor. Any Alterations or Utility Installations that Lessee shall desire to

make and which require the consent of the Lessor shall be presented to Lessor

in written form with detailed plans. Consent shall be deemed conditioned upon

Lessee's: (i) acquiring all applicable governmental permits, (ii) furnishing

Lessor with copies of both the permits and the plans and specifications prior

to commencement of the work, and (iii) compliance with all conditions of said

permits and other Applicable Requirements in a prompt and expeditious manner.

Any Alterations or Utility Installations shall be performed in a workmanlike

manner with good and sufficient materials. Lessee shall promptly upon

completion furnish Lessor with as-built plans and specifications. For work

which costs and amount in excess of one month's Base Rent, Lessor may

condition its consent upon Lessee providing a lien and completion bond in an

amount in excess of one month's Base Rent. Lessor may condition its consent

upon Lessee providing a lien and completion bond in an amount equal to 150% of

the estimated cost of such Alteration or Utility Installation and/or upon

Lessee's posting an additional Security Deposit with Lessor.

             (c) Indemnification. Lessee shall pay, when due, all claims for

labor or materials furnished or alleged to have been furnished to or for

Lessee at or for use on the Premises, which claims are or may be secured by

any mechanic's or materialmen's lien against the Premises or any interest

therein. Lessee shall give Lessor not less than 10 days notice prior to the

commencement of any work in, on or about the Premises, and Lessor shall have

the right to post notices of non-responsibility. If Lessee shall contest the

validity of any such lien, claim or demand, then Lessee shall, at its sole

expense defend and protect itself, Lessor and the Premises against the same

and shall pay and satisfy any such adverse judgment that may be rendered

thereon before the enforcement thereof. If lessor shall require, Lessee shall

furnish a surety bond in an amount equal to 150% of the amount of such

contested lien, claim or demand, indemnifying Lessor against liability for the

same. If lessor elects to participate in any such action, Lessee shall pay

Lessor's attorneys' fees and costs.

 

 

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     7.4     Ownership; Removal; Surrender; and Restoration.

            (a) Ownership. Subject to Lessor's right to require removal or

elect ownership as hereinafter provided, all Alterations and Utility

Installations made by Lessee shall be the property of Lessee, but considered a

part of the Premises, Lessor may, at any time, elect in writing to be the

owner of all or any specified part of the Lessee Owned Alterations and Utility

Installations. Unless otherwise instructed per paragraph 7.4(b) hereof, all

Lessee Owned Alterations and Utility Installations shall, at the expiration or

termination of this Lease, become the property of Lessor and be surrendered by

Lessee with the Premises.

            (b) Removal. By delivery to Lessee of written notice from Lessor

not earlier than 90 and not later than 30 days prior to the end of the term of

this Lease, Lessor may require that any or all Lessee Owned Alterations or

Utility Installations be removed by the expiration or termination of this

Lease.   Lessor may require the removal at any time of all or any part of any

Lessee Owned Alterations, or Utility Installations made without the required

consent.

            (c) Surrender; Restoration. Lessee shall surrender the Premises by

the Expiration Date or any earlier termination date with all of the

improvements, parts and surfaces thereof broom clean and free of debris, and

in good operating order, condition and state of repair, ordinary wear and tear

excepted. "Ordinary wear and tear" shall not include any damage or

deterioration that would have been prevented by good maintenance practice.

Notwithstanding the foregoing, if this Lease is for 12 months or less, then

Lessee shall surrender the Premises in the same condition as delivered to

Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee

shall repair any damage occasioned by the installation, maintenance or removal

of Trade Fixtures, Lessee owned Alterations and/or Utility Installations,

furnishings and equipment as well as the removal of any storage tank installed

by or for Lessee. Lessee shall also completely remove from the Premises any

and all Hazardous Substances brought onto the Premises by or for Lessee, or

any third party (except Hazardous Substances which were deposited via

underground migration from areas outside of the Project) even if such removal

would require Lessee to perform or pay for work that exceeds statutory

requirements. Trade Fixtures shall remain the property of Lessee and shall be

removed by Lessee. The failure by Lessee to timely vacate the Premises

pursuant to this Paragraph 7.4(c) without the express written consent of

Lessor shall constitute a holdover under the provisions of Paragraph 26 below.

 

8.    Insurance; Indemnify.

     8.1     Payment of Premium Increases.

            (a) As used herein, the term "Insurance Cost Increase" is defined

as any increase in the actual cost of the insurance applicable to the building

and/or the Project and required to be carried by Lessor, pursuant to

Paragraphs 8.2(b), 8.2(a) and 8.3(b) ("required Insurance"), over and above

the Base Premium, as hereinafter defined, calculated on an annual basis.

Insurance Cost Increase shall include, but not be limited to, requirements of

the holder of a mortgage or deed of trust covering the Premises, building

and/or Project, increased valuation of the Premises, Building and/or Project,

and/or a general premium rate increase. The term Insurance Cost Increase shall

not, however, include any premium increases resulting from the nature of the

occupancy of any other tenant of the Building. If the parties insert a dollar

amount in Paragraph 1.9, such amount shall be considered the "Base Premium."

The Base Premium shall be the annual premium applicable to the 12 month period

immediately preceding the Start Date. If however, the Project was not insured

for the entirety of such 12 month period, then the Base Premium shall be the

lowest annual premium reasonably obtainable for the Required Insurance as of

the Start Date, assuring the most nominal use possible of the Building. In any

event, however, shall Lessee be responsible for any portion of the premium

cost attributable to liability insurance coverage in excess of $2,000,000

procured under Paragraph 8.2(b).

            (b) Lessee shall pay any Insurance Cost Increase to Lessor

pursuant to Paragraph 4.2. Premiums for policy periods commencing prior to, or

extending beyond, the term of this Lease shall be prorated to coincide with

the corresponding Start Date or Expiration Date.

     8.2     Liability Insurance.

            (a) Carried by Lessee. Lessee shall obtain and keep in force a

Commercial General Liability policy of insurance protecting Lessee and Lessor

as an additional insured against claims for bodily injury, personal injury and

property damage based upon or arising out of the ownership, use, occupancy or

maintenance of the Premises and all areas appurtenant thereto. Such insurance

shall be on an occurrence basis providing single limit coverage in an amount

not less than $1,000,000 per occurrence with an annual aggregate of not less

than $2,000,000, and "Additional Insured-Managers or Lessors of Premises

Endorsement" and contain the "Amendment of the Pollution Exclusion

Endorsement" for damage caused by heat, smoke or fumes from a hostile fire.

The policy shall not contain any intra-insured exclusions as between insured

persons or organizations, but shall include coverage for liability assumed

under this Lease as an "insured contract" for the performance of Lessee's

indemnity obligations under this Lease. The limits of said insurance shall

not, however, limit the liability of Lessee nor relieve Lessee of any

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