AIR COMMERCIAL REAL ESTATE
ASSOCIATION
STANDARD
INDUSTRIAUCOMMERCIAL
MULTI-TENANT LEASE -
GROSS
I. Basic
Provisions ("Basic Provisions").
1.1 Parties:
This Lease ("Lease"), dated for reference purposes only
May 29, 2008
is made by and between s Adams Properties, A
California Partnership
(“lessof”)
and
s WeCoSign:
Frank Jekubaitis
________________________________________________________________________________("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 s
34004 W. MacArthur Blvd. Santa Ana, CA 92704 located in the City
of Santa Ana
, County of Orange
, State of California
, with zip code 92704
, as outlined on Exhibit hereto ("Premises") and
generally described as (describe briefly the nature of the
Premises):
Units consisting of approximately 1000 sq. feet of office
space.
In addition to Lessee's rights to use and occupy
the Premises as hereinafter specified, Lessee shall have
non-exclusive rights to any utility raceways of the building
containing the Premises ("Building to the Common Areas (as defined
In Paragraph 2.7 below), but shell not have any rights to the roof,
or exterior vas of the 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 hater: collectively referred to as the
'Project' (See also Paragraph 2)
1.2(b)
Parking: 2
unreserved vehicle parking spaces (See also
Paragraph 2.6)
1.3 Term:
1
years and 0
months ("Original Term") commencing s June
1, 2008
("Commencement Date") and endings May 31,
2009
("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: $ 1200.00
per month (*Base Rent"), payable on
the first
day of each month commencing June 1 2008 (See also
Paragraph 4)
¨ If this box is chocked, there are provisions In
this Lease for the Base Rent to be adjusted.
1.6 Lessee's
Share of Common Area Operating
Expenses:
percent (%) ("Lessees Share' , Lessee's Share has been calculated
by dividing the approximate square footage of the Promises by the
approximate square footage of the Project in the event that that
she of the Premises and/or the Project are modified during the term
of this Lease. Lessor shall recalculate Lessee's Share to reflect
such modification.
1.7 Base
Rent and Other Monies Paid Upon Execution:
(a) Base
Rent $ 1200.00
for the period lease term
(b) Common
Area Operating Expenses: $
for the period
(c) Security
Deposit: $ 1200.00
("Security Deposit"). (See also
Paragraph 5)
(d) Other:
$
for
(e) Total
Due Upon Execution of this Lease: $ 3000.00 (1500.00
security deposit plus $1500.00 June rent)
1.8 Agreed
Use: Office use
_______________________________________________________________________(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):
(b) Payment to Brokers:
upon execution and delivery of this lease by both Parties, Lessor
shall pay to Brokers the brokerage fee agreed to in a separate
written agreement (or if there is no such agreement the sum of
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 Attachments.
Attached hereto ere the following, all of which constitute a part
of this Lease:
¨ an Addendum consisting of
Paragraphs through
¨ a site plan depicting the Premises:
¨ a site plan depicting the Project
¨ a current set of the Rules and Regulations for
the Project:
¨ a current set of the Rules and Reputations
adopted by the owners' association;
¨
a Work Letter;
¨
other (specify):
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 in approximation which the Parties agree is reasonable and any
payments eased thereon are not subject to revision whether or not
the actual size Is more or teas. NOTE: Lessee is advised to verify
the actual size prior to executing this Lease
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. sump pumps, 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, that the structural elements of
the roof, bearing walls and foundation of the Unit shall be free of
material defects, and that the Unit does not contain hazardous
levels of any mold or fungi defined as toxic under applicable state
or federal law. 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, as 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 specificity the
nature and extent of such non-compliance, malfunction or failure,
rectify some at Lessors 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 noncompliance, 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 to the best of its
knowledge 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 an applicable laws, covenants or restrictions of record,
regulations, and ordinances in effect on the Start Dale
("Applicable Requirements"). Said warranty does not apply to the
use to with Lessee will put the Promises, modifications which may
be required by the Americans with Disabilities Act or any similar
laws as a result of Lessee's use (see Paragraph 49), 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 Applicable Requirements, and
especially the zoning are appropriate 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 after receipt of
written notice from Lessee setting forth with specificity the
nature and 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 Lessee at 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 on addition to or
on 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 such 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
thereof, 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 receipt of Lessors
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. If Lessee
is unable to finance Lessors 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 bases, 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
either: (i) immediately cease such changed use or intensity of use
and/or take such other steps as may be necessary to eliminate the
requirement for such Capital Expenditure, or (ii) complete such
Capital Expenditure at its own expense. Lessee shall not have any
right to terminate this Lease.
2.4
Acknowledgements. 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), end their suitability for
Lessee's intended use, (b) Lessee has made such investigation ash
deems necessary with reference to such matters and assumes of
responsibility therefor as the same relate to its occupancy of the
Premises, and (c) neither Lessor, Lessors 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. In 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 Lessors
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 Parking Spaces specified in Paragraph 1.2(b) on those portions
of the Common Areas designated from time to the by Lessor for
parking. Lessee shall not use more parking spaces than said number.
Said parking spaces shall be used for parking by vehicles no larger
than fullsize-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 then Permitted Size Vehicles may be parked
in the Common Area without the prior written permission of Lessor.
In addition;
(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 lot 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 circumstances 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 shall use its
best efforts 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 Lessors 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, parking areas, 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
(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 judgment, deem to be
appropriate.
3.1
Term. The Commencement Date, Expiration Date and Original Term
of this Lease are as specified in Paragraph 1.3.
3.2
Early Possession. If Lessee totally or partially occupies
the Premises prior to the Commencement Date, the obligation to pay
Base Rent shall be abated for the period of such early possession.
All other terms of this Lease (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 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 agreed, Lessor
shat not be subject to any iability therefor, nor shall such
failure affect the validity of this Lease or change the Expiration
Date, Lessee shall not, however, be obligated to pay Rent or
perform its other obligations until Lessor delivers possession of
the Premises and any period of rent abatement that Lessee would
otherwise have enjoyed shall run from the date of the delivery of
possession and continue for a period equal to what Lessee would
otherwise have enjoyed, but minus any days of delay caused by the
acts or omissions of Lessee. 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 within said 10 day period, Lessee's right
to cancel shall terminate. Except as otherwise provided, if
possession is not tendered to Lessee 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 Premisee is not delivered
within 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 evidence 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.
4.1 Rent
Defined . All monetary obligations of Lesson 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,
clean, good order and condition, but not the replacement
(see
subparagraph (e)), of this 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
cost of water, gas, electricity and telephone to service the Common
Areas and any utilities not separately metered.
(iii) Trash
disposal, pest control services, properly management, security
services, owner’s association dues and fees, the cost to
repaint the exterior of any structures and the cost of any
environmental inspections.
(iv) Reserves
set aside for maintenance and repair of Common Areas and Common
Ares equipment.
(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
deducible portion of an insured loss concerning the Building or the
Common Areas.
(viii) Auditors',
accountants' and attorneys' fees and costs related to the
operation, maintenance, repair and replacement of the
Project.
(ix) The
cost of any capital improvement 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 improvement
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 improvement in any
given month.
(x) 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 Protect or to the
operation, repair and maintenance thereof, shall be allocated
entirety to such Unit, Building, or other budding. However, any
Common Area Operating Expenses and Real Properly 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 is
payable monthly on the same day as the Base Rent is due hereunder.
The amount of such payments shall be based on Lessor's estimate of
the annual Common Area Operating Expenses. Within 60 days after
written request (but not more than once each year) Lessor shall
deliver to Lessee a reasonably detailed statement showing Lessee's
Share of the actual Common Area Operating Expenses incurred during
the preceding year. If Lessee's payments during such year exceed
Lessee's Share, Lessor shall credit the amount of such over-payment
against Lessee's future payments. If Lessee's payments during such
year were less than Lessee's Share, Lessee shall pay to Lessor the
amount of the deficiency within 10 days after delivery by Lessor to
Lessee of the statement.
(e) Except
as provided in paragraph 4.2(a)(viii), Common Area Operating
Expenses shall not include the cost of replacing equipment or
capital components such as the roof, foundations, exterior
walls or Common Area capital improvements, such as the parking lot
paving, elevators, lances that have a useful life for accounting
purposes of 5 years or more.
(f)
Common Area Operating Expenses shall not include any expenses
paid by any tenant directly to third parties, or as to which Lessor
is otherwise reimbursed by any third party, other tenant, or
insurance proceeds.
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. All monetary amounts shall be
rounded to the nearest whole dollar. In the event that any
statement or invoice prepared by Lessor is inaccurate such
inaccuracy shall not constitute a waiver and Lessee shall be
obligated to pay the amount set forth in this Lease. 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 given by Lessee to Lessor is
dishonored for any reason, Lessee agrees to pay to Lessor the sum
of $25 in addition to any Late Charge and Lessor, at its option,
may require all future Rent be paid by cashiers check. Payments
will be applied fuel to accrued late charges and attorney's fees,
second to accrued interest, then to Base Rent and Common Area
Operating Expenses, and any remaining amount to any other
outstanding charges or costs.
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 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 accomodate a
sublessee or assignee, Lessor shall have the right to increase the
Security Deposit to the extent necessary, in Lessor's 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 Lessors 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 Security Deposit shall be considered to be had in trust,
to bear interest or to be prepayment for any monies to be paid by
Lessee under this Lease.
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. Other than guide, signal and seeing eye dogs, Lessee
shall not keep or allow in the Premises any pets, animals, birds,
fish, or reptiles. Lessor shall not unreasonably withhold or delay
its consent to any written requests for a modification of the
Agreed Use, so long as the same will not impair the structural
integrity of the Building or the mechanical or electrical systems
therein, and/or is not significantly more burdensome to the
Project. 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 Lessors 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 is 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 requires 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 the normal course of the Agreed
Use, ordinary office supplies (copier toner, liquid paper, glue,
etc.) and common household cleaning materials, 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 deemes 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 Promises (including through the plumbing of sanitary
sewer system) and shall promptly at Lessee's expense, comply with
all Applicable Requirements and 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 that shall have no liability
under this Lease with respect to underground migration of any
Hazardous Substance under the Premises from areas outside of the
Project not caused or contributed to by Lessee). 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 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
suffered as a direct result of Hazardous Substances on the Premises
prior to Lessee taking possession 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 Remediation . 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 Lessee taking possession, 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 Lessors 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 Lessors option, either (i)
investigate and remediate such Hazardous Substance Condition, if
required. as soon as reasonably possible al Lessors 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 the then monthly Base Rent or $100,000, whichever
is greater, give written notice to Lessee, within 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
or 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 sold funds or satisfactory
assurance thereof within 30 days following such commitment. In such
event, this Lease shall continue in 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 in Lessor's notice of termination.
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 Lessors engineers and/or consultants which
relate in any manner to such Requirements, without regard to
whether said Requirements are now in effect or become effective
after the Start Date. Lessee shall, within 10 days after receipt of
Lessors 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 or Lessee or the Premises to comply with
any Applicable Requirements. Likewise, Lessee shall immediately
give written notice to Lessor of: (i) any water damage to the
Premises and any suspected seepage, pooling, dampness of ether
condition conducive to the production of mold; or (ii) any
mustiness or other odors that might indicate the presence of mold
in the Premises.
6.4
Inspection; Compliance . Lessor and Lessors
“Lender” (as defined in Paragraph 30) and consultants
shall have the right to enter into Premises at any time, in the
case of on emergency, and otherwise at reasonable times after
reasonable notice, 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 Hazardous
Substance condition (See Paragraph 9.1) 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 me cost of Such inspection, so long as such
inspection is reasonably related to the violation or contamination.
In addition, Lessee shall provide copies of all relevant material
safety data sheets (MSDS) to Lessor within 10 days of the receipt
of written request therefor.
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 (Lessors 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) clarifiers, 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 of such service contracts, and 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 pay to Lessor a sum
equal to 115% of the cost thereof.
(d)
Replacement . Subject to Lessee's Indemnification of Lessor
as set forth in Paragraph 8.7 below, and without relieving Lessee
of liability resulting from Lessee's failure to exercise and
perform good maintenance practices, if an item described In
Paragraph 7.1(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 but may prepay its obligation at any
time.
7.2 Lessors
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 end repair the foundations, exterior walls, structural
condition of interior bearing wails, 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 wails 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 new 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 and/or vacuum lines, power panels, electrical distribution,
security and fire protection systems, communication cabling,
lighting fixtures, HVAC equipment, plumbing, and fencing in 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 Lessors 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, will not affect the electrical, plumbing, HVAC,
and/or life safety systems, and the cumulative cost thereof during
this Lease as extended does not exceed a sum equal to 3 month'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 to 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 an 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 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} Liens;
Bonds . 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
ellects to participate on any such action Lessee shall pay Lessors
attorneys' fees and costs.
7.4
Ownership; Removal; Surrender; and Restoration .
(a)
Ownership . Subject to Lessors 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 Losee 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 of 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, than 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
the property of the Premises) even if such removal would require
Lesee to perform or pay for work that exceeds statutory
requirements. Trade Fixtures shall remain the properly of Lessee
and shall be removed by Lessee. Any personal property of Lessee not
removed by or before the Expiration Date or any earlier termination
date shall be deemed to have been abandoned by Lessee and may be
disposed of or retained by Lessor as Lessor may desire. 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.
8.1
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 6.2(b), 8.3(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 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,
assuming the most nominal use possible of the Building. In no
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
(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 in
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