1. Basic
Provisions (“Basic Provisions”)
1.1
Parties: This Lease (“ Lease ”), dated for
reference purposes only May 20, 2008, is made by and between
88 12, a California limited partnership, dba Garaventa Properties
(“ Lessor ”) and Endwave Corporation, a Delaware
corporation (“ Lessee ”), (collectively the
“ Parties, ” or individually a “
Party ”).
1.2
Premises: That certain real property, including all
improvements therein or to be provided by Lessor under the terms of
this Lease, and commonly known as 105 Lake Forest Way, Folsom,
located in the County of Sacramento, State of California, and
generally described as (describe briefly the nature of the property
and, if applicable, the “ Project ”, if the
property is located within a Project) An approximately 31,244
rentable square foot single-story office building (“
Premises ”). (See also Paragraph 2)
1.3 Term:
Five (5) years and One (1) months (“ Original
Term ”) commencing November 1, 2008 or upon
substantial completion of Lessee improvements (see Addendum,
Paragraph 55) (“ Estimated Commencement Date
”) and ending November 30, 2013 (“ 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: $39,992.32 per month (“ Base Rent ”),
payable on the First (1 st )
day of each month commencing January 1, 2009. (See also
Paragraph 4)
þ If this box is checked, there are provisions in
this Lease for the Base Rent to be adjusted.
1.6 Base Rent
and Other Monies Paid Upon Execution:
(a) Base Rent: $39,992.32 for the period 12/1/08 to
12/31/08.
(b) Security Deposit: $46,241.12 (“ Security
Deposit ”). (See also Paragraph 5)
(c) Association Fees: $N/A for the period
N/A.
(d) Other: $ N/A for N/A.
(e) Total Due Upon Execution of this Lease:
$86,233.44.
Office use and
any other permitted use under all applicable laws and zoning
ordinances including microelectronics device manufacturing and
repair. (See also Paragraph 6)
1.8 Insuring
Party: Lessor is the “ Insuring Party ”
unless otherwise stated herein. (See also
Paragraph 8)
1.9 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):
þ Cornish & Carey Commercial Real Estate
represents Lessor exclusively (“ Lessor’s Broker
”);
þ Gallaway Commercial, Inc./Colliers International
represents Lessee exclusively (“ Lessee’s Broker
”); or
o
represents both Lessor and Lessee (“ Dual Agency
”).
(b) Payment to Brokers: (Per separate agreement. See
Paragraph 54).
1.10
Guarantor. The obligations of the Lessee under this Lease are
to be guaranteed by N/A (“ Guarantor ”). (See
also Paragraph 37)
1.11
Attachments. Attached hereto are the following, all of which
constitute a part of this Lease:
þ an Addendum consisting of Paragraphs 50 through
67;
þ a site plan depicting the Premises; (Exhibit
“A”)
þ a current set of the Rules and
Regulations;
þ a Work Letter; (Exhibit
“C”)
þ other (specify): Lease Commencement Confirmation
(Exhibit “B”); Exclusions to Operating Expenses
(Exhibit “D”); Preliminary Space Plan (Exhibit
“E”); and Final Construction Schedule (Exhibit
“F”)
2.1
Letting. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises, for the term, at the rental, and
upon ail 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. Note: Lessee is advised to
verify the actual size prior to executing this
Lease.
2.2
Condition. Lessor shall deliver the Premises 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
1.
other such
elements In the Premises, 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
any buildings on the Premises (the “ Building ”)
shall be free of material defects, and that the Premises do not
contain hazardous levels of any mold or fungi defined as toxic
under applicable state or federal law. If a non-compliance with
said warranty exists as of the Start Date, or if one of such
systems or elements should malfunction or fall 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 same at
Lessor’s expense. The warranty periods shall be as follows:
(i) 8 months as to the HVAC systems, and to the remaining
systems and other elements of the Building.
2.3
Compliance. Lessor warrants that to the best of its knowledge
the improvements on the Premises comply with the building codes,
applicable laws, covenants or restrictions of record, regulations,
and ordinances (“ Applicable Requirements ”)
that were in effect at the time that each Improvement, or portion
thereof, was constructed. Said warranty does not apply to the use
to which Lessee will put the Premises, modifications which may be
required by the Americans with Disabilities Act or any similar laws
as a result of Lessee’s use (see Paragraph 50), 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 Lessor’s 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 an addition to or an alteration
of the Premises and/or Building 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 an 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 shall
pay for such Capital Expenditure and Lessee shall only be obligated
to pay, each month during the remainder of the term of this Lease,
on the date that on which the Base Rent is due, an amount equal to
144th of the portion of such costs reasonably attributable to the
Premises. Lessee shall pay Interest on the balance but may prepay
its obligation at any time. If, however, 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 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. If 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 en
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,
however, 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), 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. In addition,
2.
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.
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 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 by such date, Lessor shall not be
subject to any liability therefor, nor shall such failure affect
the validity of this Lease. 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
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 such written notice is not received by Lessor within said
10 day period, Lessee’s right to cancel shall terminate.
If possession of the Premises is not delivered within 120 days
after the Commencement Date, this Lease shall terminate unless
other agreements are reached between Lessor and Lessee, in writing.
Lessee’s right to cancel as set forth in this paragraph shall
expire if not exercised within thirty (30) days following the
expiration of sixty (60) day period in which Lessor has failed
to deliver the Premises following the Commencement Date (See
Addendum, Paragraph 56).
3.4 Lessee
Compliance. Lessor shall not be required to deliver 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 Lessor’s
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 Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to
be rent (“ Rent ”).
4.2
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 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 first 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 falls 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 already due Lessor, for Rents which will be due in the future,
and/ 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 accommodate a sublessee or assignee,
Lessor shall have the right to increase the Security Deposit to the
extent necessary, in Lessor’s
3.
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 90 days after the expiration or termination of this
Lease, 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 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 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 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
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. Lessor
acknowledges that Lessee has disclosed its intentions to use lead
solder paste, solder flux, and isopropyl alchohol in the ordinary
course of its occupancy of the premises. Tenant’s disclosure
of such intent does not modify or excuse any obligation of Lessee
to indemnify Lessor that otherwise exists.
(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, 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 shall have no liability under this Lease with respect
to underground migration of any Hazardous Substance under the
Premises from adjacent properties not caused or contributed to by
Lessee). Lessee’s obligations shall
4.
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
result from Hazardous Substances which existed on the Premises
prior to Lessee’s occupancy 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. Notwithstanding anything to the contrary herein, Lessor has
no obligation to indemnify, defend, reimburse, and hold harmless
Lessee, its employees, lenders, and sureties from and against any
and all environmental damages, including the cost of remediation,
which result from Hazardous Substances which migrate onto or under
the Premises during Lessee’s occupancy thereof, where such
migration arises from the acts or omissions of Lessee, its
employees, agents, contractors, subcontractors, suppliers, vendors
or invitees.
(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 Lessee’s occupancy, 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 caused the condition (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 62(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 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 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 within 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 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 Lessor’s engineers and/or
consultants which relate in any manner to the such Requirements,
without regard to whether such Requirements are now in effect or
become effective after the Start Date. Lessee shall, within
10 days after 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. Likewise, Lessee shall Immediately give written
notice to Lessor of: (i) any water damage to the Premises and
any suspected seepage, pooling, dampness or other 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 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 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 a
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 the 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 a written request therefor.
5.
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, fire protection system,
fixtures, walls (interior and exterior), foundations, ceilings,
roofs, roof drainage systems, floors, windows, doors, plate glass,
and skylights, located in, on, or adjacent to the Premises. 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. Lessee shall, during
the term of this Lease, keep the exterior appearance of the
Building in a first-class condition (including, e.g. graffiti
removal) consistent with the exterior appearance of other similar
facilities of comparable age and size In the vicinity, including,
when necessary, the exterior repainting of the Building. Lessee
shall he responsible for the legal disposal or remediation of any
Lessee Owned Alterations and Utility Installations, Trade Fixtures
and any personal property of any kind remaining on the premises
following the lease expiration, any option periods, or holdover
periods, that are contaminated with Hazardous
Substances.
(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) fire extinguishing systems, Including fire
alarm and/or smoke detection, (iv) landscaping and Irrigation
systems, (v) roof covering and drains, and
(vi) clarifiers. 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
Lessor’s Obligations. Subject to the provisions of
Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or
Destruction) and 14 (Condemnation), it is intended by the Parties
hereto that Lessor shall have the obligation, to repair and
maintain the common areas of the Premises including the
landscaping, driveways, parking lots, signs, and sidewalks. It is
the intention of the Parties that the terms of this Lease govern
the respective obligations of the Parties as to maintenance and
repair of the Premises, and they expressly waive 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 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 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, 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
6.
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 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 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
100% 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.
7.4 Ownership;
Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor’s rights 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, with sixty (60) days Notice of Election to elect in
writing to become the owner of specified parts of the Lessee Owned
Alterations and Utility Installations, to be effective at the end
of the sixty (60) day period, or some other such time period
as the parties may negotiate. Unless otherwise instructed per
paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
Installations shall become the property of Lessor at the expiration
or termination of this lease.
(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
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 Premises, or if
applicable, the Premises) even if such removal would require Lessee
to perform or pay for work that exceeds statutory requirements.
Trade Fixtures shall remain Ere property of Lessee and shall be
removed by Lessee. Any personal property of Lessee not removed on
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
For Insurance. Sec Addendum, Paragraph 62.
8.2 Liability
Insurance. See Addendum, Paragraph 62.
8.3
Lessee’s Property; Business Interruption
Insurance.
(a) Property Damage. Lessee shall obtain and maintain
insurance coverage on all of Lessee’s personal property,
Trade Fixtures, and Lessee Owned Alterations and Utility
Installations. Such insurance shall be full replacement cost
coverage with a deductible of not to exceed $1,000 per occurrence.
The proceeds from any such Insurance shall be used by Lessee for
the replacement of personal property, Trade Fixtures and Lessee
Owned Alterations and Utility Installations. Lessee shall provide
Lessor with written evidence that such insurance is in
force.
7.
(b) Business Interruption. Lessee shall obtain and
maintain loss of income and extra expense insurance in amounts as
will reimburse Lessee for direct or Indirect loss of earnings
attributable to all perils commonly insured against by prudent
lessees in the business of Lessee or attributable to prevention of
access to the Premises as a result of such perils.
(c) No Representation of Adequate Coverage. Lessor
makes no representation that the limits or forms of coverage of
insurance specified herein are adequate to cover Lessee’s
property, business operations or obligations under this
Lease.
8.4 Insurance
Policies. Insurance required herein shall be by companies duly
licensed or admitted to transact business in the state where the
Premises are located, and maintaining during the policy term a
“General Policyholders Rating” of at least A-, VI, as
set forth in the most current issue of ‘Best’s
Insurance Guide”, or such other rating as may be required by
a Lender. Lessee shall not do or permit to be done anything which
invalidates the required insurance policies. Lessee shall, prior to
the Start Date, deliver to Lessor certified copies of policies of
such insurance or certificates evidencing the existence and amounts
of the required insurance. No such policy shall be cancelable or
subject to modification except after 30 days prior written
notice to Lessor. Lessee shall, at least 10 days prior to the
expiration of such policies, furnish Lessor with evidence of
renewals or “insurance binders” evidencing renewal
thereof, or Lessor may order such insurance and charge the cost
thereof to Lessee, which amount shall be payable by Lessee to
Lessor upon demand. Such policies shall be for a term of at least
one year, or the length of the remaining term of this Lease,
whichever is less. If either Party shall fail to procure and
maintain the Insurance required to be carried by it, the other
Party may, but shall not be required to, procure and maintain the
same.
8.5 Waiver of
Subrogation. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to recover damages against the other, for
loss of or damage to its property arising out of or incident to the
perils required to be insured against herein. The effect of such
releases and waivers is not limited by the amount of insurance
carried or required, or by any deductibles applicable hereto. The
Parties agree to have their respective property damage insurance
carriers waive any right to subrogation that such companies may
have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.
8.6
Indemnity. See Addendum
8.7 Exemption
of Lessor and its Agents from Liability. Notwithstanding the
negligence or breach of this Lease by Lessor or Its agents, neither
Lessor nor its agents shall be liable under any circumstances for.
(i) injury or damage to the person or goods, wares,
merchandise or other property of Lessee, Lessee’s employees,
contractors, invitees, customers, or any other person in or about
the Premises, whether such damage or injury is caused by or results
from fire, steam, electricity, gas, water or rain, indoor air
quality, the presence of mold or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other
cause, whether the said injury or damage results from conditions
arising upon the Premises or upon other portions of the building of
which the Premises are a part, or from other sources or places,
(ii) any damages arising from any act or neglect of any other
tenant of Lessor or from the failure of Lessor or its agents to
enforce the provisions of any other lease in the Project, or
(iii) injury to Lessee’s business or for any loss of
Income or profit therefrom. Instead, It Is intended that
Lessee’s sole recourse in the event of such damages or injury
be to file a claim on the insurance policy(ies) that Lessee is
required to maintain pursuant to the provisions of paragraph
8.
8.8 Failure to
Provide Insurance. Lessee acknowledges that any failure on its
part to obtain or maintain the insurance required herein will
expose Lessor to risks and potentially cause Lessor to incur costs
not contemplated by this Lease, the extent of which will be
extremely difficult to ascertain. Accordingly, for any month or
portion thereof that Lessee does not maintain the required
insurance and/or does not provide Lessor with the required binders
or certificates evidencing the existence of the required insurance,
the Base Rent shall be automatically increased, without any
requirement for notice to Lessee, by an amount equal to 10% of the
then existing Base Rent or $100, whichever Is greater. The parties
agree that such increase in Base Rent represents fair and
reasonable compensation for the additional risk/costs that Lessor
will incur by reason of Lessee’s failure to maintain the
required insurance. Such increase in Base Rent shall in no event
constitute a waiver of Lessee’s Default or Breach with
respect to the failure to maintain such insurance, prevent the
exercise of any of the other rights and remedies granted hereunder,
nor relieve Lessee of Its obligation to maintain the insurance
specified in this Lease.
9. Damage or
Destruction.
(a) “Promises Partial Damage” shall mean damage
or destruction to the Improvements on the Premises, other than
Lessee Owned Alterations and Utility Installations, which can
reasonably be repaired in B months or less from the date of the
damage or destruction. Lessor shall notify Lessee in writing within
30 days from the date of the damage or destruction as to
whether or not the damage is Partial or Total. Notwithstanding the
foregoing, Premises Partial Damage shall not include damage to
windows, doors, and/or other similar items which Lessee has the
responsibility to repair or replace pursuant to the provisions of
Paragraph 7.1.
(b) “Premises Total Destruction” shall mean
damage or destruction to the Premises, other than Lessee Owned
Alterations and Utility Installations and Trade Fixtures, which
cannot reasonably be repaired In 6 months or less from the
date of the
8.
damage or
destruction. Lessor shall notify Lessee In writing within
30 days from the date of the damage or destruction as to
whether or not the damage Is Partial or Total.
(c) “Insured Loss” shall mean damage or
destruction to Improvements on the Premises, other than Lessee
Owned Alterations and Utility Installations and Trade Fixtures,
which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any
deductible amounts or coverage limits involved.
(d) “Replacement Cost” shall mean the cost to
repair or rebuild the improvements owned by Lessor at the time of
the occurrence to their condition existing immediately prior
thereto, including demolition, debris removal and upgrading
required by the operation of Applicable Requirements, and without
deduction for depreciation.
(e) “Hazardous Substance Condition” shall mean
the occurrence or discovery of a condition involving the presence
of, or a contamination by, a Hazardous Substance as defined in
Paragraph 6.2(a), in, on, or under the Premises which requires
repair, remediation, or restoration.
9.2 Partial
Damage — Insured Loss. If a Premises Partial Damage that
is an Insured Loss occurs, then Lessor shall, at Lessor’s
expense, repair such damage (but not Lessee’s Trade Fixtures
or Lessee Owned Alterations and Utility Installations) as soon as
reasonably possible and this Lease shall continue in full force and
effect; provided, however, that Lessee shall, at Lessor’s
election, make the repair of any damage or destruction the total
cost to repair of which is $10,000 or less, and, in such event,
Lessor shall make any applicable insurance proceeds available to
Lessee on a reasonable basis for that purpose. Notwithstanding the
foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage In proceeds
(except as to the deductible which is Lessee’s
responsibility) as and when required to complete said repairs. In
the event, however, such shortage was due to the fact that, by
reason of the unique nature of the improvements, full replacement
cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage
in insurance proceeds or to fully restore the unique aspects of the
Premises unless Lessee provides Lessor with the funds to cover
same, or adequate assurance thereof, within 10 days following
receipt of written notice of such shortage and request therefor. If
Lessor receives said funds or adequate assurance thereof within
said 10 day period, the party responsible for making the
repairs shall complete them as soon as reasonably possible and this
Lease shall remain in full force and effect. If such funds or
assurance are not received, Lessor may nevertheless elect by
written notice to Lessee within 10 days thereafter to:
(i) make such restoration and repair as Is commercially
reasonable with Lessor paying any shortage in proceeds, in which
case this Lease shall remain In full force and effect, or
(ii) have this Lease terminate 30 days thereafter. Lessee
shall not be entitled to reimbursement of any funds contributed by
Lessee to repair any such damage or destruction. Premises Partial
Damage due to flood or earthquake shall be subject to
Paragraph 9.3, notwithstanding that them may be some insurance
coverage, but the net proceeds of any such insurance shall be made
available for the repairs if made by either Party.
9.3 Partial
Damage — Uninsured Loss. If a Premises Partial Damage
that is not an Insured Loss occurs, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs
at Lessee’s expense), Lessor may either: (i) repair such
damage as soon as reasonably possible at Lessor’s expense, in
which event this Lease shall continue in full force and effect, or
(ii) terminate this Lease by giving written notice to Lessee
within 30 days after receipt by Lessor of knowledge of the
occurrence of such damage. Such termination shall be effective
60 days following the date of such notice. In the event Lessor
elects to terminate this Lease, Lessee shall have the right within
10 days after receipt of the termination notice to give
written notice to Lessor of Lessee’s commitment to pay for
the repair of such damage without reimbursement from Lessor. Lessee
shall provide Lessor with said funds or satisfactory assurance
thereof within 30 days after making such commitment. In such event
this Lease shall continue in full force and effect, and Lessor
shall proceed to make such repairs as soon as reasonably possible
after the required funds are available. If Lessee does not make the
required commitment, this Lease shall terminate as of the date
specified in the termination notice.
9.4 Total
Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate
60 days following such Destruction. If the damage or
destruction was caused by the gross negligence or willful
misconduct of Lessee, Lessor shall have the right to recover
Lessor’s damages from Lessee, except as provided In
Paragraph 8.6.
9.5 Damage
Near End of Term. If at any time during the last 6 months
of this Lease there is damage for which the cost to repair exceeds
one month’s Base Rent, whether or not an Insured Loss, Lessor
may terminate this Lease effective 60 days following the date
of occur a of such damage by giving a written termination notice to
Lessee within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Lessee at that time has
an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by,
(a) exercising such option and (b) providing Lessor with
any shortage in insurance proceeds (or adequate assurance thereof)
needed to make the repairs on or before the earlier of (i) the
date which is 10 days after Lessee’s receipt of
Lessor’s written notice purporting to terminate this Lease,
or (ii) the day prior to the date upon which such option
expires. If Lessee duly exercises such option during such period
and provides Lessor with funds (or adequate assurance thereof) to
cover any shortage in Insurance proceeds, Lessor shall, at
Lessor’s commercially reasonable expense, repair such damage
as soon as reasonably possible and this Lease shall continue in
full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during such period, then this Lease
shall terminate on the date specified in the termination notice and
Lessee’s option shall be extinguished.
9.
9.6 Abatement
of Rent; Lessee’s Remedies.
(a) Abatement. In the event of Premises Partial Damage
or Premises Total Destruction or a Hazardous Substance Condition
for which Lessee is not responsible under this Lease, the Rent
payable by Lessee for the period required for the repair,
remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee’s use of the
Premises is impaired, but not to exceed the proceeds received from
the Rental Value insurance. All other obligations of Lessee
hereunder shall be performed by Lessee, and Lessor shall have no
liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.
(b) Remedies. If Lessor is obligated to repair or
restore the Premises and does not commence, in a substantial and
meaningful way, such repair or restoration within 90 days
after such obligation shall accrue, Lessee may, at any time prior
to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual
notice, of Lessee’s election to terminate this Lease on a
date not less than 60 days following the giving of such
notice. If Lessee gives such notice and such repair or restoration
is not commenced within 30 days thereafter, this Lease shall
terminate as of the date specified in said notice. If the repair or
restoration is commenced within such 30 days, this Lease shall
continue in full force and effect. “Commence” shall
mean either the unconditional authorization of the preparation of
the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.
9.7
Termination; Advance Payments. Upon termination of this Lease
pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable
adjustment shall be made concerning advance Base Rent and any other
advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee’s Security
Deposit as has not been, or is not then required to be, used by
Lessor.
10.1
Definition. As used herein, the term “Real Property
Taxes” shall Include any form of assessment; real estate,
general, special, ordinary or extraordinary, or rental levy or tax
(other than inheritance, personal income or estate taxes);
improvement bond; and/or license fee imposed upon or levied against
any legal or equitable interest of Lessor in the Premises or the
Project, Lessor’s right to other Income therefrom, and/or
Lessor’s business of leasing, by any authority having the
direct or indirect power to tax and where the funds are generated
with reference to the Building address and where the proceeds so
generated are to be applied by the city, county or other local
taxing authority of a jurisdiction within which the Premises are
located. Real Property Taxes shall also include any tax, fee, levy,
assessment or charge, or any increase therein: (i) imposed by
reason of events occurring during the term of this Lease, including
but not limited to, a change in the ownership of the Premises, and
(ii) levied or assessed on machinery or equipment provided by
Lessor to Lessee pursuant to this Lease.
10.2 Payment
of Taxes. In addition to Base Rent, Lessee shall pay to Lessor
an amount equal to the Real Property Tax installment due at least
20 days prior to the applicable delinquency date. If any such
installment shall cover any period of time prior to or after the
expiration or termination of this Lease, Lessee’s share of
such installment shall be prorated. In the event Lessee incurs a
late charge on any Rent payment, Lessor may estimate the current
Real Property Taxes, and require that such taxes be paid in advance
to Lessor by Lessee monthly in advance with the payment of the Base
Rent. Such monthly payments shall be an amount equal to the amount
of the estimated installment of taxes divided by the number of
months remaining before the month in which said installment becomes
delinquent. When the actual amount of the applicable tax bill is
known, the amount of such equal monthly advance payments shall be
adjusted as required to provide the funds needed to pay the
applicable taxes. If the amount collected by Lessor is insufficient
to pay such Real Property Taxes when due, Lessee shall pay Lessor,
upon demand, such additional sum as is necessary. Advance payments
may be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a Breach by Lessee in the performance of
its obligations under this Lease, then arty such advance payments
may be treated by Lessor as an additional Security
Deposit.
10.3 Joint
Assessment. If the Premises are not separately assessed,
Lessee’s liability shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included
within the tax parcel assessed, such proportion to be conclusively
determined by Lessor from the respective valuations assigned in the
assessor’s work sheets or such other information as may be
reasonably available.
10.4 Personal
Property Taxes. Lessee shall pay, prior to delinquency, all
taxes assessed against and levied upon Lessee Owned Alterations,
Utility Installations, Trade Fixtures, furnishings, equipment and
all personal property of Lessee. When possible, Lessee shall cause
its Lessee Owned Alterations and Utility Installations, Trade
Fixtures, furnishings, equipment and all other personal property to
be assessed and billed separately from the real property of Lessor.
If any of Lessee’s said property shall be assessed with
Lessor’s real property, Lessee shall pay Lessor the taxes
attributable to Lessee’s property within 10 days after
receipt of a written statement setting forth the taxes applicable
to Lessee’s property. Lessee shall remain responsible for all
such personal property taxes until the date on which Lessor has
accepted in writing a conveyance of such property. The parties
shall pro-rate any personal property taxes to the date of such
written acceptance by Lessor.
11.
Utilities and Services. Lessee shall pay for all water, gas, heat,
light, power, telephone, trash disposal and other utilities and
services supplied to the Premises, together with any taxes thereon.
If any such services are not separately metered or billed to
Lessee,
10.
Lessee shall
pay a reasonable proportion, to be determined by Lessor, of all
charges jointly metered or billed. There shall be no abatement of
rent and Lessor shall net be Sable in any respect whatsoever for
the inadequacy, stoppage, interruption or discontinuance of any
utility or service due to riot, strike, labor dispute, breakdown,
accident, repair or other cause beyond Lessor’s reasonable
control or in cooperation with governmental request or
directions.
12.
Assignment and Subletting.
12.1
Lessor’s Consent Required.
(a) Except for a Permitted Transfer as defined in 12
(b) below, Lessee shall not voluntarily or by operation law
assign, transfer, mortgage or encumber, or sublet (collectively
“assign” or “assignment”) all or any part
of Lessee’s Interest in this Lease or in the premises without
Lessor’s prior written consent.
(b) Lessee may assign this lease or sublet the premises, or
any portion thereof, without Lessor’s consent, to any entity
which controls, in controlled by, or is under common control with
Lessee; to any entity which results from a merger of,
reorganization of, or consolidation with Lessee or to any entity
which acquires substantially all of the stock or assets of Lessee,
as a going concern, with respect to the business that is being
conducted in the premises (hereinafter each a “ Permitted
Transfer ”). In addition, a sale or transfer of the
capital stock of Lessee shall be deemed a Permitted Transfer if
such sale or transfer occurs in connection with any bona
fide financing or capitalization for the benefit of Lessee.
Landlord shall have no right to terminate the lease in connection
with, and shall have no right to any economic conseration resulting
from any Permitted Transfer. Lastely, a Permitted Transfer shall
not cause the lapse of Paragraph 39, Option Right, which are
personal to the Lessee and any Permitted Transferee”. Any
Permitted Transferee shall obtain Lessor’s prior written
consent to any change In the Agreed Use.
(c) The involvement of Lessee or its assets in any
transaction, or series of transactions (by way of merger, sale,
acquisition, financing, transfer, leveraged buy-out or otherwise),
whether or not a formal assignment or hypothecation of this Lease
or Lessee’s assets occurs, which results or will result in a
reduction of the Net Worth of Lessee by an amount greater than 25%
of such Net Worth as it was represented at the time of the
execution of this Lease or at the time of the most recent
assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting
such reduction, whichever was or is greeter, shall be considered an
assignment of this Lease to which Lessor may withhold its consent.
“ Net Worth of Lessee ” shall mean the net worth
of Lessee (excluding any guarantors) established under generally
accepted accounting principles.
(d) An assignment or subletting without consent shall, at
Lessor’s option, be a Default curable after notice per
Paragraph 13.1(c), or a noncurable Breach without the
necessity of any notice and grace period. If Lessor elects to treat
such unapproved assignment or subletting as a noncurable Breach,
Lessor may either (i) terminate this Lease, or (ii) upon
30 days written notice, increase the monthly Base Rent to 110%
of the Base Rent then in effect. Further, in the event of such
Breach and rental adjustment, (i) the purchase price of any
option to purchase the Premises held by Lessee shall be subject to
similar adjustment to 110% of the price previously in effect, and
(ii) all fixed and non-fixed rental adjustments scheduled
during the remainder of the Lease term shall be increased to 110%
of the scheduled adjusted rent.
(e) Lessee’s remedy for any breach of
Paragraph 12.1 by Lessor shall be limited to compensatory
damages and/or injunctive relief.
(f) Lessor may reasonably withhold consent to a proposed
assignment or subletting if Lessee is in Default at the time
consent is requested.
(g) Notwithstanding the foregoing, allowing a de minimis
portion of the Premises, ie. 20 square feet or less, to be used by
a third party vendor in connection with the installation of a
vending machine or payphone shall not constitute a
subletting.
12.2 Terms and
Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor’s consent, no assignment or
subletting shall: (i) be effective without the express written
assumption by such assignee or sublessee of the obligations of
Lessee under this Lease, (ii) release Lessee of any
obligations hereunder, or (iii) alter the primary liability of
Lessee for the payment of Rent or for the performance of any other
obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee’s
obligations from any person other than Lessee pending approval or
disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of Rent or
performance shall constitute a waiver or estoppel of Lessor’s
right to exercise its remedies for Lessee’s Default or
Breach.
(c) Lessor’s consent to any assignment or subletting
shall not constitute a consent to any subsequent assignment or
subletting.
(d) In the event of any Default or Breach by Lessee, Lessor
may proceed directly against Lessee, any Guarantors or anyone else
responsible for the performance of Lessee’s obligations under
this Lease, including any assignee or sublessee, without first
exhausting Lessor’s remedies against any other person or
entity responsible therefor to Lessor, or any security held by
Lessor.
(e) Each request for consent to an assignment or subletting
shall be in writing, accompanied by information relevant to
Lessor’s determination as to the financial and operational
responsibility and appropriateness of the proposed assignee or
sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee
of $500 as
11.
consideration
for Lessor’s considering and processing said request. Lessee
agrees to provide Lessor with such other or additional information
and/or documentation as may be reasonably requested. (See also
Paragraph 36)
(f) Any assignee of, or sublessee under, this Lease shall,
by reason of accepting such assignment, entering into such
sublease, or entering into possession of the Premises or any
portion thereof, be deemed to have assumed and agreed to conform
and comply with each and every term, covenant, condition and
obligation herein to be observed or performed by Lessee during the
term of said assignment
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