NOTE: In this exhibit, square
brackets [ ] surrounding text denotes
strikeout characters
STANDARD FORM BUSINESS CENTER
LEASE
This Lease,
dated as of this 18 th day of March 2003
, is made by and between
Eureka Development Company LLC, a California Limited
Liability Company (herein called “Landlord”)
and Sierra Logic, a Delaware Corporation (herein
called “Tenant”).
Landlord does
hereby lease to Tenant and Tenant hereby leases from Landlord that
certain space (herein called “Premises”), having
dimensions of approximately 10,200 square feet of
floor area. The Premises are situated within building 9083
Foothills Boulevard (the “Building”) within the
Blue Oaks Technical Center (the “Center”). The
location, address and dimensions of the Building and the Premises
are delineated on Exhibit “A” attached hereto and
incorporated herein by reference. Said Premises and the Center are
located at 9083 Foothills Boulevard, Suite 300
. in the City of Roseville, County of Placer, State of
California. The Common Area is defined in
Article 25.
This Lease is
subject to the terms, covenants and conditions herein set forth and
the Tenant covenants as a material part of the consideration for
this Lease to keep and perform each and all of said terms,
covenants and conditions by it to be kept and performed.
Tenant shall
use the Premises for general office use including computer
and software development and other general office use and
shall not use or permit the Premises to be used for any other
purpose without prior written consent of Landlord.
4.1 Initial
Minimum Rent. Tenant
agrees to pay to Landlord as minimum rent (“Minimum
Rent”), without notice or demand, the monthly sum of
ELEVEN THOUSAND SEVEN HUNDRED THIRTY AND NO
/100ths Dollars ($ 11,730.00 ), in advance, on
or before the first day of each and every successive calendar month
during the term hereof, except that the first month’s rent
shall be paid upon the execution hereof. Rent for any period which
is for less than one (1) month shall be a prorated portion of
the monthly installment herein based upon a thirty (30) day
month. Said rental shall be paid to Landlord, without deduction or
offset, in lawful money of the United States of America and at such
place as Landlord may from time to time designate in
writing.
4.2 [
Minimum Rent Adjustment. The Minimum Rent as set forth in
Section 4.1 above shall be increased for each year of the term
of this Lease following the first year (“Subsequent
Year”) if the Consumer Price Index for Urban Wage Earners and
Clerical Workers (San Francisco/Oakland/San Jose, Area: Base
1982/1984 = 100) (“Index”), as published by the United
States Department of Labor, Bureau of Labor Statistics, for the
“Comparison Month” (described below) increases over the
Index for the calendar month which is four (4) months prior to
the month in which Minimum Rent commences (“Base
Month”). The Base Month Index shall be compared with the
Index for the same calendar month for each Subsequent Year
(“Comparison Month”). If the Index for any Comparison
Month is higher than the Base Month Index, then the Minimum Rent
for the Subsequent Year following the Comparison Month shall be
increased commencing with the first month of such Subsequent Year
by a percentage which shall be calculated by dividing the Base
Month Index into that number which represents the difference, if
any, when subtracting the Base Month Index from the index for any
Comparison Month. In no event shall the Minimum Rent be less than
that set forth in Section 4.1 above. By way of illustration
only, if Tenant commences paying Minimum Rent in August of 1996,
then the Base Month Index would be that for April, 1996 (assume
such Index at 130) and that Index shall be compared with the Index
for April ,1997 (assume such Index at 136), and because
the Index for April 1997 is 4.6% higher than the Index for
April, 1996 based on the assumptions of 136 and 130, respectively,
the Minimum Rent commencing in August of 1997 would be 4.6% higher
than the Minimum Rent for the month of August, 1996; likewise the
Index for April, 1998 would be compared with the Index for April,
1996.
Should
said Bureau discontinue the publication of the above Index, or
publish the same less frequently, or after the same in some other
manner, then Landlord shall adopt a substitute index or substitute
procedure which reasonably reflects and monitors consumer
prices. ]
5.1
Commencement. The Lease
term shall be sixty-three (63) Months , plus any
partial month in which the rental commences. The parties hereto
acknowledge that certain obligations under various articles hereof
may commence prior to the Lease term, i.e., construction, hold
harmless, liability insurance, etc.; and the parties agree to be
bound by these articles prior to commencement of the Lease term.
The lease term shall commence (“Commencement Date”)
(check applicable box):
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On
June 1, 2003 , if the Premises are being leased
in its “as is” condition or subject to such incidental
work as is to be performed by Landlord prior to said date (this
work, if any, to be set forth in the attached Exhibit
“B” attached hereto and incorporated herein by
reference and, in this latter event, the rental shall commence on
said date only if Landlord shall have substantially completed said
work).
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Upon substantial completion of
Landlord’s Work as set forth in Exhibit “B”
attached hereto and incorporated herein by reference, or when the
Tenant opens for business, whichever is sooner. Subject to delay by
causes beyond the reasonable control of Landlord, or attributable
to Tenant’s action or inaction, Landlord shall use reasonable
speed and diligence in the construction of the Premises after the
commencement of such construction, and shall use best efforts to
perform the work to be performed by Landlord, as specified in
Exhibit “B”, but failure so to complete the work in the
time specified in Exhibit “B” shall in no way affect
the validity of this lease or the obligations of Tenant under this
Lease, nor shall Tenant have any claim against Landlord on account
thereof. The Premises shall be treated as having been completed in
accordance with the requirements of Exhibit “B”, on the
first day of which Landlord gives Tenant notice that Landlord has
substantially completed the work to be performed by Landlord
according to Exhibit “B”, and such other work in the
Center as well, upon reasonable completion thereof, enable Tenant
reasonably to use the Premises for the use specified in
Article 3 upon completion of Tenant’s Work, for which
provision is made in Exhibit “C” attached hereto and
incorporated by reference, and concurrent completion of common
facilities in the Center reasonably needed for access to and egress
from the Premises. “Substantial completion”, as used in
this Article 5, shall mean completed to such an extent that
Tenant may reasonably commence the work to be performed by Tenant
under Exhibit “C” without undue interference with the
balance of the work to be performed by Landlord in the Premises, in
accordance with Exhibit “B” or undue interference by
Landlord with the work to be performed by Tenant in the Premises in
accordance with Exhibit “C”.
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5.2
Tenant’s Work. Tenant’s “Construction and Fixture
Period” shall commence upon substantial completion by
Landlord of the work to be performed by Landlord in accordance with
Section 36.10 . Tenant shall, during Tenant’s
Construction and Fixture Period, perform, at Tenant’s own
cost and expense, all of Tenant’s Work, and shall equip the
Premises with all trade fixtures and personal property suitable or
appropriate to the regular and normal operation of the type of
business in which Tenant is engaged, and Tenant shall open for
business as soon as possible after substantial completion by
Landlord of Landlord’s work, as specified in
Section 36.10 . In any event, Tenant agrees to
open for business not later than the end of Tenant’s
Construction and Fixture Period. Rent shall commence at the start
of the Construction and Fixture Period.
5.3
Performance of Landlord’s Work. Except to the extent to which Tenant shall have
given Landlord notice, not later than the end of the second full
calendar month next beginning after the Commencement Date, of those
matters which Landlord has not performed its obligations under
Section 36.10 , Tenant shall have no claim that
Landlord has failed to perform any of Landlord’s obligations
under Section 36.10 .
ARTICLE 6
SECURITY DEPOSIT
Concurrently
with Tenant’s execution of this Lease, Tenant has deposited
with Landlord the sum of ELEVEN THOUSAND SEVEN HUNDRED THIRTY
AND no/100ths Dollars ($ 11,730.00 )
in addition to the first month’s rent. Said sum shall be held
by Landlord as security for the faithful performance by Tenant of
all the terms, covenants, and conditions of this Lease to be kept
and performed by Tenant during the term hereof. If Tenant defaults
with respect to any provision of this Lease, including, but not
limited to the provisions relating to the payment of rent, Landlord
may (but shall not be required to) use, apply or retain all or any
part of this security deposit for the payment of any rent or any
other sum in default, or for the payment of any amount which
Landlord may spend or become obligated to spend by reason of
Tenant’s default, or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of
Tenant’s default. If any portion of said deposit is so used
or applied, Tenant shall, within five (5) days after written
demand therefor, deposit cash with Landlord in an amount sufficient
to restore the security deposit to its original amount and
Tenant’s failure to do so shall be a default under this
Lease. Landlord shall not be required to keep this security deposit
separate from its general funds, and Tenant shall not be entitled
to interest on such deposit. If Tenant shall fully and faithfully
perform every provisions of this Lease to be performed by it, the
security deposit or any balance thereof shall be returned to Tenant
(or, at Landlord option, to the last assignee of Tenant’s
interest hereunder) within ten (10) days following the
expiration of the Lease term. In the event of termination of
Landlord’s interest in this Lease, said deposit, or any part
thereof
not previously
applied, may be turned over by Landlord to Landlord’s grantee
and, if so turned over, Tenant agrees to look solely to such
grantee for proper application of the deposit in accordance with
the terms of this Article 6, and the return thereof in
accordance herewith. The holder of a mortgage on property which
includes the Premises shall never be responsible to Tenant for the
return or application of any such deposit, whether or not such
holder succeeds to the position of Landlord hereunder, unless such
deposit shall have been received in hand by such holder.
Tenant shall also provide a letter of credit equal to one
(1) year’s equivalent of rent ($140,760.00) which shall
be released within ten (10) days of Tenant’s next round of
funding after Landlord has had a chance to review all documentation
with regards to burn rate and financial information. This shall
occur only if Tenant is not in default of their Lease and shall be
at Landlord’s sole discretion, which shall not be
unreasonably withheld.
ARTICLE 7
ADDITIONAL CHARGES
[ (a) In
addition to the Minimum Rent to be paid by Tenant pursuant to
Article 4, Tenant shall pay to Landlord at the time and in the
manner herein specified additional rent in an amount equal to
n/a percent ( % ) of the amount of Tenant’s
gross sales made in, upon or from the Premises during each calendar
year of the Lease term, less the aggregate amount of the Minimum
Rent previously paid by Tenant for said calendar
year.
(b) Within thirty (30) days after the end of each
calendar month following commencement of rents, Tenant shall
deliver to Landlord a statement showing the gross sales for such
calendar month, and, if same is due, a payment equal to said
hereinabove stated percentage of the total monthly gross sales made
in, upon, or from the Premises during each calendar month, less the
Minimum Rent for such prior calendar month, if previously paid.
Said payment shall be made with the succeeding month’s
regular rental payment. Within sixty (60) days after the end
of each calendar year of the term hereof, Tenant shall furnish to
Landlord the annual statement described in Section 7.1
(d) below, showing the total gross sales by months made in,
upon, or from the Premises during the preceding calendar year, at
which time an adjustment shall be made between Landlord and Tenant
to the end that the total percentage rent paid for each such
calendar year shall be a sum equal to said hereinabove stated
percentages of the total gross sales made in, upon, or from the
Premises during each calendar year of the term hereof, less the
Minimum Rent pursuant to Article 4 for each such calendar
year, if previously paid, so that the percentage rent, although
payable monthly, shall be computed and adjusted on an annual
basis.
(c) The
term “gross sales” as used in this lease shall include
the entire gross receipts of every kind and nature from sales and
services made in, upon, or from the Premises, whether upon credit
or for cash, in every department operating in the Premises, whether
operated by the Tenant or by a subtenant or subtenants, or by a
concessionaire or concessionaires, excepting therefrom any rebates
and/or refunds to customers and the amount of all sales tax
receipts which has to be accounted for by Tenant to any government,
or any governmental agency. Sales upon credit shall be deemed cash
sales and shall be included in the gross sales for the period which
the merchandise is delivered to the customer, whether or not title
to the merchandise passes with delivery.
(d) Tenant shall utilize, and cause to be utilized, cash
registers equipped with sealed continuous totals to record all
gross sales, and Tenant shall keep on the Premises for at least
three (3) years after the expiration of each Lease year
records, conforming to usual accounting practices, showing all of
the gross sales at or from the Premises for such Lease year,
including all tax reports, sales slips, sales checks, bank deposit
records and other supporting data. Within fifteen (15) days
after the end of each calendar quarter, or portion thereof,
included in the Lease term, Tenant shall furnish Landlord, at the
place at which rent is payable, a statement, certified by one of
Tenant’s Executive Officers, of Tenant’s gross sales
during such quarter or portion thereof; and, on or before March 1
in each calendar year included in the Lease term and within sixty
(60) days after the end of the Lease term. Tenant shall
furnish Landlord a statement, hereinafter called the “annual
statement”, certified by an independent Certified Public
Accountant approved by Landlord, of Tenant’s gross sales
during the preceding Lease year. Landlord shall have the right from
time to time, using its accountants or representatives, to audit
all annual statements of gross sales and, in connection with such
audits, to examine all of Tenant’s records (including all
supporting data) of gross sales disclosed in any annual statement
given to Landlord by Tenant; and Tenant shall make all such records
readily available for such examination. If any such audit discloses
that the actual gross sales by Tenant exceed those reported by more
than two percent (2%), Tenant shall pay the cost of such audit and
examination. In any event, Tenant shall pay Landlord any percentage
rents due under such audit. If such audit shall disclose any
willful or substantial inaccuracies, this Lease may thereupon be
canceled and terminated, at the option of Landlord . If is further
agreed that Landlord shall never be treated as a partner or
associate of Tenant in the conduct of Tenant’s business, nor
shall Landlord be liable for any debts incurred by Tenant in the
conduct of Tenant’s business or otherwise; but it is
understood and agreed that the relationship is and at all times
shall remain that of Landlord and Tenant. ]
(a) In
addition to the Minimum Rent provided in Article 4
hereinabove, and commencing at the same time as any rental
commences under this Lease, Tenant shall pay as additional rent to
Landlord the following items, herein called Adjustments:
(1) All real
estate taxes, bonds or other assessments and insurance premiums on
the Premises, including land, building, and improvements thereon.
Said real estate taxes shall include all real estate taxes and
assessments that are levied upon and/or assessed against the
Premises, including any taxes which may be levied on rents. Said
insurance shall include all insurance premiums required to be paid
by Tenant pursuant to Article 8 hereinbelow. Said taxes and
insurance premiums for purpose of this provision shall be
reasonably apportioned in accordance with the total floor area of
the Premises as it relates to the gross leasable floor area of the
Center which is from time to time completed as of the first day of
each calendar quarter (provided, however, that if any other tenants
in the Center pay taxes directly to any taxing authority or carry
their own insurance, as may be provided in their lease, their
square footage shall not be deemed a part of the floor
area).
(2) That percent
of the total cost of the following items as Tenant’s total
floor area bears to the gross leasable floor area of Blue Oaks
Technical Center which is from time to time completed as of the
first day of each calendar quarter:
(i) All real
estate taxes, including bonds and assessments, all insurance costs,
and all costs to maintain, repair, and replace the “Common
Area” of the Center, which includes all areas outside the
building wall footprints plus building roofs and exterior walls,
parking lots, sidewalks, driveways and other areas used in common
by the tenants of the Center, such costs including, but not limited
to, landscaping, lighting, security and rubbish removal in
connection with such areas.
(ii) All property
management costs to supervise and administer the Premises,
Buildings, Project and Common Area. Said costs shall include such
fees as may be paid to a third party or an affiliate of the
Landlord in connection with same and shall also include, as a
separate charge, a market competitive property management fee and a
fee payable to Landlord to supervise and administer the common area
and the premises in an amount equal to ten percent (10%) of the
total costs of Section 7.2(a) (2) (i) above.
(iii) Any parking
charges, utilities surcharges, or any other costs levied, assessed
or imposed by, or at the direction of, or resulting from statutes
or regulations, or interpretations thereof, promulgated by any
governmental authority in connection with the use or occupancy of
the Premises or the parking facilities serving the
Premises.
(b) Upon the
Commencement Date Landlord shall submit to Tenant a statement of
the anticipated monthly Adjustments for the period between such
commencement and the following January and Tenant shall pay these
Adjustments on a monthly basis concurrently with the payment of the
Rent. Tenant shall continue to make said monthly payments until
notified by Landlord of a change thereof. By March 1 of each year
Landlord shall endeavor to give Tenant a statement showing the
total Adjustments for the Center for the prior calendar year and
Tenant’s allocable share thereof, prorated from the
Commencement Date. In the event the total of the monthly payments
which Tenant has made for the prior calendar year be less than the
Tenant’s actual share of such Adjustments then Tenant shall
pay the difference in a lump sum within ten (10) days after
receipt of such statement from Landlord and shall concurrently pay
the difference in monthly payments made in the next calendar year
and the amount of monthly payments which are then calculated as
monthly Adjustments based on the prior year’s experience. Any
overpayment by Tenant shall be credited towards the monthly
Adjustments next coming due. The actual Adjustments for the prior
year shall be used for purposes of calculating the anticipated
monthly Adjustments for the then current year with actual
determination of such Adjustments after each calendar year as above
provided; excepting that in any year in which resurfacing of the
parking area of the Center is contemplated, Landlord shall be
permitted to include the anticipated cost of same as part of the
estimated monthly Adjustments. Even though the term has expired and
Tenant has vacated the Premises, when the final determination is
made of Tenant’s share of said Adjustments for the year in
which this Lease terminates, Tenant shall immediately pay any
increase due over the estimated Adjustments previously paid and,
conversely, any overpayment made shall be immediately rebated by
Landlord to Tenant. Failure of Landlord to submit statements as
called for herein shall not be deemed to be a waiver of
Tenant’s requirement to pay sums as herein
provided.
ARTICLE 8
INSURANCE AND INDEMNITY
8.1 Insuring
Party. As used in this
Article 8, the term “insuring party” shall mean
the party who has the obligation to obtain the insurance required
hereunder. This insuring party shall be designated in each Section
of this Article 8. Whether the insuring party is Landlord or
Tenant, Tenant shall, as additional rent for the Premises, pay the
cost of all insurance so obtained.
8.2
Liability Insurance. Tenant shall, at Tenant’s expense obtain
and keep in force during the term of this Lease, as the insuring
party under this Section 8.2, a policy of Combined Single
Limit, Bodily Injury and Property Damage Insurance insuring
Landlord and Tenant against any liability arising out of the
ownership, use, occupancy or maintenance of the Premises and all
areas appurtenant thereto. Such insurance shall be a combined
single limit policy in an amount not less than Two Million Dollars
($2,000,000). The policy shall contain cross liability endorsements
and shall insure performance by Tenant of the indemnity provisions
of this Article 8. The limits of said insurance shall not,
however, limit the liability of Tenant hereunder. Said insurance
shall have a Landlord’s Protective Liability endorsement
attached thereto. If Tenant shall fail to procure and maintain said
insurance, Landlord may, but shall not be required to, procure and
maintain the same, but at the expense of Tenant. Not more
frequently than each year, if, in the reasonable opinion of
Landlord, the
amount of
liability insurance required hereunder is not adequate, Tenant
shall increase said insurance coverage as required by Landlord;
provided, however, that in no event shall the amount of the
liability insurance increase be more than fifty percent (50%)
greater than the amount thereof during the preceding year of the
term of this Lease. However, the failure of Landlord to require any
additional insurance coverage shall not be deemed to relieve Tenant
from any obligations under this Lease.
(a) Landlord,
as insuring party under this Section 8.3, shall obtain and
keep in force during the term of this Lease a policy or policies of
insurance covering loss or damage to the Premises, in the amount of
ninety percent (90%) of the replacement value thereof, as the same
may exist from time to time against all perils included within the
classification of fire, extended coverage, vandalism, malicious
mischief, special extended perils (all risk) and sprinkler leakage.
Said insurance shall provide for payment of loss thereunder to
Landlord or to the holders of mortgages or deeds of trust on the
Premises. Landlord shall, in addition, obtain and keep in force
during the term of this Lease a policy of rental income insurance
covering a period of one (1) year, with loss payable to
Landlord, which insurance shall also cover all real estate taxes
and insurance costs for said period. The cost of all insurance
provided by Landlord will be payable by the Tenant as set forth in
Article 7.2
(b) Tenant
shall pay for any increase in the property insurance of other
building or buildings in the Center if said increase is caused by
Tenant’s acts, omissions, use or occupancy of the Premises.
It is provided, however, that Tenant shall not be required to pay
for any such increases in insurance costs of adjacent properties
unless such increased insurance costs was the result of unusual
features of Tenant’s occupancy of the Premises or of
Tenant’s unusual acts or omissions, the intent of the parties
being to require Tenant to be financially responsible to the extent
of such cost increases for creating situations of unusual hazard on
the Premises not reasonably contemplated by the use to which the
Premises shall be put pursuant to Article 3 above.
(c) Landlord
will not insure Tenant’s fixtures, equipment or Tenant
improvements unless the Tenant improvements have become a part of
the Premises under Article 11 hereof. Tenant shall have such
responsibility in accordance with Section 8.7
hereinbelow.
(d) Not more
frequently than once each year, if, in the opinion of Landlord, the
amount of property insurance required hereunder is not adequate,
Landlord shall increase said insurance coverage as determined by
Landlord. However, such increase may be more frequent than each
year if required by the insurance carrier in order to maintain
insurance for the full replacement value of the
Premises.
8.4
Insurance Policies. Insurance required hereunder shall be in
companies holding a “General Policyholders Rating” of A
or better as set forth in the most current issue of
“Best’s Insurance Guide”. The insuring party
shall deliver to the other party copies of policies of such
insurance or certificates evidencing the existence and amounts of
such insurance with loss payable clauses satisfactory to Landlord.
No such policy shall be cancelable or subject to reduction of
coverage or other modifications except after ten (10) days
prior written notice to Landlord. If Tenant is the insuring party,
Tenant shall, within ten (10) days prior to the expiration of
such policies, furnish Landlord with renewals or
“binders” thereof, or Landlord may order such insurance
and charge the cost thereof to Tenant, which amount shall be
payable by Tenant upon demand. Tenant shall not do or permit to be
done anything which shall invalidate the insurance policies
referred to in Section 8.3. If Tenant does or permits to be
done anything which shall increase the cost of the insurance
policies referred to in Section 8.3, then Tenant shall
forthwith upon Landlord’s demand reimburse Landlord for any
additional premiums attributable to any act or omission or
operation of Tenant causing such increase in the cost of insurance.
If Landlord is the insuring party and if the insurance policies
maintained hereunder cover other improvements in addition to the
Premises, Landlord shall deliver to Tenant a written statement
setting forth the amount of any such insurance cost increase and
showing in reasonable detail the manner in which it has been
computed.
8.5 Waiver
of Subrogation. Tenant
and Landlord each hereby waive any and all rights of recovery
against the other, or against the officers, employees, agents and
representatives of the other, for loss of or damage to such waiving
party or its property or the property of others under its control
to the extent that such loss or damage is insured against under any
insurance policy in force at the time of such loss or damages. The
insuring party shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or
carriers that the foregoing mutual waiver of subrogation is
contained in this Lease. Notwithstanding, the waiver of subrogation
would not be effective if its inclusion would cancel an insurance
policy of any party.
8.6
Indemnity. Tenant shall
indemnify and hold harmless Landlord from and against any and all
claims arising from Tenant’s use of the Premises, or from the
conduct of Tenant’s business or from any activity, work or
things done, permitted or suffered by Tenant in or about the
Premises or elsewhere and shall further indemnify and hold harmless
Landlord from and against any and all claims arising from any
breach or default in the performance of any obligation on
Tenant’s part to be performed under the terms of this Lease,
or arising from any negligence of the Tenant, or any of such claim
or any action or proceeding brought thereon; and in case any action
or proceeding be brought against Landlord by reason of any such
claim, Tenant upon notice from Landlord shall defend the same at
Tenant’s expense by counsel satisfactory to Landlord, to the
extent such claim arises from Tenant’s use. Tenant, as a
material part of the consideration to Landlord, hereby assumes all
risk of damage to property or injury to persons, in, upon or about
the Premises arising from any cause and Tenant hereby waives all
claims in respect thereof against Landlord, except in the event of
Landlord’s negligence or default hereunder.
8.7
Exemption of Landlord from Liability. Except in the event of Landlord’s, his
agent’s, or employee’s negligence, Tenant hereby agrees
that Landlord shall not be liable for injury to Tenant’s
business or any loss of income therefrom or for damage to the
improvements, trade fixtures, contents, goods, wares, merchandise
or other property of Tenant (“Tenant’s
Contents”), Tenant’s employees, invitees, customers, or
any other person in or about the Premises, nor shall Landlord be
liable for injury to the person of Tenant, Tenant’s
employees, agents or contractors, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or
rain, or from the breakage, leakage, obstruction or other defects
of pipes, sprinklers, wires, appliances, plumbing, air conditioning
or lighting fixtures, or from any other cause, whether the said
damage or injury 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, and regardless of whether
the cause of such damage or injury or the means of repairing the
same is inaccessible to Tenant. Landlord shall not be liable for
any damages arising from any act or neglect of any other tenant, if
any, of the building in which the Premises are located. Tenant
shall maintain the following insurance coverage with respect to the
insurable losses contemplated by this Section 8.7 during the
term of this Lease insuring Landlord, Tenant and any lender of
record encumbering the Premises, with full waiver of
subrogation:
(a) against
fire, extended coverage and vandalism and malicious mischief
perils, including coverage for Tenant’s Contents, in an
amount of not less than ninety percent (90%) of the full
replacement cost thereof.
(b) Broad
form boiler and machinery insurance on a blanket repair and
replacement basis with limits per accident not less than the
replacement cost of all leasehold improvements and of all boilers,
pressure vessels, air conditioning equipment, miscellaneous
electrical apparatus and all other insurable objects owned or
operated by Tenant or by others (other than Landlord) on behalf of
Tenant in the Premises or relating or serving the
Premises;
(c) Business
interruption insurance in such amount as will reimburse Tenant for
direct or indirect loss of earnings attributable to all such perils
insured against in Section 8.7(a) and 8.7(b) above;
and
(d) Workmen’s
compensation insurance covering all Tenant’s employees
working in the Premises.
8.8
Additional Insurance. Notwithstanding any provisions to the contrary
contained in this Lease, the insuring party shall also provide
insurance against damage by such other perils as any mortgage
lending institution holding a mortgage on the Premises may from
time to time require against damage by such other perils as
mortgage lending institutions generally may from time to time
require in case of similar properties and in such
amounts.
8.9 Blanket
Policy. If at any time
during the term of this Lease the insuring party shall have in full
force and effect a blanket policy of general liability insurance
and/or property insurance with the same coverage for the Premises
or for Tenant’s property as applicable all as described
above, as well as coverage of other premises and properties of the
insuring party or in which the insuring party has some interest,
such blanket insurance shall satisfy the requirements
hereof.
ARTICLE 9
USES PROHIBITED
Tenant shall
not do nor permit anything to be done in or about the Premises, nor
bring or keep anything therein which is not within the permitted
use of the Premises, which will in any way increase the existing
rate of or affect any fire or other insurance upon the Building or
any of its contents, nor cause a cancellation of any insurance
policy covering said Building or the Center or any part thereof or
any of its contents. Tenant shall not do nor permit anything to be
done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the
Building or the Center or injure or annoy them nor use or allow the
Premises to be used for any improper, immoral, unlawful or
objectionable purpose; nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises. Tenant shall not commit
nor allow to be committed any waste in or upon the
Premises.
ARTICLE 10
COMPLIANCE WITH LAW
Tenant shall not
use the Premises, nor permit anything to be done in or about the
Premises, which will in any way conflict with any law, statute,
ordinance or governmental rule or regulation now in force or which
may hereafter be enacted or promulgated. Tenant shall, at its sole
cost and expense, promptly comply with all laws, statutes,
ordinances and governmental rules, regulations or requirements now
in force or which may hereafter be in force and with the
requirements of any board of fire underwriters or other similar
bodies now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Premises, excluding structural
changes not related to or affected by Tenant’s improvements
or acts. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant, whether Landlord
be a party thereto or not, that Tenant has violated any law,
statute, ordinance or governmental rule, regulation or requirement,
shall be conclusive of that fact as between Landlord and
Tenant.
ARTICLE 11
ALTERATIONS AND ADDITIONS
Tenant shall
not make or allow to be made any alterations, additions or
improvements to or of the Premises or any part thereof excepting
non-structural interior alterations not exceeding Five Thousand
Dollars ($5,000.00) in cost without first obtaining the written
consent of Landlord, and any alterations, additions or improvements
to or of said Premises, including, but not limited to, wall
covering, paneling and built-in cabinet work, but excepting movable
furniture and trade fixtures, shall at once become a part of the
realty and belong to the Landlord and shall be surrendered with the
Premises. In the event Landlord consents to the making of any
alterations, additions or improvements to the Premises by Tenant,
the same shall be made by Tenant at Tenant’s sole cost and
expense. Notwithstanding anything to the contrary herein, no
installation, alterations, additions or improvements to or of any
electrical system or outlet to or of the Premises, or any part
thereof, shall be made, or allowed to be made by Tenant without
first obtaining the written consent of Landlord. Upon the
expiration or sooner termination of the term hereof, Tenant shall,
upon written demand by Landlord, give at least thirty
(30) days prior to the end of the term, at Tenant’s sole
cost and expense, forthwith and with all due diligence, remove any
alterations, additions, or improvements made by Tenant designated
by Landlord to be removed, including trade fixtures, movable
furniture and inventory, and Tenant shall, forthwith and with all
due diligence, at its sole cost and expense, repair any damage to
the Premises caused by such removal.
12.1
Tenant’s Repairs. By entry hereunder, Tenant shall be deemed to
have accepted the Premises as being in good, sanitary order,
condition and repair. Tenant shall, at Tenant’s sole cost and
expense, keep the Premises and every part thereof in good condition
and repair (except as hereinafter provided with respect to
Landlord’s obligations) including, without limitation, the
maintenance, replacement and repair of any storefront, doors,
window casements, glazing, heating and air-conditioning system
(when there is an air conditioning system, Tenant shall obtain a
service contract for repairs and maintenance of said system, said
maintenance contract to conform to the requirements under the
warranty, if any, on said system), pest control, plumbing, pipes,
electrical system, electrical wiring, outlets, fixtures, lighting
and conduits. Tenant shall, upon the expiration or sooner
termination of the term of this Lease, surrender the Premises to
the Landlord in good condition, broom clean, ordinary wear and tear
and damage from causes beyond the reasonable control of Tenant
excepted. Any damage to adjacent premises caused by Tenant’s
use of the Premises shall be repaired at the sole cost and expense
of Tenant.
12.2
Landlord’s Repairs. Notwithstanding the provisions of
Section 12.1 hereinabove, Landlord shall, subject to
Tenant’s reimbursement as provided in
Section 7.2(a)(2)(i), repair and maintain the structural
portions of the Building, including the exterior walls and roof,
unless such maintenance and repairs are caused in part or in whole
by the act, neglect, fault or omission of any duty by the Tenant,
its agents, servants, employees, invitees, or any damage caused by
breaking and entering, in which case Tenant shall pay to Landlord
the actual cost of such maintenance and repairs. Landlord shall not
be liable for any failure to make such repairs or to perform any
maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or
maintenance is given to Landlord by Tenant. There shall be no
abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant’s business arising from
the making of any repairs, alterations or improvements in or to any
portion of the Building or the Premises or in or to fixtures,
appurtenances and equipment therein. Tenant waives the right to
make repairs at Landlord’s expense under any law, statutes or
ordinance now or hereafter in effect. Landlord may, at
Landlord’s election, provide, through a third party vendor,
regular inspections and periodic maintenance but not repairs for
HVAC. Any repairs to the HVAC system shall be the Tenant’s
responsibility pursuant to Article 12.1 above. The cost of
said inspections and maintenance provided by the Landlord shall be
paid by the Tenant as an adjustment pursuant to
Article 7.2.
Tenant shall
keep the Premises and the property in which the Premises are
situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by or on behalf of
Tenant. Landlord may require, at Landlord’s sole option, that
Tenant shall provide to Landlord, at Tenant’s sole cost and
expense, a lien and completion bond in an amount equal to one and
one-half (1 1 / 2
) times the estimated cost of any
improvements, additions, alterations in the Premises which the
Tenant desires to make, to insure Landlord against any liability
for mechanics’ and materialmen’s liens and to insure
completion of the work.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
Tenant shall
not voluntarily, or by operation of law, assign, transfer,
mortgage, sublet or otherwise transfer or encumber all or any part
of Tenant’s interest in this lease or in the Premises without
Landlord’s prior written consent, which shall not be
unreasonably withheld. Any attempt to assignment, transfer,
mortgage, encumbrance or subletting without such consent shall be
void and shall constitute a breach of this Lease. Regardless of
Landlord’s consent, no subletting or assignment shall release
Tenant from Tenant’s obligation or alter the primary
liability of Tenant to pay the rent and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of
rent by Landlord from any person shall not be deemed to be a waiver
by Landlord of any provision hereof. Consent to one assignment or
subletting shall not be deemed a consent to any subsequent
assignment or subletting. In the event that Landlord shall consent
to a sublease or
assignment
under the provisions of this Article 14, Tenant shall pay
Landlord’s reasonable attorney’s fees incurred in
connection with giving such consent. Prior to such approval by
Landlord of subletting or assignment, Tenant shall provide Landlord
with information concerning the proposed assignee’s or
subtenant’s financial responsibility. Further, if for any
proposed assignment or sublease Tenant receives rent or other
consideration either initially or over the term of the assignment
of sublease, in excess of the rent called for hereunder, or in case
of the sublease of a portion of the Premises in excess of such rent
fairly allocable to such portion, after appropriate adjustments to
assure that all other payments called for hereunder taken into
account, Tenant shall pay to Landlord as additional rent hereunder
all of the excess of each such payment of rent or other
consideration received by Tenant promptly after its
receipt.
Tenant shall
pay for all water, gas, heat, light, power and sewer charges,
telephone service and all other services and utilities supplied to
the Premises, together with any taxes thereon. If any such services
are not separately metered to Tenant, Tenant shall pay a reasonable
proportion to be determined by Landlord of all charges jointly
metered with other premises.
ARTICLE 16
PERSONAL PROPERTY TAXES
Tenant shall
pay, or cause to be paid, before delinquency, any and all taxes
levied or assessed and which become payable during the term hereof
upon all Tenant’s leasehold improvements, equipment,
furniture, fixtures, and any other personal property located in the
Premises. In the event any or all of the Tenant’s leasehold
improvements, equipment, furniture, fixtures, and other personal
property shall be assessed and taxed with the real property, Tenant
shall pay to Landlord its share of such taxes within ten
(10) days after delivery to Tenant by Landlord of a statement
in writing setting forth the amount of such taxes applicable to
Tenant’s property.
ARTICLE 17
RULES AND REGULATIONS
Tenant shall
faithfully observe and comply with the rules and regulations
affecting the Center that Landlord shall from time to time
promulgate and/or modify. The rules and regulations shall be
binding upon the Tenant upon delivery of a copy of them to Tenant.
Landlord shall not be responsible to Tenant for the nonperformance
of any said rules and regulations by any other tenants or occupants
of the Center.
If Tenant shall
remain in possession of the Premises after the expiration of the
term of this Lease, Tenant will be deemed to be occupying the
Premises as a tenant-at-sufferance subject to all the
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