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Featured California Real Estate Leases
LEASE AGREEMENT
(NET)
BASIC LEASE INFORMATION
LEASE DATE: October 20, 1995
LESSOR: Lincoln Property Company
No. 2106 Limited Partnership
LESSOR'S ADDRESS: c/o Lincoln Property Company Management Services,
Inc.
P.O. Box 19693, 30 Executive Park, Suite 100
Irvine, California 92713-9693
LESSEE: Burke Industries, Inc.
LESSEE'S ADDRESS: 13767 Freeway Drive
Santa Fe Springs, California 90670
PREMISES: Approximately 80,722 square feet as shown on
Exhibit A
PREMISES ADDRESS: 13767 Freeway Drive
Santa Fe Springs, California 90670
BUILDING: 80,722 square feet
LOT (BUILDING'S
TAX PARCEL): Land on which the Building is
located
PARK: Consists of the Building and
the Lot
TERM: September 1, 1995 ("Commencement Date"), through
January 31, 2001 ("Expiration Date")
BASE RENT (PARA 3): Twenty-Five Thousand Eight Hundred Thirty-One
Dollars ($25,831) per month
ADJUSTMENTS TO BASE RENT: February 1, 1996 - $28,033.00 per month
March 1, 1997 - CPI adjustment to monthly Base
Rent per Addendum II.
September 1, 1998 - CPI adjustment to monthly Base
Rent per Addendum II.
March 1, 2000 - CPI adjustment to monthly Base
Rent per Addendum II.
SECURITY DEPOSIT (PARA 4.A): Twenty-Eight Thousand Thirty-Three Dollars
($28,033)
CLEANING DEPOSIT (PARA 4.B): None
*LESSEE'S SHARE OF OPERATING
EXPENSES (PARA 6.A): 100% of the [Building/Lot/Park]
*LESSEE'S SHARE OF TAX
EXPENSES (PARA 6.B): 100% of the [Building/Lot/Park]
*LESSEE'S SHARE OF COMMON
AREA UTILITY COSTS (PARA 7): 100% of the [Building/Lot/Park]
PERMITTED USES: The manufacture, distribution, warehousing, and
sales administration of rubber elastomeric
products and compounds and related administrative
offices.
GENERAL LIABILITY INSURANCE
AMOUNT (PARA 12): Bodily injury limit of not less than $1,000,000
per occurrence; Property damage limit of not less
than $1,000,000 per occurrence; Combined single
limit of not less than $2,000,000.
UNRESERVED PARKING SPACES: Exclusive and undesignated spaces within fenced
area.
BROKER (PARA 38): None
EXHIBITS: Exhibit A - Premises, Building, Lot and/or Park
Exhibit B - Tenant Improvements
Exhibit C - Rules and Regulations
Exhibit E - Form of Subordination,
Nondisturbance and Attornment
Agreement
Exhibit F - Hazardous Materials Disclosure
Certificate
Exhibit G - Intentionally Omitted
Exhibit H - Intentionally Omitted
ADDENDA: Addendum I: Option to Extend
Addendum II: CPI Calculation and Adjustments
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LEASE AGREEMENT
DATE: This Lease is made and entered into as of the Lease Date defined on
Page 1. The Basic Lease information set forth on Page 1 and this Lease
are and shall be construed as a single instrument.
1. PREMISES: Lessor hereby leases the Premises to Lessee upon the terms and
conditions contained herein. Lessee shall have the right to use, on a
non-exclusive basis, parking areas and ancillary facilities located within the
Common Area (as defined below) of the Park, subject to the terms of this Lease.
Lessee shall have the right of access to the Premises, the Building, and the
Park twenty-four (24) hours per day, seven (7) days per week during the term of
the Lease. Notwithstanding anything to the contrary set forth in the Lease,
Lessor shall not take any actions of regulating or restricting the use of the
Common Areas without the prior consent of Lessee if any such action is likely to
have a material adverse affect on Lessee's use of or access to the Premises or
the Park; provided, however, Lessor may take the foregoing actions without the
prior consent of Lessee in the event of an emergency, repairs or in order to
comply with laws. Lessee shall have the right to install its own security system
in the Premises, provided that the same does not interfere with the operation of
the Park security system, if any. As used herein, the term "Building" means the
building in which the Premises are located; the term "Lot" means the land on
which the Building is located; and the term "Park" means the Building and the
Lot.
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES: As of the
Lease Date, Lessee is already occupying the Premises pursuant to that certain
Month-To-Month Rental Agreement effective as of January 29, 1995, between Lessor
and Lessee (the "Original Lease Agreement"). The parties acknowledge that Lessee
first took occupancy of the Premises on or about January 29, 1995 pursuant to
the Original Lease Agreement. The Original Lease Agreement shall terminate and
be of no further force or effect from and after the date on which the parties
execute and deliver this Lease. The initial Lease term and the obligation to pay
Rent shall commence on the Commencement Date and continue through the Expiration
Date. In addition to the foregoing, Lessee shall be required to deliver to
Lessor the Security Deposit and the insurance certificates required under the
provisions of this Lease upon the execution of this Lease by Lessee. By taking
possession of the Premises, Lessee shall be deemed to have already accepted the
Premises in a good, clean and completed condition and state of repair, in
compliance with all applicable laws, codes, regulations, administrative orders
and ordinances, and subject to all matters of record. Notwithstanding the
foregoing, Lessee shall not be responsible for costs associated with any latent
defect in the original construction of the Building. Lessee hereby acknowledges
and agrees that neither Lessor nor Lessor's agents or representatives has made
any representations or warranties as to the suitability, safety or fitness of
the Premises for the conduct of Lessee's business, Lessee's intended use of the
Premises or for any other purpose, and that neither Lessor nor Lessor's agents
or representatives has agreed to undertake any alterations or construct any
Tenant Improvements to the Premises except as expressly provided in Section 5 of
this Lease. Lessee hereby agrees that the completion by Lessor of the Tenant
Improvements referred to in Section 5 below, and as more particularly described
in Exhibit B to this Lease, shall not in any manner extend, delay nor otherwise
affect the Commencement Date and the Expiration Date of this Lease.
3. RENT: On the date that Lessee executes this Lease, Lessee shall deliver to
Lessor the original executed Lease, the Security Deposit, and all insurance
certificates evidencing the insurance required to be obtained by Lessee under
Paragraph 12 of this Lease. Lessee agrees to pay Lessor, without prior notice or
demand, or abatement, offset, deduction or claim, except as otherwise provided
herein, the Base Rent described on Page 1, payable in advance at Lessor's
address shown on Page 1 on the first day of each month throughout the term of
the Lease. In addition to the Base Rent set forth on Page 1, Lessee shall pay
Lessor in advance and on the first (1st) day of each month throughout the term
of this Lease (including any extensions of such term), as additional rent
Lessee's share, as set forth on Page 1, of Operating Expenses, Tax Expenses,
Common Area Utility Costs, administrative expenses and Utility Expenses, as
specified in Paragraphs 6.A., 6.B., 6.C. and 7 of this Lease, respectively.
Additionally, Lessee shall pay to Lessor as additional rent hereunder, within
thirty (30) days after Lessor's written demand therefore (which demand may be
made by delivery of a bill or statement to Lessee), any and all out-of-pocket
costs and expenses incurred by Lessor to enforce the provisions of this Lease,
including, but not limited to, costs associated with any proposed assignment or
subletting of all or any portion of the Premises by Lessee, costs associated
with the delivery of notices, delivery and recordation of notice(s) of default,
reasonable attorneys' fees, expert fees, court costs and filing fees
(collectively, the "Enforcement Expenses"). The term "Rent" whenever used herein
refers to the aggregate of the Base Rent, Lessee's share of Operating Expenses,
Tax Expenses, Insurance Expenses, Administrative Expenses and Utility Expenses,
Enforcement Expenses and all other amounts described herein as "additional
rent.". If Lessor permits Lessee to occupy the Premises without requiring Lessee
to pay rental payments for a period of time, the waiver of the requirement to
pay rental payments shall only apply to waiver of the Base Rent
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<PAGE>
and Lessee shall otherwise perform all other obligations of Lessee hereunder,
including, but not limited to paying to Lessor any and all amounts considered
additional rent, such as Lessee's share of Operating Expenses, Tax Expenses,
Common Area Utility Costs, Utility Expenses, and administrative expenses. If, at
any time, Lessee is in default of or otherwise breaches any term, condition or
provision of this Lease, any such waiver by Lessor of Lessee's requirement to
pay rental payments shall be null and void and Lessee shall immediately pay to
Lessor all rental payments waived by Lessor. The Rent for any fractional part of
a calendar month at the commencement or termination of the Lease Term shall be a
prorated amount of the Rent for a full calendar month based upon the actual days
in the month. The prorated Rent shall be paid on the Commencement Date and the
first day of the calendar month in which the date of termination occurs, as the
case may be.
4. SECURITY DEPOSIT AND CLEANING DEPOSIT:
A. SECURITY DEPOSIT: Upon Lessee's execution of this Lease, Lessee shall
deliver to Lessor, as a Security Deposit for the performance by Lessee of its
obligations under this Lease, the amount described on Page 1. If Lessee is in
default beyond the applicable notice and cure period, Lessor may, but without
obligation to do so, use the Security Deposit, or any portion thereof, to cure
the default or to compensate Lessor for all damages sustained by Lessor
resulting from Lessee's default, including, but not limited to the Enforcement
Expenses. Lessee shall, immediately on demand, pay to Lessor a sum equal to the
portion of the Security Deposit so applied or used so as to replenish the amount
of the Security Deposit held up to the amount initially deposited with Lessor.
Upon Lessor's written request, concurrently with any increase in the Base Rent,
Lessee shall deliver to Lessor an amount equal to such increase, which amount
shall be added to the Security Deposit being held by Lessor and shall be deemed
a part of such Security Deposit thereafter. As soon as practicable after the
termination of this Lease, but in no event later than sixty (60) days after such
termination, Lessor shall return the Security Deposit to Lessee, less such
amounts as are reasonably necessary, to remedy Lessee's default(s) hereunder or
to otherwise restore the Premises to the condition existing as of the
Commencement Date, reasonable wear and tear and casualty excepted. If the cost
to restore the Premises exceeds the amount of the Security Deposit, Lessee shall
promptly deliver to Lessor any and all of such excess sums as reasonably
determined by Lessor. Lessor shall not be required to keep the Security Deposit
separate from other funds, and, unless otherwise required by law, Lessee shall
not be entitled to interest on the Security Deposit. In no event or circumstance
shall Lessee have the right to any use of the Security Deposit and,
specifically, Lessee may not use the Security Deposit as a credit or to
otherwise offset any payments required hereunder, including, but not limited to,
Rent or any portion thereof.
5. CONDITION OF PREMISES: Lessee has already accepted possession of the
Premises in its current "as is" condition as of the Lease Date. The parties
hereby acknowledge and agree that after the Commencement Date Lessor intends to
construct and install (or cause the construction and installation of) certain
improvements and additions in and to the Premises (the "Tenant Improvements"),
which construction and installation shall be subject to, and in accordance with,
the provisions of Exhibit B to this Lease. Lessee shall not be responsible for
costs associated with any latent defect in the original construction of the
Building. Lessee acknowledges that neither Lessor nor any of Lessor's agents,
representatives or employees has made any representations as to the suitability
or fitness of the Premises for the conduct of Lessee's business or for any other
purpose, and that neither Lessor nor any of Lessor's agents, representatives or
employees has agreed to undertake any alterations or construct any Tenant
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<PAGE>
Improvements to the Premises except as expressly provided in Exhibit B to this
Lease.
6. EXPENSES:
A. OPERATING EXPENSES: In addition to the Base Rent set forth in
Paragraph 3, Lessee shall pay its share, which is defined on Page 1, of all
Operating Expenses as additional rent. The term "Operating Expenses" as used
herein shall mean the total amounts paid or payable by Lessor in connection with
the ownership, maintenance, repair and operation of the Premises, the Building
and the Lot, and where applicable, of the Park referred to on Page 1. These
Operating Expenses may include, but are not limited to:
(i) Lessor's cost of non-structural repairs to and maintenance
of the exterior walls of the Building;
(ii) Lessor's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Area"
shall mean all areas and facilities within the Park exclusive of the
Premises. The Common Area includes, but is not limited to, parking areas,
access and perimeter roads, sidewalks, landscaped areas and similar areas
and facilities;
(iii) Lessor's annual cost of insurance insuring against fire and
extended coverage (including "all risk" coverage) and all other insurance,
including, but not limited to, earthquake, flood and/or surface water
endorsements for the Building, the Lot and the Park and rental value
insurance against loss of Rent in an amount equal to the amount of Rent for
a period of at least six (6) months but not more than twelve (12) months
commencing on the date of loss;
(iv) Lessor's cost of modifications to the Building, the Common
Area and/or the Park occasioned by any rules, laws or regulations effective
subsequent to the commencement of the Lease subject to Paragraph 6A. (7)
below;
(v) Lessor's cost of modifications to the Building, the Common
Area and/or the Park occasioned by any rules, laws or regulations arising
from Lessee's use of the Premises regardless of when such rules, laws or
regulations became effective;
(vi) If Lessor elects to so procure, Lessor's cost of
preventative maintenance, repair and replacement contracts including, but
not limited to, contracts for elevator systems and heating, ventilation and
air conditioning systems, and trash or refuse collection;
(vii) Lessor's cost of security and fire protection services for
the Park, if in Lessor's sole discretion such services are provided;
(viii) Lessor's establishment of reasonable reserves for
replacements and/or repairs of Common Area improvements, equipment and
supplies, repair or replacement of which would be properly included in
Operating Expenses; provided, however, upon expiration or earlier
termination of this Lease, Lessee shall be appropriately credited or
reimbursed for any such reserves to the extent Lessor has not actually
drawn upon such reserves;
(ix) Lessor's cost for the creation and negotiation of, and
pursuant to, any rail spur or track agreements, licenses, easements or
other similar undertakings; and
(x) Lessor's cost of supplies, equipment, rental equipment and
other similar items used in the operation and/or maintenance of the Park.
Notwithstanding the foregoing, for purposes of this Lease, Operating
Expenses shall not, however, include:
1. bad debt expenses and interest, principal, points and fees
on debts (except in connection with the financing of items which may be
included in Operating Expenses) or amortization on any mortgage or
mortgages or any other debt instrument encumbering the Park, including the
land on which the Park is situated;
2. real estate brokers' leasing commissions;
3. any costs expressly excluded from Operating Expenses
elsewhere in this Lease;
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4. costs of any items including, but not limited to, costs
incurred by Lessor for the repair or damage to the Park to the extent
Lessor receives reimbursement from insurance proceeds or from a third party
(such reimbursement to be deducted from Operating Expenses in the year in
which received, except that any deductible amount under any insurance
policy shall be included within Operating Expenses);
5. costs of capital improvements, except for (i) capital
repairs and replacements to the existing Building or equipment, including,
without limitation, seismic upgrades to the Building, and (ii) capital
improvements constructed after the Commencement Date in order to comply
with any governmental law or regulation that was enacted subsequent to the
Commencement Date (but specifically not including any re-enactment or
subsequent codification, local or otherwise, of any laws or regulations
existing as of the Commencement Date, including without limitation the
Americans with Disabilities Act or any state or local codification
thereof); in either event such capital costs shall be amortized over their
useful life, together with interest at the actual interest rate incurred by
Lessor. Notwithstanding the foregoing, in no event shall Operating Expenses
include capital improvements of or repairs to structural, foundation or
roof portions of the Building for which Lessor is otherwise specifically
responsible to maintain hereunder;
6. rentals and other related expenses for leasing a HVAC
system, elevators, or other items (except when needed in connection with
normal repairs and maintenance of the Park) which if purchased, rather than
rented, would constitute a capital improvement not included in Operating
Expenses pursuant to this Lease;
7. depreciation, amortization and interest payments, except as
specifically included in Operating Expenses pursuant to the terms of this
Lease and except on materials, tools, supplies and vendor-type equipment
purchased by Lessor to enable Lessor to supply services Lessor might
otherwise contract for with a third party, where such depreciation,
amortization and interest payments would otherwise have been included in
the charge for such third party's services, all as determined in accordance
with generally accepted accounting principles, consistently applied, and
when depreciation or amortization is permitted or required, the item shall
be amortized over its reasonably anticipated useful life;
8. costs incurred by Lessor for alterations (including
structural additions), repairs, equipment and tools which are of a capital
nature and/or which are considered capital improvements or replacements
under generally accepted accounting principles, consistently applied,
except as specifically included in Operating Expenses pursuant to the terms
of this Lease;
9. costs incurred by Lessor due to the violation by Lessor of
the terms and conditions of any lease of space in the Park;
10. overhead and profit increment paid to Lessor or to
subsidiaries or affiliates of Lessor for goods and/or services in the Park
to the extent the same exceeds the costs of such by unaffiliated third
parties on a competitive basis;
11. any costs of Lessor's general corporate overhead and general
and administrative expenses, that are in excess of the Administrative
Expenses (as defined below);
12. advertising and promotional expenditures, and costs of signs
in or on the Park identifying the owner of the Park;
13. tax penalties incurred as a result of Lessor's negligence,
inability or unwillingness to make payments or file returns when due,
unless such inability or unwillingness is due, in whole or in part, to
Lessee's failure to pay amounts due hereunder when the same are due;
14. costs arising from Lessor's charitable or political
contributions;
15. costs of repairs to the Building necessitated by or
resulting from the gross negligence of Lessor, or any of its agents,
employees or independent contractors;
16. any ground lease rental;
17. notwithstanding any contrary provision of this Lease,
including without limitation, any provision relating to capital
expenditures, cost arising from the presence of Hazardous Materials (as
defined in Paragraph 29 below), in or about the Park, but only to the
extent not introduced or contributed to by Lessee.
5
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B. TAX EXPENSES: In addition to the Base Rent set forth in Paragraph 3,
Lessee shall pay one hundred percent (100%) of all real property taxes
applicable to the Park (including the Lot and the Building) and one hundred
percent (100%) of all personal property taxes now or hereafter assessed or
levied against the Premises or Lessee's personal property. Lessee shall also pay
any increase in real property taxes attributable, in Lessor's sole discretion,
to any and all alterations, Tenant Improvements or other improvements of any
kind whatsoever placed in, on or about the Premises for the benefit of, at the
request of, or by Lessee. The term "Tax Expenses" includes, but is not limited
to, any form of tax and assessment (general, special, ordinary or
extraordinary), commercial rental tax, payments under any improvement bond or
bonds, license, rental tax, transaction tax, levy, or penalty imposed by
authority having the direct or indirect power of tax (including any city,
county, state or federal government, or any school, agricultural, lighting,
drainage or other improvement district thereof) as against any legal or
equitable interest of Lessor in the Premises, Lot or Park, as against Lessor's
right to rent or other income therefrom, or as against Lessor's business of
leasing the Premises or the occupancy of Lessee or any other tax, fee, or
excise, however described (excluding inheritance or estate taxes), including any
value added tax, or any tax imposed in substitution, partially or totally, of
any tax previously included within the definition of real property taxes, or any
additional tax the nature of which was previously included within the definition
of real property tax. Notwithstanding anything to the contrary contained in the
Lease, Tax Expenses shall not include (i) any excess profits taxes, franchise
taxes, gift taxes, capital stock taxes, inheritance an succession taxes, estate
taxes, federal and state income taxes, and other taxes to the extent applicable
to Lessor's general or net income (as opposed to rents or receipts), (ii) any
items for which Lessee or other tenants are directly liable pursuant to their
leases, (iii) penalties incurred as a result of Lessor's negligence, inability
or unwillingness to make payment of, and/or to file any tax or informational
returns with respect to, any real property taxes or assessments, when due,
unless such inability or unwillingness is due, in whole or in part, to Lessee's
failure to pay amounts due hereunder when the same are due; or (iv) any other
taxes or assessments charged or levied against Lessor which are not related to
the use, ownership or operation of the Park
With respect to any assessments or taxes for which Lessor has the right to
elect to make a lump sum payment or cause such assessment or tax to be amortized
and paid over a reasonable period of time at a reasonably acceptable interest
rate, Lessor shall only include in the definition of Tax Expenses the amortized
portion of such taxes and assessments (including any applicable interest
charges) for purposes of this Lease. The parties acknowledge and agree that as
of the Lease Date Lessor is currently employing a firm that specializes in
reviewing and possibly contesting taxes and assessments levied against the Park
and other properties (the "Tax Consultant"). If at any time during the term of
this Lease Lessor permanently ceases to employ the Tax Consultant or another
firm to provide services similar to those being provided by the Tax Consultant
with respect to the Park or if the tax consultant chooses not to contest the Tax
Expenses in a given year, Lessee shall thereafter have the following right to
contest the Tax Expenses payable by Lessee hereunder and any other taxes payable
by Lessee with respect to the Premises. Provided Lessee is not in default of any
of the terms, provisions or obligations under this Lease beyond all notice and
applicable cure periods, and Lessee has delivered to Lessor at least sixty (60)
days prior written notice of Lessee's intention to initiate such a proceeding,
Lessee shall have the right to contest the amount or validity of the Tax
Expenses payable by Lessee hereunder and any other taxes payable by Lessee with
respect to the Premises by appropriate administrative and legal proceedings
brought either in its own name, Lessor's name or jointly with Lessor. Any such
proceeding shall be undertaken by counsel selected by Lessee and reasonably
approved by Lessor, and if Lessee deems it appropriate, such measures shall be
taken in the name of Lessee. Lessor hereby agrees that it will promptly upon
receipt of a written request therefor from Lessee (but in no event later than
forty-five (45) business days after Lessor's receipt of such written request)
furnish Lessee copies of all notices of assessment of Tax Expenses. Lessor shall
execute and deliver to Lessee whatever documents may be reasonably necessary or
proper to permit Lessee to so contest such taxes or which may be necessary to
secure payment of any refund which may result from any such proceedings;
provided, however, if Lessee makes such contest Lessee shall be solely
responsible for any and all penalties and liabilities arising therefrom as well
as for providing such security as Lessor may reasonably request in connection
with any such contest. Any such proceeding shall be undertaken at the sole cost
and expense of Lessee. Any tax refund shall, only to the extent of the Tax
Expenses payable by Lessee hereunder and any other taxes payable by Lessee with
respect to the Premises actually paid by Lessee to Lessor for the fiscal tax
year or years being contested, belong solely to Lessee to the extent such refund
is attributable to the Premises and for a period concurrent with the term of the
Lease (otherwise an appropriate apportionment shall be made), and any excess
amount of any such refund shall belong solely to Lessor. In exercising such
right to contest the above-described taxes and assessments in no event or
circumstances shall Lessee permit all or any portion of the Premises, the Lot or
the Park to be sold or otherwise transferred to the taxing authorities or any
governmental agency in connection with any such contest.
C. PAYMENT OF EXPENSES AND ADMINISTRATIVE EXPENSES: Lessor shall
estimate Lessee's share of the Operating Expenses and Tax Expenses for the
calendar year in which the Lease commences. Commencing on the Commencement
Date, one-twelfth (1/12th) of this estimated amount shall be paid by
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Lessee to Lessor, as additional rent, on the first (1st) day of each month and
throughout the remaining months of such calendar year. Thereafter, Lessor may
estimate such expenses as of the beginning of each calendar year and Lessee
shall pay one-twelfth (1/12th) of such estimated amount as additional rent
hereunder on the first day of each month during such calendar year and for each
ensuing calendar year throughout the term of this Lease (including any
extensions of the term). Not later than March 31 of each of the following
calendar years, or as soon thereafter as reasonably possible, including the
calendar year after the calendar year in which this Lease terminates or the term
expires, Lessor shall furnish Lessee with a true and correct accounting of
actual Operating Expenses and Tax Expenses. Within thirty (30) days of Lessor's
delivery of such accounting, Lessee shall pay to Lessor the amount of any
underpayment. Notwithstanding the foregoing, failure by Lessor to give such
accounting by the date which is one year after the end of the applicable
calendar year shall constitute a waiver by Lessor of its right to collect any of
Lessee's underpayment other than any underpayment of Tax Expenses as to which
such failures shall not constitute a waiver at any time. Lessor shall credit the
amount of any overpayment by Lessee toward the next estimated monthly
installment(s) of Rent falling due, or where the term of the Lease has expired,
refund the amount of overpayment to Lessee. After receipt of a statement by
Lessee, if Lessee disputes the amount of additional rent set forth in the
statement, a certified public accountant employed be Lessee or an independent
certified public accountant designated by Lessee, may, after reasonable notice
to Lessor and at reasonable times, inspect and photocopy Lessor's records at
Lessor's offices in the greater Los Angeles area. If after such inspection,
Lessee still disputes such additional rent, a certification as to the proper
amount shall be made, at Lessee's expense, by an independent certified public
account mutually selected by Lessor and Lessee. If such certification proves
that the Operating Expenses set forth in the statement were overstated by more
than ten percent (10%), then the cost of Lessee's accountant and the cost of
such certification shall be paid for by Lessor; otherwise, the costs of Lessee's
accountant, the audit and the certification shall be paid for by Lessee.
Promptly following the parties receipt of such certification, the parties shall
make such appropriate payment or reimbursements, as the case may be, to each
other, as are determined to be owing pursuant to such certification, together
with interest at the rate of ten percent (10%) per annum from the date due until
paid, in the case of payments by Lessee to Lessor, or from the date paid until
reimbursed, in the case of reimbursements by Lessor to Lessee. Lessor shall
maintain records of all Operating Expenses set forth in each statement delivered
to Lessee for a three (3) year period following Lessor's delivery of the
applicable statement. The payment by Lessee of any amounts pursuant to the Lease
shall not preclude Lessee from questioning the correctness of any statement
delivered by Lessor. Lessee's obligations to pay its share of Operating Expenses
and Tax Expenses and Lessor's obligation to refund any overpayment as provided
above, shall survive the expiration or earlier termination of this Lease.
If the term of the Lease expires prior to the annual reconciliation of
expenses, if any, Lessor shall have the right to reasonably estimate Lessee's
share of such expenses, and if Lessor determines that an underpayment is due,
Lessee hereby agrees that Lessor shall be entitled to deduct such underpayment
from Lessee's Security Deposit subject to the annual reconciliation. If Lessor
reasonably determines that an overpayment has been made by Lessee, Lessor shall
refund said overpayment together with the return of Lessee's Security Deposit.
Notwithstanding the foregoing, failure of Lessor to accurately estimate Lessee's
share of such expenses shall not constitute a waiver of Lessor's right to
collect any of Lessee's underpayment at anytime.
In addition to the Base Rent set forth in Paragraph 3 hereof, Lessee shall
pay Lessor, without prior notice or demand, except as otherwise provided herein
on the first (1st) day of each month throughout the term of this Lease
(including any extensions of such term), as compensation to Lessor for
accounting and management services rendered on behalf of the Park, an amount
equal to ten percent (10%) of the aggregate of Lessee's share of (i) the total
Operating Expenses and Tax Expenses as described in Paragraphs 6.A. and 6.B.
above, respectively, and (ii) all Common Area Utility Costs for the Park as
described in Paragraph 7. Lessee's obligations to pay its share of such
administrative expenses shall survive the expiration or earlier termination of
this Lease.
7. UTILITIES: Lessee shall pay the cost of all water, sewer use and
connection fees, gas, heat, electricity, refuse pickup, janitorial service,
telephone and other utilities billed or metered separately to the Premises
and/or Lessee. Lessee shall also pay 100% of any assessments or charges for
utility or similar purposes included within any tax bill for the Lot on which
the Premises are situated. For any such utility fees or use charges that are not
billed or metered separately to Lessee, Lessee shall pay to Lessor, as
additional rent, without prior notice or demand, except as otherwise provided
herein on the first (1st) day of each month throughout the term of this Lease
the amount which is attributable to Lessee's use of the Premises ("Utility
Expenses"). If Lessee disputes any such estimate or determination, then Lessee
shall either pay the estimated amount (subject to Lessee's right to conduct an
audit, as provided above) or cause the Premises to be separately metered at
Lessee's sole expense. In addition, Lessee shall pay; Lessor as additional
rent, 100% of any Common Area utility costs, fees, charges or expenses ("Common
Area Utility Costs") within fifteen (15) days after receiving a bill from
Lessor. Lessee acknowledges that the Premises may become subject to the
rationing of utility services or restrictions on utility use as
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required by a public utility company, governmental agency or other similar
entity having jurisdiction thereof. Notwithstanding any such rationing or
restrictions on use of any such utility services, Lessee acknowledges and agrees
that its tenancy and occupancy hereunder shall be subject to such rationing
restrictions as may be governmentally imposed or imposed by a utility company
upon Lessor, Lessee, the Premises, the Building or the Park, and Lessee shall in
no event be excused or relieved from any covenant or obligation to be kept or
performed by Lessee by reason of any such rationing or restrictions. Lessee
further agrees to pay and discharge, prior to delinquency, any amount, tax,
charge, surcharge, assessment or imposition attributed to the Term of this Lease
and levied, assessed or imposed upon the Premises, or Lessee's use and occupancy
thereof, or as a result directly or indirectly of any such rationing or
restrictions.
8. LATE CHARGES: Lessee acknowledges that late payment by Lessee to Lessor of
Base Rent, Lessee's share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, Utility Expenses or other sums due hereunder, will cause Lessor
to incur costs not contemplated by this Lease, the exact amount of such costs
being extremely difficult and impracticable to fix. Such costs include, without
limitation, processing and accounting charges, and late charges that may be
imposed on Lessor by the terms of any note secured by any encumbrance against
the Premises, and late charges and penalties due to the late payment of real
property taxes on the Premises. Therefore, if any installment of Rent or any
other sum due from Lessee is not received by Lessor within ten (10) days
following the date of written notice that such installment or other sum is due,
(provided, the delivery of the normal monthly or other billing statements shall,
without limitation, constitute written notice as it pertains to Base Rent and
recurring monthly charges, and the delivery of a written invoice constitutes
written notice for any other sums due), Lessee shall promptly pay to Lessor all
of the following, as applicable: (a) an additional sum equal to seven percent
(7%) of such delinquent amount plus interest on such delinquent amount at the
rate equal to the prime or reference rate announced from time to time by Bank of
America at its main office in San Francisco, California (hereafter, the "prime
rate") plus two percent (2%) for the time period such payments are delinquent as
a late charge for every month or portion thereof that such sums remain unpaid,
(b) the amount of seventy-five dollars ($75) for each three-day notice prepared
for, or served on, Lessee, (c) the amount of fifty dollars ($50) relating to
checks for which there are not sufficient funds. The parties agree that this
late charge and the other charges referenced above represent a fair and
reasonable estimate of the costs that Lessor will incur by reason of late
payment by Lessee. Acceptance of any late charge or other charges shall not
constitute a waiver by Lessor of Lessee's default with respect to the delinquent
amount, nor prevent Lessor from exercising any of the other rights and remedies
available to Lessor for any other breach of Lessee under this Lease.
9. USE OF PREMISES: The Premises are to be used solely for the uses stated on
Page 1 and for no other uses or purposes without Lessor's prior written consent
which consent shall not be unreasonably withheld. The use of the Premises by
Lessee and its agents, invitees and employees shall be subject to, and at all
times in compliance with, (a) any and all applicable laws, ordinances, statutes,
orders and regulations as same exist from time to time (collectively, the
"Laws"), and (b) any and all declarations of covenants, conditions and
restrictions ("CC&Rs") and any supplement thereto that are hereafter recorded in
any official or public records with respect to the Premises, the Building, the
Lot and/or the Park, or any portion thereof; provided, Lessor agrees that after
the Lease date it will not enter in to any CC&Rs that would materially,
adversely affect Lessee's rights hereunder.
Lessee shall not use the Premises or permit anything to be done in or about
the Premises nor keep or bring anything therein which will in any way conflict
with any of the requirements of the Board of Fire Underwriters or similar body
now or hereafter constituted or in any way increase the existing rate of or
affect any policy of fire or other insurance upon the Building or any of its
contents, or cause a cancellation of any insurance policy. Lessee shall not do
or permit anything to be done in or about the Premises which will in any way
obstruct or interfere with the rights of Lessor, or use or allow the Premises to
be used for any, unlawful or objectionable purpose, as reasonably determined by
Lessor, nor shall Lessee cause, maintain or permit any private or public
nuisance in, on or about the Premises, Building, Park and/or the Common Area,
including, but not limited to, any offensive odors, fumes or vibrations. Lessee
shall not damage or deface or otherwise commit or suffer to be committed any
waste in, upon or about the Premises. Lessee shall not permit any animals,
including, but not limited to, any household pets, to be brought or kept in or
about the Premises. Lessee shall place no loads upon the floors, walls, or
ceilings in excess of the maximum designed load permitted by the applicable
Uniform Building Code or which may damage the Building or outside Park; nor
place any harmful liquids in the drainage systems; nor dump or store waste
materials, refuse or other such materials, or allow such to remain outside the
Building area, except in refuse dumpsters or in any enclosed trash areas
provided. Lessee shall honor the rules and regulations set forth in Exhibit C,
attached to and made a part of this Lease, and any other reasonable rules and
regulations of Lessor now or hereafter enacted related to parking and the
operation of the Building and the Park. Notwithstanding anything to the contrary
contained in the Lease, Lessor agrees that the Rules and Regulations shall not
be (i) modified or enforced in any way by Lessor so as to unreasonably interfere
with the permitted use set forth in the Basic Lease Information or Lessee's
access
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to the Premises, Building or Park, or (ii) discrimination enforced against
Lessee. Lessor agrees that nothing in the Rules and Regulations of the Park
shall be used to prohibit the conduct of any business from the Premises which
Lessee is permitted to conduct pursuant to the Basic Lease Information. If
Lessee fails to comply with such Laws, CC&Rs (hereinafter recorded), rules and
regulations or the provisions of this Lease, Lessor shall have the right to
collect from Lessee a reasonable sum as a penalty, in addition to all rights and
remedies of Lessor hereunder including, but not limited to, the payment by
Lessee to Lessor of all Enforcement Expenses and Lessor's costs and expenses, if
any, to cure any of such failures of Lessee, if Lessor, at its sole option,
elects to undertake such cure after twenty (20) days written notice that Lessor
has so elected to undertake such cure.
10. ALTERATIONS AND ADDITIONS: Lessee may make any improvements, alterations,
additions or changes to the Premises (collectively, the "Alterations") which (i)
do not affect the Building systems and equipment, exterior appearance of the
Building, or structural aspects of the Building, and (ii) do not, in the
aggregate, cost more than $25,000 in any twelve-month period, by providing
Lessor with written notice not less than ten (10) days prior to the commencement
thereof. Lessee may not make any Alterations which may affect the Building
systems and equipment, exterior appearance of the Building, or structural
aspects of the Building or which, in the aggregate, cost more than $25,000 in
any twelve-month period, or which require a permit from the applicable
governmental authorities, without first procuring the prior written consent of
Lessor to such Alterations, which consent shall be requested by Lessee not less
than fifteen (15) days prior to commencement thereof, and which consent may be
withheld by Lessor in its sole discretion. Any time Lessee proposes to make
Alterations, whether or not the consent of Lessor is required pursuant to this
Paragraph, Lessee's notice regarding the proposed Alterations shall be provided
together with the plans and specifications for the Alterations, and Lessor shall
approve or disapprove of the same within ten (10) days after its receipt of the
same. Lessee shall not install any signs, improvements, nor make or permit any
other alterations or additions to the Premises without the prior written consent
of Lessor, which consent shall not be unreasonably withheld. If any such
Alterations are expressly permitted by Lessor, Lessee shall deliver at least ten
(10) days prior notice to Lessor, from the date Lessee intends to commence
construction, sufficient to enable Lessor to post a Notice of
Non-Responsibility. In all events, Lessee shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Lessor. All Alterations shall be installed by a licensed contractor
reasonably approved by Lessor, at Lessee's sole expense in compliance with all
applicable Laws and CC&Rs. Lessee shall keep the Premises, the Building, the Lot
and the Park free from any liens arising out of any work performed, materials
furnished or obligations incurred by or on behalf of Lessee. Upon termination of
this Lease, Lessee shall remove all signs, fixtures, furniture and furnishings
and unless Lessor has advised Lessee at the time of installation that removal
will not be required, remove any improvements made by Lessee and repair any
damage caused by the installation or removal of such signs, fixtures, furniture,
furnishings and improvements and leave the Premises in as good condition as they
were in at the time of the commencement of this Lease, excepting for reasonable
wear and tear and casualty. Reasonable wear and tear shall not include any
damage or deterioration that would have been prevented by proper maintenance by
Lessee or Lessee otherwise performing all of its obligations under this Lease.
11. REPAIRS AND MAINTENANCE: Lessee shall, at Lessee's sole cost and expense,
keep and maintain the Premises and the adjacent Park in good, clean and safe
condition and repair including, but not limited to, repairing any damage caused
by Lessee or its employees, representatives, agents, invitees, licensees or
contractors. Without limiting the generality of the foregoing, Lessee shall be
solely responsible for maintaining, repairing and replacing all interior
plumbing and mechanical systems, heating, ventilation and air conditioning
systems, interior electrical wiring and equipment, interior lighting, all
interior glass in the Premises, interior window casements, partitions, tenant
signage, interior doors and door closers, fixtures, equipment, interior
painting, and interior walls and floors of the Premises. Lessee's obligation to
keep, maintain, preserve and repair the Premises and the adjacent Park shall
specifically extend to the cleanup and removal of any and all Hazardous
Materials (as defined in Paragraph 29 below) occurring in, on or about the
Premises, to the extent the same are introduced by or result from the actions of
Lessee, its agents, representatives, employees, invitees, licensees, subtenants
or contractors (collectively, "Lessee's Agents").
Subject to the provisions of Paragraphs 6 and 9 of this Lease and except
for repairs rendered necessary by the intentional or negligent acts or omissions
of Lessee or Lessee's Agents, Lessor agrees, at Lessor's expense, subject to
reimbursement pursuant to Paragraph 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, signage (exclusive of tenant
signage), exterior electrical wiring and equipment, exterior lighting, all
exterior glass, exterior doors and entrances, exterior window casements,
exterior doors and door closer, exterior painting, and underground utility and
sewer pipes outside the exterior walls of the Building. Lessor reserves the
right, but without the obligation, to procure and maintain the heating,
ventilation and air conditioning systems maintenance contract and if Lessor so
elects, Lessee will reimburse Lessor for the cost thereof in accordance with the
provisions of Paragraph 6 above.
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Except for repairs rendered necessary by the active or passive negligent
acts or omissions of Lessee or Lessee's Agents, Lessor agrees, at Lessor's sole
cost and expense, to keep in good repair the structural portions of the floors,
foundations and exterior walls (exclusive of glass and exterior doors of the
Premises), and the structural portions of the roof and membrane of the Building
and any other repairs caused by the gross negligent acts or willful misconduct
of Lessor Lessor's agents. Term of this Lease, Lessee shall thereafter be
responsible for the cost of maintaining the roof membrane.
Except for normal maintenance and repair of the items outlined above,
Lessee shall have no right of access to or right to install any device on the
roof of the Building nor make any penetrations of the roof of the Building
without the express prior written consent of Lessor. If Lessee refuses or
neglects or otherwise fails to repair and maintain the Premises and the Park
properly as required herein and to the reasonable satisfaction of Lessor, within
thirty (30) days after Lessor's written notice to Lessee (or if the failure is
such that it cannot be corrected within thirty days, Lessee fails to commence
the repair and maintenance within such thirty-day period or fails to thereafter
to prosecute to completion such repair and maintenance within a reasonable
time), Lessor may, but without obligation to do so, during reasonable times and
in a manner designed to minimize interference with Lessee's business, make such
repairs and/or maintenance without Lessor having any liability to Lessee for any
loss or damage that may accrue to Lessee's merchandise, fixtures or other
property, or to Lessee's business by reason thereof except as a result of the
gross negligence or willful misconduct of Lessor, its agents, contractors or
employees. In the event Lessor makes such repairs and/or maintenance, upon
completion thereof Lessee shall pay to Lessor, as additional rent, the Lessor's
actual out-of-pocket costs for making such repairs and/or maintenance, plus ten
percent (10%) for overhead, upon presentation of a bill therefor, plus any
Enforcement Expenses. The obligations of Lessee hereunder shall survive the
expiration of the term of this Lease or the earlier termination thereof. Lessee
hereby waives any right to repair at the expense of Lessor under any applicable
Laws now or hereafter in effect respecting the Premises.
12. INSURANCE: Lessee shall maintain in full force and effect at all times
during the term of this Lease, at Lessee's sole cost and expense, for the
protection of Lessee and Lessor, as their interests may appear, policies of
insurance which afford the following coverages: (i) worker's compensation:
statutory limits; (ii) employer's liability: as required by law with a minimum
of $1,000,000; (iii) comprehensive general liability insurance (occurrence form)
including blanket contractual liability, broad form property damage, premises,
personal injury, completed operations, products liability, personal and
advertising coverage, a plate-glass rider to provide coverage for all glass in,
on or about the Premises including, without limitation, skylights, and fire
damage with a combined single limit of not less than $1,000,000 per occurrence,
and $2,000,000 general aggregate per occurrence per location if Lessee has
multiple locations, with deletion of (a) the exclusion for operations within
fifty (50) feet of a railroad track (railroad protective liability), if
applicable, and (b) the exclusion for explosion, collapse or underground hazard,
if applicable, and if necessary, Lessee shall provide for restoration of the
aggregate limit; (iv) comprehensive automobile liability insurance: a combined
single limit of not less than $2,000,000 per occurrence and insuring Lessee
against liability for claims arising out of the ownership, maintenance, or use
of any owned, hired or non-owned automobiles; and (v) "all risk" property
insurance if applicable, covering damage to or loss of any personal property,
fixtures and equipment, including, without limitation, electronic data
processing equipment, of Lessee (and coverage for the full replacement cost
thereof including business interruption of Lessee), together with, if the
property of Lessee's invitees is to be kept in the Premises, warehouser's legal
liability or bailee customers insurance for the full replacement cost of the
property belonging to invitees and located in the Premises.
Insurance required to be maintained by Lessee shall be written by companies
licensed to do business in the State of California and having a "General
Policyholders Rating" of at least A/VII as set forth in the most current issue
of "Best's Insurance Guide." Lessee shall deliver to Lessor certificates of
insurance for all insurance required to be maintained by Lessee hereunder at the
time of execution of this Lease by Lessee. Lessee shall, at least thirty (30)
days prior to expiration of each policy, furnish Lessor with certificates of
renewal or "binders" thereof. Each certificate shall expressly provide that such
policies shall not be cancelable or otherwise subject to modification except
after thirty (30) days prior written notice to the parties named as additional
insureds as required in this Lease (except for cancellation for nonpayment of
premium, in which event cancellation shall not take effect until at least ten
(10) days' notice has been given to Lessor). If Lessee fails to maintain any
insurance required in this Lease, Lessee shall be liable for all losses and
costs resulting from such failure.
Lessor, any property management company of Lessor for the Premises, any
lender(s) of Lessor having a lien against the Premises, the Building, the Lot or
the Park, and any joint venture partners of Lessor shall be named as additional
insureds under all of the policies required in Paragraph 12(iii) above.
Additionally, such policies shall provide for severability of interest. All
insurance to be maintained by Lessee shall, except for workers' compensation and
employer's liability insurance, be primary, without right of contribution from
insurance maintained by Lessor. Any umbrella liability policy or excess
liability policy (which shall be in "following form") shall provide that if the
underlying aggregate is exhausted, the excess coverage will drop down as primary
insurance. The limits of insurance maintained
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by Lessee shall not limit Lessee's liability under this Lease. Lessee shall have
the right to provide the insurance coverages which it is obligated to carry
pursuant to the terms of this Lease under a blanket insurance policy, provided
such blanket policy expressly affords coverage for the Premises and for Lessor
as required by this Lease.
The coverage and amounts of insurance carried by Lessor in connection with the
Park shall at a minimum be comparable to the coverage and amounts of insurance
which are carried by reasonably prudent landlords of comparable buildings
located in the vicinity of the Park and shall insure the Building for one
hundred percent (100%) of its actual replacement cost. Upon inquiry by Lessee,
from time to time, Lessor shall inform Lessee of such coverage carried by
Lessor.
13. LIMITATION OF LIABILITY AND INDEMNITY: Except for damage resulting from
the gross negligence or willful misconduct of Lessor or its authorized
representatives, Lessee agrees to protect, defend (with counsel reasonably
acceptable to Lessor) and hold Lessor and Lessor's lender(s), partners,
employees, representatives, legal representatives, successors and assigns
(collectively, the "Indemnitees") harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, judgments, charges and
expenses (including reasonable attorneys' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision) (collectively "Costs") arising from or in any way
related to, directly or indirectly, Lessee's use of the Premises and/or the
Park, or the conduct of Lessee's business, or from any activity, work or thing
done, permitted or suffered by Lessee in or about the Premises, or in any way
connected with the Premises or with the improvements or personal property
therein, including, but not limited to, any liability for injury to person or
property of Lessee, Lessee's Agents or third party persons. Lessee agrees that
the obligations of Lessee herein shall survive the expiration or earlier
termination of this Lease.
Except for damage resulting from the gross negligence or willful misconduct
of Lessor or its authorized representatives, Lessor shall not be liable to
Lessee for any loss or damage to Lessee or Lessee's property, for any injury to
or loss of Lessee's business or for any damage or injury to any person from any
cause whatsoever, including, but not limited to, any acts, errors or omissions
by or on behalf of any other tenants or occupants of the Building and/or the
Park; Lessee shall not, in any event or circumstance, be permitted to offset or
otherwise credit against any payments of Rent required herein for matters for
which Lessor may be liable hereunder, except as expressly otherwise provided
herein. Lessor and its authorized representatives shall not be liable for any
interference with light or air, or for any latent defect in the Premises or the
Building, subject to Lessor's obligations to maintain pursuant to Paragraph 11
above. Except as otherwise expressly provided herein, to the fullest extent
permitted by law, but subject to Paragraph 31 (iv) below, Lessee agrees that
neither Lessor nor any of Lessor's lender(s), partners, employees,
representatives, legal representatives, successors and assigns shall at any time
or to any extent whatsoever be liable, responsible or in any way accountable for
any loss, liability, injury, death or damage to persons or property which at any
time may be suffered or sustained by Lessee or by any person(s) whomsoever who
may at any time be using or occupying or visiting the Premises, the Building or
the Park.
14. ASSIGNMENT AND SUBLEASING:
A. PROHIBITION: Lessee shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Lessee of all or any portion of the Premises without first
obtaining the prior written consent of Lessor, which shall not be unreasonably
withheld; provided, however, that Lessee may sublet portions of the Premises
that are not, in the aggregate, greater than 5,000 square feet, as long as the
subtenant's use is consistent with the terms of the Lease and Lessor has been
notified in writing not less than 30 days prior to the effective date of such
sublease. If Lessee seeks to sublet or assign all or any portion of the
Premises, Lessee shall deliver to Lessor at least thirty (30) days prior to the
proposed commencement of the sublease or assignment (the "Proposed Effective
Date") the following: (i) the name of the proposed assignee or sublessee; (ii)
such information as to such assignee's or sublessee's financial responsibility
and standing as Lessor may reasonably require; and (iii) a copy of the proposed
sublease or assignment agreement and all agreements collateral thereto, which
shall include a provision whereby the assignee or sublessee assumes all of
Lessee's obligations (pro-rata in the case of a sublease) and agrees to be bound
by the terms hereof. As additional rent hereunder, Lessee shall reimburse Lessor
for actual legal and other expenses incurred by Lessor in connection with any
request by Lessee for Lessor's consent to assignment or subletting; provided,
however, Lessee may sublet portions of the Premises that are not, in the
aggregate, greater than 5,000 square feet, so long as the subtenant's use is
consistent with the terms of the Lease, and Lessor has been notified in writing
not less than (30) days prior to the effective date of such subleasing. Each
permitted assignee or sublessee shall assume and be deemed to assume this Lease
(pro-rata in the case of a sublease) and shall be and remain liable jointly and
severally with Lessee for payment of Rent and for the due performance of, and
compliance with all the terms, covenants, conditions
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and agreements herein contained on Lessee's part to be performed or complied
with, for the term of this Lease. No assignment or subletting shall affect the
continuing primary liability of Lessee (which, following assignment, shall be
joint and several with the assignee), and Lessee shall not be released from
performing any of the terms, covenants and conditions of this Lease. For
purposes hereof, in the event Lessee is a corporation, partnership, joint
venture, trust or other entity other than a natural person, any change in the
direct or indirect ownership of Lessee (whether pursuant to one or more
transfers) which results in a change of more than fifty percent (50%) in the
direct or indirect ownership of Lessee shall be deemed to be an assignment
within the meaning of this Paragraph 14 and shall be subject to all the
provisions hereof. Any and all options, first rights of refusal, tenant
improvement allowances and other similar rights granted to Lessee in this Lease,
if any, shall not be assignable by Lessee unless expressly authorized in writing
by Lessor. Notwithstanding anything to the contrary set forth in the Lease,
Lessee may assign the Lease at any time, or sublease all or part of the
Premises, without the receipt of Lessor's consent, to (i) an entity which is
controlled by, controls, or is under common control with, Lessee (an
"Affiliate"), or which owns or is owned by an Affiliate, (ii) an entity with
which Lessee merges or consolidates, or (iii) a purchaser of all or
substantially all of Lessee's stock or assets, so long as such transaction was
not entered into as a subterfuge to avoid the obligations and restrictions of
the Lease; provided, any such Affiliate, purchaser or other entity shall have a
net worth equal to or greater than the greater of Lessee's net worth at the time
the assignment or sublease is to be effective or Lessee's net worth as of the
Commencement Date. The term "control," as used in this Paragraph 14, shall mean
the ownership, direct or indirect, of the power to direct or cause the direction
of the management and policies of a person or entity, whether through the
ownership of voting securities, by contract or otherwise.
B. EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment, less all of Lessee's
actual costs and expenses in connection with such sublease or assignment exceeds
the Rent or pro rata portion of the Rent, as the case may be, for such space
reserved in the Lease, Lessee shall pay the Lessor monthly, as additional rent,
at the same time as the monthly installments of Rent are payable hereunder,
fifty percent (50%) of the excess of each such payment of rent or other
consideration in excess of the Rent called for hereunder.
C. WAIVER: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Lessor to any assignee or
sublessee, or failure by Lessor to take action against any assignee or
sublessee, Lessee waives notice of any default of any assignee or sublessee and
agrees that Lessor may, at its option, proceed against Lessee without having
taken action against or joined such assignee or sublessee, except that Lessee
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee. Notwithstanding the foregoing, Lessor
shall, as a courtesy, provide copies to Lessee of any notice of default provided
to any assignee and Lessee shall have a period of time to cure any default
identified in such notice, equal to the cure period provided in this Lease, such
cure period to be measured from the date such notice is provided to Lessee.
15. WAIVER OF SUBROGATION: Each of Lessor and Lessee waives any right to
recover against the other for damages to property, including, but not limited
to, personal property, fixtures and equipment, covered by insurance. This
provision is intended to waive fully, and for the benefit of Lessor and Lessee,
any rights and/or claims which might give rise to a right of subrogation in
favor of any insurance carrier. The coverage obtained by Lessee pursuant to this
Lease shall include, without limitation, a waiver of subrogation endorsement
attached to the certificate of insurance. The foregoing waiver of subrogation
shall not extend to criminal acts.
16. AD VALOREM TAXES: Prior to delinquency, Lessee shall pay all taxes and
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the Premises
by, or on behalf of, Lessee; and if requested by Lessor, Lessee shall promptly
deliver to Lessor copies of receipts for payment of all such taxes and
assessments. To the extent any such taxes are not separately assessed or billed
to Lessee, Lessee shall pay the amount thereof as reasonably invoiced by Lessor.
17. SUBORDINATION: Without the necessity of any additional document being
executed by Lessee for the purpose of effecting a subordination, and at the
election of Lessor or any bona fide mortgagee or deed of trust beneficiary with
a lien on all or any portion of the Premises or any ground lessor with respect
to the land of which the Premises are a part, this Lease shall be subject and
subordinate at all times to: (i) all ground leases or underlying leases which
may now exist or hereafter be executed affecting the Building or the land upon
which the Building is situated or both, and (ii) the lien of any mortgage or
deed of trust which may now exist or hereafter be executed in any amount for
which the Building, the Lot, ground leases or underlying leases, or Lessor's
interest or estate in any of said items is specified as security; provided,
however, with respect to ground leases, mortgages or deeds of trust not
currently affecting the Park, the foregoing subordination shall be contingent
upon Lessee's receipt from the ground lessor,
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mortgagee or beneficiary of an executed Nondisturbance Agreement (as defined
below). Notwithstanding the foregoing, Lessor or any such ground lessor,
mortgagee, or any beneficiary shall have the right to subordinate or cause to be
subordinated any such ground leases or underlying leases or any such liens to
this Lease. If any ground lease or underlying lease terminates for any reason or
any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Lessee shall, notwithstanding any
subordination and upon the request of such successor to Lessor, attorn to and
become the Lessee of the successor in interest to Lessor, provided such
successor in interest will not disturb Lessee's use, occupancy or quiet
enjoyment of the Premises so long as Lessee is not in default of the terms and
provisions of this Lease. The successor in interest to Lessor following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) subject to any offsets or defenses which Lessee
might have against any prior lessor; (c) bound by prepayment of more than one
(1) month's Rent; or (d) liable to Lessee for any Security Deposit not actually
received by such successor in interest. Lessee covenants and agrees to execute
(and acknowledge if required by Lessor, any lender or ground lessor) and
deliver, within ten (10) business days of a demand or request by Lessor a
subordination, nondisturbance and attornment agreement in substantially the form
of Exhibit E hereto ("Nondisturbance Agreement") to Lessor, or any ground
lessor, or, mortgagee or beneficiary. Lessee's failure to timely execute and
deliver such agreement shall, at Lessor's option, constitute a material default
hereunder. It is further agreed that Lessee shall be liable to Lessor, and shall
indemnify Lessor from and against any loss, cost, damage or expense, incidental,
consequential, or otherwise, arising or accruing directly or indirectly, from
any failure of Lessee to execute or deliver to Lessor any such agreement. Lessee
hereby irrevocably appoints Lessor as attorney-in-fact of Lessee, which
appointment is coupled with an interest, to execute, deliver and record any such
agreement in the name and on behalf of Lessee.
Lessor shall use commercially reasonable efforts to cause the existing
lender with regard to the Park (the "Existing Lender") to provide to Lessee a
Subordination, Non-Disturbance and Attornment Agreement, in recordable form and,
in such form as is reasonably acceptable to Lessor, Lessee and the Existing
Lender (the "SNDA") within sixty (60) days after the execution and delivery of
this Lease by Lessor and Lessee. Lessor hereby further agrees to use
commercially reasonable efforts to cause the SNDA to be substantially similar to
the Non-Disturbance Agreement attached hereto as Exhibit E. Lessee shall
cooperate and act reasonably and in an expeditious manner with respect to the
negotiation, execution and delivery of the SNDA.
18. RIGHT OF ENTRY: Lessee grants Lessor or its agents the right to enter the
Premises at all reasonable times, upon 48 hours prior written notice, for
purposes of inspection, exhibition, posting of notices, repair or alteration
provided all such actions must be taken in a manner designed to minimize
interference to Lessee's business. At Lessor's option, Lessor shall at all times
have and retain a key with which to unlock all the doors in, upon and about the
Premises, excluding Lessee's vaults and safes. It is further agreed that Lessor
shall have the right to use any and all means Lessor deems necessary to enter
the Premises in an emergency. Lessor shall also have the right to place "for
rent" (during the last six (6) months of the term), and/or "for sale" signs on
the outside of the Premises. Except as expressly provided otherwise herein,
Lessee hereby waives any claim from damages or for any injury or inconvenience
to or interference with Lessee's business, or any other loss occasioned thereby
except for any claim for any of the foregoing arising out of the gross active
negligent acts or willful misconduct of Lessor or its authorized
representatives.
19. ESTOPPEL CERTIFICATE: Lessee shall execute (and acknowledge if required by
any lender or ground lessor) and deliver to Lessor, within not less than ten
(10) business days after Lessor provides such to Lessee, a statement in writing
certifying that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification), the date to which the Rent
and other charges are paid in advance, if any, acknowledging that there are not,
to Lessee's actual knowledge, any uncured defaults on the part of Lessor
hereunder or specifying such defaults as are claimed, and such other matters as
Lessor may reasonably require. Any such statement may be conclusively relied
upon by Lessor and any prospective purchaser or encumbrancer of the Premises.
Lessee's failure to deliver such statement within such time shall be conclusive
upon the Lessee that (a) this Lease is in full force and effect, without
modification except as may be represented by Lessor; (b) there are no uncured
defaults in Lessor's performance; and (c) not more than one month's Rent has
been paid in advance. Failure by Lessee to so deliver such certified estoppel
certificate shall be a default of the provisions of this Lease. Lessee shall be
liable to Lessor, and shall indemnify Lessor from and against any loss, cost,
damage or expense, incidental, consequential, or otherwise, arising or accruing
directly or indirectly, from any failure of Lessee to execute or deliver to
Lessor any such certified estoppel certificate.
Lessee hereby irrevocably appoints Lessor as attorney-in-fact of Lessee,
which appointment is, coupled with an interest, to act in Lessee's name, place
and stead to execute and deliver such estoppel certificate on behalf of Lessee.
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Lessor hereby agrees to provide to Lessee an estoppel certificate signed by
Lessor, containing the same types of information, and within the same period of
time as set forth above, with such changes as are reasonably necessary to
reflect that the estoppel certificate is being granted and signed by Lessor to
Lessee, rather than from Lessee to Lessor or a lender.
20. LESSEE'S DEFAULT: The occurrence of any one or more of the following
events shall, at Lessor's option, constitute a default and breach of this Lease
by Lessee:
(i) The failure by Lessee to make any payment of Base Rent or any
other payment required hereunder on the date said payment is due, or the
failure by Lessee to make any other payment required hereunder by the later
of the date such payment or ten (10) days after written notice, provided
delivery of the normal monthly billing statements shall, without
limitation, be deemed adequate written notice;
(ii) The failure by Lessee to observe, perform or comply with any of
the conditions, covenants or provisions of this Lease within twenty (20)
days after receipt of written notice of such failure (except default in the
payment of Rent); provided, if such default is susceptible of cure and
Lessee has promptly commenced the cure of such default within such
twenty-day period and is diligently prosecuting such cure to completion,
then the same shall not be a default unless it remains uncured for a period
of sixty (60) days after notice;
(iii) The making of a general assignment by Lessee for the benefit of
creditors, the filing of a voluntary petition by Lessee or the filing of an
involuntary petition by any of Lessee's creditors seeking the
rehabilitation, liquidation, or reorganization of Lessee under any law
relating to bankruptcy, insolvency or other relief of debtors and, in the
case of an involuntary action, the failure to remove or discharge the same
within sixty (60) days of such filing, the appointment of a receiver or
other custodian to take possession of substantially all of Lessee's assets
or this leasehold, Lessee's insolvency or inability to pay Lessee's debts
or failure generally to pay Lessee's debts when due, any court entering a
decree or order directing the winding up or liquidation of Lessee or of
substantially all of Lessee's assets, Lessee taking any action toward the
dissolution or winding up of Lessee's affairs, the cessation or suspension
of Lessee's use of the Premises, or the attachment, execution or other
judicial seizure of substantially all of Lessee's assets or this leasehold;
(iv) Lessee's use or storage of Hazardous Materials on the Premises
other than as permitted by the provisions of Paragraph 29 below; or
(v) The making of any material misrepresentation or omission by
Lessee in any materials delivered by or on behalf of Lessee to Lessor
pursuant to this Lease.
21. REMEDIES FOR LESSEE'S DEFAULT: In the event of Lessee's default and breach
of the Lease, Lessor may terminate Lessee's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Lessor this
Lease shall terminate on the date specified by Lessor in such notice and Lessee
shall immediately surrender possession of the Premises to Lessor. In addition,
the Lessor shall have the immediate right of re-entry whether or not this Lease
is terminated. No re-entry or taking possession of the Premises by Lessor
pursuant to this Paragraph 21 shall be construed as an election to terminate
this Lease unless a written notice of such intention is given to Lessee. If
Lessor relets the Premises or any portion thereof, (i) Lessee shall be liable
immediately to Lessor for all costs Lessor incurs in reletting the Premises or
any part thereof, including, without limitation, broker's commissions, expenses
of cleaning, and other similar costs, and (ii) the rent received by Lessor from
such reletting shall be applied to the payment of, first, any indebtedness from
Lessee to Lessor other than Base Rent, Operating Expenses, Tax Expenses, Common
Area Utility Costs, and Utility Expenses; second, all costs including
maintenance, incurred by Lessor in reletting; and, third, Base Rent, Operating
Expenses, Tax Expenses, Common Area Utility Costs, and Utility Expenses due
under this Lease. After deducting the payments referred to above, any sum
remaining from the rental Lessor receives from reletting shall be held by Lessor
and applied in payment of future Rent as Rent becomes due under this Lease. In
no event shall Lessee be entitled to any excess rent received by Lessor.
Reletting may be for a period shorter or longer than the remaining term of this
Lease. No act by Lessor other than giving written notice to Lessee shall
terminate this Lease. Acts of maintenance, efforts to relet the Premises or the
appointment of a receiver on Lessor's initiative to protect Lessor's interest
under this Lease shall not constitute a termination of Lessee's right to
possession. So long as this Lease is not terminated, Lessor shall have the right
to remedy any default of Lessee, to maintain or improve the Premises, to cause a
receiver to be appointed to administer the Premises and new or existing
subleases and to add to the Rent payable hereunder all of Lessor's reasonable
costs in so doing, with interest at the prime rate plus two percent (2%) from
the date of such expenditure.
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If Lessee's right to possession is terminated by Lessor because of a breach
and default of the Lease, then in either such case, Lessor may recover from
Lessee all damages suffered by Lessor as a result of Lessee's failure to perform
its obligations hereunder, including, but not limited to, the cost of any tenant
improvements, and all costs Lessor incurs in reletting the Premises or any part
thereof, including without limitation, brokerage or leasing commissions,
expenses of cleaning, and like costs, and the worth at the time of the award
(computed in accordance with paragraph (3) of Subdivision (a) of Section 1951.2
of the California Civil Code) of the amount by which the Rent then unpaid
hereunder for the balance of the Lease term exceeds the amount of such loss of
Rent for the same period which Lessee proves could be reasonably avoided by
Lessor and in such case, Lessor prior to the award, may relet the Premises for
the purpose of mitigating damages suffered by Lessor because of Lessee's failure
to perform its obligations hereunder; provided, however, that even though Lessee
has abandoned the Premises following such breach, this Lease shall nevertheless
continue in full force and effect for as long as Lessor does not terminate
Lessee's right of possession, and until such termination, Lessor shall have the
remedy described in Section 1951.4 of the California Civil Code (Lessor may
continue this Lease in effect after Lessee's breach and abandonment and recover
Rent as it becomes due, if Lessee has the right to sublet or assign, subject
only to reasonable limitations) and may enforce all its rights and remedies
under this Lease, including the right to recover the Rent from Lessee as it
becomes due hereunder. The "worth at the time of the award" within the meaning
of Subparagraphs (a)(1) and (a)(2) of Section 1951.2 of the California Civil
Code shall be computed by allowing interest at the rate of ten percent (10%) per
annum. Lessee waives redemption or relief from forfeiture under California Code
of Civil Procedure Sections 1174 and 1179, or under any other present or future
law, in the event Lessee is evicted or Lessor takes possession of the Premises
by reason of any default of Lessee hereunder.
The foregoing rights and remedies of Lessor are not exclusive; they are
cumulative in addition to any rights and remedies now or hereafter existing at
law, in equity by statute or otherwise, or to any equitable remedies Lessor may
have, and to any remedies Lessor may have under bankruptcy laws or laws
affecting creditor's rights generally. In addition to all remedies set forth
above, if a default or breach of this Lease (as set forth in Paragraph 20 above)
occurs, any and all Base Rent waived by Lessor under Paragraph 3 above shall be
immediately due and payable to Lessor and, if more than three (3) such defaults
or breaches occur in any consecutive twelve (12) month period, all options
granted to Lessee hereunder shall automatically terminate, unless otherwise
expressly agreed to in writing by Lessor.
The waiver by Lessor of any default or breach of any provision of this
Lease shall not be deemed or construed a waiver of any other breach or default
by Lessee hereunder or of any subsequent breach or default of this Lease, except
for the default specified in the waiver.
22. HOLDING OVER: If Lessee holds possession of the Premises after the
expiration of the term of this Lease with Lessor's consent, unless otherwise
agreed to by the parties hereto, Lessee shall become a tenant from
month-to-month upon the terms and provisions of this Lease, provided the monthly
Base Rent during such hold over period shall be 150% of the Base Rent due on the
last month of the Lease term, payable in advance on or before the first day of
each month. Such month-to-month tenancy shall not constitute a renewal or
extension for any further term. All options, if any, granted under the terms of
this Lease shall be deemed automatically terminated and be of no force or effect
during said month-to-month tenancy. Lessee shall continue in possession until
such tenancy shall be terminated by either Lessor or Lessee giving written
notice of termination to the other party at least thirty (30) days prior to the
effective date of termination. If Lessee continues to hold over after such
notice, Lessor may exercise all remedies available to it to remove Lessee from
the Premises. This paragraph shall not be construed as Lessor's permission for
Lessee to hold over. Acceptance of Base Rent by Lessor following expiration or
termination of this Lease shall not constitute a renewal of this Lease.
23. LESSOR'S DEFAULT: Lessor shall not be deemed in breach or default of this
Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor hereunder. For purposes of this provision, a
reasonable time shall be thirty (30) days after receipt by Lessor of written
notice specifying the nature of the obligation Lessor has not performed;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days, after receipt of written notice, is reasonably necessary
for its performance, then Lessor shall not be in breach or default of this Lease
if performance of such obligation is commenced within such thirty (30) day
period, thereafter diligently pursued to completion, and the completion of same
is accomplished within one hundred twenty (120) days (subject to force majeure
delays) after Lessor's receipt of the written notice from Lessee.
Notwithstanding the foregoing, if due to the nature of the actions to be
undertaken by Lessor to complete the cure of any failure of Lessor hereunder a
period of more than 120 days (as extended due to force majeure events) is
reasonably necessary to complete such cure, Lessee shall give Lessor such
additional time as may be reasonably necessary to allow Lessor to complete such
cure.
24. PARKING: Lessee shall have a license to use the number of undesignated and
nonexclusive parking spaces set forth on the Basic Lease Information.
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25. SALE OF PREMISES: In the event of any sale of the Premises by Lessor,
Lessor shall be and is hereby entirely released from any and all of its
obligations to perform or further perform under this Lease and from all
liability hereunder accruing from and after the date of such sale; and the
purchaser, at such sale or any subsequent sale of the Premises shall be deemed,
without any further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of the Lessor
under this Lease. Lessee agrees to attorn to such new owner provided such new
owner does not disturb Lessee's use, occupancy or quiet enjoyment of the
Premises so long as Lessee is not in default of any of the provisions of this
Lease.
26. WAIVER: No delay or omission in the exercise of any right or remedy of
Lessor or Lessee on any default by the other party shall impair such a right or
remedy or be construed as a waiver.
The subsequent acceptance of Rent by Lessor after breach by Lessee of any
covenant or term of this Lease shall not be deemed a waiver of such breach,
other than a waiver of timely payment for the particular Rent payment involved,
and shall not prevent Lessor from maintaining an unlawful detainer or other
action based on such breach.
No payment by Lessee or receipt by Lessor of a lesser amount than the
monthly Rent and other sums due hereunder shall be deemed to be other than on
account of the earliest Rent or other sums due, nor shall any endorsement or
statement on any check or accompanying any check or payment be deemed an accord
and satisfaction; and Lessor may accept such check or payment without prejudice
to Lessor's right to recover the balance of such Rent or other sum or pursue any
other remedy provided in this Lease.
27. CASUALTY DAMAGE: If the Premises or any part thereof shall be damaged by
fire or other casualty, Lessee shall give prompt written notice thereof to
Lessor. In case the Premises or the Building shall be substantially damaged by
fire or other casualty, Lessor may, at its option, terminate this Lease by
notifying Lessee in writing of such termination within sixty (60) days after the
date of such damage, in which event the Rent shall be abated as of the date of
such damage. If Lessor does not elect to terminate this Lease and provided
insurance proceeds (plus applicable deductibles) and any contributions from
Lessee, if necessary, are available to fully repair the damage, Lessor shall
within ninety (90) days after the date of such damage commence to repair and
restore the Building and/or Premises, as applicable, and shall proceed with
reasonable diligence to restore the Building and/or Premises (except that Lessor
shall not be responsible for delays outside its control) to substantially the
same condition in which it was immediately prior to the happening of the
casualty; provided, Lessor shall not be required to rebuild, repair, or replace
any part of Lessee's furniture, furnishings or fixtures and equipment removable
by Lessee or any improvements, alterations or additions installed by or for the
benefit of Lessee under the provisions of this Lease. Lessor shall not in any
event be required to spend for such work an amount in excess of the insurance
proceeds (plus applicable deductibles) and any contributions from Lessee, if
necessary, actually received by Lessor as a result of the fire or other
casualty. Lessor shall not be liable for any inconvenience or annoyance to
Lessee, injury to the business of Lessee, loss of use of any part of the
Premises by the Lessee or loss of Lessee's personal property resulting in any
way from such damage or the repair thereof, except that, subject to the
provisions of the next sentence, Lessor shall allow Lessee a fair diminution of
Rent during the time and to the extent the Premises are unfit for occupancy. If
the Premises or any other portion of the Building is damaged by fire or other
casualty resulting from the gross negligence or willful misconduct of Lessee or
any of Lessee's Agents, the Rent shall not be diminished during the repair of
such damage except to the extent covered by Lessor's insurance and Lessee shall
be liable to Lessor for the cost and expense of the repair and restoration of
the Building caused thereby to the extent such cost and expense is not covered
by insurance proceeds provided Lessor carries insurance on the Building in
keeping with standard coverages carried by owners of comparable buildings in the
area. In the event the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Lessor shall have the right to terminate this Lease by delivering written notice
of termination to Lessee within thirty (30) days after the date of notice to
Lessee of any such event, whereupon all rights and obligations shall cease and
terminate hereunder.
In the event the Premises or the Building is destroyed or substantially damaged
during the last twelve (12) months of the Term of this Lease or in the event
Lessor elects to repair the Premises and/or the Building, as applicable and such
repairs have not been substantially completed within one year following the date
of the damage or destruction, then notwithstanding anything to the contrary
contained in the Lease, Lessor and Lessee shall each have the right to terminate
the Lease by giving written notice to the other party hereto of its election to
so terminate, in which event this Lease shall cease and terminate as of the date
of such notice or as of the date of termination set forth in such notice, as the
case may be, and Lessee shall pay Rent, properly apportioned through the date
the Lease so terminates, and both parties hereto shall thereafter be freed and
discharged of all further obligations hereunder, except for obligations accrued
prior to the date of such termination or as provided for in provisions of this
Lease which by their term survive the expiration or earlier termination of the
Term.
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Except as otherwise provided in this Paragraph 27, Lessee hereby waives the
provisions of Sections 1932(2), 1933(4), 1941 and 1942 of the California Civil
Code.
28. CONDEMNATION: If a substantial portion of the Premises is condemned by
eminent domain, inversely condemned or sold in lieu of condemnation for any
public or quasi-public use or purpose ("Condemned"), then Lessee or Lessor may
terminate this Lease as of the date when physical possession of the Premises is
taken and title vests in such condemning authority, and Rent shall be adjusted
to the date of termination. Lessee shall not because of such condemnation assert
any claim against Lessor or the condemning authority for any compensation
because of such condemnation, and Lessor shall be entitled to receive the entire
amount of any award without deduction for any estate or interest of Lessee
provided, however, Lessee shall be entitled to claim separately an award for
moving expenses, goodwill and fixtures. If a substantial portion of the Building
or the Lot is so Condemned, Lessor at its option may terminate this Lease. If
Lessor does not elect to terminate this Lease, Lessor shall, if necessary,
promptly proceed to restore the Premises or the Building to substantially its
same condition prior to such partial condemnation, allowing for the reasonable
effects of such partial condemnation, and a proportionate allowance shall be
made to Lessee for the Rent corresponding to the time during which, and to the
part of the Premises of which, Lessee is deprived on account of such partial
condemnation and restoration. Lessor shall not be required to spend funds for
restoration in excess of the amount received by Lessor as compensation awarded.
For purposes of this Section 28, the term a "substantial portion" shall mean and
refer to twenty-five percent (25%) or more of the Premises, or a portion of the
Premises less than twenty-five percent (25%) which effectively prohibits
Lessee's ability to conduct its operations in and from the Premises.
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS: Concurrently with executing
this Lease, and within thirty (30) days of each anniversary of the Commencement
Date during the term of this Lease, following Lessor's written request therefor
Lessee shall execute, and deliver to Lessor, the Hazardous Materials Disclosure
Certificate in substantially the form attached as Exhibit F, and any other
reasonably necessary documents as requested by Lessor. Subject to the remaining
provisions of this paragraph, Lessee shall be entitled to use and store only
those Hazardous Materials (defined below), that are necessary for Lessee's
business and to the extent disclosed in the Hazardous Materials Disclosure
Certificate (and approved by Lessor), provided that such usage and storage is in
full compliance with any and all local, state and federal environmental, health
and/or safety-related laws, statutes, orders, standards, courts' decisions,
ordinances, rules and regulations (as interpreted by judicial and administrative
decisions), decrees, directives, guidelines, permits or permit conditions,
currently existing and as amended, enacted, issued or adopted in the future
which are or become applicable to Lessee or the Premises (collectively, the
"Environmental Laws"). Lessor shall have the right at all times during the term
of this Lease, upon 48 hours prior written notice and during normal business
hours, except in the event of emergency, in which case no notice or hour
restriction shall apply, to (i) inspect the Premises, (ii) conduct tests and
investigations to determine whether Lessee is in compliance with the provisions
of this paragraph, and (iii) request lists of all Hazardous Materials used,
stored or located on, under or about the Premises; the cost of all such
inspections, tests and investigations to be borne by Lessee, if Lessor
reasonably believes they are necessary because of an actual or suspected
release, spill or discharge of Hazardous Materials or other violation of
Environmental Laws. All such inspections, tests and investigations shall be
conducted so as to minimize interference with the business of Lessee. Lessee
shall give to Lessor immediate verbal and follow-up written notice of any
spills, releases or discharges of Hazardous Materials on, under or about the
Premises, or in any Common Areas (if not considered part of the Premises).
Lessee covenants to promptly investigate, clean up and otherwise remediate any
spill, release or discharge of Hazardous Materials caused by the acts (active or
passive) or omissions of Lessee, or Lessee's Agents, at Lessee's sole cost and
expense; such investigation, clean up and remediation to be performed after
Lessee has obtained Lessor's written consent, which shall not be unreasonably
withheld; provided, however, that Lessee shall be entitled to respond
immediately to an emergency without first obtaining Lessor's written consent. If
Lessee fails to so promptly investigate, clean up or otherwise remediate, Lessor
may, but without obligation to do so, following twenty (20) days prior written
notice except in the event of an emergency, in which case notice will not be
required, take any and all steps necessary to rectify the same and Lessee shall
promptly reimburse Lessor, upon demand, for all actual out-of-pocket costs and
expenses to Lessor of performing investigation and remediation work. Lessee
shall indemnify, defend (with counsel acceptable to Lessor) and hold Lessor and
Lessor's lenders, partners, property management company (if other than Lessor),
directors, officers, employees, representatives, contractors and shareholders
and each of their respective successors and assigns harmless from and against
any and all costs arising at any time during or after the term of this Lease in
connection with or related to the use, presence, transportation, storage,
disposal, spill, release or discharge of Hazardous Materials on, in or about the
Premises as a result (directly or indirectly) of the acts (active or passive) or
omissions of Lessee, or Lessee's Agents. Lessee shall not be entitled to install
any tanks under, on or about the Premises for the storage of Hazardous Materials
without the express written consent of Lessor, which may be given or withheld in
Lessor's sole discretion. Neither the written consent of Lessor to the presence
of Hazardous Materials on, under or about the Premises nor the strict compliance
by Lessee with all Environmental Laws shall excuse Lessee
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from its obligation of indemnification pursuant hereto. As used herein, the term
"Hazardous Materials" shall mean (i) any hazardous or toxic wastes, materials or
substances, and other pollutants or contaminants, which are or become regulated
by any Environmental Laws; (ii) petroleum and petroleum by products; (iii)
asbestos; (iv) polychlorinated biphenyls; and (v) radioactive materials. The
provisions of this paragraph shall survive the termination of this Lease. If it
is determined by Lessor that Lessee, its use of the Premises, Building and/or
Park, or the condition of the Premises, Building and/or Park is not in
compliance with all Environmental Laws at the expiration or termination of this
Lease as a result of Lessee's or Lessee's Agents occupancy, acts, or omissions,
then at Lessor's sole option, Lessor may require Lessee to hold over possession
of the Premises until Lessee can surrender the Premises to Lessor in compliance
with all Environmental Laws. Any such holdover by Lessee will be with Lessor's
consent, will not be terminable by Lessee in any event or circumstance and will
otherwise be subject to the provisions of Paragraph 22 of this Lease.
Notwithstanding anything to the contrary herein, Lessee shall not be responsible
nor liable for any investigation costs, penalties, remediation, closures, fines,
costs or expenses to the extent directly resulting from the contamination of the
Premises, the Building or the Park with Hazardous Materials to the extent such
environmental contamination: (a) was present before the date of January 29,
1995; (b) is directly caused by Lessor or Lessor's authorized agents,
representatives or contractors; or (c) emanates from off-site sources.
30. FINANCIAL STATEMENTS: Lessee, for the reliance of Lessor, any lender
holding or anticipated to acquire a lien upon the Premises, the Building or the
Park or any portion thereof, or any prospective purchaser of the Building or the
Park or any portion thereof, within ten (10) business days after Lessor's
request therefor, but not more often than once annually so long as Lessee is not
in default of this Lease, shall deliver to Lessor the then current financial
statements of Lessee, certified by a financial officer of Lessee (including
interim periods following the end of the last fiscal year for which annual
statements are available) which statements shall be prepared or compiled by a
certified public accountant and shall present fairly the financial condition of
Lessee at such dates and the result of its operations and changes in its
financial positions for the periods ended on such dates.
31. GENERAL PROVISIONS:
(i) TIME. Time is of the essence in this Lease and with respect to
each and all of its provisions in which performance is a factor.
(ii) SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
(iii) RECORDATION. Lessee shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Lessor.
(iv) LESSOR'S PERSONAL LIABILITY. The liability of Lessor (which, for
purposes of this Lease, shall include Lessor and the owner of the Building if
other than Lessor) to Lessee for any default by Lessor under the terms of this
Lease shall be limited to the actual interest of Lessor and its present or
future partners in the Premises and the Building, including any insurance and
condemnation proceeds, and Lessee agrees to look solely to the Building,
including any insurance and condemnation proceeds, for satisfaction of any
liability and shall not look to other assets of Lessor nor seek any recourse
against the assets of the individual partners, directors, officers,
shareholders, agents or employees of Lessor; it being intended that Lessor and
the individual partners, directors, officers, shareholders, agents or employees
of Lessor shall not be personally liable in any manner whatsoever for any
judgment or deficiency. The liability of Lessor under this Lease is limited to
its actual period of ownership of title to the Building, and Lessor shall be
automatically released from further performance under this Lease and from all
further liabilities and expenses hereunder upon transfer of Lessor's interest in
the Premises or the Building. Lessee agrees to attorn to any entity purchasing
or otherwise acquiring the Premises.
(v) SEPARABILITY. Any provisions of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provisions hereof and such other provision shall remain in full force and
effect.
(vi) CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California.
(vii) ATTORNEYS' FEES. In the event any legal action is brought to
enforce or interpret the provisions of this Lease, the prevailing party therein
shall be entitled to recover all costs and expenses including reasonable
attorneys' fees. Any such attorneys' fees and other expenses incurred by either
party in enforcing a judgment in its favor under this Lease shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys' fees obligation is intended to be severable from the other
provisions of this Lease and to survive and not be merged into any such
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judgment.
(viii) ENTIRE AGREEMENT. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party that is not in writing and
signed by all parties to this Lease shall be binding.
(ix) WARRANTY OF AUTHORITY. Each person executing this Lease on
behalf of a party represents and warrants that (1) such person is duly and
validly authorized to do so on behalf of the entity it purports to so bind, and
(2) if such party is a partnership, corporation or trustee, that such
partnership, corporation or trustee has full right and authority to enter into
this Lease and perform all of its obligations hereunder.
(x) NOTICES. All notices and demands required or permitted to be
sent to Lessor or Lessee shall be in writing and shall be sent by United States
mail, certified and postage prepaid, or by personal delivery or by overnight
courier, addressed to Lessor at 30 Executive Park, Suite 100, Irvine, California
92714, or to Lessee at the Premises, or to such other place as such party may
designate in a notice to the other party given as provided herein. Notice shall
be deemed given upon the earlier of actual receipt or the third day following
deposit in the United States mail.
(xi) JOINT AND SEVERAL. If Lessee consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.
(xii) COVENANTS AND CONDITIONS. Each provision to be performed by
Lessee hereunder shall be deemed to be both a covenant and a condition.
(xiii) WAIVER OF JURY TRIAL. The parties hereto shall and they hereby
do waive trial by jury in any action, proceeding or counterclaim brought by
either of the parties hereto against the other on any matters whatsoever arising
out of or in any way related to this Lease, the relationship of Lessor and
Lessee, Lessee's use or occupancy of the Premises, the Building or the Park,
and/or any claim of injury, loss or damage.
(xiv) COUNTERCLAIMS. In the event Lessor commences any unlawful
detainer proceedings, Lessee shall not interpose any counterclaim of whatever
nature or description in any such proceedings, provided, however, nothing
contained herein shall be deemed or construed as a waiver of the Lessee's right
to assert such claims in any separate action brought by Lessee or the right to
offset the amount of any final judgment owed by Lessor to Lessee.
32. SIGNS: All signs and graphics of every kind visible in or from public view
or corridors or the exterior of the Premises shall be subject to Lessor's prior
written approval, which shall not be unreasonably withheld or delayed, and shall
be subject to any applicable governmental laws, ordinances, and regulations.
Lessee shall remove all such signs and graphics prior to the termination of this
Lease. Such installations and removals shall be made in a manner as to avoid
damage or defacement of the Premises; and Lessee shall repair any damage or
defacement, including without limitation, discoloration caused by such
installation or removal. Lessor shall have the right, at its option, to deduct
from the Security Deposit such sums as are reasonably necessary to remove such
signs, including, but not limited to, the costs and expenses associated with any
repairs necessitated by such removal. Lessee further agrees to maintain any such
sign, awning, canopy, advertising matter, lettering, decoration or other thing
as may be approved in good condition and repair at all times.
33. MORTGAGEE PROTECTION: Upon any breach or default on the part of Lessor,
Lessee will give written notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises
who has provided Lessee with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be more than ninety
(90) days), including time to obtain possession of the Premises by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure. If
such breach or default cannot be cured within such time period, then such
additional time as may be necessary will be given to such beneficiary or
mortgagee to effect such cure so long as such beneficiary or mortgagee has
commenced the cure within the original time period and thereafter diligently
pursues such cure to completion, in which event this Lease shall not be
terminated while such cure is being diligently pursued. Lessee agrees that each
lender to whom this Lease has been assigned by Lessor is an express third party
beneficiary hereof. Lessee shall not make any prepayment of Rent more than one
(1) month in advance without the prior written consent of each such lender.
Lessee waives the collection of any deposit from such lender(s) or any purchaser
at a foreclosure sale of such lender(s)' deed of trust. unless the lender(s) or
such purchaser shall have actually received and not refunded the deposit. Lessee
agrees to make all payments under this Lease to the lender with the most senior
encumbrance upon receiving a direction, in writing, to pay said amounts to such
lender. Lessee shall comply with such
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written direction to pay without determining whether an event of default exists
under such lender's loan to Lessor and Lessor hereby instructs Lessee to do so.
34. QUITCLAIM: Upon any termination of this Lease, Lessee shall, at Lessor's
request, execute, have acknowledged and deliver to Lessor a quitclaim deed of
Lessee's interest in and to the Premises.
35. MODIFICATIONS FOR LENDER: If, in connection with obtaining financing for
the Premises or any portion thereof, Lessor's lender shall request reasonable
modification(s) to this Lease as a condition to such financing, Lessee shall not
unreasonably withhold, delay or defer its consent thereto, provided such
modifications do not materially adversely affect Lessee's rights hereunder or
the use, occupancy or quiet enjoyment of Lessee hereunder or increase Lessee's
monetary obligations hereunder.
36. WARRANTIES OF LESSEE: Lessee hereby warrants and represents to Lessor, for
the express benefit of Lessor, that Lessee has undertaken a complete and
independent evaluation of the risks inherent in the execution of this Lease and
the operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Lessee has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Lessee hereby further warrants
and represents to Lessor, for the express benefit of Lessor, that in entering
into this Lease, Lessee has not relied upon any statement, fact, promise or
representation (whether express or implied, written or oral) not specifically
set forth herein in writing and that any statement, fact, promise or
representation (whether express or implied, written or oral) made at any time to
Lessee, which is not expressly incorporated herein in writing, is hereby waived
by Lessee.
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Lessor and Lessee hereby
agree and acknowledge that the Premises, the Building and/or the Park may be
subject to the requirements of the Americans with Disabilities Act (the "ADA"),
a federal law codified at 42 U.S.C. 12101 et seq, including, but not limited to
Title III thereof, all regulations and guidelines related thereto, and any
amendments thereof. Any Tenant Improvements to be constructed hereunder shall be
in compliance with the requirements of the ADA, and all costs incurred for
purposes of compliance therewith shall be a part of and included in the costs of
the Tenant Improvements. Lessee is responsible for conducting its own
independent investigation of this matter. Except for the construction of any
Tenant Improvements, for which Lessee shall be solely responsible for compliance
with the ADA, if any barrier removal work or other work is required to the
Building, the Common Area or the Park under Title III of the ADA, then such work
shall be performed by Lessor at Lessor's sole cost and expense; provided, if
such work is required under the ADA as a result of Lessee's use of the Premises
or any work or alteration made to the Premises by or on behalf of Lessee, then
such work shall be performed by Lessor at the sole cost and expense of Lessee.
Except as otherwise provided in this provision, Lessee shall be responsible at
its sole cost and expense for fully and faithfully complying with all applicable
requirements of the ADA.
38. BROKERAGE COMMISSION: Each of Lessor and Lessee hereby represents and
warrants to the other that such party's sole contact in connection with this
Lease has been directly with the other party, and that no other broker or finder
can properly claim a right to a commission or a finder's fee based upon contacts
between the claimant and such party. Each party shall indemnify, defend by
counsel acceptable to the other, protect and hold the other harmless from and
against any costs arising from or relating to any claim for a fee or commission
by any broker or finder in connection with the Premises and this Lease other
than Broker, if any arising out of the actions of such party.
39. ABATEMENT OF RENT: In the event Lessee is prevented from using, and
actually does not use, the Premises or any portion thereof for a period of three
(3) consecutive business days as a result of
(i) a casualty to the Premises or Building, not caused or contributed
to by Lessee or any of Lessee's Agents which substantially interferes with
Lessee's use of the Premises, then the Rent hereunder shall be equitably abated
after the end of such three-day period for such time as Lessee is prevented from
using the Premises or prevented from using the Premises or portion thereof as a
result of such casualty; or
(ii) a civil authority shutdown, then the Rent hereunder shall be
equitably abated after the end of such three-day period for the lesser of (A)
such time as Lessee is prevented from using the Premises or portion thereof as a
result of such shutdown or (B) thirty (30) days; or
(iii) any other reason to the extent Lessor recovers rent loss
insurance proceeds. Lessor shall use reasonable efforts to obtain such recovery.
The foregoing Rent abatement shall be equitable, and the Base Rent
abatement shall be in the proportion that the rentable area of the portion of
the Premises that Lessee is prevented from using bears to the total rentable
area of the Premises.
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40. LESSOR'S ABILITY TO PERFORM LESSEE'S UNPERFORMED OBLIGATIONS:
Notwithstanding anything to the contrary contained in this Lease, if Lessee
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Lessee pursuant to this Lease, and provided
Lessor has provided Lessee with a twenty (20) day written notice to perform,
except in the event of an emergency in which case notice is not required, and/or
if the failure of Lessee relates to a matter which in Lessor's judgement
reasonably exercised is of an emergency nature and such failure shall remain
uncured for a period of time commensurate with such emergency, then Lessor may,
at Lessor's option without any obligation to do so, and in its sole discretion
as to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Lessor by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Lessee or
anyone holding under or through Lessee, except any loss resulting from Lessor's
gross negligence. If Lessor so performs any of Lessee's obligations hereunder,
the full amount of the cost and expense entailed or the payment so made or the
amount of the loss so sustained, shall immediately be owing by Lessee to Lessor,
and Lessee shall promptly pay to Lessor upon demand, as Additional Rent, the
full amount thereof with interest thereon from the date of payment at the rate
of ten percent (10%) per annum.
41. LESSEE'S ABILITY TO PERFORM LESSOR'S UNPERFORMED OBLIGATIONS:
Notwithstanding anything to the contrary contained in this Lease, if Lessor
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Lessor pursuant to this Lease, and/or if the
failure of Lessor relates to a matter which in Lessee's judgement reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, after expiration of all
applicable notice and cure periods for Lessor's and any mortgagee's benefit as
set forth in Paragraphs 23 and 33, respectively, then after the delivery by
Lessee to Lessor of at least twenty (20) days advance written notice (not
applicable if such notice already provided) for any failure not considered to be
an emergency, and at least two (2) business days advance written notice (which
may be given by facsimile) for any failure considered to be an emergency. Lessee
may, at Lessee's option without any obligation to do so, perform any such term,
provision, covenant, or condition. If Lessee so performs any of Lessor's
obligations hereunder, the full amount of the reasonable and actual cost and
expense incurred shall immediately be owing by Lessor to Lessee, and Lessor
shall promptly pay to Lessee upon demand the full amount thereof with interest
thereon from the date of payment at the rate of ten percent (10%) per annum. The
foregoing rights and remedies of Lessee are not exclusive; they are cumulative
in addition to any rights and remedies now or hereafter existing at law, in
equity by statute or otherwise, or to any equitable remedies Lessee may have
generally.
IN WITNESS WHEREOF, this Lease is executed on the date and year first
written above.
LESSOR:
LINCOLN PROPER COMPANY NO. 2106 LIMITED PARTNERSHIP, a California
Limited Partnership
By: /s/ Erik M. Hansen
-------------------------------------------
Erik M. Hansen, a Managing General Partner
Date: 11/29/95
-----------------------------------------
LESSEE:
BURKE INDUSTRIES, INC., a California corporation
By: /s/ Reed Wolthausen
-------------------------------------------
Title: Senior VP - CFO
----------------------------------------
Date: 11/21/95
-----------------------------------------
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EXHIBIT A
PREMISES, BUILDING, LOT AND/OR PARK
[MAP]
PREMISES
BUILDING
LOT/PARK
<PAGE>
EXHIBIT B
TENANT IMPROVEMENT AGREEMENT
LEASE DATE FOR REFERENCE PURPOSES: October 20, 1995
LESSOR: Lincoln Property Company
No. 2106 Limited Partnership
LESSEE: Burke Industries, Inc.
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