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Sample Business ContractsHome: Sample Business Contracts: LEASE AGREEMENT by and between CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM as Landlord and CERADYNE, INC. as Tenant Suite 100, Building 696 and Suite 122, Building 780
COVER PAGE The capitalized terms in this Lease shall have the meanings ascribed to them below, and each reference to such term in the Lease shall incorporate such meaning therein as if fully set forth therein.
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CERADYNE, INC. LEASE AGREEMENT TABLE OF CONTENTS
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THIS LEASE AGREEMENT dated December 17, 2003 (“for identification purposes only”) is made and entered into on the day and year last below written, by and between CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM, a public entity of the State of California (hereinafter referred to as “Landlord”), and CERADYNE, INC., a Delaware corporation, d/b/a Ceradyne Thermo Materials (hereinafter referred to as “Tenant”). 1. LEASED PREMISES 1.01 Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the property hereinafter referred to collectively as the “Leased Premises”, described as approximately 38,600 rentable square feet of office/warehouse space located at Building 696, Suite 100, ParkNorth Business Center, 696 ParkNorth Boulevard, Clarkston, Georgia 30021, and approximately 8,400 rentable square feet of office/warehouse space located at Building 780, Suite 122, ParkNorth Business Center, 780 ParkNorth Boulevard, Clarkston, Georgia 30021, as shown on the Site Plan attached hereto as Exhibit “A” and incorporated herein by specific reference thereto. The buildings in which the Leased Premises are located are herein referred to collectively as the “Buildings”; and the real property on which the Buildings are situated is herein referred to as the “Land”. The Buildings, the Land and the other buildings and improvements located on the Land are herein referred to collectively as the “Project”. Floor Plans of the Buildings depicting the approximate dimensions and location of the Leased Premises within the Buildings are attached hereto as Exhibit “B-1” and “B-2”, respectively, and incorporated herein by specific reference thereto. 2. TERM 2.01 Tenant hereby agrees to lease the Leased Premises from Landlord and Landlord hereby agrees to lease the Leased Premises to Tenant upon the terms, conditions and covenants contained herein. The term of this Lease shall extend for a period of sixty-four (64) full consecutive months commencing on the later of (i) the Substantial Completion Date with respect to the Landlord’s Work as provided for in Exhibit “D”, which is attached hereto and incorporated herein by specific reference thereto, or (ii) February 1, 2004 (hereinafter referred to as the “Commencement Date”), and continuing until midnight on the last day of the sixty-fourth (64th) full month following the Commencement Date, except to the extent the term of this Lease is earlier terminated under any of the terms and provisions of this Lease. Promptly upon the Commencement Date, the parties will complete and execute the Tenant’s Acceptance of Premises which is attached to this Lease as Exhibit “C” and incorporated herein by specific reference thereto, thereby setting forth and conclusively establishing (to the extent necessary) the Commencement Date and the Expiration Date of the Lease, so that such dates are certain, and such instrument, when executed, shall be and hereby is made a part of this Lease and incorporated into this Lease by specific reference. The terms “Substantial Completion Date” and “Landlord’s Work” shall be deemed to have the meaning and definition as set forth in attached Exhibit “D”.
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3. RENTAL 3.01 As rental for the Leased Premises, Tenant agrees to pay to Landlord Base Rental as set forth in the following schedule, subject to the terms and provisions regarding abatement of Base Rental as provided for in Section 3.05 of this Lease, hereinbelow:
The Base Rental shall be due on or before the first day of each calendar month during the term, together with any other additional rental as hereinafter set forth; provided that, if the term shall commence on any date other than the first day of the month, then Base Rental for such first partial month shall be prorated as set forth below and shall be due and payable by Tenant on the Commencement Date. Tenant shall pay interest at a rate of twelve percent (12%) per annum on payments of rent that are paid more than ten (10) days after the due date thereof. If the Lease shall commence on any date other than the first day of a calendar month, or end on any date other than the last day of a calendar month, rent for such month shall be prorated. The commission of the Agent, as hereinafter provided, shall not apply to any amounts of rent which are payable under the terms of this Lease other than Base Rental. 3.02 Tenant shall deposit with Landlord, upon delivery of this Lease, an amount equal to THIRTY-ONE THOUSAND THREE HUNDRED ONE AND 67/100THS DOLLARS ($31,301.67), a portion of which, or FOURTEEN THOUSAND SEVEN HUNDRED TWENTY-SIX AND 67/100THS DOLLARS ($14,726.67) is to be applied as Base Rental for the first full month of the term for which Base Rental is due hereunder (after the application of the provisions regarding abatement of Base Rental as provided for hereinbelow), and, the other portion of which, or SIXTEEN THOUSAND FIVE HUNDRED SEVENTY-FIVE AND NO/100THS DOLLARS ($16,575.00), is to be held as a refundable security deposit (hereinafter referred to as the “Security Deposit”). Landlord may apply all or any part of the Security Deposit to cure any default by Tenant hereunder and Tenant shall promptly restore to the Security Deposit all amounts so applied upon demand therefor. Any portion of the Security Deposit which has not been applied by Landlord in accordance with the provisions hereof shall be returned to Tenant, without interest, within thirty (30) days after the expiration of the term of this Lease. 3.03 In addition to the Base Rental, Tenant agrees to pay Landlord as additional rental, its pro rata share of the amounts described in subparagraphs (a) and (b) below. Each year during the term hereof, Landlord shall give Tenant written notice of its estimate of the amount of common area maintenance charges and common area utility charges (collectively “Charges”) for the Leased Premises for the calendar year. Tenant shall, thereafter, during that calendar year, pay to Landlord one-twelfth (1/12) of the amount set forth in said statement at such time as its monthly installments of Base Rental hereunder are due and payable. At such time as Landlord is able to determine the actual Charges for such calendar year, Landlord shall deliver to Tenant a statement thereof and in the event the estimated Charges differ from the actual Charges, any adjustment necessary shall be made to additional rental payments next coming due under this paragraph. In this regard, Landlord shall make commercially reasonable efforts to deliver such statement to Tenant within ninety (90) days following the end of each calendar year. (a) Landlord agrees to maintain those areas around the Buildings and in the Project, including parking areas, planted areas, signs and landscaped areas which are from time to time designated by Landlord. Tenant agrees to pay to Landlord as additional rental its pro rata share of all ground maintenance charges and other common area charges and expenses for the
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Buildings and the Land (“CAM Charges”). The term “grounds maintenance” shall include, without limitation, all landscaping, planting, lawn and grounds care, and all repairs and maintenance to the grounds, signs and other common areas around the Buildings and in the Project and to all sidewalks, driveways, loading areas and parking areas. CAM Charges shall not include any of the following items: (a) Cost of items considered capital repairs, replacements, improvements, and equipment under generally accepted accounting principles (“Capital Items”); (b) Rental for items, which if purchased rather than rented, would constitute a Capital Item, except for expenses in connection with minor repairs on or keeping the Project in operation while minor repairs are being made; (c) Costs incurred by Landlord for repairs, to the extent that Landlord is reimbursed by insurance proceeds; (d) Marketing costs; (e) Costs incurred by Landlord due to the violation by Landlord or any other tenant of the terms and conditions of any lease of space in the Project; (f) Overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and services provided to the Project to the extent the same exceeds the fair market costs of such goods and services rendered by unaffiliated third parties; (g) Landlord’s general corporate overhead and general and administrative expenses; (h) Costs incurred by Landlord in connection with upgrading the Project to comply with life, fire, and safety codes, ordinances, statutes, or other laws in effect prior to the Commencement Date, including penalties or damages incurred due to non-compliance; (i) Costs arising from the negligence or fault of other tenants, Landlord, or their agents, contractors, or invitees. (j) Costs arising from latent defects in the base, shell, or core of the Building or improvements installed by Landlord; (k) Costs for sculpture, paintings, or other works of art; (l) Costs of any “tenant relations” parties or events not consented to in writing by Tenant; (m) Any flowers, balloons, or other gifts provided to any entity, including, but not limited to, Tenant, other tenants, employees, vendors, contractors, prospective tenants and agents. (b) In the event any utilities furnished to the Buildings or the Leased Premises are not separately metered, Tenant shall pay to Landlord, as additional rental, Tenant’s pro rata share of the gas, water, electricity, fuel, irrigation costs, light and heat, garbage collection services and for all other sanitary services rendered to the Leased Premises used by Tenant. Tenant’s prorated amount shall be determined on the basis of the size of the Leased Premises, unless Landlord determines that Tenant’s use of the Leased Premises justifies a disproportionate allocation of utility costs to Tenant or that other tenants’ use of their premises justifies a disproportionate allocation to such tenants. 3.04 Tenant agrees to pay as additional rent to Landlord, upon demand, its pro rata share of any utility surcharges, or any other costs levied, assessed or imposed by, or at the direction of, or resulting from statutes or regulations, or interpretations thereof, promulgated by any Federal, State, Municipal or local governmental authorities in connection with the use or occupancy of the Leased Premises. 3.05 Notwithstanding anything contained hereinabove to the contrary, if Tenant faithfully performs and complies with all of the terms and conditions of this Lease during the
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entire term hereof, Tenant’s obligation to pay monthly Base Rental shall be abated during the first four (4) full months of the term of this Lease (months 1 through 4); that is, the amount of monthly Base Rental which shall be payable by Tenant during the first four (4) full months of the term of this Lease (months 1 through 4) shall be in the amount of and shall be limited to ZERO AND NO/100THS DOLLARS ($0.00) per month. Abatement of rent as provided for herein shall apply to payment of monthly Base Rental only and shall not be applicable to payment of CAM Charges, taxes, insurance premiums, additional rent or any other charges, costs, expenses, or other amounts of rent payable by Tenant under this Lease. If Tenant at any time commits a breach or default under this Lease, however, which default is not cured by Tenant within any applicable notice and right to cure period which may be provided for herein, then Landlord may, in addition to all of the other rights or remedies it may have, rescind such abatement of monthly Base Rental and immediately recapture and collect the entire amount of the previously abated rent. However, Landlord’s failure to rescind the abatement of monthly Base Rental as provided for hereunder as a result of any breach or default by Tenant shall not be deemed to constitute a mutual departure from the express terms and provisions of this Lease or to be a waiver of Landlord’s rights to so rescind such abatement with regard to any subsequent breach or default by Tenant. 3.06 Until receipt of written notice from Landlord specifying a different address for payment, all amounts payable by Tenant pursuant to the terms and provisions of this Lease shall be made payable to “CBRE Investors ITS CALSTRS” and shall be delivered to Landlord at the following address: CBRE INVESTORS ITS CALSTRS 3.07 Landlord shall maintain accurate and complete books and records of all CAM Charges in a manner sufficient to calculate and verify CAM Charges for each calendar year occurring wholly or partially within the Lease Term, as such may be renewed and extended. Upon written request from Tenant, Landlord shall provide to Tenant reasonable detail of the calculations of CAM Charges (including, as applicable, Landlord’s budgets, estimates and adjustments thereto). Landlord shall maintain adequate books and records and accounting procedures. Upon at least fifteen (15) days prior written notice to Landlord, Tenant, or a mutually agreed upon certified public accounting firm acting as Tenant’s agent, shall have the right to audit and inspect such books and records from time to time for the sole purpose of verifying in good faith the accuracy of the information contained in any statement of CAM Charges provided by Landlord. Landlord shall cooperate with Tenant during the course of such audit, including, without limitation, making available books, records and personnel (provided such audit shall be conducted during regular business hours). Tenant and its auditors shall be entitled, at Tenant’s expense, to make photocopies of such books and records. Tenant shall keep all information derived from such audit confidential and shall use the same only for purposes of verifying, or resolving disputes about, charges with respect to this Lease. Any audit performed or conducted by or on behalf of Tenant shall be performed and conducted at the location where such books and records are maintained by Landlord, or at such other location as Landlord shall reasonably determine to be appropriate, and in a manner so as to minimize interference with Landlord’s business operations. Landlord shall have no obligation to approve any certified public accountant proposed by Tenant to perform such audit or inspection unless such party is able to demonstrate reasonably satisfactory experience in the auditing and review of leasehold operating expenses. Furthermore, in no event shall any such audit or inspection of Landlord’s books and records be conducted by any person or entity whose compensation is to be determined in whole or in part on a contingency based upon any savings which may be derived by Tenant from the refund of previously paid CAM Charges. If any audit discloses that Tenant has paid the wrong amount with respect to CAM Charges, and Landlord agrees with such determination, then Tenant shall pay the underpayment, or Landlord shall refund any overpayment or apply same as a credit against future Rent, as the case may be, within thirty (30) days after determination of the proper amount. Such right to audit and
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inspect Landlord’s books and records shall expire with respect to any calendar year of the Lease term unless Tenant notifies Landlord within one hundred eighty (180) days following the receipt of Landlord’s statement of CAM Charges with respect to such year of Tenant’s intention to exercise its audit rights hereunder. If Tenant fails to provide such notice within such time period, then Landlord’s statement of CAM Charges shall be conclusively deemed to be correct in all respects and shall be binding upon Tenant. If such audit discloses that actual total CAM Charges with respect to the Project were overstated by more than ten percent (10%), Tenant will receive a credit against Tenant’s future CAM Charges obligations, as applicable, for the reasonable cost of an audit performed by a third party; otherwise the cost of such audit will be borne solely and exclusively by Tenant. Tenant agrees to keep, and to cause its accountant and employees to keep, all information revealed by any audit of Landlord’s books and records confidential and not to disclose any such information or permit any such information to be disclosed to any tenant other than Landlord, unless compelled to do so by a court of law. If Landlord disputes the results of Tenant’s audits, Landlord shall have the right to initiate an arbitration in accordance with Section 19 of the Lease. Pending the outcome of any audit conducted hereunder, Tenant shall pay the undisputed portion of CAM Charges. 4. DELAY IN DELIVERY OF POSSESSION 4.01 If Landlord, for any reason whatsoever, cannot deliver possession of the Leased Premises to Tenant on or before the Anticipated Commencement Date as set forth on the Cover Page of this Lease, then this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom, but in that event the Commencement Date shall be delayed until possession of the Leased Premises is tendered by Landlord to Tenant, and the terms of this Lease shall be extended for a period equal to the period of such delay in delivery of possession, plus the number of days necessary to end the term of this Lease on the last day of a month. In the event of any such delay, Tenant’s obligation for the payment of Base Rental, Charges and common utility costs shall be abated in full until the delivery of possession of the Leased Premises as provided for hereinabove. Notwithstanding anything to the contrary contained in this Section 4.01, in the event of any delay in the delivery of possession of the Leased Premises resulting from any delays by Tenant, the Commencement Date of this Lease shall be deemed to be the date the Leased Premises would have been delivered to Tenant but for such delays by Tenant, and rent shall commence on such date. 5. USE OF LEASED PREMISES 5.01 The Leased Premises may be used and occupied only for the purpose of ceramic component manufacturing and general office and warehouse use and for no other purpose or purposes, without Landlord’s prior written consent. Tenant shall promptly comply at its sole expense with all laws, ordinances, orders, and regulations affecting the Leased Premises and their cleanliness, safety, occupation and use. Tenant will not perform any act or carry on any practices that may injure the Building or be a nuisance or menace to tenants of adjoining premises. Tenant shall not cause, maintain or permit any outside storage on or about the Leased Premises, including pallets or other refuse. The rear loading areas of the Tenant’s unit must be clean and unobstructed. On or before the Commencement Date, Tenant shall take possession of, and, thereafter, continuously occupy the Leased Premises during the term of this Lease, and operate thereon the normal business operations of Tenant. 6. UTILITIES 6.01 Landlord shall not be liable in the event of any interruption in the supply of any utilities, except to the extent caused by the gross negligence or wilful misconduct of Landlord; provided that, Landlord shall have no liability hereunder for any consequential, punitive or special damages resulting from any such interruptions of utility services. Tenant agrees that it will not install any equipment which will exceed or overload the capacity of any utility facilities and that if any equipment installed by Tenant shall require additional utility facilities,
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the same shall be installed by Tenant at Tenant’s expense in accordance with plans and specifications approved in writing by Landlord. Tenant shall be solely responsible for and shall pay all charges for use or consumption of sanitary sewer, water, gas, electricity and any other utility services serving the Leased Premises. In the event that Landlord determines (in its reasonable and good faith discretion) that it is advisable to separately meter any utility services provided to the Leased Premises, Landlord shall have the right to install a sub-meter and bill Tenant for the actual cost thereof, which shall be paid to Landlord within fifteen (15) days following Tenant’s receipt of such invoice. 7. ACCEPTANCE OF LEASED PREMISES 7.01 By entry hereunder, Tenant acknowledges that it has examined the Leased Premises and accepts the same as being in the condition called for by this Lease, and as suited for the uses intended by Tenant. 7.02 Tenant hereby expressly acknowledges that it has had the opportunity to verify the square footages contained within the Leased Premises and the Building prior to the execution of this Lease, and hereby waives any right to adjust the rentable square footage of either the Leased Premises or the Building based upon any asserted inaccuracy in the square footages thereof. Furthermore, Tenant hereby expressly agrees that no audit or reassessment of the Leased Premises or the Building at any time hereafter shall reduce or otherwise affect Tenant’s obligation to pay rent in the amounts as set forth in this Lease or to in any way reduce or otherwise affect the computation of Tenant’s pro rata share of CAM Charges, utility charges, taxes, insurance premiums or any other charges as set forth herein. 8. ALTERATIONS, MECHANICS’ LIENS 8.01 Alterations may not be made to the Leased Premises without prior written consent of Landlord, and any alterations of the Leased Premises shall at Landlord’s option become part of the realty and belong to Landlord. Notwithstanding the foregoing, however, Landlord’s consent to any interior non-structural, cosmetic alterations to the Leased Premises shall not be unreasonably withheld or delayed. Tenant shall only be obligated to remove any such alterations upon the expiration or earlier termination of the Lease if Landlord, at the time Landlord grants its consent therefor, states in writing that such alterations must be removed upon expiration or earlier termination of the Lease, or if Tenant has installed such alterations without Landlord’s consent. 8.02 Should Tenant desire to alter the Leased Premises and Landlord gives written consent to such alterations, at Landlord’s option, Tenant shall contract with a contractor approved by Landlord for the construction of such alterations, which approval shall not be unreasonably withheld or delayed. In this regard, Landlord hereby grants its express written consent, in advance, to the use of Mallory and Evans, having a mailing address of P.O. Box 447, Decatur, Georgia 30031, as the general contractor for purposes of any such alterations. Upon completion of the work, Tenant shall provide lien waivers from the subcontractors or a final affidavit of lien waiver from the general contractor. (Lien waivers and the Affidavit of Lien Waiver shall be in a form reasonably acceptable to Landlord.) 8.03 Notwithstanding anything in either paragraph 8.01 or paragraph 8.02 above, Tenant may, upon written consent of Landlord, which consent shall not be unreasonably withheld or delayed, install trade fixtures, machinery or other trade equipment in conformance with all applicable laws, statutes, ordinances, rules and regulations, and the same may be removed upon the termination of this Lease, provided Tenant shall not be in default under any of the terms and conditions of this Lease and the Leased Premises are not damaged by such removal. Tenant shall return the Leased Premises on the termination of this Lease in the same condition as existing following completion of Tenant’s Work, as such term is defined and further detailed in the Rider, attached hereto as Exhibit “D”, reasonable wear and tear and damage due to casualty or condemnation alone excepted. Tenant shall keep the Leased
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Premises, the Buildings and property in which the Leased Premises are situated free from any liens arising out of any work performed for, materials furnished to, or obligations incurred by Tenant. All such work provided for above, shall be done at such times and in such manner as Landlord may from time to time designate. Except in the event of an emergency, Tenant shall give Landlord written notice five (5) days prior to employing any laborer or contractor to perform work resulting in an alteration of the Leased Premises so that Landlord may post a notice of non-responsibility. Tenant will pay or cause to be paid all costs and charges for work done by Tenant or caused to be done by Tenant in or to the Leased Premises or any property in which Landlord may hold any interest, and for all materials furnished for or in connection with such work. Tenant will indemnify Landlord against, and hold harmless Landlord against the liens and claims of lien and all other liabilities, liens, claims and demands on account of such work by or on behalf of Tenant. If any such lien at any time is filed against the Leased Premises or any part of the Buildings, Tenant shall immediately cause such lien to be discharged of record, or at its discretion bond off the lien pursuant to O.C.G.A. Sec. 44-14-364. Nothing herein will be deemed the consent or agreement of Landlord to subject Landlord’s interest in the Leased Premises or Buildings to liability under any mechanics or other lien law. In the event that Tenant fails to cause a lien which has been filed to be discharged, or shall fail to bond off said lien as herein provided, within ten (10) days of notice of said lien, in addition to all other rights and remedies it may have under the Lease or at law, Landlord may, at its option, pay such charge and related costs and interests and said amount and expenses, including reasonable attorneys’ fees shall be immediately due from Tenant to Landlord as additional rent. 9. QUIET CONDUCT/QUIET ENJOYMENT 9.01 Tenant shall not commit or suffer any waste upon the Leased Premises, or any nuisance, or other act or thing which may disturb the quiet enjoyment of any other tenant in the Buildings or any building in the Project in which the Leased Premises are located. 9.02 So long as Tenant is not in default in the payment of rent or other charges or in the performance of any of the other terms, covenants, or conditions of the Lease beyond any applicable notice and/or right to cure periods provided for in this Lease, Tenant shall not be disturbed by Landlord or anyone claiming by, through or under Landlord in Tenant’s possession, enjoyment, use and occupancy of the Leased Premises during the original or any renewal term of the Lease or any extension or modification thereof. 10. FIRE INSURANCE, HAZARDS 10.01 No use shall be made or permitted to be made of the Leased Premises, nor acts done which might increase the existing rate of insurance upon the Buildings or cause the cancellation of any insurance policy covering the Building, or any part thereof, nor shall Tenant sell, or permit to be kept, used or sold, in or about the Leased Premises, any article which may be prohibited by the Standard form of fire insurance policies; provided, however, that the foregoing provision shall in no way limit or prohibit those uses of the Leased Premises which are expressly permitted pursuant to and in accordance with Section 5.01 of this Lease. Tenant shall, at its sole cost and expense, comply with any and all requirements pertaining to the Leased Premises, of any insurance organization or company, necessary for the maintenance of reasonable fire and public liability insurance, covering the Leased Premises, the Buildings and appurtenances. 10.02 Tenant shall maintain in full force and effect on all of its inventory, fixtures and equipment in the Leased Premises a policy or policies of fire and extended coverage insurance with standard coverage endorsement to the extent of at least eighty percent (80%) of their insurable value. During the term of this Lease the proceeds from any such policy or policies of insurance shall be used for the repair or replacement of the fixtures, and Landlord will sign all documents necessary or proper in connection with the settlement of any claim or loss by Tenant. Landlord will not carry insurance on Tenant’s possessions. Tenant
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shall furnish Landlord with a certificate of such policy within thirty (30) days of the commencement of this Lease, and whenever required, shall satisfy Landlord that such policy is in full force and effect. 11. LIABILITY INSURANCE 11.01 Tenant, at its own expense, shall provide and keep in force with companies reasonably acceptable to Landlord public liability insurance for the benefit of Landlord and Tenant jointly against liability for bodily injury and property damage in the amount of not less than Three Million Dollars ($3,000,000.00) per occurrence in respect to injuries to or death of more than one person, in the amount of not less than One Million Dollars ($1,000,000.00) per occurrence in respect to injuries or death to any one person, and in the amount of not less than One Million Dollars ($1,000,000.00) per occurrence in respect to damage to property, such limits to be for any greater amounts as may be reasonably indicated by circumstances from time to time existing. Tenant shall furnish Landlord with a certificate of such policy or policies within thirty (30) days of the Commencement Date of this Lease and whenever required shall satisfy Landlord that such policy or policies are in full force and effect. All such policies shall name Landlord as an additional insured and shall be primary and non-contributing with any insurance carried by Landlord. The policies shall contain a contractual liability endorsement which shall expressly insure Landlord against the performance of Tenant’s agreements of indemnity as provided for in this Lease. The policies shall further provide that they shall not be canceled or altered without ten (10) days prior written notice to Landlord. 12. INDEMNIFICATION 12.01 Tenant shall indemnify and hold harmless Landlord against and from any and all claims arising from Tenant’s use of the Leased Premises (other than those arising solely from negligence of Landlord or its agents or employees), or the conduct of its business or from any activity, work, or thing done, permitted or suffered by the Tenant to be done in or about the Leased Premises, and shall further indemnify and hold harmless Landlord against and from any and all claims arising from any breach or default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease, or arising from any act, neglect, fault or omission of the Tenant, or of its agents or employees, and from and against all costs, attorney’s fees, expenses and liabilities incurred with respect to any such claim and/or with respect to any action or proceeding brought relative thereto, and in case any action or proceeding be brought against Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall defend the same at Tenant’s expense by counsel chosen by Tenant and who is reasonably acceptable to Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property or injury to persons in or about the Leased Premises from any cause whatsoever except that which is caused by the failure of Landlord to observe any of the terms and conditions of this Lease where such failure has persisted for an unreasonable period of time after written notice of such failure, and except for any such damage or injury resulting from the gross negligence or wilful misconduct of Landlord, and Tenant hereby waives all claims in respect thereof against Landlord. 12.02 Landlord shall indemnify Tenant and hold Tenant harmless against and from any and all claims arising from any breach or default in the performance of any obligation on Landlord’s part to be performed under the terms of this Lease, or arising from any act, neglect, fault or omission of Landlord, or of its agents or employees, and from and against all costs, attorney’s fees, expenses and liabilities incurred with respect to any such claim and/or with respect to any action or proceeding brought relative thereto, and in case any action or proceeding be brought against Tenant by reason of any such claim, Landlord, upon notice from Tenant, shall defend the same at Landlord’s expense by counsel chosen by Landlord and who is reasonably acceptable to Tenant.
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12.03 Landlord shall indemnify Tenant and hold Tenant harmless against and from any and all claims arising in the common areas of the Buildings or the grounds, sidewalks, driveways and parking areas on the Land (except to the extent arising from negligence of Tenant or its agents or employees), and from and against all costs, attorney’s fees, expenses and liabilities incurred with respect to any such claim and/or with respect to any action or proceeding brought relative thereto, and in case any action or proceeding be brought against Tenant by reason of any such claim, Landlord, upon notice from Tenant, shall defend the same at Landlord’s expense by counsel chosen by Landlord and who is reasonably acceptable to Tenant. 12.04 The obligations of Landlord and Tenant under this paragraph arising by reason of any occurrence taking place during the term of this Lease shall survive the termination or expiration of this Lease. 13. WAIVER OF CLAIMS 13.01 Tenant, as a material part of the consideration to be rendered to Landlord, hereby assumes all risk of damage to property or injury to persons in or about the Leased Premises and hereby waives all claims against Landlord for damages to goods, wares and merchandise in, upon or about the Leased Premises and for injury to Tenant, its agents, employees, invitees, or third persons in or about the Leased Premises from any cause arising at any time, except for claims caused by or otherwise arising from the failure of Landlord to observe any of the terms and conditions of this Lease where such failure has persisted for an unreasonable period of time after written notice of such failure to Landlord by Tenant, and except for claims caused by or otherwise arising from the negligence or willful neglect of Landlord or its employees, agents or contractors. 13.02 Tenant shall have included in all policies of property insurance required hereunder a waiver by the insurer of all right of subrogation against the Landlord in connection with any loss or damage thereby insured against, and Landlord shall have included in all property insurance policies maintained by Landlord with respect to the Leased Premises a waiver by the insurer of all right of subrogation against the Tenant in connection with any loss or damage thereby insured against. To the full extent permitted by law, Landlord, as to its property insurance policies, and Tenant, as to its property insurance policies, each waives all right of recovery against the other for, and agrees to release the other from liability for, loss or damage to the extent such loss or damage results from a cause covered by valid and collectible insurance in effect at the time of such loss or damage or which would have been covered had the policies required hereunder been maintained; provided, however, that the foregoing release by each party is conditioned upon the other party’s carrying insurance with the above described waiver of subrogation to the extent required above, and if such coverage is not obtained or maintained by either party, then the other party’s foregoing release shall be deemed to be rescinded until such waiver is either obtained or reinstated. 14. REPAIRS 14.01 Tenant shall, at its sole cost, keep and maintain the Leased Premises and appurtenances and every part thereof (excepting exterior walls, structural portions of the Leased Premises and roofs, which Landlord agrees to repair) including by way of illustration and not by way of limitation all windows, and skylights, doors, any store front and the interior of the Leased Premises, including all plumbing, heating, air conditioning, sewer, electrical systems and all fixtures and all other similar equipment serving the Leased Premises in good and sanitary order, condition, and repair. Notwithstanding the foregoing, however, Tenant shall have no obligation for the repair of any plumbing systems located outside of the Leased Premises, except to the extent any such repair is necessitated by or is the result of or otherwise arises from the negligence or willful misconduct of Tenant or any of Tenant’s officers, employees or agents. Tenant shall be responsible for all pest control within the Leased Premises, including, but not limited to the eradication of any ants or termites should infestation
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be observed during the term of the Lease. Tenant shall, at its sole cost, keep and maintain all utilities, fixtures and mechanical equipment used by Tenant in good order, condition, and repair. All windows shall be washed and cleaned as often as necessary to keep them clean and free from smudges and stains. In the event Tenant fails to maintain the Leased Premises as required herein or fails to commence repairs (requested by Landlord in writing) within thirty (30) days after such request, or fails diligently to proceed thereafter to complete such repairs, Landlord shall have the right in order to preserve the Leased Premises or portion thereof, and/or the appearance thereof, to make such repairs or have a contractor make such repairs and charge Tenant for the cost thereof as additional rent, together with interest at the rate of twelve percent (12%) per annum from the date of making such payments. 14.02 Landlord agrees to keep in good repair the roof, structural portions of the Building, foundations, and exterior walls of the Leased Premises, except repairs rendered necessary by the negligence of Tenant, its agents, employees or invitees. Landlord gives to Tenant exclusive control of Leased Premises and shall be under no obligations to inspect said Leased Premises. Tenant shall promptly report in writing to Landlord any defective condition known to it which Landlord is required to repair, and Landlord shall move with reasonable diligence to repair such item. Failure to report such defects of which Tenant has actual knowledge shall make Tenant responsible to Landlord for any liability incurred by Landlord by reason of such defects. 14.03 Tenant agrees that it shall, as part of the Tenant’s Work, install new HVAC equipment within the Leased Premises. All such new HVAC equipment may, at Tenant’s option, be removed by Tenant upon the expiration or earlier termination of this Lease; provided that, Tenant shall repair any damage to the Leased Premises resulting from such removal and shall otherwise return the Leased Premises in its condition prior to the installation of such HVAC equipment, ordinary wear and tear excepted. The contract shall be between Tenant and a dealer-authorized company reasonably acceptable to Landlord, and shall at a minimum provide for an equipment check and tune-up service each spring and fall, and filter and lubrication service every three (3) months. A copy of said contract shall be provided to Landlord, as well as any modification, extension, renewal or replacement thereof. 15. SIGNS, LANDSCAPING 15.01 Landlord shall have the right to control landscaping and Tenant shall make no alterations or additions to the landscaping. Landlord shall have the right to approve the placing of signs and the size and quality of the same. Tenant shall place no exterior signs on the Leased Premises without the prior written consent of Landlord. Any signs not in conformity with the Lease may be immediately removed by Landlord. Notwithstanding anything contained in this Lease to the contrary, the cost of the fabrication and installation of Tenant’s marquis and Buildings signage, as applicable, shall be the sole and exclusive responsibility and liability of Tenant. 16. ENTRY BY LANDLORD 16.01 Tenant shall permit Landlord and Landlord’s agents to enter the Leased Premises at all reasonable times, with reasonable periods of notice (except in cases of emergency), for the purpose of inspecting the same or for the purpose of maintaining the Building, or for the purpose of making repairs, alterations, or additions to any portion of the Building, including the erection and maintenance of such scaffolding, canopies, fences and props as may be required, or for the purpose of posting notices of non-responsibility for alterations, additions, or repairs, or for the purpose of showing the Leased Premises to prospective tenants or purchasers, or placing upon the Buildings any usual or ordinary “for sale” signs, without any rebate of rent and without any liability to Tenant for any loss of occupation or quiet enjoyment of the Leased Premises thereby occasioned; and shall permit Landlord at any time within four (4) months prior to the expiration of this Lease, to place upon the Leased Premises any usual or ordinary “to let” or “to lease” signs. For each of the
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aforesaid purposes, Landlord shall at all times have and retain a key with which to unlock all of the exterior doors about the Leased Premises. 17. TAXES AND INSURANCE INCREASE 17.01 Tenant shall pay before delinquency any and all taxes, assessments, license fees, and public charges levied, assessed, or imposed and which become payable during the Lease upon Tenant’s fixtures, furniture, appliances and personal property installed or located in the Leased Premises. 17.02 Tenant shall pay, as additional rental during the term of this Lease and any extension or renewal thereof, the amount by which Tenant’s pro rata share of all taxes (as herein defined) for each tax year exceeds Tenant’s pro rata share of all taxes attributable to calendar year 2004. In the event the Leased Premises are less than the area of the entire property assessed for such taxes for any such tax year, then the tax for any such year applicable to the Leased Premises shall be determined by proration on the basis that the rentable floor area of the Leased Premises bears to the rentable floor area of the entire property assessed. The term “taxes” shall include all ad valorem taxes, special assessments, and governmental charges assessed against the Buildings or the Land; and such term shall also include any reasonable expenses, including fees and disbursements of attorneys, tax consultants, arbitrators, appraisers, experts and other witnesses, incurred by Landlord in contesting any taxes or the assessed valuation of all or any part of the Buildings or the Land. If either the first or final year of the lease term fails to coincide with the tax year, then the amount of taxes upon which the amount payable by Tenant is computed under this Lease shall be reduced by the pro rata part of such taxes that are attributable to the portion of any such tax year which is outside of the lease term. The agent’s commission shall not apply to any such additional rental resulting from the provisions of this paragraph. 17.03 Tenant agrees to pay the amount for all taxes levied upon or measured by the rent payable hereunder, whether as a so-called sales tax, transaction privilege tax, excise tax, or otherwise (but no income taxes of Landlord shall be payable by Tenant). Such taxes shall be due and payable at the same time as and in addition to each payment of rent. 17.04 Commencing in the year 2005 and during each remaining year of the lease term or any extension or renewal thereof, in the event that the insurance premiums payable by the Landlord for insurance coverage on the Buildings are increased, whether such increase is due to an increase in the valuation of the Buildings, or in the applicable rate of insurance, then Tenant agrees to pay Landlord as additional rental, Tenant’s pro rata share of the increase in said insurance premiums over the base amount paid in the year 2004. The term “insurance” shall include all fire and extended coverage insurance on the Buildings and all liability insurance coverage on the common areas of the Building, and the grounds, sidewalks, driveways and parking areas on the Land, together with such other insurance coverages, including, but not limited to, rent interruption insurance, as are from time to time obtained by Landlord. Tenant’s pro rata share shall be based on the square footage of the Leased Premises leased to Tenant (as specified in paragraph 1.01 hereof) compared to the total square footage of leasable space in the entire Building. If during the final year of the Lease, or any extension or renewal thereof, the term does not coincide with the year upon which the insurance rate is determined, the increase in premiums for the portion of that year shall be prorated according to the number of months during which Tenant is in possession of the Leased Premises. 17.05 On or about January 1 of each calendar year during the term of this Lease, Landlord shall provide Tenant with a good faith estimate of the amount by which taxes and insurance will exceed the base amounts during such calendar year. Tenant shall thereafter pay one-twelfth (1/12) of its pro rata share of such increase at such time as its monthly installments of Base Rental hereunder are due and payable. When the actual bills have been received by Landlord, Landlord shall notify Tenant of the actual taxes and insurance for such calendar year. If Tenant has paid more than it would have paid had the actual bills been known, Landlord shall credit such excess against the next additional rent payments coming due, or, in the event the lease term has at such time expired or terminated, Landlord shall pay such amount to Tenant
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within thirty (30) days following the date of such notification; however, if Tenant has not paid enough, Tenant shall pay the remainder to Landlord within fifteen (15) days following receipt of a statement from Landlord. 17.06 The provisions of paragraphs 17.01, 17.02, 17.03, 17.04 and 17.05 hereof shall survive the expiration or earlier termination of this Lease. 18. ABANDONMENT 18.01 Tenant shall not vacate nor abandon the Leased Premises at any time during the term of this Lease; and if Tenant shall abandon, vacate or surrender the Leased Premises, or be dispossessed by process of law, or otherwise, any personal property belonging to Tenant and left on the Leased Premises shall, at the option of the Landlord, be deemed abandoned and be and become the property of Landlord. 19. DESTRUCTION 19.01 If the Leased Premises or any portion thereof are destroyed by storm, fire, lightning, earthquake or other casualty, Tenant shall immediately notify Landlord. In the event the Leased Premises cannot, in Landlord’s reasonable, good faith judgment, be restored within one hundred eighty (180) days of the date of such damage or destruction, this Lease shall terminate as of the date of such destruction, and all rent and other sums payable by Tenant hereunder shall be accounted for as between Landlord and Tenant as of that date. Landlord shall notify Tenant within thirty (30) days of the date of the damage or destruction whether the Leased Premises can be restored within one hundred eighty (180) days. If this Lease is not terminated as provided in this Paragraph, Landlord shall, to the extent insurance proceeds payable on account of such damage or destruction are available to Landlord (with the excess proceeds belonging to Landlord), within a reasonable time, but in all events within one hundred eighty (180) days following the date of any such damage or destruction, repair, restore, rebuild, reconstruct or replace the damaged or destroyed portion of the Leased Premises to a condition substantially similar to the condition which existed prior to the damage or destruction; provided, however, Landlord shall only be required to repair, restore, rebuild, reconstruct and replace the Leased Premises to the condition as existing on the Commencement Date of this Lease, and Tenant shall, at its sole cost and expense, repair, restore, rebuild, reconstruct and replace, as required, any and all improvements installed in the Leased Premises by Tenant, including, without limitation, that work constituting the Tenant’s Work as more particularly described on Exhibit “D” attached hereto, and all trade fixtures, personal property, inventory, signs and other contents in the Leased Premises, and all other repairs not specifically required of Landlord hereunder, in a manner and to at least the condition existing prior to the damage. Tenant’s obligation to pay Base Rent and Charges shall abate until Landlord has repaired, restored, rebuilt, reconstructed or replaced the Leased Premises, as required herein, in proportion to the part of the Leased Premises which are unusable by Tenant. If the damage or destruction is due to the act, neglect, fault or omission of Tenant, there shall be no rent abatement except to the extent of rent loss insurance. In the event of any dispute between Landlord and Tenant relative to the provisions of this paragraph, Landlord and Tenant agree that the dispute shall be resolved by binding arbitration in accordance with O.C.G.A. § 9-9-1, et seq., and the American Arbitration Association’s “Arbitration Rules for the Real Estate Industry”, as in effect as of the Commencement Date. In the event the parties cannot agree on the selection of one (1) arbitrator, they agree to submit the dispute to American Arbitration Association, who shall select one (1) arbitrator. The decision of the arbitrator shall be final and binding on both Landlord and Tenant who shall bear the cost of such arbitration equally between them, provided, however, the arbitrator, in his discretion, shall have authority to award attorneys’ fees and otherwise allocate the costs of arbitration as part of any final award. Landlord shall not be required to repair any property installed in the Leased Premises by Tenant unless such property has been primarily insured under Landlord’s insurance policies. Tenant waives any right under applicable laws inconsistent with the terms of this paragraph and in the event of a destruction agrees to accept any commercially reasonable offer by
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Landlord to provide Tenant with comparable space within the Project in which the Leased Premises are located on the same terms as this Lease. Notwithstanding the provisions of this paragraph, if any such damage or destruction occurs within the final one (1) year of the term hereof, then either Landlord or Tenant, in its sole discretion, may, without regard to the aforesaid 180-day period, terminate this Lease by written notice to the other such party. 20. ASSIGNMENT AND SUBLETTING 20.01 Landlord shall have the right to transfer and assign, in whole or in part its rights and obligations in the Buildings and property that are the subject of this Lease. Tenant shall not assign this Lease or sublet all or any part of the Leased Premises without the prior written consent of the Landlord; provided that, Landlord’s consent to the subletting of any or all of the Leased Premises shall not be unreasonably withheld or delayed. In the event of any assignment or subletting, Tenant shall nevertheless at all times, remain fully responsible and liable for the payment of the rent and for compliance with all of its other obligations under the terms, provisions and covenants of this Lease. If all or any part of the Leased Premises are then assigned or sublet, Landlord, in addition to any other remedies provided by this Lease or provided by law, may at its option, collect directly from the assignee or subtenant all rents becoming due to Tenant by reason of the assignment or sublease; provided that, the foregoing provision shall apply to a sublease only if Tenant is at such time in default under this Lease beyond any applicable notice and/or right to cure period provided for under this Lease. Any collection directly by Landlord from the assignee or subtenant shall not be construed to constitute a novation or a release of Tenant from the further performance of its obligations under this Lease. In the event that Tenant sublets the Leased Premises or any part thereof, or assigns this Lease and at any time receives rent and/or other consideration which exceeds that which Tenant would at that time be obligated to pay to Landlord, Tenant shall pay to Landlord fifty percent (50%) of the gross excess in such rent as such rent is received by Tenant and fifty percent (50%) of any other consideration received by Tenant from such subtenant in connection with such sublease or, in the case of any assignment of this Lease by Tenant, Landlord shall receive fifty percent (50%) of any consideration paid to Tenant by such assignee in connection with such assignment. In addition, should Landlord agree to an assignment or sublease agreement, Tenant will pay to Landlord on demand a sum not to exceed $1,000.00 to partially reimburse Landlord for its costs, including reasonable attorneys’ fees, incurred in connection with processing such assignment or subletting request. Notwithstanding any contrary provisions contained in this Lease, Tenant may, upon at least ten (10) days prior written notice to Landlord, but without obtaining Landlord’s prior consent, without constituting a default under the Lease, and without triggering any recapture or termination rights in favor of Landlord, assign the Lease or sublet all or any portion of the Leased Premises to (a) any entity formed by Tenant, provided Tenant owns or beneficially controls a majority of the outstanding ownership interest in such entity, (b) any parent or subsidiary entity of Tenant, (c) any person or entity that acquires all or substantially all of Tenant’s assets, provided that such acquiring entity has a net worth on the date of such acquisition equal to or grater than the net worth of Tenant as of the date of this Lease, or (d) any entity with which Tenant merges, regardless of whether Tenant is the surviving entity, provided that such surviving entity has a net worth on the date of such merger equal to or greater than the net worth of Tenant as of the date of this Lease. In addition, an assignment or sublet shall not include, and Landlord’s consent shall not be required with respect to, any sale or other transfer of any shares of Tenant’s capital stock, including, but not limited to, (i) any initial or subsequent public offering by Tenant, or (ii) if Tenant is a public company, the sale or transfer of Tenant’s stock to take Tenant private. In the event of any such proposed assignment of the Lease or subletting of the Leased Premises not requiring Landlord’s consent hereunder, Tenant’s notice of such proposed assignment or subletting as required hereinabove shall clearly identify the nature of the transaction and the identity of the proposed assignee or subtenant; and Tenant shall further provide Landlord with such additional information regarding such proposed transaction as Landlord shall thereafter reasonably request or require. Landlord shall, in this regard, have the right to reject any such proposed assignment or subletting which is to an assignee or subtenant whose business, in Landlord’s reasonable judgment, is not in
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reasonable conformity with the nature and types of the businesses of the tenants occupying the Project as of the date of this Lease. 21. EVENTS OF DEFAULT 21.01 In addition to any other event specified in this Lease as an event of default, the occurrence of any one or more of the following events during the term of this Lease shall constitute a breach of this Lease by Tenant and shall entitle Landlord to exercise any or all of the rights and remedies set forth in Article 22 of this Lease hereinbelow or which may be otherwise provided at law or in equity: (i) if Tenant shall fail to pay any installment of Base Rental, additional rental or any other charge or expense required to be paid by Tenant under this Lease on or before the date the same shall become due and payable, and such failure shall continue for a period of five (5) days following Tenant’s receipt of written notice that any such amount is delinquent; (ii) if Tenant shall fail to comply with or to otherwise perform or observe any other term, provision, condition or covenant of this Lease, and any such failure shall continue for a period of thirty (30) days following Tenant’s receipt of written notice of any such failure, provided that, if any such failure is of a type that cannot reasonably be cured within such thirty (30) day period, then Tenant shall not be deemed to be in default hereunder if Tenant commences such cure within such thirty (30) day period and thereafter diligently and continuously pursues such cure to completion; (iii) if Tenant’s interest in the Lease or in the Leased Premises is assigned or sublet by operation of law or otherwise in contravention of the provisions of Article 20 of this Lease hereinabove; (iv) if Tenant shall vacate or abandon the Leased Premises in contravention of the provisions of Article 18 of this Lease hereinabove; (v) if Tenant shall otherwise refuse to take possession of the Leased Premises upon the Commencement Date; (v) if Tenant or any guarantor of the Lease shall commit any event of insolvency, including, but not limited to, the filing of a voluntary petition in bankruptcy or for reorganization, the making of an assignment for the benefit of creditors, the admission in writing that any such party is unable to pay its debts generally as they become due, the issuance of a court order or decree that any such party is adjudicated a bankrupt, is declared insolvent, or is dissolved, the filing of an involuntary petition proposing the liquidation or reorganization of any such party pursuant to the bankruptcy or insolvency laws of the United States or any state which petition is not discharged or denied within ninety (90) days after the date upon which it was filed, the appointment of a trustee, receiver, liquidator, custodian or similar official with respect to the major part of any such party’s property, or the levy upon Tenant’s leasehold interest in the Leased Premises or the attachment thereof by process of law. 22. LANDLORD’S REMEDIES 22.01 In the event of a default which continues beyond any applicable notice and/or right to cure period provided for in this Lease, Landlord in addition to any and all other rights or remedies that it may have hereunder, at law or in equity shall have the right to either terminate this Lease or from time to time, without terminating this Lease relet the Leased Premises or any part thereof for the account and in the name of Tenant or otherwise, for any such term or terms and conditions as Landlord in its sole discretion may deem advisable with the right to make reasonable alterations and repairs to the Leased Premises. Tenant shall pay to Landlord, as soon as ascertained, the reasonable costs and expenses incurred by Landlord in such reletting or in making such reasonable alterations and repairs. Should such rentals received from time to time from such reletting during any month be less than that agreed to be paid during that month by Tenant hereunder, the Tenant shall pay such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. 22.02 No such reletting of the Leased Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such reletting without termination, Landlord may immediately or at any time thereafter terminate this Lease, and this Lease shall be deemed to have been terminated upon receipt by Tenant of notice of such termination; upon such termination Landlord shall
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recover from Tenant all damages that Landlord may suffer by reason of such termination including, without limitation, all arrearages in rentals, costs, charges, additional rentals, and reimbursements, the cost (including court costs and attorneys’ fees actually incurred) of recovering possession of the Leased Premises, the actual or estimated (as reasonably estimated by Landlord) cost of any alteration of or repair to the Leased Premises which is necessary or proper to prepare the same for reletting; and, in addition thereto, Landlord shall have and recover from Tenant the difference between the present value (discounted at a rate per annum equal to the discount rate of the Federal Reserve Bank of Atlanta at the time the Event of Default occurs) of the rental to be paid by Tenant for the remainder of the lease term, and the present value (discounted at the same rate) of the fair market rental for the Leased Premises for the remainder of the lease term, taking into account the cost, time and other factors necessary to relet the Leased Premises, provided, however that such payment shall not constitute a penalty or forfeiture, but shall constitute full liquidated damages due to Landlord as a result of Tenant’s default. Landlord and Tenant acknowledge that Landlord’s actual damages in the event of a default by Tenant under this Lease will be difficult to ascertain, and that the liquidated damages provided above represent the parties’ best estimate of such damages. The parties expressly acknowledge that the foregoing liquidated damages are intended not as a penalty, but as full liquidated damages, as permitted by Section 13-6-7 of the Official Code of Georgia Annotated. 23. ATTORNEY’S FEES 23.01 If Landlord and Tenant litigate any provision of this Lease or the subject matter of this Lease, the unsuccessful litigant will pay to the successful litigant all reasonable costs and expenses, including reasonable attorneys’ fees and court costs, incurred by the successful litigant at trial and on any appeal. If, without fault, either Landlord or Tenant is made a party to any litigation instituted by or against the other, the other will indemnify the faultless one against all loss, liability, and expense, including reasonable attorneys’ fees and court costs, incurred by it in connection with such litigation. 24. CONDEMNATION 24.01 If, at any time during the term of this Lease, title to the entire Leased Premises should become vested in a public or quasi-public authority by virtue of the exercise of expropriation, appropriation, condemnation or other power in the nature of eminent domain, or by voluntary transfer from the owner of the Leased Premises under threat of such a taking then this Lease shall terminate as of the time of such vesting of title, after which neither party shall be further obligated to the other except for occurrence antedating such taking. The same results shall follow if less than the entire Leased Premises be thus taken, or transferred in lieu of such a taking, but to such extent that it would be legally and commercially impossible for Tenant to occupy the portion of the Leased Premises remaining, and impossible for Tenant to reasonably conduct its trade or business therein. 24.02 Should there be such a partial taking or transfer in lieu thereof, but not to such an extent as to make such continued occupancy and operation by Tenant an impossibility, then this Lease shall continue on all of its same terms and conditions subject only to an equitable reduction in rent proportionate to such taking. 24.03 In the event of any such taking or transfer, whether of the entire Leased Premises, or a portion thereof, it is expressly agreed and understood that all sums awarded, allowed or received in connection therewith shall belong to Landlord, and any rights otherwise vested in Tenant are hereby assigned to Landlord, and Tenant shall have no interest in or claim to any such sums or any portion thereof, whether the same be for the taking of the property or for damages, or otherwise. Nothing herein shall be construed, however, to preclude Tenant from prosecuting any claim directly against the condemning authority for loss of business (including loss of goodwill), moving expenses, damage to, and cost of, trade fixtures, furniture
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and other personal property belonging to Tenant; provided, however, that Tenant shall make no claim which shall diminish or adversely affect any award claimed or received by Landlord. 25. NOTICES 25.01 All notices, statements, demands, requests, consents, approvals, authorization, offers, agreements, appointments, or designations under this Lease by either party to the other shall be in writing and shall be sufficiently given and served upon the other party, (i) by depositing same in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested; (ii) by recognized overnight, third party prepaid courier service (such as Federal Express), requiring signed receipt; (iii) by delivering the same in person to such party; or (iv) by prepaid telegram, telecopy or telex with delivery of an original copy of any such notice delivered pursuant to (ii) or (iii) above to be received no later than the next business day. Any such notice shall be deemed to be the notice of a party hereto if given by the party actually providing such notice or by such party’s legal counsel, or, with respect to Landlord, by Landlord’s property management agent. Notice personally delivered or sent by courier service, telegram, telecopy or telex shall be effective upon receipt. Any notice mailed in the foregoing manner shall be effective three (3) business days after its deposit in the United States mail. Either party may change its address for notices by giving notice to the other as provided above. Any rejection or other refusal to accept any such notice or the inability of the party giving such notice to deliver same as the result of a change of address as to which no notice of change has been given as provided herein shall be deemed to constitute receipt of such notice by the party which is unable or unwilling to accept such notice. For purposes of notice, the addresses of the parties shall be as follows:
Stradling Yocca Carlson & Rauth
California State Teachers’ Retirement System with additional copy to: CB Richard Ellis, Inc. with additional copy to: Epstein Becker & Green, P.C.
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26. WAIVER 26.01 The waiver by Landlord of any breach of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant, or condition or any subsequent breach of the same or any other term, covenant, or condition herein contained. The subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant, or condition of this Lease, other than the failure of Tenant to pay the particular rental so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such rent. 27. EFFECT OF HOLDING OVER 27.01 If Tenant should remain in possession of the Leased Premises after the expiration of the lease term and without executing a new lease, then such holding over shall be construed as a tenancy from month to month, subject to all the conditions, provisions, and obligations of this Lease insofar as the same are applicable to a month to month tenancy, except that the rent payable pursuant to subparagraph 3.01 hereof shall be 150% of the rent payable pursuant to subparagraph 3.01. 28. SUBORDINATION 28.01 This Lease, at Landlord’s option, shall be subordinate to any ground lease, first priority mortgage, first priority deed of trust, or first priority security deed (collectively, a “Superior Lien”) now or hereafter placed upon the real property of which the Leased Premises are a part and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof. Notwithstanding the foregoing, in the event Landlord determines hereafter to encumber the Leased Premises by any future Superior Lien, Landlord shall use reasonable, good faith efforts to obtain a non-disturbance and attornment against from the holder of any such future Superior Lien which is reasonably acceptable to both Tenant and such holder, and which provides, at minimum, that the holder of such Superior Lien shall not disturb Tenant’s possession of the Leased Premises except in accordance with the terms of this Lease. 28.02 Subject to the terms of Section 28.01, Tenant agrees to execute any documents required or desirable in Landlord’s opinion to effectuate such subordination or to make this Lease prior to the lien of any such Superior Lien, all such documents to be in form and substance reasonably acceptable to Landlord. Subject to the terms of Section 28.01, if requested to do so, Tenant agrees to attorn to any person or other entity that acquires title to the real property encompassing the Leased Premises, whether through judicial foreclosure, sale under power, or otherwise, and to any assignee of such person or other entity. 29. ESTOPPEL CERTIFICATE 29.01 Upon ten (10) days notice from Landlord to Tenant, Tenant shall deliver a certificate dated as of the first day of the calendar month in which such notice is received, executed by an appropriate officer, partner or individual, in the form as Landlord may reasonably require and stating but not limited to the following: (i) the Commencement Date of this Lease; (ii) the space occupied by Tenant hereunder; (iii) the expiration date hereof; (iv) a description of any renewal or expansion options; (v) the amount of rental currently and actually paid by Tenant under this Lease; (vi) the nature of any default or claimed default hereunder by Landlord and (vii) that Tenant is not in default hereunder nor has any event occurred which with the passage of time or the giving of notice would become a default by Tenant hereunder.
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30. PARKING 30.01 Tenant shall be entitled to park in common with other tenants of Landlord. Tenant agrees not to overburden the parking facilities and agrees to cooperate with Landlord and other tenants in the use of parking facilities. Tenant agrees to park all Tenant’s trucks in the parking spaces provided at the rear of the Buildings. “Parking” as used herein means the use by Tenant’s employees, its visitors, invitees, and customers for the parking of motor vehicles for such periods of time as are reasonably necessary in connection with use of and/or visits to the Leased Premises. No vehicle may be repaired or serviced in the parking area and any vehicle deemed abandoned by Landlord will be towed from the project and all costs therein shall be borne by the Tenant. All driveways, ingress and egress, and all parking spaces are for the joint use of all tenants. No area outside of the Leased Premises shall be used by Tenant for storage without Landlord’s prior written permission. There shall be no parking permitted on any of the streets or roadways located in the Project. 31. MORTGAGEE PROTECTION 31.01 In the event of any default on the part of Landlord, Tenant will give notice by registered or certified mail to any beneficiary of a deed or trust or holder of a security deed or mortgage covering the Leased Premises whose address shall have been furnished to Tenant. 32. RULES AND REGULATIONS 32.01 This Lease is subject to such reasonable rules and regulations regarding the use of the Project as may hereafter be adopted and promulgated by Landlord and which shall be provided to Tenant in writing. In addition, Tenant shall comply with all covenants, restrictions and other matters of record in the deed records of the county in which the Leased Premises are located which affect or encumber the Leased Premises, the Buildings or the Land. 33. RELOCATION [INTENTIONALLY OMITTED] 34. BROKERAGE COMMISSIONS 34.01 Landlord’s Agent shall be entitled to receive a commission in the amounts and upon such terms and conditions as may be contained in any applicable commission agreement between Landlord and such party. 34.02 Tenant warrants and represents to Landlord that, other than Landlord’s Agent, no other party is entitled, as a result of the actions of Tenant, to a commission or other fee resulting from the execution of this Lease; and in the event Tenant extends or renews this Lease, or expands the Leased Premises, and any agent of Tenant is entitled to a commission in connection with such renewal or extension, Tenant shall pay all commissions and fees payable to any party engaged by Tenant to represent Tenant in connection therewith. Landlord warrants and represents to Tenant that, except as set forth above, no other party is entitled, as a result of the actions of Landlord, to a commission or other fee resulting from the execution of this Lease; and in the event Tenant extends or renews this Lease, or expands the Leased Premises, and Landlord’s Agent is entitled to a commission under the above-referenced commission agreement, Landlord shall pay all commissions and fees payable to Landlord’s Agent and any party (other than Landlord’s Agent) engaged by Landlord to represent Landlord in connection therewith. Landlord and Tenant agree to indemnify and hold each other harmless from any loss, cost, damage or expense (including reasonable attorneys’ fees) incurred by the nonindemnifying party as a result of the untruth or incorrectness of the foregoing warranty and representation, or failure to comply with the provisions of this subparagraph.
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34.03 Landlord’s Agent, or employees of Landlord or its affiliates, are representing Landlord and are not representing Tenant. 35. DEFINITION AND LIABILITY OF LANDLORD 35.01 As used in this Lease, the term “Landlord” means only the current owner of the fee title to the Buildings or the leasehold estate under a ground lease of the Buildings at the time in question. Each Landlord is obligated to perform the obligations of Landlord under this Lease only during the time such Landlord owns such interest or title. Any Landlord who transfers its title or interest in the Buildings is relieved of all liabilities for the obligations of Landlord under this Lease to be performed on or after the date of transfer. Tenant agrees to look solely to the transferee with respect to all matters in connection with this Lease. 35.02 It is expressly understood and agreed that notwithstanding anything in this Lease to the contrary, and notwithstanding any applicable law to the contrary, the liability of Landlord hereunder (including any successor landlord) and any recourse by Tenant against Landlord shall be limited solely and exclusively to the interest of Landlord in and to the Project and Building, and neither Landlord, nor any of its constituent partners or members, shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. Under no circumstances shall Landlord be liable for injury to Tenant’s business or for any loss of income or profit therefrom. 35.03 This Lease is being executed by CB RICHARD ELLIS INVESTORS, L.L.C., a Delaware limited liability company (“CBRE Investors”), as investment manager on behalf of Landlord. No present or future officer, director, employee, trustee, partner, member, manager, retirant, beneficiary, internal investment contractor, investment manager or agent of Landlord shall have any personal liability, directly or indirectly, and recourse shall not be had against any such officer, director, employee, trustee, partner, member, manager, retirant, beneficiary, internal investment contractor, investment manager or agent under or in connection with this Lease or any other document or instrument heretofore executed in connection with this Lease. Tenant hereby waives and releases any and all such personal liability and recourse. The limitations of liability provided in this Article 35 are in addition to, and not in limitation of, any limitation on liability applicable to Landlord provided by law or in any other contract, agreement or instrument. Tenant further acknowledges that CBRE Investors has entered into this Lease as an investment manager to Landlord and Tenant agrees that all persons dealing with CBRE Investors must look solely to Landlord (for which CBRE Investors is acting as investment manager) for the enforcement of any claims arising under this Lease (subject to the limitations upon Landlord’s liability as set forth above), as neither CBRE Investors nor any of its affiliated entities (including, but not limited to CB Richard Ellis, Inc. and CB Richard Ellis Services, Inc.) nor any of their respective officers, directors, agents, managers, trustees, employees, members, investment managers, partners or shareholders, assume any personal, corporate, partnership, limited liability company, or other liability for any of the obligations entered into by CBRE Investors as investment manager for Landlord.
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36. PROHIBITED TRANSACTIONS 36.01 Tenant hereby acknowledges that Landlord is a unit of the California State and Consumer Services Agency established pursuant to Title I, Division 1, Parts 13 and 14 of the California Education Code, Sections 22000 et seq., as amended (the “Education Code”). As a result, Landlord is prohibited from engaging in certain transactions with or for the benefit of any “employer”, “employing agency”, “member”, “beneficiary” or “participant” (as those terms are defined in the Education Code). In addition, Landlord may be subject to certain restrictions and requirements under the Internal Revenue Code, 26 U.S.C. Section 1 et seq. (the “Code”). Accordingly, Tenant represents and warrants to Landlord that (a) Tenant is neither an employer or employing agency nor a member, beneficiary or participant; (b) Tenant has not made any contribution or contributions to Landlord; (c) to Tenant’s actual knowledge, neither any employer, employing agency, member, beneficiary or participant, nor any person who has made any contribution to Landlord, nor any combination thereof, is related to Tenant by any relationship described in Section 267(b) of the Code; (d) neither Landlord, Landlord’s investment advisor, CBRE Investors, their affiliates, related entities, agents, officers, directors or employees, nor any Landlord board member, employee or internal investment contractor (both groups collectively, “Landlord’s Affiliates”) has received nor will receive, directly or indirectly, any payment, consideration or other benefit (other than those expressly provided for in this Lease) from, nor do any of Landlord’s Affiliates have any agreement or arrangement with Tenant or any person or entity affiliated with Tenant relating to the transactions contemplated by this Lease; and (e) to Tenant’s actual knowledge, no Landlord’s Affiliates have any direct or indirect ownership interest in Tenant or any person or entity affiliated with Tenant. 37. HAZARDOUS MATERIALS 37.01 As used in this Lease, the term “Hazardous Material” shall be deemed to mean any flammable items, explosives, radioactive materials, hazardous or toxic substances, material or waste or related materials, including any substances defined as or included in the definition of “hazardous substances”, “hazardous wastes”, “infectious wastes”, “hazardous materials” or “toxic substances” now or subsequently regulated under any federal, state or local laws, regulations or ordinances including, without limitation, oil, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, chemicals known to cause cancer or reproductive toxicity, asbestos, polychlorinated biphenyls (PCBs) and similar compounds, and including any different products and materials which are subsequently found to have adverse effects on the environment or the health and safety of persons. Without limitation, Hazardous Materials shall expressly include those substances and materials described in and under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq., the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. § 6901 et seq., and any applicable state or local laws or regulations adopted pursuant to these acts. 37.02 Tenant shall not cause or permit any Hazardous Material to be generated, produced, manufactured, brought upon, used, stored, treated, discharged, released, spilled or disposed of on, in, under or about the Leased Premises, the Buildings or the Project by Tenant, its affiliates, agents, employees, contractors, sublessees, assignees or invitees (collectively, “Tenant Parties”); provided, however, that nothing herein shall prohibit: (a) routine janitorial and office supplies to be used and/or stored on the Leased Premises in the usual and customary manner and quantities and in compliance with all applicable environmental laws and regulations; and (b) etchants, adhesives, and other materials to be used and/or stored on the Leased Premises that are reasonably necessary to service and maintain Tenant’s equipment and that are used, stored and disposed of in compliance with all applicable environmental laws and regulations. Tenant shall indemnify, defend and hold Landlord harmless from and against any and all actions (including, without limitation, remedial or enforcement actions of any kind, administrative or judicial proceedings, and orders or judgments arising out of or resulting therefrom), costs, claims, damages (including, without limitation, punitive damages), expenses
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(including, without limitation, attorneys’, consultants’ and experts’ fees, court costs and amounts paid in settlement of any claims or actions), fines, forfeitures or other civil, administrative or criminal penalties, injunctive or other relief (whether or not based upon personal injury, property damage, or contamination of, or adverse effects upon, the environment, water tables or natural resources), liabilities or losses (collectively, “Environmental Claims”) arising from a breach of this prohibition by Tenant or any of the Tenant Parties. 37.03 Except as expressly permitted above, in the event that Hazardous Materials are discovered upon, in, or under the Leased Premises, the Buildings or the Project, and/or any governmental agency or entity having jurisdiction over the Project requires the removal of such Hazardous Materials, Tenant shall be responsible for the removal and disposal of those Hazardous Materials arising out of or related to the use or occupancy of the Leased Premises, the Buildings or the Project by Tenant or any of the Tenant Parties. Tenant shall not, however, be responsible for the removal and disposal of those Hazardous Materials arising out of or related to the use or occupancy of the Leased Premises, the Buildings or the Project by prior lessees of the Leased Premises, or other lessees or owners of the Project, except to the extent Tenant or any of the Tenant Parties have contributed to or exacerbated such pre-existing condition. Notwithstanding the foregoing, Tenant shall not take any remedial action in or about the Leased Premises, the Buildings or the Project, nor enter into any settlement agreement, consent decree or other compromise with respect to any claims relating to Hazardous Materials in any way connected with the Leased Premises, the Buildings or the Project, without first notifying Landlord of Tenant’s intention to do so and affording Landlord the opportunity to appear, intervene or otherwise appropriately assert and protect Landlord’s interest with respect thereto. Tenant immediately shall notify Landlord in writing of: (i) any spill, release, discharge or disposal of any Hazardous Material in, on, under, around or about the Leased Premises, the Buildings or any portion thereof, of which Tenant has knowledge; (ii) any enforcement, cleanup, removal or other governmental or regulatory action instituted, contemplated, or threatened pursuant to any Hazardous Materials Laws of which Tenant has notice; (iii) any claim made or threatened by any person against Tenant, any of the Tenant Parties, the Leased Premises, the Buildings or the Project relating to damage, contribution, cost recovery, compensation, loss or injury resulting from or claimed to result from any Hazardous Materials of which Tenant has knowledge; and (iv) any reports made to any governmental agency or entity arising out of or in connection with any Hazardous Materials in, on, under, around or about or removed from the Leased Premises, the Buildings or the Project, of which Tenant has knowledge, including any complaints, notices warnings, reports or asserted violations in connection therewith. Tenant also shall supply to Landlord as promptly as possible, and in any event within five (5) business days after Tenant first receives or sends the same, copies of all claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Leased Premises, the Buildings or the Project or the use or occupancy thereof by Tenant or any of the Tenant Parties. 37.04 If any lender or governmental agency shall ever require testing to ascertain whether or not there has been any release of Hazardous Materials, then the reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand as additional charges if such requirement applies to the Leased Premises; provided that, Tenant shall not be responsible for the cost of any such testing unless there exists reasonably convincing evidence that Tenant or its employees, agents or contractors caused the contamination or other hazardous condition or that the Hazardous Materials otherwise emanated or were released from the Leased Premises during the term of this Lease and that Landlord was not responsible for such release. In addition, Tenant shall execute affidavits, representations and the like from time to time at Landlord’s request concerning Tenant’s best knowledge and belief regarding the presence of hazardous substances or materials on the Leased Premises. 37.05 Landlord hereby in good faith represents and warrants, to the best of Landlord’s knowledge and belief, that no Hazardous Materials are contained or located in, on, or under the Leased Premises as of the date of this Lease. Landlord shall not knowingly and/or wilfully cause the release of nor allow any of Landlord’s agents to cause the release of, any Hazardous Materials in the Project, except for routine janitorial and office supplies used and/or
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stored on the Project in the usual and customary manner and quantities and in compliance with all applicable environmental laws and regulations. Landlord, at its sole cost and expense, shall clean up, remove, remediate and repair any soil or groundwater contamination or other damage or contamination materially affecting the Leased Premises in conformance with the requirements of applicable law from a release of any Hazardous Materials in the Leased Premises caused or knowingly and willfully permitted by Landlord. 37.06 The respective rights and obligations of Landlord and Tenant under this Article 37 shall survive the expiration or earlier termination of this Lease. 38. MISCELLANEOUS PROVISIONS 38.01 Whenever the singular number is used in this Lease and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders, and the word “person” shall include corporation, firm or association. The obligations imposed upon each of the entities identified as Tenant under this Lease shall be joint and several. 38.02 The headings or titles to paragraphs of this Lease are for convenience only and shall have no effect upon the construction or interpretation of any part of this Lease. 38.03 This instrument contains all of the agreements and conditions made between the parties to this Lease and may not be modified orally or in any other manner than by agreement in writing signed by all parties to this Lease. 38.04 Where the consent of a party is required, such consent will not be unreasonably withheld or delayed. 38.05 This Lease shall create only the relationship of landlord and tenant between Landlord and Tenant; no estate shall pass out of Landlord; Tenant has only a usufruct, not subject to levy and/or sale and not assignable by Tenant except as provided in paragraph 20.01 hereof. 38.06 Except as otherwise expressly stated, each payment required to be made by Tenant shall be in addition to and not in substitution for other payments to be made by Tenant. 38.07 All covenants and agreements to be performed by Tenant under any of the terms of this Lease shall be performed by Tenant at Tenant’s sole cost and expense and without any abatement of rent. 38.08 No payment by Tenant or receipt by Landlord of a lesser amount than any installment or payment of rent due shall be deemed to be other than on account of the amount due, and no endorsement or statement on any check or payment of rent shall be deemed an accord and satisfaction. Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such installment or payment of rent, or pursue any other remedies available to Landlord. 38.09 Subject to paragraph 20, the terms and provisions of this Lease shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors, and assigns of Landlord and Tenant. In the event of any conveyance by Landlord of its interest in and to the Leased Premises, the Buildings or the Land, all obligations under this Lease of the conveying party shall cease and Tenant shall thereafter look solely to the party to whom the Leased Premises were conveyed for performance of all of Landlord’s duties and obligations under this Lease. 38.10 Tenant acknowledges and agrees that, whether or n | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
