Arizona-Mesa-4840 East Jasmine Street Lease - McKellips Corporate Square and Renaissance International Group
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE -- GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
McKellops Corporate Square Suite 105
1. Basic Provisions ("Basic Provisions").
1.1 Parties: This Lease (Lease"), dated for reference purposes only, June
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1, 1998, is made by and between Mr. Art Grandlich, D.B.A. McKellips Corporate
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Square (Lessee"), and Renaissance International Group, a Nevada corporation
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("Lessee") (collectively the "Parties," or Individually a "Party").
1.2(a) Premises: That certain portion of the Building, Including all
Improvements therein or to be provided by Lessor under the terms of this Lease,
commonly known by the street address of 4840 East Jasmine Street, Suite 105,
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located in the City of Mesa County of Maricopa, State of Arizona, with zip code
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85205, as on Exhibit A attached hereto (Premises"). The "Building" is that
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certain building containing the Premises and generally described as (describe
briefly the nature of the Building): an approximate 16,772 square foot
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office/warehouse suite located at McKellops Corporate Square per Exhibit A
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attached.
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In addition to Lessee's rights to use and occupy the Premises as hereinafter
specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the Building or to any
other buildings in the Industrial Center. The Premises, the Building, the
Common Areas, the land upon which they are located, along with all other
buildings and Improvements thereon, are herein collectively referred to as the
"Industrial Center." (Also see Paragraph 2.)
1.2(b) Parking: 57 unreserved vehicle parking spaces ("Unreserved Parking
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Spaces"); and 3 reserved vehicle parking spaces (Reserved Parking Spaces").
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(Also see Paragraph 2.6)
1.3 Term 5 years and 0 months ("Original Term") commencing July 1, 1998
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("Commencement Date" and ending June 30, 2003 (Expiration Date"). (Also see
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Paragraphs 3.2 and 3.3.)
1.4 Early Possession: June 1998 ("Early Possession Date"). (Also see
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Paragraphs 3.2 and 3.3.)
1.5 Base Rent: $ See Addendum per month (Base Rent"), payable on the
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first day of each month commencing July 1, 1998. (Also see Paragraph 4.)
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[ ] If this box is checked, this Lease provides for the Base Rent to be
adjusted per Addendum _______, attached hereto.
1.6(a) Base Rent Paid Upon Execution: $14,324.93 as Base Rent for the
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period July 1998 & June 2003
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1.6(b) Lessee's Share of Common Area Operating Expenses: 19.62% percent (
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%) (Kessee's Square") as determined but [ x ] prorate square footage of the
Premises as compared to the total square footage of the Building or [ ] other
criteria as described in Addendum ______.
1.7 Security Deposit: $9,000.00 ("Security Deposit"). (Also see
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Paragraph 5.)
1.8 Permitted Use: General office use, warehouse use and research and
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development for a financial service company. ("Permitted Use") (Also see
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Paragraph 6.)
1.9 Insuring Party. Lessor is the "Insuring Party." (Also see Paragraph
8.) Annual Premium $12,517.00 (July 97, July 98)
1.10(a) Real Estate Brokers. The following real estate broker(s)
(collectively, the "Brokers") and brokerage relationships exist in this
transaction and are consented to by the Parties (check applicable boxes):
[ x] Lee & Associates - Robertson represent Lessor exclusively ("Lessor's
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Broker"); See Addendum for
[ x] Grubb & Ellis - Hartland represents Lessee exclusively ("Lessee's
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Broker"); or commission payment
schedule.
[ ] represents both Lessor and Lessee ((Dual Agency"). (Also see
Paragraph 15.)
2. Premises, Parking and Common Areas.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby teases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental and/or Common Area Operating Expenses, is
an approximation which Lessor and Lessee agree is reasonable and the rental and
Lessee's Share (as defined in Paragraph 1.6(b)) based thereon is not subject to
revision whether or not the actual square footage is more or less.
2.2 Condition. Lessor shall deliver the Premises to Lessee clean and free
of debris on the Commencement Date and warrants to Lessee that the exalting
plumbing, electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems and loading doors, if any, in the Premises, other than those
con-structed by Lessee, shall be in good operating condition on the Commencement
Date. If a non-compliance with said warranty exists as of the Commencement Date,
Lessor shall, except as otherwise provided in this Lease, promptly alter receipt
of written notice term Lessee setting forth with specify the nature and extent
of such non-compliance, rectify same at Lessor's expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within thirty
(30) days after the Commencement Date, correction of that non-compliance shall
be the obligation of Lessee at Lessee's sole cost and expense.
2.3 Compliance with Covenants, Restrictions and Building Code. Lessor
warrants that any improvements (other than those constructed by Lessee or at
Lessee's direction) on or in the Premises which have been constructed or
installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement Date.
Lessor further warrants to Lessee that Lessor has no knowledge of any claim
having been made by any governmental agency that a violation or violations of
applicable building codes, regulations, or ordinances exist with regard to the
Premises as of the Commencement Date. Said warranties shall not apply to any
Alterations or Utility Installations (defined in Paragraph 7.3(a)) made or to be
made by Lessee, If the Premises do not comply with aid warranties, Lessor shall,
except as otherwise provided In this Lease, promptly after receipt of written
notice from Lessee given within six (6) months following the Commencement Date
and setting forth with the nature and extent of such non-compliance, take such
action, at Lessor's expense, as may be reasonable or appropriate to rectify the
non-compli-ance. Lessor makes no warranty that the Permitted Use in Paragraph
1.8 is permitted for the Premises under Applicable Laws (as defined in Paragraph
2.4).
2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it has
been advised by the Broker(s) to satisfy itself with respect to the condition of
the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, seismic and earthquake requirements,
and com-pliance with the Americans with Disabilities Act and applicable zoning,
municipal, county, state and federal laws, ordinances and regulations and any
covenants or restrictions of record (collectively. "Applicable Laws") and the
present and future suitability of the Premises for Lessee's Intended use; (b)
that Lessee has made such Investigation as it deems necessary with reference to
such matters, is satisfied with reference thereto, and assumes all
responsibility therefore as the same relate to Lessee's occupancy of the
Premises and/or the terms of this Lease; and (c) that neither Lessor, nor any of
Lessor's agents, has made any oral or written representations or warranties with
respect to said matters other than as set forth in this Lease.
2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor In this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. in such
event, Lessee shall, at Lessee's sole cost and expense, correct any
non-compliance of the Premises with said warranties.
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2.6 Vehicle Parking. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph
1.2(b) on those portions of the Common Areas designated from time ho time by
Lessor for parking. Lessee shall not use more parking spaces than said number.
Said parking spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein carted "Permitted Size
Vehicles." Vehicles other than Permitted Size Vehicles shall be parked and
loaded or unloaded as directed by Lessor in the Rules and Regulations (as
defined In Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)
(a) Lessee shall not permit or allow any vehicles that belong to or
are controlled by Lessee or Lessee's employees, suppliers, shippers, customers.
contractors or invitees to be loaded, unloaded, or parked In areas other than
those designated by Lessor or such activities.
(b) it Lessee permits or allows any at the prohibited activities
described in this Paragraph 2.6, then Lessor shall have the right, without
notice, In addition to such other rights and remedies that It may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.
(c) Lessor shall at lbs Commencement Date chi this Lease, provide the
parking required by Applicable Law.
2.7 Common Areas- The term "Common Areas" is delved as all areas and
facilities outside the Premises and within the exterior boundary the of the
Industrial Center and interior utility raceways within the Premises that are
provided and designated by the Lessor from time to time for the general
non-exclusive use of Lessor, Lessee and other lessees the industrial Center and
their respective employees, suppliers, shippers, customers, contractors and
invitees. Including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas.
2.8 Common Areas-Lessee's Rights. Lessor hereby grants to Lessee, for the
benefit of lessee and Its employees, suppliers, shippers, contractors, customers
and invitees, during the term of this Lease, the non-exclusive right to use, In
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and pillages reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Industrial Center. Under no of
circumstances shall the right herein granted to use the Common Areas be deemed
to Include the right to store any property, temporarily or permanently. in the
Common Areas. Any such storage shall be permitted only by the prior written
consent of Lessor or Lessor's designated agent, which consent may be revoked at
any time. In the event that any unauthorized storage shall occur then Lessor
shall have the right, without notice, In addition to such other rights and
remedies that It may have, to remove the properly and charge the cost to Lessee,
which cost shall be Immedi-ately payable upon demand by Lessor.
2.9 Common Areas-Rules and Regulations. Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from lime to time, to establish, modify, amend
and enforce reasonable Rules and Regulations with respect thereto in accordance
with Paragraph 40. Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause its employees, suppliers, shippers, cus-tomers,
contractors and invitees to so abide and conform. Lesson shall not be
responsible to Lessee Ion the non-compliance with said rules and regulations by
other lessees of the Industrial Center.
2.10 Common Areas--Changes. Lessor shall have the right, In Lessor's sole
discretion, from time to time:
(a) To make changes to the Common Areas, Including, without
limitation, changes In the location, size, shape and number driveways,
entrances, parking spaces, parking areas, loading and unloading areas, Ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the Industrial
Center to be a part of the Common Areas;
(d) To add additional buildings and Improvements to the Common Areas;
(a) for use the Common Areas while engaged In making additional
improvements, repairs or allegations to the Industrial Center, or any portion
thereof; and
(f) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Industrial Center as Lessor may. In
the exteriors of sound business judgment, deem to be appropriate.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 Early Possession. II an Early Possession Date is specified in Paragraph
1.4 and If Lessee totally or partially occupies the Premises alter the Early
Possession Date but prior to The Commencement Date, the obligation to pay Base
Rent shall be abated for the period of such early occupancy. All other Terms of
this Lease, however, (including but not limited to the Obligations to pay
Lessee's Share of Common Area Operating Expenses and ho carry the Insurance
required by Paragraph B) shall be In effect during such period. Any such early
possession shall not affect nor advance the Expiration Date of the Original
Term.
3.3 Delay In Possession. It for any reason Lessor cannot deliver possession
of the Premises Lessee by the Early Possession Date, If one Is specified In
Paragraph 1.4, no Early Possession Dale is specified, by the Commencement Date,
Lessor shah not be subject to any liability therefore, nor shall such failure
affect the validity of this Lease, or the Obligations of Lessee hereunder, or
extend the term hereof, but in such case, Lessee shall riot, except as otherwise
provided herein, be obligated to pay rent or perform any other obligation at
Lessee under this terms of this Lease until Lessor delivers possession of the
Premises to Lessee. If possession of the Premises Is not delivered Lessee within
sixty (60) days after the Commencement Date, Lessee may, at Its option, by
notice In writ-ing to Lessor within ten (10) days alter the end of said sixty
(60) day period, cancel this Lease, In which event the parties shall be
discharged from all Obligations hereunder; provided further, however, if such
written notice of Lessee is not received by Lessor within said ten (10) day
period, Lessee's right to cancel this Lease hereunder shall terminate and be of
no further Force or elf act. Except as may be otherwise provided, and regardless
of when this Original Term actually com-mences, if possession Is not tendered to
Lessee when required by this Lease and Lessee does not terminate this Lease, as
aforesaid, the period tree of the oblig-ation to pay Base Rent, If any. that
Lessee would otherwise have enjoyed shall run from the date of delivery of
possession and continue for a period equal to the nod during which the Lessee
would have otherwise enjoyed under the terms hereof, but minus any days of delay
caused by the acts, changes or omissions of lessee.
4. Rent.
4.1 Base Rent. Lessee shah pay Base Rent and other rent or charges, as the
same may be adjusted from time to time, to Lessor In lawful money of the United
States, without offset or deduction, on or before the day on which ills due
under the terms of this Lease. Base Rent and all other rent and charges for any
period during this torn none which Is Ice less than one full month shall be
prorated based upon Ibis actual number of days of the month Involved Payment of
Base Rent and other charges shall be made to Lessor at its address stated herein
onto such other persons or at such other addresses as Lessor may trim lime to
lime designate In to Lessee.
4.2 Common Area Operating Expenses. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share (as specified in
Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, In accordance with the
fol-lowing provisions:
a) "Common Ares Operating Expenses" are ditched, Ion purposes of this
Lease, as all costs incurred by Lessor relating to the ownership and
operation of the industrial Center, including, but not limited to, the
following:
(I) The operation, repair and maintenance, In neat, clean, good
order and condition, of the following:
(aa) The Common Areas, including parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, drive-ways, landscaped areas, striping, bumpers,
Irrigation systems, Common Area lighting facilities, fences and
gales, elevators and roof.
(bb) Exterior signs and any tenant directories.
(cc) Fire detection and sprinkler systems.
(II) The cost of water, gas, electricity and telephone to service
the Common Areas.
(III) Trash disposal, property management and security services
and the costs of any environmental Inspections.
(IV Reserves set aside for maintenance and repair of Common
Areas.
(v) An',' Increase above the Base Real Property Taxes (as defined
In Paragraph 10.2(b)) Ion this Building and the Common Areas.
(vi) Any insurance Cost increase" (as defined in Paragraph 8.1).
(vii) The cost of Insurance carried by Lessor with respect to the
Common Areas.
(VIII) Any deductible portion of an insured toss concerning the
Building or the Common Areas,
(ix) Any other services to be provided by Lessor that are slated
elsewhere In this Lease ho be a Common Area Operating Expense.
(b) My Common Area Operating Expenses and Real Properly Taxes that are
specially attributable to the Building onto any other building In the Industrial
Center onto the operation, repair and maintenance hereof, shah be allocated
enthalpy to the Building onto such other building. t-however, any Common Area
Operating Expenses and Float Property Taxes that are not superficially
attributable to the Building onto any other building onto the operation, repair
and maintenance thereof, shall be equitably allocated by Lessor to alt buildings
In the Industrial Center.
(c) The Inclusion of this Improvements, and services set forth In
Subparagraph 4.2(a) shall not be deemed to Impose an obligation upon Lessor no
sillier have said improvements or faultiest onto provide those services unless
this Industrial Center already has the same, Lessor already provides the
services, or Lessor bias agreed elsewhere In this Lease to provide the same or
some of them.
(d) Lessee's Share of Common Area Operating Expenses shall be payable by
Lessee within tan (10) days alter a reasonably delayed statement of actual
expenses Is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to lime of Lessee's Share of annual
Common Area Operating Expenses and the same shall be payable monthly or
quarterly, as Lessor shall designate, during each 12-month period of the Lease
term, on the same day as the Base Rent Is due hereunder. Lessor shall deliver to
Lessee within sixty (60) days alter the expiration of each calendar year a
reasonably detail statement showing Lessee's Share of this actual Common Area
Operating Expenses incurred during this preceding year. If Lessee's payments
under this Paragraph 4.2(d) during said preceding year exceed Lessee's Share as
Indicated on said statement, Lesson shaft be credited the amount of such over-
<PAGE>
payment against Lessee's Share of Common Area Operating Expenses next becoming
due. It Lessee's payments under this Paragraph 4.2(d) during said preceding year
were less 'than Lessee's Share as indicated on said statement, Lessee shall pay
to Lessor the amount of the deficiency within tan (10) days alter delivery by
Lessor to Lessee of said statement.
5, Security Deposit. Lessee shall deposal with Lessor upon Lessee's execution
hereof the Security Deposit set forth In Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's Obligations under this Lease. if Lessee falls
to pay Base Rent or other rent or charges due hereunder, or otherwise defaults
under this Lease (as defined In Paragraph 13.1), Lessor may use, apply or retain
alt or any portion to said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for any liability, cost, expense,
loss or damage (Including attorneys' lees) which Lessor may suffer or Incur by
reason thereof. If Lessor uses or applies alt or any portion of said Security
Deposit, Lessee shall within ten (10) days alter written request therefore
deposit monies with Lessor sudden to restore said Security Deposit to the lull
amount required by this Lease. Any time the Base Rent increases during this term
of this Lease, Lessee shall, upon written request from Lessor, deposit
additional monies with Lessor as an addition to the Security Deposit so that The
total amount of the Security Deposit shall at all times bear the same proportion
to the then current Base Rent as the Initial Security Deposit bears to the
initial Base Rent set forth In Paragraph 1,5. Lessor shall not be required to
keep all or any part of this Security Deposit separate from its general
accounts. Lessor shall, at the expiration or earlier termination of the term
hereof and after Lessee has vacated the Premises, return to Lessee (or, at
Lessor's option, to the last assignee, If any, of Lessee's Interest herein),
that portion of the Security Deposit not used or applied by Lessor. Unless
otherwise expressly agreed In writing by Lessor, no part dl the Security Deposit
shall be considered to be held In trust, to bear Interest or other increment for
Its use, onto be prepayment for any monies to be paid by Lessee under this
Lease.
6. Use.
6.1 Permitted Use.
(a) Lessee shall use and occupy the Premises only for the Permitted
Use set forth In Paragraph 1.8, or any other legal use which Is reasonably
comparable thereto, and for no other purpose. Lessee shall not use or
permit the use of the Premises In a manner that Is unlawful, creates waste
or a nuisance, or that disturbs owners and/or occupants of, or causes
damage to the Premises or neighboring premises or properties.
(b) Lessor hereby agrees to not unreasonably withhold or delay Its
consent to any written request by Lessee, Lessee's assignees or subtenants,
and by prospective assignees and subtenants on Lessee, its assignees and
subtenants, Ion a modification of said Permitted Use, so long as the same
will not impair the structural integrity of the improvements on the
Premises or in this Building or the mechanical or electrical systems
therein, does not conflict with uses by other lessees, is not significantly
more burdensome to the Premises or the Building and the Improvements
thereon, and is otherwise permissible pursuant to this Paragraph 6. If
Lessor elects to withhold such consent, Lessor shall within live (5)
business days alter such request give a written notification of same, which
notice shall Include an explanation on Lessor's reasonable objections to
the change In use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as
used In this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or In combination with other materials expected to be on this
Premises, Is sillier: (I) potentially Injurious to the public health,
safety or welfare, the environment, or the Premises; (Ii) regulated or
monitored by any governmental authority; or (Ill) a basis for potential
liability of Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substance shall include,
but not be limited to, hydrocarbons, petroleum, gas the, crude oil on any
products or by-products thereof. Lessee shall not engage in any activity in
or about the Premises which constitutes a Reportable Use (as hereinafter
defined) of I] hazardous Substances without the express prior written
consent of Lessor and compliance in a timely manner (at Lessee's sole cost
and expense) with all Applicable Requirements (as defined In Paragraph
6.3). "Reportable Use" shall mean (I) the installation or use at any above
or below ground storage tank, (II) the generation, possession, storage,
use, transportation, or disposal of a [hazardous Substance that requires a
permit from, or with respect to which a report, notice, registration or
business plan Is required to be tiled with, any government at authority,
and (iii) the presence In, on or about this Premises of a Hazardous
Substance with respect to which any Applicable Laws require lust a notice
be given to persons entering or occupying the Premises or neighboring
properties. Notwithstanding this foregoing, Lessee may, without Lessor's
prior consent, but upon notice to Lessor and In compliance with all
Applicable Requirements, use any Ordinary and customary materials
reasonably required to be used by Lessee In the normal course of the
Permitted Use, so long as such use Is not a Reportable Use and doss not
expose the Premises or neighboring properties to any meaningful risk at
contamination or damage or expose Lessor to any liability therefor. In
addition, Lessor may (but without any obligation to do so) condition its
consent to any Reportable Use at any Hazardous Substance by Lessee upon
Lessee's giving Lessor such additional assurances as Lessor, In its
reasonable discretion, deems necessary to protect Itself, the public, the
Premises and this environment against damage, contamination or Injury
and/or liability thereof or, Including but not limited to the installation
(and, at Lessor's option, removal on or before Lease expiration or earlier
termination) of reasonably necessary protective notifications to this
Premises (such as concrete encasements) and/or the deposit of an additional
Security Deposit under Paragraph 5 hereof.
(b) Duty to Inform Lessor. II Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance has cone to be located In, on, under or
about the Premises or this Building, other than as previously consented to
by Lessor, Lessee shall immediately give Lessor written notice thereof,
together with a copy of any statement, report, notice, registration,
application, or business plan, license, claim, action, or proceeding given
to, or received from, any governmental authority or private party
concerning the presence, spill, release, discharge of, or exposure to, such
Hazardous Substance including but not limited to all such documents as may
be involved in arty Reportable Use involving the Premises. Lessee shall not
cause or permit any Hazardous Substance to be spilled or released In, on,
under or about this Premises (Including, without limitation, through the
plumbing or sanitary sewer system).
(c) Indemnification, Lessee shall indemnify, protect, defend and hold
Lessor, Its agents, employees, lenders and ground lessor, if any, and the
Premises; harmless from and against any and all damages, liabilities,
judgments, costs, claims, liens, expenses, penalties, loss of permits and
attorneys' and con-sultants' lees arising out of or Involving any Hazardous
Substandard brought onto the Premises by Orion Lessee or by anyone under
Lessee's control. Lessee's Obligations under this Paragraph 6.2(c) shall
Include, but riot be limited to, this elf acts on any contamination or
injury to person, property or the environment created or suit snarl by
Lessee, and the cost of investigation (including consultancies' and
attorneys' fees and selling), removal, remediation, restoration and/or
abatement thereof, or of any contamination therein involved, and shah
survive the expiration or earlier termination of this Lease. No
termination, cancellation or release agreement entered Into by Lessor and
Lessee shall release Lessee from its obligations under this Lease with
respect to Hazardous Substances, unless superficially so agreed by Lessor
in writing at this time of such agreement.
6.3 Lessee's Compliance with Requirements. Lessee shall, at Lessee's sole
cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements," which term is used In this Lease to mean aft laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
Insurance underwriter en rating bureau, and the recommendations of Lessor's
engineers and/or consul-tants, relating in any manner to the Premises (including
but not limited to matters pertaining to (I) industrial hygiene, (ii)
environmental conditions on, in. tinder or about the Premises, including soil
and groundwater conditions, and (iii) the use, generation, manufacture,
production, Installation, maintenance, removal, trans-portation, storage, spill,
or release of any Hazardous Substance), now sued or which may hereof ten come
Into effect. Lessee shall, within five (5) days after receipt of Lessor's
written request, provide Lessor with copies of all documents and information,
including but not limited to permits, registrations, manifests, applications,
reports and certificates, Lessee's compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents Involved) any threatened or actual claim,
notice, warning, complaint or report pertaining to or involving failure by
Lessee cribs Premises to comply with any Applicable Requirements.
6.4 Inspection; Compliance with Law. Lessor, Lessor's agents, employees,
contractors and designated representatives, and the holders of any mort-gages,
deeds of trust or ground leases on the Premises ("Lenders") shall have the right
to enter this Premises at any time in the case at an emergency, and otherwise at
reasonable times, for the purpose of Inspecting the condition of the Premises
and for verifying compliance by Lessee with this Lease and all Applicable
Requirements (as defined In Paragraph 6.3), and Lessor shall be entitled to
employ experts and/or consultants In connection therewith to advise Lessor with
respect to Lessee's activities, including but not limited to Lessee's
installation, operation, use, monitoring, maintenance, or removal at any
Hazardous Substance on or from this Premises. This costs and expenses of any
such Inspections shall be paid by the party requesting same, unless a Default or
Breach of this Lease by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
onto be imminent, or unless the inspection Is requested or ordered by a
governmental authority as the result on any such existing or imminent violation
or contamination. in such case, Lessee shall upon request reimburse Lessor or
Lessor's Lender, as this case may be, ton the costs and expenses of such
Inspections.
7. Maintenance, Repairs. Utility Installations, Trade Fixtures and Alterations.
7.1 Lessee's Obligations.
(a) Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessor's
Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee
shall, at Lessee's sole cost and expense and at all times, keep the
Premises and every part thereof In good order, condition and repair
(whether or not such portion of the Premises requiring repair, or the means
of repairing the same, are reasonably or readily accessible to Lessee, and
whether or riot this need Ion such repairs occurs as a result of Lessee's
use, any prior use, this elements or this age of such por-tion of this
Premises), including, without limiting the generality of the foregoing, all
equipment or facilities superficially serving the Premises, such as
plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities, boilers, fired or unfired pressure vessels, the hose
connections if within the Premises, fixtures, interior walls, Interior
surfaces of exterior walls, ceilings, Floors, windows, doors, plate glass,
and skylights, but excluding any items which are the responsibility of
Lessor pursuant to Paragraph
7.2 below. Lessee, In keeping the Premises In good order, condition and
repair, shall exercise and perform good maintenance practices. Lessee's
Obligations shall Include restorations, replacements or renewals when necessary
to keep this and all improvements thereon or a part thereof in good order,
condition and state of repair.
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain a contract, with copies to Lessor, In customary form and substance
for and with a contractor specializing and experienced in this Inspection,
maintenance and service of the heating, air conditioning and ventilation
system Ion the Premises. However, Lessor reserves the right, upon notice to
Lessee, to procure and maintain this contract for the heating, air
conditioning and ventilating systems, and If Lessor so elects, Lessee shall
reimburse Lessor, upon demand, I or the cost thereof.
(c) If Lessee fails to perform lessee's Obligations under this
Paragraph
7.1, Lessor may enter upon the Premises after ten (10) days' prior
written notice to Lessee (except In the case of an emergency, In which case
no notice shall be required), perform such Obligations on Lessee's behalf,
and put the Premises in good order, condition and repair, In accordance
with Paragraph 13.2 below.
7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance with Covenants, Restrictions and Building
Code), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's
Obligations), 9 (Damage on Destruction) and 14 (Condemnation), Lessor,
subject to reimbursement pursuant to Paragraph 4.2, shall keep In good
order, condition and repair the foundations, exterior walls, structural
condition of Interior bearing walls, exterior roof, fire sprinkler and/or
standpipe and hose (if located in the Common Areas) or other automatic hire
extinguishing system Including the alarm and/or smoke detection
<PAGE>
C American industrial Real Estate Association 1993 systems and
equipment, fire hydrants, parking lots, walkways, parkways, driveways,
landscaping, fences, signs and utility systems serving the Common
Areas and all parts thereof, as well as providing the services for
which there is a Common Area Operating Expense pursuant to Paragraph
4.2. Lessor shall not be obligated to paint the exterior or interior
surfaces of exterior walls nor shah Lessor be obligated to maintain,
repair or replace. windows, doors or plate glass of the Premises.
Lessee expressly waives the benefit of any statute now or hereafter in
effect which would otherwise afford Lessee the right to make repairs
at Lessor's expense or to terminate this Lease because of Lessor's
failure to keep the Building, Industrial Center or Common Areas in
good order, condition and repair.
7.3 Utility installations, Trade Fixtures, Alterations.
(a) Definitions; Consent Required. The term "Utility
Installations" Is used In this Lease to refer to all air these, power
panels, electrical distribution, security, fire protection systems,
communications systems, lighting fixtures, heating, ventilating and
air conditioning equipment, plumbing, and fining In, on or about the
Premises. The term "Trade Fixtures" shall mean Lessee's machinery and
equipment which can be removed without doing material damage to the
Premises. The term "Alterations" shall meant any modification of the
Improvements on the Premises which are provided by Lessor under the
terms of this Lease, other than Utility Installations or Trade
Fixtures. "Lessee-Owned Alterations and/or Utility installations" are
defined as Alterations and/or Utility Installations made by Lessee
that are not yet owned by Lessor pursuant to Paragraph 7.4(a). Lessee
shall not take nor cause to be made any Alterations or Utility
Installations In, on, under or about the Premises without Lessor's
prior written consent. Lessee inlay, however, make non-structural
Utility installations to the Interior of the Premises (excluding this
real) without Lessor's consent but upon notice to Lessor, so long as
they are not visible from the outs Idea of the Premises, do not
Involve puncturing, relocating or removing the roof or any existing
wails, or changing or with the fire sprinkler or fire detection
systems and the cumulative cost thereof during the term of this Lease
as extended does not exceed $2,500.00.
(b) Consent. Any Alterations or Utility installations that Lessee
shall desire to make and which require the consent of the Lessor shall
be presented to Lessor in written form with detailed plans. All
consents given by Lessor, whether by virtue of Paragraph 7.3(a) or by
subsequent specific consent, shall be deemed conditioned upon: (I)
Lessee's acquiring all applicable permits required by governmental
authorities; (ii) the furnishing of copies of such permits together
with a copy of the plans and specifications for the Alteration or
Utility Installation to Lessor prior to commencement of this work
thereon and (iii) this compliance by Lessee with all conditions of
said permits in a prompt and expeditious manner. Any Alterations on
Utility installations by Lessee during the term of this Lease shall be
done in a good and workmanlike manner, with good and sufficient
materials, and be in compliance with all Applicable Requirements.
Lessee shall promptly upon completion thereof furnish Lessor with
as-built plans and specifications therefor. Lessor may, (but without
obligation to do so) condition its consent to any requested Alteration
or Utility installation that costs $2,500.00 or more upon Lessee's
providing Lessor with a lien and completion bond In an amount equal to
one and one-halt times the estimated cost of such Alteration or
Utility Installation.
(c) Lien Protection. Lessee shall say when due all claims for
labor or materials furnished or alleged to have been furnished to or
for Lessee at or for use on the Premises, which claims are or may be
secured by any mechanic's or lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work In, on, or about this Premises,
and Lessor shall have the right to post notices of non-responsibility
In or on the Premises as provided by law. II Lessee shall, In good
faith, contest the validity of any such lien, claim or demand, then
Lessee shall, at its sole expense, del and protect itself, Lessor and
this Premises against the same and shall pay and satisfy any such
adverse judgment that may be ren-dered thereon before the enforcement
thereof against this Lessor cribs Premises. If Lessor shall require,
Lessee shall furnish to Lessor a surety bond satisfactory to Lessor In
an amount equal to one and one-half times this amount at such
congested lien claim or demand, Indemnifying Lessor( against liability
for the same, as required by law for the holding of the Premises made
from the effect of such lien or claim. in addition, Lessor may require
Lessee to pay Lessor's attorneys' fees and costs In participating In
such action if Lessor shall diode ills to its best Interest Is do so.
7.4 Ownership, Removal, Surrender, and Restoration.
(a) Ownership. Subject to Lessor's right to require their removal
and to cause Lessee to become the owner thereof as hereinafter
provided In this Paragraph 7.4, all Alterations and Utility
Installations made to this Premises by Lessee shall be lbs property of
and owned by Lessee, but considered a part of this Premises. Lessor
may, at any time and at its option, elect in writing to Lessee to be
this owner at all or any special part of the Lessee-Owned Alterations
and Utility Installations. Unless otherwise instructed per
Subparagraph 7.4(b) hereof, all Lessee-Owned Alterations and Utility
installations shall, at the expiration or earlier termination of this
Lease, become the property at Lessor and remain upon the Premises and
be surrendered with the Premises by Lessee.
(b) Removal. Unless otherwise agreed In writing, Lessor may
require that any or all Lessee-Owned Alterations or Utility
Installations be removed by the expiration or earlier termination of
this Lease, notwithstanding that their installation may have been
consented to by Lessor. Lessor may require the removal at any time of
alt or any part of any Alterations or Utility Installations made
without this required consent of Lessor.
(c) Surrender/Restoration. Lessee shall surrender the Premises by
the end of this last day of the Lease term or any earlier termination
date, clean and free of debris and In good operating order, condition
and state of repair, Ordinary wear and tear excepted. Ordinary wear
and tear shall not Include any damage or deterioration that would have
been prevented by good maintenance practice or by Lessee performing
all of its Obligations under this Lease. Except as otherwise agreed or
specified herein, this Premises, as surrendered, shall include the
Alterations and Utility Installations. The obligation of Lessee shall
Include the repair of any damage occasioned by the installation,
maintenance or removal of Lessee's Trade Fixtures, furnishings,
equipment, and Lessee-Owned Alterations and Utility Installations, as
well as the removal of any storage tank installed by or for Lessee,
and the removal, replacement, or remediation of any soil, material or
ground water contaminated by Lessee, all as may then be required by
Applicable Requirements and/or good practice. Lessee's Trade Fixtures
shall remain the property of Lessee and shall be removed by Lessee
subject to its obligation to repair and restore the Premises per this
Lease.
8. Insurance; indemnity.
8.1 Payment of Premium Increases.
(a) As used herein, the term "Insurance Cost increase" is defined
as any increase in the actual cost of this insurance applicable to the
Building and required to be carried by Lessor pursuant to Paragraphs
0.2(b), 8.3(a) and 8.3(b), ('Required insurance"), over and above the
Base Premium, as hereinafter defined, calculated on an annual basis.
"insurance Cost increase" shall include, but not be limited to,
requirements of this holder of a mortgage or deed of trust covering
the Premises, increased valuation of the Premises, and/or a general
premium rate Increase. The term 'Insurance Cost Increase" shall not,
however, Include any premium Increases resulting from the nature of
the occupancy of any other lessee of the Building. It the parties
insert a dollar amount in Paragraph 1.9, such amount shall be
considered the "Bass Premium." it a dollar amount has not been
inserted in Paragraph 1.9 and if this Building lies been previously
occupied dur-ing the twelve (12) menu period immediately preceding
this Commencement Date, this 'Base Premium" shall be the annual
premium applicable to such twelve (12) month period. tithe Building
was not fully occupied during such twelve (12) month period, this
"Base Premium" shall be the lowest annual premium reasonably
obtainable ion this Required insurance as of the Commencement Date,
assuming this most nominal use possible of the Building. in no event,
however, shall Lessee be responsible for any portion of the premium
cost attributable to liability insurance coverage in excess of
$1,000,000 procured under Paragraph 8.2(b).
(b) Lessee shall pay any Insurance Cost Increase to Lessor
pursuant to Paragraph 4.2. Premiums I or policy periods communing
prior to, or extending beyond, the term old this Lease shall be
prorated to confide with this corresponding Commencernment Date or
Expiration Date.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force
dinning the term of this Lease a Commercial General Liability policy
of Insurance protect-ing Lessee, Lessor and any Lender(s) whose names
have been provided to Lessee in writing (as additional instanced)
against claims for bodily Injury, personal Injury and property damage
based upon, involving or arising out of the ownership, use, occupancy
or maintenance of the Premises and all areas appurtenant thereto. Such
Insurance shall be on an occurrence basis providing single limit
coverage In an amount not less than $1,000,000 per occurrence with an
"Additional Insured-Managers or Lessors of Premises" endorsement and
contain the "Amendment of the Pollution Exclusion" endorsement for
damage caused by heat, smoke or-fumes from a hostile fire. The policy
shall not contain any intra-insured exclusions as between insured
persons or organizations, but shall include coverage for liability
assumed under this Lease as an 'insured contract" for the performance
of Lessee's Indemnity Obligations tinder this Lease. This limits of
said Insurance required by this Lease or as carried by Lessee shall
not, however, linarite the liability of Lessee nor relieve Lessee of
any obligation hereunder. All Insurance to be carried by Lessee shall
be primary to and not with any similar Insurance carried by Lessor,
whose insurance shall be considered excess insurance only.
(b) Carried by Lessor. Lessor shall also maintain liability Insurance
described in Paragraph 6.2(a) above, In addition to and not in lieu of, the
Insur-ance required to be by Lessee. Lessee shall riot be named as an
additional insured therein.
8.3 Property insurance-Building, improvements and Rental Value.
(a) Building and Improvements. Lessor shall obtain and keep in force during
the term of this Lease a policy or policies In the name of Lessor, with loss
payable to Lessor and to any Lender(s), insuring against or damage to the
Premises. Such Insurance shall be (or full replacement cash, as the same shall
exist mom tin-re to time, or the amount required by any Lender(s), but in no
event more than the commercially reasonable and available insurable value
thereof It, by reason or the us nature or age at the Improvements involved, such
latter amount is less than full replacement cost. Lessee-Owned Alterations and
Utility installations, Trade Fixtures and Lessee's personal pro p arty shah be
insured by Lessee pursuant to Paragraph 6.4. Ii the coverage is available and
commercially appropriate, Lessor's policy or policies shall insure against all
risks of direct physical loss or damage (except the perils on flood and/or
earthquake unless required by a Lender or included in the Base Premium),
including coverage for any additional costs resulting from debris removal and
reasonable amounts of coverage for the enforcement of any ordinance or law
regulating the reconstruction or replacement of any undamaged sections of the
Building required to be demolished or removed ,y reason of the enforcement on
any building, zoning, safety or land use laws as the result of a covered loss,
but not Including plate glass insurance. Said policy or policies shall also
contain an agreed valuation provision in lieu of any ca-insurance clause, waiver
of subrogation, and inflation guard protection causing an increase In the annual
property insurance coverage amount by a factor at not less than the adjusted
U.S. Department of Labor Consumer Price index far Alt Urban Consumers Ion the
nearest to where this Premises are located.
(b) Rental Value. Lessor shall also obtain and keep in lance during the
term of this Lease a policy or policies In this name of Lessor, with toss
payable to Lessor and any Lender(s), insuring the loss of lbs lull rental and
other charges pay able by all lessees old this Building to Lessor far one year
(including all Real Property Taxes, insurance costs, all Common Area Operating
Expenses and any such edited rental Increases). Said Insurance may provide that
In the event the Lease is terminated by reason of an stirred loss, ibis period
of indemnity non. such coverage shall be extended beyond the date at the
completion of repairs or replacement of the Premises, to provide for one lull
year's loss of renal revenues from the date of any such loss. Said Insurance
shall contain an agreed valuation provision In lieu old any co-insurance clause,
and this amount on coverage shall be adjusted annually to reflect the protected
rental income, Real Property Taxes, Insurance premium costs and other expenses,
II any, otherwise payable, for the next 12-month period. Common Area Operating
Expenses shall Include any deductible amount In the event of such loss.
(c) Adjacent Premises. Lessee shall pay for any increase In the premiums
for the property Insurance of ibis Building and for this Common Areas or other
buildings in this Industrial Carrier If said increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises.
<PAGE>
MULTI-TENANT- (d) Lessee's Improvements. Since Lessor Is the Insuring
Party, Lessor shall not be required to Insure Lessee-Owned Alterations and
Utility installations units the item In question has become this property of
Lessor under the tennis on this Lease.
8.4 Lessee's Property insurance. Subject to the requirements of Paragraph
8.5, Lessee at Its cost shah either by separate policy or, at Lessor's option,
by endorsement to a policy already carried, mainland Insurance coverage an all
of Lessee's personal property, Trade Fixtures and Lessee-Owned Alterations and
Utility installations in, on, or about this Premises similar in coverage to that
carried by Lessor as the insulin Party under Paragraph 8.3(a). Such insurance
shall be full replacement cost coverage with a deductible not to exceed $1,000
per occurrence. The proceeds from any such insurance shall be used by Lessee for
the replacement of personal property and the restoration of Trade Fixtures and
Lessee-Owned Alterations and Utility Installations. Upon request from Lessor,
Lessee shall provide Lessor with written evidence that such insurance Is in
force.
8.5 Insurance Policies. insurance required hereunder shah be in companies
duly licensed to transact business In the stats where the Premises are located,
and maintaining during this policy term a "General Policyholders Rating" on at
least 8+, V, or such other rating as may be required by a Lender, as set forth
in this most current issue of "Best's Insurance Guide." Lessee shall not do or
permit to be done anything which shah Invalidate the Insurance policies referred
to Inn this Paragraph 8. Lessee shall cause to be delivered to Lessor, within
seven (7) days after the earlier of this Early Possession Dale or the
Commencement Date, copies of, or certificates evidencing the existence and
amounts at, the Insurance required under Paragraph 8.2(a) and 8.4. No such
policy shall be cancelable or subject to modification except alter thirty (30)
days' prior written notice to Lessor. Lessee shall at least thirty (30) days p
mien to the expiration of such policies, fur-nish Lessor with evidence of
renewals or "Insurance binders" evidencing renewal thereof, or Lessor may order
such Insurance and charge the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand.
8.6 Waiver of Subrogation. Without affecting any other rights or remedies,
Lessee and Lesson each hereby release and relieve the other, and waive their en
the right to recover damages (whether In contract or In tort against the other,
ion loss or damage to their property arising out on or incident to the perils
required to be Insured against under Paragraph 8. This effect of such releases
and waivers of the right to recover damages shall not be limited by the amount
of insurance carried or required, or by any deductibles applicable thereto.
Lessor and Lessee agree to have their respective insurance companies issuing
property damage insurance waive any right to subrogation that such companies may
have against Lessor or Lessee, as this case may be, so long as the insurance is
not Invalidated thereby.
8.7 Indemnity. Except for Lessor's negligence and/or breach of express
warranties, Lessee shah indemnify, protect, defend and hold harmless the
Premises, Lessor and his angels, Lessor's masher or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, loss of permits, attorneys' and consultants'
tees, expenses and/or liabilities arising out of, Involving, or in connection
with, the occupancy of the Premises by Lessee, the conduct of Lessee's business,
any act, omission or neglect of Lessee, its agents, contractors, employees or
Invitees, and out old any Default or Breach by Lessee In this performance In a
timely manner of any obligation on Lessee's part to be performed under this
tease. The foregoing shall include, but not be limited to, the defense or
pursuit of any claim or any action or proceeding involved herein, and whether or
not (in this case of claims made against Lessor) litigated and/or reduced to
judgment. In case any action cc proceeding be brought against Lessor by reason
of any of the foregoing matters, Lessee upon notice from Lessor shall defend the
same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such damn in order to be so indemnified.
8.8 Exemption of Lessor from Liability. Lessor shall not be liable for
Injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person In on about the Premises, whether such damage or Injury is caused by or
result from fire, steam, electricity, gas, water or rain, or from this breakage,
leakage, obstruction or other defects of pipes, the sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, from other sources or places, and regardless of whether the cause of such
damage or Injury or the means of repairing the same Is accessible on not, Lessor
shah riot be liable ion any damages arising from any act or neglect of any other
lessee at Lessor nor from the failure by Lesson to enforce the provisions of any
other lease in the industrial Center. Notwithstanding Lessor's negligence or
breach of this Lease, Lessor shall under no circumstances be liable for injury
to Lessee's business or for any loss of income or profit therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility installations,
the repair cost of which damage or destruction Is less than fifty percent
(50%) of the then Replacement Cost (as defined in Paragraph 9.1(d)) of the
Premises (exclud-ing Lessee-Owned Alterations and Utility Installations and
Trade Fixtures) immediately prior to such damage or destruction.
(b) "Premises Total Destruction" shah mean damage or destruction to
to-re Premises, other than Lessee-Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is fifty
percent (50%) or more of this then Replacement Cost of the Premises
(excluding Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction. in addition,
damage or destruction to this Building, other than Lessee-Owned Alterations
and Utility Installations and Trade Fixtures on any lessees alibis
Building, the cast of which damage or destruction Is fifty percent (50%) or
more of the then Replacement Cost (excluding Lessee-Owned Alterations and
Utility installations and Trade Fixtures of any lessees of this Building)
at this Building shall, at the option of Lessor, be deemed to be Premises
Total Destruction.
(c) "insured Loss" shall mean damage or destruction to the Premises,
other than Lessee-Owned Alterations and Installations and Trade Fixtures,
which was caused by an event required to b covered by the insurance
described in Paragraph 13.3(a) Irrespective of any deductible amounts or
coverage hauls Involved.
(d) "Replacement Cost" shah mean this cost to repair or rebuild the
improvements owned by Lessor at the time on the occurrence to their
condition existing Immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of applicable building
codes, ordinances or laws, and without deduction for depreciation.
(e) "Hazardous Substance Condition" shall mean lbs occurrence or
discovery of a condition involving the presence of, or a contamination by,
a hazardous Substance as defined iii Paragraph 6.2(a), in, on, or under
this Premises.
9.2 Premises Partial Damage-insured Loss. if Primaries Partial Damage that
Is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such
damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continua in
full force and . in the event, however, that theirs Is a shortage at insurance
proceeds and such shortage is due to the fact that, by reason of lbs unique
nature of this improvements In the Premises, full replacement cost insurance
coverage was not commercially reasonable and available, Lessor shah have no
oblig-ation to pay for the shortage In insurance proceeds onto fully restore the
unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within ten (10) days following
receipt of written notice on such shortage and request that-el on. II Lessor
receives said funds or adequate assurance thereof within said ten (10) day
period, Lessor shall complete them as soon as reasonably possible and this Lease
shall remain In full lance and effect. II Lessor does not receive such funds or
assurance within said period, Lessor nevertheless elect by written notice to
Lessee within ten (10) days thereafter to make such restoration and repair as is
commercially reasonable with Lessor paying any shortage In proceeds. In which
case this Lease shall remain in full force and effect. ii Lessor does not
receive such funds or assurance within such ten (10) day period, and II Lessor
doss not so elect to restore and repair, then tins Lease shall terminate sixty
(60) days following the occurrence of the damage or destruction. Unless
otherwise agreed, Lessee shall in no event have any might to reimbursement from
Lessor for any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earth-quake shall be
subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that there
may be some insurance coverage, but the net proceeds of any such insurance shall
be made available far tins repairs if made by either Party.
9.3 Partial Damage-Uninsured Loss. It Premises Partial Damage that is not
an Insured Loss occurs, unless caused by a negligent or willful act of Less (In
which event Lessee shah make the repairs at Lessee's expense and this Lease
shall continue in full hence and oiled), Lessor may at Lessor's option, either
repair such damage as soon as reasonably possible at Lessor's expense, In which
event this Lease shall continue in lull lance and elf act, or (11) give writ-ten
notice to Lessee within thirty (30) days alter receipt by Lessor of knowledge of
the occurrence on such damage of Lesson's desire to terminate this Lease as of
the dale sixty (60) days following the date of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have this right written tern (10) days after the receipt of such notice to
give written notice to Lessor on Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following such commitment from Lessee. in such
event this Lease shall continue In full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible alter this required
hinds are available. if Lessee does riot give such notice and provide this funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.
9.4 Total Destruction. Notwithstanding any other provision hereof, if
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following this date of such Premises Total Destruction, whether or not the
damage or destruction Is an insured Loss or was caused by a negligent or willful
act of Lessee. In the event, however, that the damage or destruction was caused
by Lessee, Lessor shall have this right to recover Lessor's damages from Lessee
except as released and waived In Paragraph 9.7.
9.5 Damage Near End of Term. If at any time during the last six (6) months
of this term of this Lease there Is damage for which the cost to repair exceeds
one month's Base Rent, whether or not an insured Loss, Lesser may, at Lesson's
option, terminate this Lease effective sixty (60) days following the date of
occurrence of such damage by giving written notice to Lessee at Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, If Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by (a) exercising such option, an-rd (b) providing Lessor with any
shortage in insurance proceeds (or adequate assurance thereof) needed to make
the repairs on or before the earlier of (I) the date which is ten (10) days
alter Lessee's receipt of Lessor's written notice purporting to terminate this
Lease, or (ii) the day prior to the date upon which such option expires. if
Lessee duly exercises such opinion during such period and provides Lessor with
funds (or adequate assurance thereof) to cover any shortage In Insurance
proceeds, Lesson shall, at Lessor's expense repair such damage as soon as
reasonably possible and tints Lease shall continue in full force and effect. if
Lessee fails to exercise such option and provide such funds or assurance during
such period, then this Lease shall terminate as of the date set forth In the
first sentence of this Paragraph 9.5.
9.6 Abatement of Rent; Lessee's Remedies.
(a) In the event of (I) Premises Partial Damage or (ii) Hazardous
Substance Condition ion which Lessee Is not legally responsible, the Base
Rent, Common Area Operating Expenses and other charges, If any, payable by
Lessee hereunder hoc the period during which such damage or condition, its
repair, remediation or restoration continues, shall be abated in proportion
to the degree ho which Lessee's use of the Premises Is Impaired, but not in
excess of proceeds from Insurance required to be carried under Paragraph
8.3(b). Except for abatement of Base Rent, Common Area Operating Expenses
and other charges, it any, as aforesaid, all other Obligations of Lessee
thereunder shall be performed by Lessee, and Lessee shall have no claim
against Lessor tar any damage suffered y rea-son of any such damage,
destruction, repair, ran-radiation or restoration.
<PAGE>
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration at the Premises
within ninety (90) days alter such obligation shall accrue, Lessee may, at
any time prior to the commence-ment of such repair or restoration, give
written notice to Lessor and to any Lenders of which Lessee has actual
notice of Lessee's election to terminate this Lease on a date not lass than
sixty (60) days following the giving of such notice, hi Lessee gives such
notice ho Lessor and such Lenders and such repair or restoration Is not
commenced within thirty (30) days after receipt of such notice, this Lease
shall terminate as of the date specified in said notice, if Lessor or a
Lender commences the repair or restoration of this Premises within thirty
(30) days after the receipt at such notice, this Lease shall continue In
lull force and effect. "Commence" as used In this Paragraph
9.6 shall mean either the unconditional authorization of the preparation of
the required plans, or this beginning of the actual work on the Premises,
whichever occurs first.
9.7 Hazardous Substance Conditions, if a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (In which case Lessee
shall make this Investigation and remediation thereat required by Applicable
Requirements and this Lease shall continue in full force and effect, but subject
to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor may at
Lessor's option either (I) investigate and remediate such Hazardous Substance
Condition, If required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue In full force and elf ed, or (II) lithe
estimated cost to investigate and remediate such condition exceeds twelve (12)
times the then monthly Base rent or $100,000 which ever is greater, give written
notice to Lessee within thirty (30) days after receipt by Lessor at knowledge
alit-re occurrence on such Hazardous Substance Condition of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date on such
notice, In this event Lessor elects to give such notice of Lessor's Intention to
terminate this Lease. Lessee shall have the night within ten (10) days after the
receipt old such notice to give written notice to Lessor of Lessee's commitment
to pay for the excess costs of(s) Investigation and remediation on such
Hazardous Substance Condition to lbs extent required by Applicable Requirements,
over (b) an amount equal to twelve (12) times the bi-ran monthly Base Rent or
$100,000, whichever Is greater. Lessee shall provide Lessor with the funds
required of Lessee or satisfactory assurance thereof within thirty (30) days
hollowing said commitment by Lessee. in such event this Lease shah continue in
full lance and effect, and Lessor shall pro-ceed to make such investigation and
remediation as soon as reasonably possible after the required funds are
available, If Lessee does not give such notice end provide the required Funds or
assurance thereof within the time period specified above, this Lease shah
terminate as of the date specified In Lessor's notice after,
9.8 Terminator-Advance Payments, Upon termination on this Lease pursuant to
this Paragraph 9, Lessor is-rail return to Lessee any advance payment made by
Lessee to Lessor and so much of Lessee's Security Deposit as has not been, or is
not then required to be, used by Lessor under the terms at -us Lease, the Waiver
of Statutes. Lessor and Lessee agree that the terms alibis Lease shall govern
the sued of any damage to or destruction of the-re Premises and Building with
respect to the termination of thus Lease an-rd hereby waive this provisions of
any present or future statue to the extent ills inconsistent herewith.
10. Real Property Taxes.
10.1 Payment of Taxes. Lessor strait pay the Real Property Taxes, as
defined In Paragraph 10.2(a), applicable to the industrial Center, and except as
otherwise provided in Paragraph 10.3, any Increases in such amounts over the
Base Real Property Taxes shall be included in the calculation of Common Area
Operating Expenses In accordance with the provisions of Paragraph 4.2.
10.2 Real Property Tax Definitions. 1997 Property Taxes $59,744.06
(a) As used herein, this term "Real Property Taxes" shall Include any
form Eli Sal slate tax or assessment, general, special, Ordinary or
extraordinary, and any license fee, commercial rental tax, Improvement bond
or bonds, levy or tax (other ti-ran inheritance, personal Income or estate
taxes) Imposed upon the Industrial Center by any authority b-raving the
direct or indirect power to tax, Including any, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage,
or other Improvement district thereof, levied against any legal or
equitable Interest on Lessor in the Industrial Center or any portion
thereof, Lessor's right to rent or other Income thereof ram, and/or
Lessor's business of leasing The Premises. This term "Real Property Taxes"
shall also include any lax, fee, levy, assessment or charge, or any
Increase therein, imposed by reason. of events occurring, or changes In
Applicable Law taking effect, during the term of this Lease, including but
not limited lo a change In time ownership of this Industrial Center on in
the Improvements thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and what're or not contemplated by Ibis
Parties.
(b) As used herein, this term Base Real Property Taxes is-rail be the
amount of Real Property Taxes, which are assessed against the Premises,
Building or Common Areas In the calendar year during which the Lease is
executed. in calculating Real Property Taxes by any calendar year, the Real
Property Taxes I or any real estate tax year shall be included In time
calculation on Real Property Taxes Ion such calendar year based upon the
number of days which such calendar year and tax year h-rave common.
10.3 Additional Improvements. Common Area Operating Expenses shall not
Include Real Property Taxes specified In this tax assessor's records and work
sheets as belong caused by additional improvements placed upon the Industrial
Center by other lessees or by Lesson for the exclusive employment at such other
lessees. Notwithstanding Paragraph 10.1 , Lessee small, whatever, pay to Lessor
at the time Common Area Operating Expenses are payable under Paragraph 4.2, the
entreaty of any Increase in Real Property Taxes if assessed solely by reason 01
Alterations, Trade Fixtures or Utility installations placed upon the Premises by
Lessee or at Lessees request.
10.4 Joint Assessment. if this Building is all separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all on Lbs land and Improvements Included within the tax
parcel assessed, such proportion to be determined by Lessor from flue respective
valuations assigned in fire assessor's work sheets or such other information as
may be reasonably available. Lessor's reasonable determination thereof, In good
faith, shall be conclusive.
10.5 Lessee's Property Taxes. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or stored within the industrial Center. When
possible, Lessee shall cause Its Lessee-Owned Alterations and Utility, Trade
Fixtures, furnishings, equipment and all other personal property to be assessed
and billed separately from the real property of Lessor. if any of Lessee's said
property shall be assessed with Lessor's real property, Lessee shall pay Lessor
the taxes attributable to Lessee's property within ten (10) days after receipt
of a written statement setting forth the taxes applicable to Lessee's property.
11, Utilities. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electrify, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon. It
any such services are not separately metered to lbs Premises or separately
billed to the Premises, Lessee shall pay to Lessor a reasonable proportion to be
determined by Lessor of all such cal-ranges Jointly metered or billed with other
premises in the Building, In the manner and within the limo periods set hurter
In Paragraph 4.2(d).
12. Assignment and Subletting.
12.1 Lessor's Consent Required.
(a) Lessee shah not voluntarily or by operation of law assign,
transfer, mortgage or transfer on encumber (collectively, "assign) or
sublet all or any part on Lessee's interest inn this Lease or in the
Premises wilt-rout Lessor's prior written consent given under and sublet to
the terms at Paragraph 36.
(b) A change in the control of Lessee shall constitute an assignment
requiring Lessor's consent. The transfer, on a cumulative basis, of
twenty-live percent (25%) or more of the voting control of Lessee shah
constitute a change In control purpose.
(c) The Involvement of Lessee or its assets in any transaction, or
series old transactions (by way of merger, sale, acquisition, fanning, ,
transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation on this Lease or Lessee's assets occurs, which
results on will result in a reduction of lbs Net Worth of Lessee, as
hereinafter defined, by an amount equal to or greater than twenty-live
percent (25%) of such Net Worth of Lessee as It was represented to Lesson
at the limo of hull execution and delivery of this Lease or at the time of
lbs most recent assignment to which Lessor has consented, err as It exists
immediately prior to said transition or transactions constituting such
reduction, at whichever time said Net Worth of Lessee was or Is greater,
shall be considered an assignment of this Lease by Lessee to which Lessor
may reasonably with-rah-raid its consent. "Net Worth of Lessee" for
purposes of this Lease shall be the net worth of Lessee (excluding any
Guarantors) establish-red under generally accepted accounting pineapples
consistently applied.
(d) An assignment on subletting on Lessee's Interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option,
be a Default curable after notice per Paragraph 13.1, or a non-curable
Breach without the necessity of any notice an-rd grace period, if Lesson
elects to treat such unconcealed to assignment or subjecting as a
non-curable Breach, Lessor shall have the right to either: (I) hermit-rate
Ibis Lease, or (Ii) upon thirty (30) days' written notice ("Lessor's
Notice"), Increase the monthly Base Rent ion the Premises to the greater of
the then fair market rental value of this Premises, as reasonably
determined by Lessor, or one hundred ten percent (110%) of the Base Rent
Insured. Pending the new fair market rental value, If disputed by Lessee,
Lessee shall pay the amount set forth In Lessor's Notice, with any
overpayment credited against the next s) of Base Rent coming due, and any
underpayment for the period retroactively to The elf active dale of the
adjustment being due and payable immediately upon this determination .
Further, in the event of such Breach and mental adjustment, (I) the
purchase price on any option to purchase it Premises I-Reid by Lessee shah
be subject to similar adjustment to the fair market value as reasonably
determined by Lessor (without -us Lease being considered an encumbrance or
any deduction for derogation or obsolescence, and considering this Premises
at us highest and best use and in good condition) arena hundred hen percent
(110%) of the price previously In elect, (II) any Index-oriented rental or
price adjustment formulas contained in ibis Lease shall be adjusted to
require that the base index be determined with reference to the index
applicable to this time of such adjustment, and (ill) any fixed rental
adjustments during the remainder of the Lease term shall be increased In
the same as the new rental bears to the Bass Rent inn effect prior to this
adjustment specified in Lessor's Notice.
(a) Lessee's remedy Ion any breach on this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, any assignment on subletting shall
not be elective with-rout lbs express written assumption by such assignee
or Sublessee on the Obligations of Lessee under this Lease, (ii) release
Lessee of any Obligations hereunder, nor (iii) alter the primary liability
at Lessee tenths payment of Base Rent and other sums due Lessor hereunder
or Ion Tim performance of any other Obligations performed by Lessee under
this Lease.
(b) Lessor may accept any rent or performance of Lessee's Obligations
from any person other ran Lessee pending approval or disapproval of an
assignment. Neither a delay In the approval or disapproval at such
assignment nor the acceptance of any rent for performance shall constitute
a waiver or estoppels of Lessor's right to exteriors Its remedies for the
Default on Beach by Lessee of any on the terms, covenants or conditions of
this Lease.
(c) The consent of Lessor to any assignment or subletting shah not
constitute a consent to any subsequent assignment or subletting by Lessee
or ho any subsequent or success) assignment or subletting by the assignee
or subleases. However, Lessor may consent to subsequent subjecting and
assignments on the sublease or any amendments or modifications Thai-ole
without nullifying Lessee or anyone else liable under this Lease or the
sublease and Without obtaining their consent, and such action shall not
relieve such persons from this Lease or the sublease.
<PAGE>
(d) In this event of any Default or Breach of Lessee's obligation
under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or anyone else responsible tar the performance of the Lessee's
Obligations under this Lease, including any Sublessee, without hi-
exhausting Lessor's remedies against any other person or entity responsible
afar-afar to Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall be
ti-u writing, accompanied by Information relevant to Lessor's determination
as to the financial and operational responsibility and appropriateness on
tins proposed assignee or Sublessee, including but not limited to the
Intended use and/or required modification of the Premises, it any, together
with a non-refundable deposit of $1,000 an ten percent (bob) at the monthly
Base Rent applicable to the portion of the Premises which is the subject of
the proposed assignment or sublease, whichever is greater, as reasonable
consideration for Lessor's considering and processing the request for
consent. Lessee egress to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested by Lesson.
(f) Any assignee on, or Sublessee under, this Lease shall, by reason
of accepting such assignment or entering Into such sublease, be deemed, for
the benefit of Lessor, to have assumed and agreed to conform and comply
with each and every term, covenant, condition and obligation herein to be
observed or performed by Lessee during the term on said assignment or
sublease, other than such Obligations as are contrary to or inconsistent
with provisions of an assignment or sublease to which Lesson has
superficially consented in writing.
(g) This occurrence of a transaction described in Paragraph 12.2(c)
shall give Lessor the right (but not the obligation) to require that the
Security Deposit be Increased by an amount equal to six (6) times the
monthly Base Rent, and Lessor may make the actual receipt by Lessor on the
Security Deposit Increase a condition to Lessor's consent to such
transaction.
(h) Lessor, as a condition to giving Its consent to any assignment or
subletting, may require that the amount and adjustment schedule at the rent
payable under this Lease be adjusted to what is them the market value
and/or adjustment schedule for property similar to the Premises as then
constituted, as determined by Lessor.
12.3 Additional Terms and Conditions Applicable to Subletting. The following
terms and conditions shall apply to any subletting by Lessee of all or any part
of the Premises and shall be deemed Included in all subleases under this Lease
wit-tether or not expressly Incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and Income arising am any sublease of all or a
portion of the Premises heretofore or bereave tar made by Lessee, and
Lessor may collect such rent and Income and apply same toward Lessee's
Obligations under this Lease; provided, however, that until a Breach (as
defined In Paragraph 13.1) shall occur In the performance of Lessee's
Obligations under this Lease, Lessee may. except as otherwise provided in
this Lease, receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of the foregoing provision or any
other assignment of such sublease to Lessor, nor by reason of the
collection on the rents a Sublessee, be deemed liable to this Sublessee for
any failure of Lessee to perform and comply with any of Lessee's
Obligations to such Sublessee under such Sublease. Lessee hereby
irrevocably authorizes and directs any such Sublessee, upon receipt of a
written notice from Lessor slating that a Breach exists In the performance
of Lessee's Obligations under this Lease, to pay to Lessor the rents and
other charges due and to became due under the sublease. Sublessee shall
rely upon any such statement and request from Lessor and shall pay such
rents and other ranges to Lessor without any obligation or right to inquire
as to whether such Breach exists and notwithstanding any notice from or
claim from Lessee to the contrary. Lessee shall have no right or claim
against such Sublessee, or, until the Breach has been cured, against
Lessor, for any such rents and other charges so paid by said Sublessee to
tensor.
(b) In the event of a Breach by Lessee in the pert ordnance Ellis
Obligations under this Lease, Lessor, at its option and will-rout any
obligation to do so, may require any Sublessee to althorn to Lessor, in
which event Lessor shall undertake the Obligations at the SubLessor under
such sublease from the time of the exteriors of said option to the
expiration of such sublease; provided, however, Lessor shall not be liable
any prepaid rents or security deposit paid by such sub-. lessee to such
SubLessor or I or any other prior defaults or breaches of such SubLessor
under such sublease.
(c) Any matter requiring the consent of the SubLessor tinder a
sublease shall also require the consent at Lessor herein.
(d) No Sublessee under a sublease approved by Lessor shall further
assign or sublet all or any part of the Premises without Lessor's prior
written consent.
(e) Lessor shall deliver a copy of any notice of Del audit or Breach
by Lessee to the Sublessee, wino shall have the right to cure the Default
of Lessee with-rim the grace period, II arty, specified in such. The
Sublessee shall have a right at reimbursement and ail set mom and against
Lessee for any such Defaults cured by the Sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. Lessor and Lessee agree that II an attorney is
consulted by Lessor in. connection with a Lessee Default or Breach (as
hereinafter ditched), $350.00 is a reasonable minimum sum per such occurrence
non legal services and costs In the preparation and service at a notice of
Default, and that Lessor may include The cost of such services and costs In said
notice as rent due and payable to cure said default. A "Default" by Lessee is
delved as a failure by Lessee to observe, comply with or phi-loran any at the
terms, covenants, conditions or rules applicable to Lessee under this Lease. A
"Breach" by Lessee Is ditched as this occurrence of any one or mane of the I
olio wing Defaults, and, where a grace period for cure alter notice is specified
herein, the failure by Lessee to cure such Default prior to the expiration of
the applicable grace period, and shall entitle Lessor to pursue the remedies set
forth in Paragraphs 13.2 and/or 13.3:
(a) This vacating of the Premises will-rout the intention to reoccupy
same, or the abandonment on the Premises.
(b) Except as expressly otherwise provided In this Lease, the failure
by Lessee to make any payment of Base Rent, Lessee's Share of Common Area
Operating Expenses, or any other monetary payment required to be made by
Lessee hereunder as and when due, this failure by Lessee to provide Lessor
with reasonable evidence of insurance or surety bond required under this
Lease, or the failure of Lessee to tulip any obligation under this Lease
whiff endangers or threatens life or property, where such failure continues
for a period of lories (3) days written notice thereof by or on bat-rail of
Lessor to Lessee.
(c) Except as expressly otherwise provided lid-u Ibis Lease, the
failure by Lessee to provide Lessor with reasonable witan evidence (in duly
executed original form, if applicable) of (I) compliance with Applicable
Requirements per Paragraph 6.3, (ii) the inspection, maintenance and
service contracts required under Paragraph 7.1(b), (ill) the recession of
an unauthorized assignment or subletting per Paragraph 12.1, (iv) a Tenancy
Statement per Paragraphs 16 or 37, (v) the subordination an
non-subordination at Lids Lease pen Paragraph 30, (vi) this guaranty at the
performer-race of Lessee's Obligations under this Lease if required under
Paragraphs 1.11 and 37, (vii) the execution of any document requested under
Paragraph 42 (easements), or (viii) any other documentation or Information
which Lessor may reasonably require of Lessee under the terms of this
lease, where any such failure continues ion a period often (10) days
following written notice by an on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the tennis, covenants, conditions or
provisions of Ibis Lease, on of the rules adopted under Paragraph 40 hereof
that are to be observed, corn p lied with or performed by Lessee, other
Hiram ti-rose described in Subparagraphs 13.1(a), (b) or (c), above, we
Rena such Saul continues for a period on thirty (30) days alter written
notice thereof by or on befall of Lessor to Lessee; provided, however, that
lithe nature on Lessee's Default is such that mare than thirty (30) days
are reasonably required for its curs, then it shall not be deemed to be a
Breach of this Lease by Lessee it Lessee commences such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
(e) The occurrence of any air this following events: (I) the making by
Lessee at any general arrangement or assignment far the banal It of
creditors; (ii) Lessee's becoming a "debtor" as defined In 11 U.S. Code
Section lob or any successor statute (unless, in the case of a petition
filed against Lessee, the same is dismissed within sixty (60) days); (iii)
the appointment on a trustee or receiver to hake possession on
substantially all of Lessee's assets Locale at the Premises or of Lessee's
interest In this Lease, where possession is not respired to Lessee within
thirty (30) days; or (iv) this attachment, execution or other judoka
seizure oil substantially all of Laser's assets located at the Premises or
oil Lessee's Interest in this Lease, where such seizure is not discharged
within thirty (30) days; provided, however, in the event that any provision
on this Subparagraph 13.1(e) is contrary to any applicable law, such
provision shall be of no force or effect, and shall not affect the validity
of the remaining provisions.
(f) The discovery by Lessor that any Financial statement of Lessee or
oil any Guarantor, given to Lessor by Lessee or any Guarantor, was
materially
(g) lithe performance of Laser's Obligations under this Lease is
guaranteed: (I) the detain of a Guarantor, (ii) lye termination of a
Guarantor's liability with respect to this Lease other than inn accordance
with the terms of such guaranty, (Iii) a Guarantor's becoming Insolvent or
the subject on a bankruptcy tiling, (iv) a Guarantor's refusal to no nor
this guaranty, or (v) a Guarantor's breach allies guaranty obligation on an
breach basis, and Lessee's failure, within sixty (60) days following
written notice by or on behalf of Lessor to Lessee of any such event, to
provide Lessor with written alternative assurances of security, which, when
coupled with the then existing resources of Lessee, equals or exceeds the
combined biannual resources at Lessee and the Guarantors that existed at
the time of execution of this Lease.
13.2 Remedies. If Lessee fails to phi-f chi any alt invasive duty or
obligation of Lessee under this Lease, with-rim Len (10) days after written
notice to Lessee (or in case of an emergency, whiteout notice), Lessor may at
its opinion (but with-rout obligation to do so), perform-run such duly or
obligation on Lessee's behalf, Including but not limited to the obtain-ring of
reasonably required bonds, insurance policies, of- governmental licenses,
permits or approvals. The costs and expenses 01 any such performance by Lessor
shah be due and payable by Lessee to Lessor upon invoice three-hour. ii any
check given to Lessor by Lessee shall not be honored by the bank upon which Ills
drawn, Lessor, at its own option, may require all Future payments to be made
under this Lease by Lessee to be made only by cashier's check. In the event of a
Breach at tennis Lease by Lessee (as deigned In Paragraph 13.1), with on
will-rout further malice or demand, and wilt-rout limiting Lessor In the
dextrose of any nagging or remedy which Lessor may h-rave by reason of such
Breach, Lessor may:
(a) Terminate Lessee's night to possession of .11-re Premises by any
lawful means, In which case this Lease and lye term hereof shall germinal
and Lessee shall immediately surrender possession-ref the Premises to
Lessor. in such event Lessor shall be entitled to recover hi-cm Lessee: (I)
the worth at the time at the award on the unpaid remit which had been
earned at the time on termination; (Ii) ibis worth at the time of award at
the amount by which The unpaid rent which would I-rave bean earned alter
termination until the time on award exceeds the amount of such rental loss
that the Lessee proves could have been reasonably avoided; (iii) the worth
at the time of award of the amount by which the unpaid remit for the
balance to the term alter the lines of award exceeds the amount of-such
rental loss that the Lessee proves could be reasonably avoided; and (live)
any other amount necessary ho compensate Lessor Ice all the detriment
proximately caused by the Lessee's failure to perform its Obligations under
lids Lease or which In the Ordinary course of things would be likely to
result therefrom. Including but not limited to the cost on recovering
possession of the Premises, expenses of relating, Including necessary
renovation and alteration on the Premises, reasonable attorneys' tees, and
lb-rat portion of any leasing commission paid by Lessor in connection with
this Lease applicable to the unexposed term of this Lease. The worth at the
Lime to award old the amount retorted to in provision (iii) of the
immediately preceding sentence shall be centupled by discounting such
amount at the dis-count rate of the Federal Reserve Bank on San Francisco
on the Federal Reserve Bank District in which the Premises are located at
this time of award plus one percent (1%). Efforts by Lessor to mitigate
damages caused by Lessee's Umlaut or Breach of this Lease shall not waive
Lessor's right to recover damages under this Paragraph 13.2. If termination
of lids Lease Is obtained through the provisional remedy of unlawful
detained, Lesson shall have the right to makeover in such pro-
<PAGE>
ceding the unpaid rent and damages as are recoverable therein, or Lessor
may reserve the nigh-rah to recover all or any part thereof in a separate
suit for such rent and/or damages. If a notice and grace period required
under Subparagraph 13.1(b), (c) or(d) was not previously given, a notice to
pay rent or quit, onto perform or quit, as the case may be, given to Lessee
under any statue authorizing the fort allure of leases for unlawful data
inner shall also constitute the applicable notice for grace period purposes
required by Subparagraph 13.1(b),(c) or (d). In such case, the applicable
grace period under the unlawful staler statue shall run concur-rently alter
the one such statutory notice, and the failure of Lessee to cure the
Default with-rim the greater of the two (2) such grace periods shall
constitute both an unlawful detained and a Breach of lulls Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Coniine the Lease and Lessee's right to possession In effect (in
California under California Oval Code Section 1951.4) after Lessee's Breach
and recover the rent as it becomes due, provided Lessee has The right to
sublet or assign, subject only to reasonable limitations. Lessor and Lessee
agree that the limitations on assignment and subletting In this Lease are
reasonable. Acts of maintenance or preservation, efforts to insist the
Premises, or the appointment of a receiver to protect this Lessor's
Interest under this Lease, shall not constitute a termination of the
Lessee's nigh-not to possession.
(c) Pursue any other remedy now or hereafter available to Lesson under
the laws or judoka diffusions of the state wherein the Premises are
located.
(d) The expiration or this Lease and/or the termination of Lessee's
right to possession shall not relieve Lessee lean liability under any
Indemnity provisions of this Lease as to matters occurring on accruing
during the term hereof on by reason at Lessee's occupancy of the Premises.
13.3 inducement Recapture in Event of Breach. Any agreement by Lessor for
tree or abased rant or other charges applicable to the Premises, or for the
giving on paying by Lessor to crier Lessee at any cash or other bonus,
inducement or consideration for Lessee's entering Into this Lease, all of which
concessions are hereinafter referred to as "inducement Provisions" shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be perform-teed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of a Breach (as defined In Paragraph 13.1) of this Lease by Lessee, any such
inducement Provision shah be deemed deleted from this Lease and of no further
force or ailed, and any rent, other flange, bonus, Inducement or consideration
theretofore abated, given or paid by Lessor under such an inducement Provision
shall be immediately due and payable by Lessee to Lessor,. an-rd recoverable by
Lessor, as additional rent due tinder this Lease, notwithstanding any subsequent
cure of said Breach by Lessee. The acceptance by Lesson of rent or the cure
chit-re Breach which Initialed this operation of this Paragraph 13.3 shall not
be deemed a waiver by Lessor of ice provisions of this Paragraph 13.3 unless
superficially so stated In writing by Lessor at the lime on such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee
to Lessor on ret-rim and tot-rein sums due hereunder will cause Lessor to Incur
costs not contemplated by this Lease, the exact of which will be extremely to
ascertain. Such costs include, but are not limited to, processing and accounting
charges, and late changes which may be Imposed upon Lessor by the terms of any
ground lease, montage or deed of trust ,evening the Premises. Accordingly, if
any Installment of rent or other sum due from Lessee shall not be received by
Lessor or Lessor's designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lesson a
late charge equal to six percent (6%) of such overdue amount. The parties hereby
agree that such kits charge represents a lair and of the costs Lessor will Incur
by reason of ladle payment by Lessee. Acceptance of such late charge by Lesson
shall in no event constitute a waiver on Lessee's Dalai or Breach with- respect
to such overdue amount, nor prevent Lessor from expressing any of the other
rights and remedies granted hereunder. in the event range Is payable hereunder,
whether or not collected, for three (3) consecutive installments of Base Ran,
them notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.
13.5 Breach by Lessor. Lessor shah not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lesson. For imposes of this Paragraph 13.5, a reasonable time
shah In no event be less than thirty (30) days alter receipt by Lessor, and by
any Lender(s) whose name and address shall have been furnished to Lessee in
willing ton such purpose, cal written notice spooling wherein such obligation of
Lessor has not been performed; provided, however, that if the nature of Lessor's
obligation is such that more than thirty (30) days after such notice are
reasonably required for its then Lessor shall not be In breach of this Lease If
performance Is commenced within such thirty (30) day period and thereat at
dili-gently pursued to completion.
14. Condemnation. if the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the dextrose of said power
(all of wig-rich are herein called, this Lease is-nail terminals as to the part
so taken as at It-re date the condemning authority lakes tithe or possession,
whichever hi-sty occurs. if more than Len percent (10%) of the hoer area alibis
Premises, or more than twenty-live percent (25%) 0111-re portion of the Common
Areas designated Ion Lessee's parking, is taken by condemnation, Lessee may, at
Lessee's option, to be expressed In writing within Len (10) days attar Lessor
shall have given Lessee written notice on such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as on the dale the condemning authority takes
such possession. Ii Lessee does not terminate this Lease In accordance with the
lane going, Ibis Lease shall remain in full force and effect as to this portion
of this Premises remaining, except that the Base Rant shall be reduced in the
same proportion as the retable floor area alibis Premises taken beans to the
total retable floor area of the Premises. No reduction of Base Rent shall occur
it the condemnation does not apply to any portion of the Pram-uses. Any award
for the taking oil all on any part of this Premises under the power of eminent
domain or any payment made under threat of the dextrose of such power shall be
the property of Lessor, whether such award shall be made as compensation for
diminution of value of the leasehold an for the taking of the fee, or as
severance damages; provided, however, that Lessee shall be entitled to any
compensation, separately awarded to Lessee for Lessee's relocation expenses
and/cry loss on Lessee's Trade Fixtures. In the event that this Lease Is not
terminated by reason of such condemnation, Lessor shall to the extent allies net
severance damages received, over and above Lessee's St-rare of the legal and
Eli-tar expenses incurred by Lessor in the condemnation mat-ter, repair any
damage to the Premises chatted by stitch condemnation auth-rarity. Lessee shall
be responsible for the payment of any amount In excess of such net severance
damages required to complete soon repair.
15. Brokers' Fees.
15.1 Procuring Cause. The Broken(s) married in Paragraph 1.10 Is/are cause
of this Lease.
15.2 Additional Terms. Unless Lessor and Broker(s) I-rave otherwise agreed
in writing, Lessor agrees plat: (a) II Lessee expresses any Option (as defined
in Paragraph 39. granted under this Lease on any Option subsequently granted, or
(b) II Lessee acquires any rights to the Pram-rises or other premises in which
Lesson has an Interest, or (c) if Lessee ram-rains In possession of the Premises
with the consent at Lessor after the expiration of the term of this Lease after
having failed to dextrose an Option, or (d) If said Brokers are the procuring
cause of any amber lease or sale entered info between the Parties pertaining to
the Premises and/or any adjacent property in which Lessor has an interest, or
(a) If Base Rent is increased, whether by agreement or operation of an
escalation clause herein, then as to any of said transactions, Lessor shall pay
said Broker(s) a lee In accordance with the schedule of said Broker(s) In of
tact at the time of the execution of this Lease.
15.3 Assumption of Obligations. Any buyer or transferee of Lessor's
interest In this Lease, whether such transfer is by agreement or by operable of
law, shall be deemed to have assumed Lessor's obligation under this Paragraph
15. Each Broken shall be an intended third party of the provisions of Paragraph
1.10 and of this Paragraph 15 to the extent of its interest in any commission
arising from Ibis Lease and may enforce right directly against Lessor and its
successors,
15.4 Representations and Warranties. Lessee and Lessor each represent and
warrant to the outer that It has had no dealings with any p son-son, firm,
bro-ken or finder other ti-ran as named in Paragraph 1.10(a) in connection with
the negotiation of this Lease and/or hits consummation of the transaction
contemplated hereby, and Thai no broker or other person, firm or entity other
ti-ran said named Broker(s) is enchained to any commission or hider's fee in
connection with said trans-action. Lessee and Lessor do each hereby agree to
indemnify, protect, defend and hold the other harmless horn and against
liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of
the Indemnifying Party, including any costs, expenses, and/or attorneys' fees
reasonably Incurred with respect thereto.
16 Tenancy and Biannual Statements.
16.1 Tenancy Statement. Each-n Party (as "Responding Party") shall with-rim
ten (to) days after written notice from the other Party (the "Requesting Party")
execute, acknowledge and deliver Ian 11w Requesting Party a statement In writing
In a term similar to the then most current "Tenancy Statement" form published by
The American Industrial Real Estate Association, platys such additional
collimation and/or statements as may be reasonably requested by the Requesting
Party.
16.2 Biannual Statement. ii Lesson desires to finance, reliance, or sell
ibis Premises car-re Building, or any part thereof, Lessee and alt shall deliver
to any potential lender or purchaser designated b Lessor such statements of
Lessee and such Guarantors as n-ray be reasonably requited by such tender or
purchaser, Including but not limited ho Lessee's statements Ion the past line
(3) years. All such shall be received by Lessor and such lender or purchaser in
confidence and shah be used only ice the purposes herein set forth.
17. Lessor's Liability. The term "Lessor" as used herein shall mean the owner or
owners at It-new limner In question of the fee tills to the Premises. in the
evenly of a transfer on Lessor's title mi-Interest In 11-re Premises or In this
Lease, Lessor rail-rail deliver to the or assignee (in cash or by credit) any
unused Security Deposit held by Lessor at the time of sect transfer or
assignment. Except as provided in Paragraph 153, upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with rasped Ice the Obligations and/or
covenants Linden lids Lease thereat(tar to be performed by the Lessor. Subject
to The foregoing, the Obligations and/or covenants in lids Lease to be performed
by the Lesson is-nail be binding only upon the Lesson as hereinabove defined.
18. Severability. This Invalidly of any provision on Il-is Lease, as of
competent , shall In no way affect the validity of any other provision hereof.
19. Interest on Past-Due Obligations. Arty monetary payment due Lessor
hereunder, other Il-ran late charges, not received by Lessor with-rim ten (10)
days follow-ing this date on which-n it was due, shall bear Interest hi-at-run
this dale due at the prime rate charged by the largest state chartered batik In
the state in which the Premises are located pies tour percent (4%) per annum,
but rich exceeding the maximum rate allowed by law, In addition to the potential
late range-range provided for In Paragraph 13.4.
20, lime of Essence. lime is at the essence with respect Ice the performance of
all obligations to t)e performed or observed by the Parties under lures Lease.
21. Rent Deferred. Alt monetary Obligations at Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. No Prior or rein-rein Agreements; Broker Disclaimer. This Lease complains
all agreements between the Parties welting respect to any mallet mentioned
herein, and no other prior on contemporaneous agreement or understanding shah be
elective. Lessor and Lessee each represents and warrants to the Brokers that It
has made, and is relying solely upon, its awn Investigation as to the nature,
quality, character and responsibility of the other Party to this Lease and as to
the nature, quality and character of The Premises. Brokers have no
responsibility with rasped thereto or with respect to any default or breach
hereof by either Party. Each Broker nail-nail be an intended third party on the
provisions of this Paragraph 22.
<PAGE>
23. Notched.
23.1 Notice . All notices required or permitted by this Lease rail-rail be
In writing and may be delivered in parson (by hand or by messenger or cot infer
serve's) or may be sent by regular, certified or registered mall on U.S. Postal
Service Express Mail, with postage p repaid, or by facsimile transmission
dun-mug normal business hours, and shall be deemed sufficiently given served in
a manner specified In this Paragraph 23. The addresses noted adjacent to a
Party's signature on Hulls Lease shall be that Party's address for delivery on
mailing on notice purposes. Either Party may by written notice to this other
spiffy a different address for malice purposes, except that upon Lessee's taking
possession of the Pram-rises, the Premises shall constitute Lessee's address for
the purpose at mail-ing or delivering notices to Lessee. A copy of all notices
required or permitted to be given to Lessor hereunder shall be concurrently
transmitted to such party or parties at such addresses as Lessor may from tin-re
to time hereafter designate by written notice to Lessee.
23.2 Date of Notice. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given an the date at delivery shown on
the receipt card, or If no delivery date is shown, this postmark thereon. hi
semi by regular mail, the notice shall be deemed given forty-sigh-in (48) hours
after the same Is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantees next day delivery shall be deemed given twenty-tour (24) hours alter
delivery on the same to the United States Postal Service or courier, If any
notice is transmitted by fac-simile transmission or similar means, the same
shall be deemed served or delivered upon telephone or facsimile confirmation of
receipt on the transmission thereof, provided a copy Is also delivered via
delivery or malt. If notice is received on a Saturday or a Sunday or a legal
holiday, it shall be deemed received on the next business day.
24, Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Broach by Lessee
of the same or any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any such act shall not be denned to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an stopped to enforce the provision
or provisions at this Lease requiring such consent. Regardless of Lessor's
knowledge of a Default or Breach at the lime of accepting rent, the acceptance
of rent by Lessor shall not be a waiver of any Default or Breach by Lessee of
any provision hereof. Any payment given Lessor by Lessee may be accepted by
Lessor on account of moneys or damages due Lessor, any qualifying state-ments or
conditions made by Lessee in connection therewith, which such statements and/or
conditions shall be of no force or effect whatsoever unless superficially agreed
to in writing by Lessor at or before the time of deposit of such payment.
25. Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation nail-nail be
responsible for payment of any lees or taxes applicable thereto.
26. No Right To Holdover. Lessee has no night to retain possession at the
Premises or any part thinnest beyond the expiration or earlier termination of
this Lease. In the event that Lessee holds over In violation at this Paragraph
26 then the Base Rent payable from and after The time of the expiration or
earlier termination at this Lease shall be increased to Iowa hundred percent
(200%) at the Base Rent applicable during the preceding such expiration or
earlier termination. Nothing contained herein shall be construed as a consent by
Lessor ho any holding over by Lessee.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28, Covenants and Conditions. All provisions of Lease to be observed or
performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the Panties,
their personal representatives, successors and, assigns and be governed by the
laws of the State in which the Premises are located. Any mitigation between the
Parties hereto concerning this Lease shall be initiated In the county in which
the Premises are located.
30. Subordination; Attainment; Non-Disturbance.
30.1 Subordination. Tints Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed by Lessor upon the real property at which the Premises are a
part, to any and all advances made on this security thereof, at-rd to all
renewals, modifications, consolidations, replacements and extensions to Israel.
Lessee agrees that tibia Lenders holding any such Security Device shall have no
duty, liability an obligation to perform any on lb-new Obligations on Lesson
under tins Lease, but that In the event oil Lessor's default with respect to any
such obligation, Lessee will give any Lender whose name and address h-nave been
punished Lessee In writing I or such purpose notice of Lessor's default pursuant
to Paragraph 13.5. if any Lender shall heel to have this Lease and/or any Option
granted hereby superior to the lien old its Security Device and shall give
written notice thereof to Lessee, lids Lease and such Options shall be deemed
prior to such Security Device, notwithstanding the relative dates of the
documentation or recondition to Israel.
30.2 Attainment. Subject to the non-disturbance provisions on Paragraph
30.3, Lessee agrees to altar to a Lender or any other panty wire acquires
ownership of line Prentiss by reason of a foreclosure of a Security Device, and
that in the event on such foreclosure, such new owner shall not: (I) be liable
for any act or omission of any prior lesson on with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (lei) be bound by
prepayment of more tab-ran one month's rent.
30.3 Non-Disturbance. With respect to Security Devices entered Into by
Lessor abler the execution of this lease, Lessee's subordination of this Lease
shall be sublet to receiving assurance (a non-disturbance agreement") from the
Lender that Lessee's possession and this Lease, including any options ho extend
the term hereof, will not be disturbed so none as Lessee is rot-rot In Breach
hereof and althorns to the record owner of the Premises.
30.4 Self-Executing. The agreements contained In this Paragraph 30 shall be
effective without the execution of any further documents; provided, however,
that upon written request from Lesson or a Lender in connection with a sale,
fanning or f Premises, Lessee and Lessor shall execute such further writings as
may be reasonably required to separately document any such subordination or
moon-subordination, atonement and/or non-disturbance agreement as Is provided
tar herein.
31. Attorneys' Fees. II any Party or Broken brings an action or proceeding to
enforce the terms hassle or declare rights hereunder, the Prevailing Party (as
here-alter defined) In any such proceeding, action, or appeal terrain, shall be
entitled to reasonable attorneys' lees. Such lees may be awarded In the same
suit or recovered in a separate stilt, whether or not such action or proceeding
Is pursued to diffusion or judgment. The trine "Prevailing Party" shall Include,
without limitation, a Party or Broker who substantially obtains or defeats this
relief sough-rim, as this case may be, whether by compromise, settlement,
judgment, or the abandonment by this other Party on Broker of its claim or
defense. The attorneys' fee award shall not be computed iii accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably Incurred. Lessor shall be entitled to attorneys' fees, costs and
expenses Incurred in preparation and ser-vice of notices old Default and
consultations In connection therewith, whether or not a legal action is
subsequently commenced In connection with such Default or resultant's Breach.
Broker(s) shall be Intended third party beneficiaries of this Paragraph 31.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall
have the right to enter Line Premises at any lime, in the case of , and
otherwise at reasonable times for the purpose of showing the same to prospective
purchasers, lenders, or lessees, and making such alterations, repairs,
improvements or additions to the Premises onto the Building, as Lessor may
reasonably deem necessary. Lessor may at any time place on or about the Premises
or Building any Ordinary 'for Sale" signs and Lessor may at any lime during the
last one hundred eighty (180) days of the term hereon place on or about the
Premises any Ordinary "For Lease' signs. Alt such activities at Lessor shall be
without abatement or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conduced, either
voluntarily or Involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary In this Lease, Lesson shall not be obligated to dextrose any standard
at reasonableness in determining whether to grant such consent.
34. Signs. Lessee shall not place any sign upon Ibis exterior of T-bone
Pram-rises or the Building, except that Lessee may, with Lessor's prior written
consent, Install (but riot on the roof) such signs as are reasonably required to
advertise Lessee's own business so long as such signs are in a location
designated by Lessor and comply with Applicable Requirements and the signage
criteria established for the Industrial Center by Lessor. The Installation on
any sign on the Premises by or for Lessee shall be subject to the provisions at
Paragraph 7 (Maintenance, Repairs, Utility Installations, Trade Fixtures an-rd
Alterations). Unless otherwise expressly agreed herein, Lesson reserves all
rights to the use of the roof of thus Building, and the right to install
advertising signs on the Building, Including the roof, which do not unreasonably
mien are within the conduct on Lessee's business; Lessor shall be entitled to
alt revenues from such advertising signs.
35. Termination; Merger. Unless stated otherwise in writing by Lessor, this
voluntary on toner surrender of lids Lease by Lessee, the mutual termination or
cancellation hereof, or a termination hereof by Lesson f or Breach by Lessee,
shall automatically terminate any sublease or lesser estate In thus Premises;
provided, however, Lessor shah, in the event of Amy such surrender, termination
or cancellation, have the option to continue any one or all of any existing .
Lessor's failure within ten (10) days following any such event to make a within
election to Ice contrary by willed notice to the holder of any such lesser
Interest, shall constitute Lessor's election to have such event constitute the
termination at such interest.
36. Consents,
(a) Except Ion Paragraph 33 hereon (Auctions) or as cherries provided
herein, wherever In Hulls Lease the consent of a Party Is required to an
act by Or ion the other Party. such consent shall not be unreasonably
withheld or delayed. Lessor's actual reasonable costs and expenses
(including but not limited to architects', attorneys', engineers' and other
consultants' fees) incurred in thus consideration of, or response to, a
request by Lessee for any Lessor consent pertaining to this Lease on the
Premises, including but not limited to consents to an assignment a
subletting on the presence or use oil a Hazardous Substance, shall be paid
by Lessee to Lessor upon receipt at an invoice and supporting documentation
therefore. In addition to the deposit described in Paragraph 12.2(e),
Lessor may. as a condition to considering any such request by Lessee,
require that Lessee deposit with Lesson an amount on money (In addition to
the Security Deposit held under Paragraph 5): reasonably calculated by
Lessor to represent the cost Lessor will incur in considering and
responding to Laser's request. Any unused portion at said deposit shall be
refunded to Lessee without interest. Lessor's consent to any act,
assignment of this Lease or subletting of the Premises by Lessee shall not
constitute an acknowledgment that no Default or Breach by Lessee on lids
Lease exists, nor shall such consent be deemed a waiver of any then
existing Default on Breach, except as may be otherwise superficially stated
in writing by Lessor at the time of such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to spiffy herein
any particular condition to Lessor's consent shall not preclude the
transpositions by Lessor at The lime of consent of sofa Curler or other
conditions as are then reasonable whir reference to It-re particular matter
tar which consent is being given.
37. Guarantor.
37.l Farm of Guaranty. If there are to be any Guanos of this Lease per
Paragraph 1.11, The harm of the guaranty to be executed by each such Guarantor
shall be in the form mast recently published by the American industrial Real
Estate and each such Guarantor shall have T-bone same obligations as Lessee
under this lease, Including but not limited to the obligation to provide the
Tenancy Statement and required In Paragraph
<PAGE>
37.2 Additional Obligation. of Guarantor. it shall constitute a Default of
the Lessee under this Lease It any such-n Guarantor falls or refuses, upon
reasonable request by Lessor to give: (a) evidence of tubes due execution at the
guaranty called for by times Lease, Including the auth-rarity of The Guarantor
(and of this party signing on Guarantor's behalf) to obligate such Guarantor on
said guaranty, and resolution allies board of directors authorizing the making
of such guaranty, together with a certificate of Incumbency showing the
signatures of the parsons authorized to sign on Its behalf, (b) current biannual
statements of Guarantor as may from time to time be requested by Lessor, (c) a
Tenancy Statement, or (d) written confirmation that the guaranty is still In
effect.
38. Quiet Possession. Upon payment by Lessee of the rent for the Premises and
the performance of all of the covenants, conditions and provisions on Lessee's
part to be observed and performed under this Lease, Lessee shall have quiet
possession of the Pram-n-rises ton the menthe term hereof subject to all of the
provisions of this Lease.
39. Options.
39.1 Definition. As used In this Lease, the word "Option" has the following
meaning: (a) the might to extend Tim term of this Lease or to renew this Lease
or to extend or renew am-nay lease that Lessee has on other property on Lessor;
(b) the right of first refusal to lease the Premises or the right of
first offer to lease the Premises or The right of first refusal to lease
other property of Lessor on the nigh-not of first alien to lease other
property at Lessor; (c) the night to purchase toe Premises, on the nigh-not
of first refusal to purchase the Promises, anther right old oilier to
purchase the Premises, or the night to purchase other property of Lessor,
on the right at first refusal to purchase other properly of Lessor, anther
nigh' it at lint oilier to purchase other properly of Lessor.
39.2 Options Personal to Original Lessee. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 here-of,
and cannot be voluntarily or Involuntarily assigned or expressed by any person
on entity other than said original Lessee while the original Lessee Is Iii lull
and actual possession at the Premises and with-rout the Intention of thereafter
assigning or subletting. The Options, ii any, herein-n granted to Lessee are not
assignable, either as a pant on an assignment of this Lease or separately on
apart and no Opulent may be separated from this Lease in any manner, by
reservation or otherwise.
39.3 Multiple Options. In the event that Lessee has any multiple Options to
extend or renew lures Lease, a later option cannot be expressed unless the prior
Options to extend or renew this Lease have been validly expressed.
39.4 Effect of Default on Options.
(a) Lessee shall have no night to dextrose an Option, notwithstanding
any provision in T-bone grant of Option to the contrary: (I) during the
period communing with-n It-new giving of any notice of Default under
Paragraph 13.1 and continuing until the noticed Default Is cured, or (ii)
during the period of time any mone-tary obligation due Lessor from Lessee
is unpaid (without regard to whether notice thereof is given Lessee), or
(iii) during the time Lessee Is In Breach of this Lease, or (Iv) In the
event ti-Nat Lessor has given to Lessee three (3) or more notices of
separate Defaults under Paragraph 13.1 during the twelve (12) month pennon
Immediately preceding the dextrose of the Option, Rollins Del caulis are
cured.
(b) The p silk of time within-rich-n an Option may be expressed shall
not be extended or enlarged by reason of Lessee's inability to extensors an
Option because of The provisions of P paragraph 39.4(a)
(c) All rights of Lessee under the provisions of an Option shah
terminate and be of no further force or effect, notwithstanding Lessee's
due and timely dextrose of the Option, II, after such dextrose and during
Ibis tern-n on this Lease, (rot) Lessee lolls to pay to Lessor a monetary
obligation at Lessee Ion a period at thirty (30) days after such-n
obligation becomes due (without any necessity of Lessor to give notice
it-eared to Lessee), or (ii) Lessor gives to Lessee three (3) or more
notices of separate Defaults under Paragraph-n 13.1 during any twelve (12)
month-n period, whether or not the DePaul's are cured, or (iii) II Lessee
commits a Breach of this Lease.
40. Rules and Regulations. Lessee agrees that II will abide by, and keep and
observe all reasonable rules and regulations ("Rules and Regulations') which-n
Lessor may make Iron time to time Ion the management, safely, care, and
clianthus of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as forth-new convenience of other occupants
or tenants of the Building and the industrial Center and their ingles.
41. Security Measures. Lessee hereby acknowledges payable to Lesson hereunder
does not include the cost at guard service or other security measures, and that
Lessor shah have nark obligation whatsoever to provide same, Lessee assumes all
responsibility for the protection of the Premises, Lessee, its agents and
invitees and their property from the acts of ti-rind panties.
42. Reservations. Lessor reserves the right, from lime to liars, to grant,
without the consent on joiner of Lessee, such easements, nights of way, utility
raceways, and dedications lint Lessor deems necessary, and to cause the
recordation of parcel maps and , so long as such easements, rights of way,
utility race-ways, dedications, maps and restrictions do not reasonably intender
will-n Line use of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lesson to effectuate any such easement nights,
dedication, map or restrictions.
43. Performance Under Protest. Ii at any time a dispute nail-nail anise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money Is
assented shah have the right to n-rake payment "under protest" and such-n
payment shall not be regarded as a voluntary payment and there shall survive the
noggin on Line part on said Party to Institute suit for recovery of such sum. If
it shall be adjudged that there was no legal obligation on the part of said
Panty to pay such Sinai or any part thereof, said Panty shall be entitled to
recover such sum or so. much thereof as ii was not legally required to pay under
this provisions of this Lease.
44. Authority. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity no p re-sents and warrants that h-new or she Is duly authorized to
execute and deliver this Lease on its behalf. II Lessee Is a corporation, trust
or partnership, Lessee shall, within thirty (30) days after request by Lesson,
deliver to Lessor evidence satisfactory to Lessor on such-n authority.
45. Any conflict between the printed provisions of this Lease and the
typewritten on handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
46, Offer. Preparation of this Lease by sillier Lessor on Lessee or Lessor's
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be
deemed an alter to lease. This Lease Is not Intended to be binding until
executed and delivered by all Parties hereto.
47 Amendments. This Lease may be modified only In writing, signed by the parties
in interest at The time of the modification. The Parties shall amend this Lease
from time to time to reflect any adjustments to Nat are made to the Base Rent or
other rent payable under this Lease. As long as they do not materially change
Lessee's Obligations hereunder, Lessee agrees to make such reasonable
non-monetary modifications to this Lease as may be reasonably required by an
National insurance company or pension plan Lender In connection with the
obtaining of normal fanning or of the property of which the Premises are a pant.
48. Multiple Parties. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
Obligations of such multiple parties shah be the join-rim and several
responsibility old all persons on entities named herein as such-n Lesson or
Lessee.
<PAGE>
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED Tills LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE Tile INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR ATTORNEYS
REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CON-SULTED TO EVALUATE THE
CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF ASBESTOS,
UNDERGROUND STORAGE TANKS OR HAZ-ARDOUS SUBSTANCES. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOSIATION
OR BY THE REAL ESTATE BROKERS OR THEIR CONTRACTORS, AGENTS OR EMPLOYEES AS
TO THE LEGAL SUFFIOFENCY, LEGAL EFFECT, OR TAX CONSE-QUENCES OF THIS LEASE
OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON
THE ADVICE OF THEIR OWN COUNSEL AS TO Tile LEGAL AND TAX CONSEQUENCES OF
THIS LEASE. IF THE SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN
ATTORNEY FROM THE STATE WHERE Tile PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: Executed at: Phoenix, AZ
----------------------- ----------------------------
On: On: 6/1/98
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By LESSOR:Mr. Art Grandlich d.b.a. By LESSEE Renaissance International Group
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McKellips Corporate Square a Nevada Corporation
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By: /s/ A. Granduch By: /S/ William O'Neal
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Name Printed: A. Granduch Name Printed: William O'Neal
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Title: Owner Title: Senior Vice President
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By: By:
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Name Printed: Name Printed:
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Title: Title:
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Address:201 West Apache Trail Address:4840 East Jasmine Street,
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Apache Junction,AZ 85220 Mesa Az, 85205
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Telephone:(602) 983-2500 Telephone( )
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Facsimile:(602) 983-7963 Facsimile:
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BROKER: BROKER:
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Executed at: Executed at:
------------------------------- ------------------------------
On: On:
---------------------------------- ---------------------------------------
By: By:
---------------------------------- ---------------------------------------
Name Printed: Name Printed:
----------------------- ----------------------------------
Title: Title:
------------------------------- ------------------------------------
By: By:
---------------------------------- ---------------------------------------
Name Printed: Name Printed:
---------------------- ----------------------------
Title: Title:
------------------------------ ------------------------------------
Telephone:( ) Telephone( )
---------------------- ----------------------------
Facsimile: Facsimile:
--------------------------- --------------------------------
NOTE: These forms are often modified to meet changing requirements of law
and needs of the industry. Always write or call to make sure you are utilizing
the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOSIATION, 345 S.
Figueroa St., N- Los Angeles, CA 90071. (213) 687-8777.
<PAGE>
ADDENDUM
This ADDENDUM is a part of that certain lease by and between Mr. Art Grandlich,
d.b.a. McKellips Corporate Square (Lessor) and Renaissance International Group,
Ltd. (RIGL), a Nevada corporation (Lessee) of even date herewith.
PRESSES
-------
Per Paragraph 2 of the Lease Agreement, Lessee hereby leases Suite 105 of
McKellips Corporate Square, which consists of 16,772 square feet which is a
19.62% portion of the menthe complex which totals 85,464 square feet. Subject
Suite shall be delivered to Lessee in the current condition without additional
tenant improvements by the Lessor. All HVAC to be in good operating condition.
After thirty (30) days, Lessee to be responsible for all I-IVAC operating and
maintenance expenses.
Rental Schedule
----------------
The following rental schedule shall apply during the term of this agreement:
July 1, 1998 until June 30, 1999: $4,528.44 per month plus applicable rental tax
and common area charges.
July 1, 1999 until June 30, 2000: $9,224.60 per month plus applicable rental tax
and common area charges.
July 1, 2000 until June 30, 2003: $9,727.76 per month plus applicable rental tax
and common area charges.
Note: In the event that the Lessee does not complete the 6,000 square feet of
office space on or before September 30, 1998, the rent shall escalate to
$9,224.60 per month effective October 1,1998.
TENANT
-------
Lessee shall be responsible for constructing all tenant improvements to the
Suite in a professional and workmanlike manner pursuant to all applicable and
state building codes, at Lessee's sole cost and expense. On or before September
30, 1998, Lessee shall construct a minimum of 6,000 square feet of
air-conditioned office area and any demising walls that may be required to
subdivide the space. The blueprints of the proposed tenant improvements shall be
submitted to the Lessor for review and approval prior to commencement of
construction.
OCCUPANCY
---------
Lessee shall have occupancy to the Premises upon mutual execution of this
agreement to commence Tenant Improvements and begin to move employees into
subject property. No rental shall be charged during this period.
ASSIGNMENT
------------
Lessee shall have the right to assign the lease to any entity or person owning
at least fifty-one percent (51 %) of the stock of RIGL or any subsidiary in
which RIGL owns at least a fifty-one percent (51%) interest,
RIGHT OF FIRST REFUSAL
----------------------
Lessee shall have a right of first refusal to lease the remaining premises of
Building B as such space becomes available, and upon substantially similar terms
as set forth herein. Lessee must lease space in the current condition without
additional tenant improvements by the Lessor. Lessee must provide approval
within seven (7) days after notification by Lessor that additional space is
available.
SIGNAGE
--------
Lessee shall have the right, at its own expense, to maintain within the interior
of the leased Premises (not visible from the exterior) any signs and advertising
matter customary or appropriate in the conduct of RIGL's business. Lessee shall
have the exclusive right to the use of the exterior surface of the leased
Premises for the largest sign allowable by the Lofty of Mesa, which shall be
provided at Lessee's expense. Lessor shall have the right to approve Lessee's
exterior sign plan, which approval shall not be unreasonably withheld.
HAZARDOUS WASTE
----------------
Lessor hereby represents and warrants to the best of Lessor's knowledge, there
is no hazardous waste on or under the property (McKellips Corporate Square).
BROKERAGE
---------
After the Tenant Improvements are completed and all lien waivers for labor and
materials are delivered to the Lessor a leasing commission of five percent (5%)
of the total lease consideration ($25,761) shall be payable by the Lessor. The
commission shall be divided equally between Lee & Associates Arizona and Grubb &
Ellis and paid on an annual basis on July 1 of each calendar year ($5,152 per
annum).
In the event Grubb & Ellis elects not to collect the commission in annual
installments, the Lessor agrees to
<PAGE>
OPTION TO EXTEND
----------------
Provided this lease agreement is in full force and effect and neither party is
in violation of any terms and conditions of the lease, Lessor hereby grants
Lessee an option to extend the lease for an additional five (5) year period. The
lease rate for the option period shall be pursuant to fair market value at the
time the lease is extended. Lessee must give one hundred twenty (120) days
written notice of Lessee's intention to dextrose this option.
PARKING
-------
Lessee shall be entitled to 57 unreserved parking spaces and 3 reserved, covered
parking spaces. In the event Lessee wants additional covered parking, Lessee may
construct additional covered parking stalls at Lessee's sole cost and expense.
Lessor will have the right to approve location of additional covered parking
canopy and they shall be designed and constructed in a manner that is similar to
the other canopies already located at Muckheaps Corporate Square.
TELEPHONE EQUIPMENT
-------------------
Lessee shall be responsible for all telephone equipment and telephone these to
subject property.
<PAGE>
Exhibit "A"
{GRAPHIC OMMITED}
<PAGE>
AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE (this "Amendment') amends and modifies that certain
Lease and Addendum thereto by and between MT. Art Grandlich d/b/a McKellips
Corporate Square (Lessor) and Renaissance International Group, Ltd. (RIGI), a
Nevada corporation (Lessee) dated 1, 1 998. as follows:
"Lessee shall be responsible for constructing all tenant improvements to the
Suite in a professional and workmanlike manner pursuant to all applicable
municipal and state building codes, at Lessee's sole cost and expense. No later
than 90-days from the dale Lessee's plans are approved by the City of Mesa.
Lessee shall construct a minimum of 6,000 square feet of air conditioned office
area and any walls that may be required to subdivide the space. The blueprints
of the proposed tenant improvements shall be submitted to the Lessor for review
and approval prior to commencement of construction. In the event that the Lessee
does not complete the 6,000 square feet of office space on or before such date
of the rent shall escalate to
$9,224.60 per month effective upon the
"Lessor"
Mr. Art Grandlich
d/b/a McKellips Corporate Square
By: /s/ Art Grandlich
--------------------------------------------
Art Grandlich
"Lessee"
Renaissance International Group, Ltd., a Nevada
By: /s/ Kevin Jones
--------------------------------------------
Kevin Jones
Its President