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FORM 10-K/A
AMENDMENT NO. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 1995.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD TO .
COMMISSION FILE NUMBER 0-07428
CALIFORNIA MICROWAVE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 94-1668412
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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650 N. MARY AVENUE, SUNNYVALE, CALIFORNIA 94086
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 732-4000
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, $.10 PAR VALUE
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant was approximately $420,679,000 as of September 15, 1995.
Indicate the number of shares outstanding of the issuer's common stock, as
of the latest practicable date: On September 15, 1995, there were 15,841,002
shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the registrant's Annual Report to Stockholders for fiscal
year ended June 30, 1995. (Part II of Form 10-K)
(2) Portions of definitive proxy statement filed with Securities and
Exchange Commission relating to the registrant's 1995 Annual Meeting of
Stockholders. (Part III of Form 10-K)
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PART IV
ITEM 1. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) 3. EXHIBITS
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3.1 Restated Certificate of Incorporation. (Exhibit to the Company's Form 8 dated
February 19, 1993, constituting Amendment No. 1 to the Company's Registration
Statement on Form 8-A for the Common Stock; incorporated herein by
reference.)
3.2 Bylaws. (Exhibit to the Company's Form 10-K for its fiscal year ended June
30, 1994; incorporated by reference herein.)
4.1 Indenture of Trust, amended, as relating to 1987 Industrial Development
Revenue Refunding Bonds of Satellite Transmission Systems, Inc.*
4.2 Reimbursement Agreement between Satellite Transmission Systems, Inc. and The
Bank of Tokyo, Ltd., San Francisco Agency, relating to Satellite Transmission
Systems, Inc. Indenture.*
4.3 Guarantee of California Microwave, Inc. in favor of The Bank of Tokyo, Ltd.,
San Francisco Agency, relating to Satellite Transmission Systems, Inc.
Indenture.*
4.4 Rights Agreement, dated July 27, 1989. (Exhibit to the Company's Form 8-A
filed on August 2, 1989; incorporated herein by reference.)
4.5 Master Indenture of Trust (First Program), relating to County of Monroe
Industrial Development Bonds.*
4.6 Series F Supplemental Indenture, dated as of June 1, 1992, relating to
$2,800,000 of County of Monroe Industrial Development Bonds.*
4.7 Guaranty of California Microwave, Inc. in favor of Security Pacific National
Trust Company (New York), as Trustee, dated as of June 1, 1992, relating to
$2,800,000 of County of Monroe Industrial Development Bonds.*
4.8 Letter of Credit Reimbursement Agreement, between California Microwave, Inc.
and Marine Midland Bank, N.A., dated as of June 1, 1992, relating to
$2,800,000 of County of Monroe Industrial Development Bonds.*
10.1 Employee Stock Purchase Plan, as amended through August 1994.** (Exhibit to
the Company's Form 10-K for its fiscal year ended June 30, 1994; incorporated
herein by reference.)
10.2 Lease dated March 10, 1977, of the premises at 990 Almanor Avenue in
Sunnyvale, California. (Exhibit for the Company's Form 10-K for its fiscal
year ended June 30, 1994; incorporated herein by reference.)
10.3 Lease dated July 27, 1977, of the premises at 985 Almanor Avenue in
Sunnyvale, California, with Lease Amendment Number One dated August 23, 1977.
(Exhibit to the Company's Form 10-K for its fiscal year ended June 30, 1993;
incorporated herein by reference.)
10.4 1986 Stock Option Plan, as amended.** (Exhibit to the Company's Form 10-K for
its fiscal year ended June 30, 1991; incorporated herein by reference.)
10.5 1988 Restricted Stock Plan.** (Exhibit to the Company's Form 10-K for its
fiscal year ended June 30, 1994; incorporated herein by reference.)
10.6 Lease of the property located at 2105 West Fifth, Tempe, Arizona. (Exhibit to
the Company's Form 10-K for its fiscal year ended June 30, 1991; incorporated
herein by reference.)
10.7 Stock Purchase Agreement among Microwave Radio Corporation, the stockholders
of Microwave Radio Corporation and California Microwave, Inc., dated as of
March 11, 1992. (Exhibit to the Company's Form 8-K, filed on May 4, 1992;
incorporated herein by reference.)
10.8 Credit Agreement between California Microwave, Inc. and Bank of America
National Trust and Savings Association, as agent, dated April 20, 1992.
(Exhibit to the Company's Form 10-K for the fiscal year ended June 30, 1992;
incorporated herein by reference.)
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10.9 First Amendment to Credit Agreement between California Microwave, Inc. and
Bank of America National Trust Association, as agent, dated June 29, 1992.
(Exhibit to the Company's Form 10-K for the fiscal year ended June 30, 1992;
incorporated herein by reference.)
10.10 Lease of the premises located at 20 Alpha Road, Chelmsford, MA. (Exhibit to
the Company's Form 10-K for the fiscal year ended June 30, 1992; incorporated
herein by reference.)
10.11 1992 Stock Option Plan as amended through August 1995.**+
10.12 Letter agreement with Philip F. Otto dated September 22, 1992.** (Exhibit to
the Company's Form 10-K for its fiscal year ended June 30, 1992; incorporated
herein by reference.)
10.13 Amendment to letter agreement with Philip F. Otto, dated July 30, 1993.**
(Exhibit to Company's Form 10-K for its fiscal year ended June 30, 1993;
incorporated herein by reference.)
10.14 Letter agreement between California Microwave, Inc. and David B. Leeson dated
January 20, 1993.** (Exhibit to the Company's Form 8-K dated January 20,
1993; incorporated herein by reference.)
10.15 Consulting agreement between California Microwave, Inc. and David B. Leeson
dated January 20, 1993.** (Exhibit to the Company's Form 8-K dated January
20, 1993; incorporated herein by reference).
10.16 Lease of the property located at 55 Commerce Drive, Hauppauge, N.Y (Exhibit
to this Company's Form 10-K for its fiscal year ended June 30, 1993;
incorporated herein by reference).
10.17 Credit Agreement between California Microwave, Inc. and Bank of America
National Trust and Savings Association, dated May 17, 1993. (Exhibit to the
Company's Form 10-K for the fiscal year ended June 30, 1993; incorporated
herein by reference.)
10.18 Credit Agreement between California Microwave, Inc. and Banca Nazionale Del
Lavoro, dated June 25, 1993. (Exhibit to the Company's Form 10-K for the
fiscal year ended June 30, 1993; incorporated herein by reference.)
10.19 Amendment to Credit Agreement between California Microwave, Inc. and Bank of
America National Trust and Savings Association, dated October 25, 1993.
(Exhibit to the Company's Form 10-K for the fiscal year ended June 30, 1994;
incorporated herein by reference)
10.20 Second Amendment to Credit Agreement between California Microwave, Inc. and
Bank of America National Trust and Savings Association, dated October 25,
1993. (Exhibit to the Company's Form 10-K for the fiscal year ended June 30,
1994; incorporated herein by reference)
10.21 Third Amendment to Credit Agreement between California Microwave, Inc. and
Bank of America National Trust and Savings Association, dated February 22,
1994. (Exhibit to the Company's Form 10-K for the fiscal year ended June 30,
1994; incorporated herein by reference)
10.22 Fourth Amendment to Credit Agreement between California Microwave, Inc. and
Bank of America National Trust and Savings Association, dated as of March 1,
1995.+
10.23 Waiver and Fifth Amendment to Credit Agreement between California Microwave,
Inc. and Bank of America National Trust and Savings Association, dated as of
June 30, 1995.+
10.24 Agreement For the Sale of Assets of Telesciences Transmission Systems, Inc.
to CMI Sub, Inc. and California Microwave Inc., dated October 23, 1993.
(Exhibit to the Company's Form 8-K dated November 9, 1993; incorporated
herein by reference.)
10.25 Shareholders' Agreement among California Microwave, Inc., Cornix Systems,
Harry F. Eustace, Barbara Eustace, Garber International Associates and Dr.
F.V. Garber, dated March 8, 1994. (Exhibit to the Company's Form 10-K for its
fiscal year ended June 30, 1994; incorporated herein reference.)
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10.26 Amendment to letter agreement with Philip F. Otto, dated August 15, 1994.**+
(Exhibit to the Company's Form 10-K for its fiscal year ended June 30, 1994;
incorporated herein reference.)
10.27 Agreement and Plan of Reorganization of Merger, dated as of January 31, 1995
among California Microwave, Inc., CMI Acquisition Corporation and Microwave
Networks Incorporated ("Agreement and Plan of Reorganization"; Exhibit to the
Company's Form 8-K dated February 13, 1995; incorporated herein by
reference.)
10.28 First Amendment to Agreement and Plan of Reorganization, dated April 28, 1995
(Exhibit to the Company's Registration Statement on Form S-4, Registration
No. 33-57593, filed May 1, 1995; incorporated herein by reference).
10.29 Letter Agreement with Garrett E. Pierce, dated March 30, 1994.**+
10.30 Letter Agreement with Leon F. Blachowicz, dated December 2, 1994.**+
10.31 Lease dated October 27, 1989, of the premises at 171 Covington Drive,
Bloomingdale, Illinois, with First Amendment to Lease dated June 30, 1990 and
Second Amendment to Lease dated June 30, 1994.
10.32 Lease dated February 24, 1992 of the premises at 855 Mission Court, Fremont,
California.
11 Computation of Per Share Earnings.+
13 Annual Report to Stockholders (pages incorporated by reference).+
21 List of Subsidiaries.+
23 Consent of Ernst & Young LLP, Independent Auditors.+
24 Powers of Attorney.+
27 Financial Data Schedule.+
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* Registrant agrees to file such exhibits upon request by the Commission.
** Compensatory plan or arrangement.
+ Previously filed.
Exhibits are available from the Registrant upon request.
(B) REPORTS ON FORM 8-K
1. Form 8-K filed on June 14, 1995 regarding the acquisition of MNI by
Registrant.
2. Form 8-K filed on June 30, 1995 regarding restructuring and other
charges taken by Registrant in June 1995.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
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Dated: October 4, 1995 CALIFORNIA MICROWAVE, INC.
By /s/ PHILIP F. OTTO
Philip F. Otto
Chairman, President and
Chief Executive Officer
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Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
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/s/ PHILIP F. OTTO Chairman, President and Chief Executive October 4, 1995
PHILIP F. OTTO Officer (principal executive officer)
/s/ GARRETTE E. PIERCE Executive Vice President and Chief October 4, 1995
GARRETT E. PIERCE Financial Officer (principal financial
and accounting officer)
Gilbert F. Johnson* President -- Government Group and October 4, 1995
GILBERT F. JOHNSON Director
David B. Leeson* Director October 4, 1995
DAVID B. LESSON
Robert A. Helliwell* Director October 4, 1995
ROBERT A. HELLIWELL
Arthur H. Hausman* Director October 4, 1995
ARTHUR H. HAUSMAN
Edward E. David. Jr.* Director October 4, 1995
EDWARD E. DAVID, JR.
Alfred M. Gray* Director October 4, 1995
ALFRED M. GRAY*
*By /s/ GEORGE L. SPILLANE
Attorney-in-fact
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INDEX OF EXHIBITS
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NUMBER DESCRIPTION
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10.31 Lease dated October 27, 1989, of the premises at 171 Covington Drive, Bloomingdale,
Illinois, with First Amendment to Lease dated June 30, 1990 and Second Amendment to
Lease dated June 30, 1994.
10.32 Lease dated February 24, 1992 of the premises at 855 Mission Court, Fremont,
California.
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EXHIBIT 10.31
LEASE
LANDLORD: American National Bank and Trust Company of Chicago, not
individually but solely as Trustee under Trust Agreement dated
December 28, 1988 and known as Trust Number 106990-07
TENANT: Motorola, Inc., a Delaware corporation
DATE OF LEASE: October 27th, 1989
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TABLE OF CONTENTS
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Article Page
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I GRANT AND TERM........................................ 1
II CONSTRUCTION OF IMPROVEMENTS.......................... 1
III RENT.................................................. 5
IV USE................................................... 6
V POSSESSION............................................ 7
VI TAXES................................................. 9
VII INSURANCE............................................. 11
VIII UTILITIES............................................. 13
IX REPAIRS............................................... 14
X COMPLIANCE WITH LAWS AND ORDINANCES................... 15
XI MECHANIC'S LIENS AND OTHER LIENS...................... 16
XII LANDLORD'S RIGHT TO CURE DEFAULT...................... 17
XIII DEFAULTS OF TENANT.................................... 17
XIV DESTRUCTION AND RESTORATION........................... 22
XV CONDEMNATION.......................................... 23
XVI ASSIGNMENT AND SUBLETTING............................. 25
XVII SUBORDINATION, NONDISTURBANCE,
NOTICE TO MORTGAGEE AND ATTORNMENT.................... 27
XVIII SIGNS................................................. 28
XIX REPORTS BY TENANT..................................... 28
XX CHANGES AND ALTERATIONS............................... 28
XXI SURRENDER............................................. 29
XXII ENVIRONMENTAL......................................... 30
XIII CANCELLATION OPTION................................... 34
XIV RENEWAL OPTION........................................ 34
XV PURCHASE OPTION....................................... 35
XXVI INTENTIONALLY DELETED................................. 38
XXVII MISCELLANEOUS PROVISIONS.............................. 38
XXVIII EXCULPATORY PROVISIONS................................ 43
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LEASE
THIS LEASE ("Lease") is made as of the 27th day of October 1989, by and
between AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, not individually
but solely as Trustee under Trust Agreement dated December 28, 1988 and known
as Trust Number 106990-07 ("Landlord"), and MOTOROLA, INC., a Delaware
corporation ("Tenant").
ARTICLE I
GRANT AND TERM
1.1 Landlord, for and in consideration of the rents herein reserved and
of the covenants and agreements herein contained on the part of Tenant to be
performed, hereby leases to Tenant, and Tenant hereby leases from Landlord,
that certain parcel of real estate (the "Land") which consists of all of Lots
40, 41 and 42 and a portion of Lot 43 in Covington Corporate Center,
Bloomingdale, DuPage County, Illinois (the "Center"), legally described on
Exhibit A attached hereto and made a part hereof and any and all improvements
(the "Improvements") now existing or to be constructed thereon. The Land
comprises approximately 7.72 acres. The Land and the Improvements are
collectively referred to as the "Premises". The structure located upon the Land
and forming a part of the Improvements which is constructed for human occupancy
or for the storage of goods, merchandise, equipment or other personal property
is referred to as the "Building". The Building currently consists of
approximately 99.551 square feet of office, light manufacturing, assembly and
warehouse space (the "Existing Building"), with approximately 10,512 square
feet of additional space (the "Addition") to be built, all of which shall be
improved in accordance with final plans and specifications to be agreed upon by
Landlord and Tenant (collectively the "Improved Space").
1.2. The term hereof (the "Term") shall commence on the day that
construction of the improvements to the office area (the "Office Area") of the
Existing Building have been substantially completed in accordance with the
Final Plans (as defined herein), subject to normal "punch list items" (the
"Commencement Date"), as evidenced by the issuance of a conditional certificate
of occupancy for the Office Area, and shall expire on the day immediately
preceding the tenth (10th) anniversary of the first (1st) day of the first
(1st) full calendar month of the Term (the "Expiration Date").
If Tenant takes possession of the Premises prior to the Commencement
Date, all terms and provisions of this Lease shall apply, including the
obligation for the payment of Base Rent and Additional Rent (as said terms are
defined herein). In the event any such pre-Term possession of the Office Area
by Tenant commences on a date other than the first day of the calendar month,
Tenant shall pay Base Rent on a per diem basis, prorated on a three hundred
sixty five (365) day basis, at the monthly rate set forth herein, in advance,
for such partial month, as well as any Additional Rent for such partial month.
Landlord and Tenant shall, within thirty (30) days after, respectively,
(a) the commencement of the Term, and (b) the expiration of the Term, or any
earlier termination of this Lease, confirm in writing by an instrument in
recordable form that, respectively, such commencement or such expiration or
termination has occurred, setting forth therein the Commencement Date and the
Expiration Date.
ARTICLE II
CONSTRUCTION OF IMPROVEMENTS
2.1 Subject to the terms and conditions set forth in this Article II,
Landlord shall cause to be performed the work provided for in the Final Plans.
Landlord hereby agrees to provide Tenant with a "Construction Allowance" in an
amount equal to Two Million Seven Hundred Fifty One Thousand Five Hundred
Seventy-Five Dollars ($2,751,575.00), to be applied toward the Costs (as
defined herein) of the Improved Space. Additionally, Landlord covenants and
agrees that (i) the cost of mechanical, structural and electrical design work
shall not exceed Eighty Eight Thousand Dollars ($88,000.00), which design work
cost is not part of the Construction Allowance, and (ii) the cost of the
architectural design work shall not exceed One Hundred Thirty Two Thousand
Dollars ($132,000.00), which design work cost is not part of the Construction
Allowance, both of said costs to be paid for by Landlord. In the event the
Construction Allowance exceeds the Costs as conclusively determined in good
faith by Landlord,
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Tenant shall receive a credit against the first installment(s) of Monthly Base
Rent (as defined herein) due and payable hereunder in an amount equal to $0.01
per square foot of the Building Area for each Ten Thousand Dollars ($10,000.00)
of unused Construction Allowance. In the event the Costs, as conclusively
determined in good faith by Landlord, exceed the Construction Allowance, Tenant
shall reimburse said excess amount to Landlord as follows:
(a) The amount of such excess up to and including One Million
Four Hundred Thirty Thousand Eight Hundred Nineteen Dollars
($1,430,819.00) [the product obtained by multiplying 110,063 square
feet by $13.00 per square foot] shall, at Tenant's option, either (i)
be paid by Tenant to Landlord in cash within thirty (30) days after the
Contractor or the Architect (as said terms are defined herein)
certifies to Landlord and Tenant in writing that the construction of
the Improved Space has been substantially completed; or (ii) be
amortized at the rate of twelve percent (12%) per annum over the Term
and paid by Tenant to Landlord in equal monthly installments, in
advance, on each date that Monthly Base Rent is due hereunder, subject,
however, to the terms and provisions of Article XXIII below; and
(b) That portion, if any, of the excess which is greater than One
Million Four Hundred Thirty Thousand Eight Hundred Nineteen Dollars
($1,430,819.00) shall, at Tenant's option, either (i) be paid by
Tenant to Landlord in cash within thirty (30) days after the Contractor
or the Architect certifies to Landlord and Tenant in writing that the
construction of the Improved Space has been substantially completed; or
(ii) be amortized over five (5) years at the rate of twelve percent
(12%) per annum and paid by Tenant to Landlord in equal monthly
installments, in advance, on each date that Monthly Base Rent is due
hereunder, subject, however, to the terms and provisions of Article
XXIII below.
2.2. Landlord agrees to furnish all of the material, labor and
equipment for the construction of the Improved Space specified on the Space
Plan, the Site Plans, the Design and Construction Schedule and the Outline
Plans and Specifications collectively attached hereto as Exhibit B and by this
reference made a part hereof. The Improved Space shall be constructed in a good
and workmanlike manner in accordance with final plans and specifications (the
"Final Plans"). Tenant shall cause EDI, Inc., its design firm, to (i) prepare
the Final Plans in accordance with Exhibit B attached hereto, and (ii) deliver
the Final Plans to Landlord and Tenant on or before November 20, 1989. Tenant
shall cause EDI, Inc., to indemnify and hold harmless Landlord, Landlord's
beneficiary, Contractor, Architect and all Mortgagees (as defined herein) from
and against any and all errors, omissions, loss, damage, expenses, fees,
penalties, costs and judgments all or any of the indemnitees may suffer as a
result of EDI, Inc.'s design work in connection with the Improvements, Tenant
hereby acknowledging that none of said indemnitees shall have any liability to
either Tenant or EDI, Inc. in connection therewith. Tenant and Landlord shall
each approve or disapprove of the Final Plans in writing on or before November
27, 1989; Landlord and Tenant each agreeing that it shall not withhold its
approval thereof except for reasonable cause and that it shall not act in an
arbitrary or capricious manner with respect thereto. If Tenant or Landlord
fails to disapprove of the Final Plans by November 27, 1989, said party shall
be deemed to have approved same. The Final Plans shall be (a) subject to the
approval of any local governmental agencies having jurisdiction over the
construction of the Improved Space, and (b) revised, and the Improved Space
shall be modified, to incorporate any revisions thereto required by any local
governmental agency.
2.3. "Changes" shall mean any revisions to the Improved Space or the
Final Plans after they are approved, or deemed to be approved, by Landlord and
Tenant which are (a) requested by Tenant including, without limitation, changes
from the Outline Plans and Specifications which are incorporated into the Final
Plans after the initial preparation thereof, or (b) required by any local
governmental agency in order to comply with any applicable statutes, ordinances,
regulations or codes.
2.4. If Landlord approves Changes requested by Tenant, or if Changes
are required by any local governmental agency, Landlord shall determine any
changes in the Costs of the Improved Space and deliver to Tenant a pricing
schedule (the "Pricing Schedule") setting forth a schedule of the Costs of the
Improved Space. Landlord shall revise the Pricing Schedule from time to time to
reflect any further Changes since the prior Pricing Schedule. Tenant shall
approve or disapprove in writing the costs shown in the Pricing Schedule or any
revised Pricing Schedule within seven (7) business days after Landlord submits
the revised Pricing Schedule to Tenant. If such approval is not received by
Landlord within the applicable seven (7) business day period, (a) if Tenant
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has requested Changes, Tenant shall be deemed to have abandoned its request for
same, or (b) if Changes were required by a local governmental agency. Tenant
shall be deemed to have approved such costs. If Landlord approves Changes
requested by Tenant (which approval shall not be unreasonably withheld or
delayed), and Tenant approves the revised Pricing Schedule, the work to be
performed by Landlord shall include the revisions to the Improved Space shown
in the revised Final Plans and the total cost of such revisions to the Improved
Space and the Final Plans requested by Tenant shall be included in the Costs of
Improved Space. The Costs of Changes required by any local governmental agency,
including the cost of revisions of the Final Plans required as a result
thereof, shall be added to and included in the Costs of Improved Space.
2.5. Landlord, at its option, may substitute for items or materials
provided for in the Final Plans, as revised from time to time, other items or
materials of comparable kind and quality if the use of the items or materials
provided for in the Final Plans would cause delay in the completion of
construction of the Improved Space; provided, however, that any such
substitutions shall not materially and adversely affect Tenant's use and
occupancy of the Premises for its intended purpose. Landlord shall notify
Tenant, by written notice, when and to the extent Landlord is required to
utilize substitutes for the items or materials provided for in the Final
Plans, as revised as aforesaid.
2.6. As used herein, the term "Costs" shall mean and refer to all costs
expended by Landlord relative to the construction of the Improved Space, which
shall include, without limitation, the costs of equipment, material and labor,
contractor's field overhead and fees, architectural design and engineering
fees, fees and expenses of architects and other professionals for
presentations to governmental agencies, fees and expenses incurred in the
preparation of space studies and working drawings, governmental agency fees,
sales and use taxes (but not real property taxes), fees for permits and other
costs directly related to the construction of the Improved Space.
2.7. Landlord shall contribute the Construction Allowance towards the
Costs of the work provided for in the Final Plans. Tenant shall pay the amount
of any net increases in the Costs due to Changes (the "Net Costs of Changes")
to the extent the Net Costs of Changes, when aggregated with the Costs, exceed
the sum of the Construction Allowance, when and as provided in Section 2.1
above.
2.8. (In the event Tenant desires to inspect the Premises prior to the
time the Building is substantially complete, Tenant shall so notify Landlord
thereof and Landlord shall attempt to schedule the desired inspection with
Landlord's general contractor (the "Contractor") or Landlord's architect (the
"Architect"), provided that in no event shall Tenant's inspection interrupt or
interfere with any work then being performed by Landlord or its contractors or
agents at the time of such inspection.
2.9. Landlord shall diligently complete as soon as reasonably possible
any items of work and adjustment (including "punch list items") not completed
on the Commencement Date, and in connection therewith, Landlord may enter into
the Building to complete same. Such entry by Landlord, its agents, employees,
contractors or representatives for such purpose shall not constitute an actual
or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of Base Rent or Additional Rent, or relieve Tenant
from any of its obligations hereunder, or impose any other liability on
Landlord, its agents, employees, contractors or representatives; provided,
however, that all such work and adjustments shall be completed in a manner so
as not to unreasonably interfere with Tenant's use and occupancy of the
Premises. Subject to Tenant's obligation to pay any Costs, including any Net
Costs of Changes, which exceed the Construction Allowance, when and as provided
in Section 2.1 above, to which payment obligations Tenant has agreed, Landlord
shall hold Tenant harmless from and against any and all liens filed in
connection with the construction of the Improvements (including the Improved
Space), other than those arising out of or through Tenant's acts or contracts
relating to construction or installation of any improvements or fixtures in the
Improvements by Tenant, including, without limitation, Tenant's contract with
EDI, Inc., or any alterations to the Improvements undertaken by Tenant, all in
accordance with the terms and conditions of this Lease. Landlord shall
substantially complete the punch list items within ninety (90) days after
receipt of such punch list from Tenant. In the event Landlord has not
substantially completed the punch list items within such ninety (90) day
period, as extended for any Force Majeure Event, Tenant shall have the option,
upon written notice to Landlord, to complete any incomplete item from the punch
list and offset the cost of completion against the next Rent payment then due.
2.10. Landlord shall assign to Tenant all assignable warranties and
guarantees that Landlord receives that relate to the construction of the
Building or the Improved
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Space and any fixtures installed in connection therewith at such times, and
from time to time, when Landlord's maintenance obligations with respect to
particular components of the work expire. Tenant shall reassign any such
assignable warranties and guarantees to Landlord upon the expiration of the
Term or any earlier termination thereof (except in the event of Tenant's
acquisition of the Premises, in which event Tenant shall be entitled to retain
all such warranties and guarantees).
2.11. Except as may be expressly provided in this Lease and in lieu of
all other warranties and liability by reason of the construction of the
improvements (including the Improved Space), Landlord shall (a) cause Contractor
to warrant, for a period of one (1) year from the Commencement Date, that the
Building shall be free from all defects in materials or workmanship, including
latent defects, and (b) cause Contractor to correct such defects without any
cost or expense to Tenant upon receiving written notice thereof from Tenant
during the aforesaid one (1) year period. Landlord's liability hereunder shall
be limited to the cost of correcting such defects, but Tenant shall be entitled
to the benefits of any insurance which Tenant may carry reason of damages
sustained to property of Tenant or to Tenant's business, and any insurance so
carried by Tenant shall expressly provide that the insurer shall not be
subrogated to any rights against Landlord.
2.12. Landlord warrants and agrees that the Office Area will, as of the
Commencement Date, comply with and conform to all lawful requirements, rules,
regulations, laws and ordinances of all legally constituted authorities
relating thereto. If it becomes necessary to obtain any governmental permit or
approval (other than the customary building permit) in order to construct the
Improvements, Tenant agrees to cooperate fully with Landlord in all respects in
order to obtain the same; provided, however, that Tenant shall not be obligated
to pay any fees, costs or expenses to obtain any such permit or approval.
2.13. Promptly after all construction work on the Building is
completed, Landlord shall deliver copies of the Final Plans to Tenant.
2.14. Notwithstanding anything contained within this Article II to the
contrary, in the event Landlord shall fail to substantially complete the
construction of the Improved Space as required pursuant to this Article II,
Tenant, upon written notice to Landlord and expiration of the cure period
provided for in Section 27.24 below, shall have the right to complete the
construction of the Improved Space, whereupon Tenant shall be entitled to
deduct from the installment(s) of Monthly Base Rent next due and owing all
reasonable costs and expenses Tenant incurs in completing said construction in
accordance with the Final Plans; provided, however, that in no event shall
Tenant be entitled to deduct an aggregate amount in excess of the difference
between (a) the sum of the Construction Allowance and any additional costs and
expenses reasonably incurred by Tenant as a result of Landlord's failure to
perform, and (b) the Costs expended to date by Landlord with respect to the
construction of the Improved Space.
2.15. Tenant hereby acknowledges that with regard to the construction
of the Addition and the Tenant finish work to be included within the Improved
Space, Landlord shall employ McShane Builders, Inc. as the Contractor. The
Contractor shall be obligated to obtain not less than three (3) competitive
bids for each subcontract to be let for work done other than by McShane
Builders, Inc.
2.16. Landlord acknowledges that the Final Plans shall provide for
space for parking not less than three hundred fifty (350) cars [with room for
expansion to three hundred eighty (380) cars], exclusive of any parking in the
rear of the Building on a paved and striped parking lot. Tenant acknowledges
that the paving and striping of the parking lot shall not be completed by April
2, 1990, Tenant hereby agreeing to cooperate with Landlord and Contractor to
effectuate said paving and striping.
2.17. Landlord, at its sole cost, shall provide the following:
(a) landscaping to screen the dock wall from the main corporate
entrance:
(b) landscaping to screen the parking area and east side of the
Building from the retail development planned for the property adjacent
to the Land, if and when developed; and
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<PAGE> 7
(c) construction of a concrete slab on grade in the northeast
corner of the Building and installation of four (4) interior truck docks
with levelators in the southeast corner of the Building, and 2 600 Amp
480 volt electric services.
2.18. Landlord, at its sole cost, shall direct the Contractor to stub
telephone conduits to the interior wall of the Building.
ARTICLE III
RENT
3.1. Tenant covenants to pay annual base rent ("Base Rent") during the
Term in equal monthly installments ("Monthly Base Rent") in the amounts set
forth below, in advance on the first day of each and every calendar month
during the Term, and at the same rate prorated for fractions of a month if the
Commencement Date occurs on any day other than the first day of a calendar
month or the Term ends on any day other than the last day of a calendar month.
Base Rent shall be payable in the following amounts:
<TABLE>
<CAPTION>
Months Monthly Base Rent Annual Base Rent
------ ----------------- ----------------
<S> <C> <C>
1 through 24 $72,641.58 $ 871,698.96
25 through 48 $77,777.85 $ 933,334.20
49 through 84 $83,372.71 $1,000,472.60
85 through 120 $92,452.92 $1,109.435.00
</TABLE>
3.2 (a) This Lease is what is commonly called a "net lease", it being
understood that Landlord shall receive the Monthly Base Rent set forth
in Paragraph 3.1 hereof free and clear of any and all other impositions,
taxes (excluding, however, any income or franchise tax levied or
assessed against Landlord or its beneficiary), assessments, liens,
charges or expenses of any nature whatsoever in connection with the
ownership, maintenance, repair and operation of the Premises (other than
with respect to Landlord's obligations set forth in Article IX below).
In addition to the Monthly Base Rent, Tenant shall, except as otherwise
expressly set forth herein, pay to Landlord, or the other persons or
entities respectively entitled thereto, all impositions, taxes,
assessments, insurance premiums, operating charges, maintenance charges
and any other charges, costs and expenses which arise or may be
contemplated under any provisions of this Lease during the Term. All or
such charges, costs and expenses, when due, shall constitute additional
rent ("Additional Rent"), and upon the failure of Tenant to pay any of
such costs, charges or expenses, Landlord shall have the same rights and
remedies as otherwise provided in this Lease for the failure of Tenant
to pay Base Rent. Base Rent, Additional Rent and all other sums payable
hereunder by Tenant (collectively, "Rent") shall be paid without notice
or demand and without setoff, counterclaim, abatement, suspension,
deduction or defense, except as otherwise expressly provided elsewhere
in this Lease.
(b) Except as otherwise expressly provided herein, this Lease
shall not terminate, nor shall Tenant have any right to terminate this
Lease, nor shall Tenant be entitled to any abatement or reduction of
Base Rent hereunder, nor shall the obligations of the Tenant hereunder
be affected, by reason of (i) any damage to or the destruction of all or
any part of the Premises whatever cause; (ii) the taking of a portion of
the Premises by condemnation, requisition or otherwise as provided in
Article XV below; or (iii) any other cause beyond Landlord's reasonable
control, whether similar or dissimilar to the foregoing, any present or
future laws to the contrary notwithstanding. It is the intention of the
parties hereto that the obligations of Tenant hereunder shall be
separate and independent covenants and agreements, that the Base Rent,
the Additional Rent and all other sums Tenant covenants to pay hereunder
shall continue to be payable in all events and that the obligations of
Tenant hereunder shall continue unaffected, unless the requirement to
pay or perform the same shall have been terminated pursuant to an
express provision of this Lease. Nothing herein shall preclude Tenant
from pursuing or realizing upon its other remedies at law or in equity
by reason of any default hereunder by Landlord.
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<PAGE> 8
(c) Subject to federal bankruptcy laws and other applicable
statutes, laws, regulations and orders, Tenant agrees that it will
remain obligated under this Lease in accordance with its terms, and that
it will not take any action to terminate, rescind or avoid this Lease,
notwithstanding (i) the bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution, winding-up or other
proceeding affecting Landlord or any assignee of Landlord in any such
proceeding, and (ii) any action with respect to the Lease which may be
taken by any trustee or receiver of Landlord or any assignee of Landlord
in any such proceeding, or by any court in any such proceeding provided
that this Lease is not effectively disaffirmed in such proceedings and
Tenant receives reasonable assurance thereof within a reasonable period
of time following the commencement of such proceedings.
(d) Tenant waives all rights which may now or hereafter be
conferred by law (i) to quit, terminate or surrender this Lease or the
Premises, or any part thereof, or (ii) to any abatement, suspension,
deferment or reduction of Base Rent, Additional Rent or any other sums
payable under this Lease, except as otherwise expressly provided herein
or as determined by a final judicial determination by a court of
competent jurisdiction.
3.3. Rent shall be paid to or upon the order of Landlord at Landlord's
address set forth herein or as otherwise designated in writing by Landlord.
Landlord may change its address by notice to Tenant of such change pursuant to
Paragraph 27.4 below.
3.4. In the event Tenant fails to pay Rent within five (5) days after
same is due and payable and, as a result thereof, Landlord is required to pay a
late charge or delinquency fee to Mortgagee (as defined herein), Tenant
covenants to pay Landlord a "Late Charge" in an amount equal to the lesser of
(a) the late charge or delinquency fee required to be paid by Landlord to
Mortgagee, or (b) four percent (4%) of the installment of Rent that Tenant has
failed to pay in a timely manner. The Late Charge shall be remitted by Tenant
to Landlord on the first (1st) day of the calendar month immediately following
Tenant's receipt of a copy of the paid invoice for said late charge or
delinquency fee that Landlord receives from Mortgagee.
3.5. Notwithstanding anything contained in this Lease to the contrary,
Tenant shall have no obligation to pay that portion of the Monthly Base Rent
equal to Six Thousand Nine Hundred Thirty Seven and 92/100 Dollars ($6,937.92)
[which represents the portion of Monthly Base Rent attributable to the
Addition] until such time as the Addition has been substantially completed in
accordance with the Final Plans, subject to normal punch list items, as
evidenced by the issuance of a conditional certificate of occupancy for the
Addition.
ARTICLE IV
USE
4.1. The Premises shall be used and occupied by Tenant solely as a
general office, warehouse, distribution facility, research and development
facility and for light manufacturing and assembly, or any combination thereof,
all in connection with the operation of Tenant's customary business, and for no
other purposes whatsoever.
4.2. Tenant shall not use or permit the Premises to be used in any
manner other than the permitted uses set forth in Paragraph 4.1, including,
without limitation, heavy manufacturing, public warehousing or any other use
inconsistent with the quality of uses contemplated hereby. Notwithstanding
anything contained in this Lease to the contrary, Tenant shall not use or permit
the Premises to be used in any manner which would (a) be contrary to any
statute, rule, order, ordinance, requirement or regulation applicable thereto;
(b) violate any certificate of occupancy affecting the Premises; (c) cause
injury to the improvements; (d) cause the value or usefulness of the Premises or
any part thereof to diminish; (e) constitute a public or private nuisance or
waste; or (f) render the insurance on the Premises void or the insurance risk
more hazardous, or create any defense to payment, and Tenant agrees that it will
promptly, upon discovery of any such use, take all necessary steps to compel the
discontinuance of such use.
4.3. Tenant shall not use, suffer or permit the Premises, or any
portion thereof, to be used by Tenant, any third party or the public, as such,
without restriction or in such a manner as might reasonably tend to impair
Landlord's title to the Premises,
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<PAGE> 9
or any portion thereof, or in such a manner as might reasonably make possible a
claim or claims of adverse usage or adverse possession by the public, as such,
or third persons, or of implied dedication of the Premises, or any portion
thereof. Nothing contained herein and no action or inaction by Landlord shall
be deemed or construed to mean that Landlord has granted to Tenant any right,
power or permission to do any act or make any agreement that may create, or
give rise to or be the foundation for any such right, title, interest, lien,
charge or other encumbrance upon the estate of Landlord in the Premises.
4.4. Notwithstanding anything contained in this Lease to the contrary,
in the event the Premises can no longer be utilized for the permitted uses set
forth in Paragraph 4.1 above, this Lease shall terminate as of the day said
uses are no longer permitted.
4.5. Notwithstanding anything contained in this Lease to the contrary,
Tenant shall have the right, subject to the prior written approval of the
Village of Bloomingdale, Illinois, as evidenced by the issuance of all required
permits, to install an antenna tower not exceeding one hundred (100) feet in
height on the Land provided that Tenant delivers to Landlord evidence that such
tower complies with all applicable government rules and regulations.
4.6. Provided there exists no uncured Event of Default, Landlord shall,
subject to the terms and provisions of Paragraph 5.1 below, take no action
which will deny access by Tenant to the Land or Building at any time during the
Term.
ARTICLE V
POSSESSION
5.1. Except as otherwise expressly provided herein (or by written
instrument signed subsequent to the date hereof by Landlord and Tenant),
Landlord shall deliver possession of the components of the Building pursuant
to the following schedule:
A. Landlord shall deliver possession of the Office Area to
Tenant by March 2, 1990, subject, however, to delays caused by:
(i) the failure the Village of Bloomingdale, Illinois
to issue a building permit relating to the
construction activities to be undertaken pursuant
to this Lease by November 27, 1989;
(ii) Tenant's failure to approve of the Final Plans by
November 27, 1989, with no Tenant requested
Changes;
(iii) Tenant's failure to meet all deadlines required of
Tenant as set forth on the Design and Construction
Schedule attached hereto as Exhibit B; and
(iv) Force Majeure Events (as defined in Paragraph 27.22
below);
B. Landlord shall deliver possession of the "Production Area"
to Tenant by April 2, 1990, subject, however, to delays caused by:
(i) the failure of the Village of Bloomingdale, Illinois
to issue a building permit relating to the
construction activities to be undertaken pursuant
to this Lease by November 27, 1989;
(ii) Tenant's failure to approve of the Final Plans by
November 27, 1989, with no Tenant requested
Changes;
(iii) Tenant's failure to meet all deadlines required of
Tenant as set forth on the Design and Construction
Schedule attached hereto as Exhibit B; and
(iv) Force Majeure Events; and
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<PAGE> 10
C. Landlord shall deliver possession of the Addition to Tenant by
July 1, 1990, subject, however, to delays caused by:
(i) the failure of the Village of Bloomingdale, Illinois to
issue a building permit relating to the construction
activities to be undertaken pursuant to this Lease by
November 27, 1989;
(ii) Tenant's failure to approve of the Final Plans by November
27, 1989 with no Tenant requested Changes;
(iii) Tenant's failure to meet all deadlines required of Tenant
as set forth on the Design and Construction Schedule
attached hereto as Exhibit B; and
(iv) Force Majeure Events.
In the event that Landlord shall be unable to deliver possession of the three
(3) components of the Building pursuant to the preceding provisions of this
Paragraph 5.1. Landlord shall-not be subject to any liability for the failure
to so deliver possession by any of said dates, nor shall the validity of this
Lease or the obligations of Tenant hereunder be in any way affected; provided,
however, that (a) in the event of any such delay in delivering possession of
the Office Area for any reason other than as set forth in paragraph 5.1A above
beyond March 2, 1990, the Term shall be extended for the same number of days as
the length of such delay, so as to result in a Term of ten (10) years; (b) in
the event of any such delay in delivering possession of the Office Area, the
Production Area or the Addition, respectively, beyond the dates set forth above
for any reason other than as set forth above, Tenant shall not be obligated to
remit any Base Rent or Additional Rent during such period of delay; and (c) in
the event of any such delay in delivering possession of the Office Area, the
Production Area or the Addition, respectively, beyond the dates set forth above
for any reason other than as set forth above. Landlord shall credit, first, to
any COSTS Tenant is obligated to pay pursuant to Paragraph 2.1(a) above, and
second, to installments of Rent next due and payable by Tenant, the sum of One
Thousand Dollars ($1,000) per day for each day that delivery of possession of
the three (3) components of the Building is delayed; provided further, however,
that the foregoing clauses (a), (b) and (c) shall not apply if any such delay
in delivering possession of all or any component of the Building is caused by
any act or omission of Tenant (including, without limitation, any Changes
requested by Tenant). In the event Tenant causes any delay(s) which results in
Landlord being delayed in delivering possession of the Office Area by March 2,
1990 and/or the Addition by July 1, 1990, Tenant's obligation to pay Rent
with respect to the Existing Building and/or the Addition shall commence as of
March 2, 1990 and/or as of July 1, 1990, as applicable. Taking possession of
all or any portion of the Existing Building by Tenant shall be conclusive
evidence as against Tenant that the completed portion of the Existing Building
is in satisfactory condition on the date of taking possession, subject to
normal "punch list items" and subject to Section 2.11 above. The failure of
Tenant to take possession of the Existing Building by the Commencement Date
shall not affect the liability or Tenant hereunder. Pre-Term access to the
Office Area by Tenant for purposes of installing any fixtures, equipment or
other personality therein shall not constitute possession; provided, however,
that Tenant shall not have any access to the Production Area or the Addition
prior to the delivery of possession thereof to Tenant.
5.2. Landlord shall deliver possession of the Addition to Tenant as
soon as such portion of the Premises has been substantially completed.
Possession of the Addition shall be delivered to Tenant by July 1, 1990,
subject, however, to the terms of Paragraph 5.1 above; provided that if the
Addition is substantially completed prior to July 1, 1990. Tenant shall be
entitled to take possession at said time, in which event all of Tenant's
obligations hereunder, including the obligation to pay Rent, shall commence.
5.3. Notwithstanding anything contained in this Lease to the contrary,
the Term shall not be extended, nor shall the Commencement Date be delayed due
to Landlord's failure to pave the parking areas prior to March 2, 1990,
provided that (a) parking is permitted by local Governmental Authorities
on the gravel area on the north side of the Building, or (b) Landlord provides
reasonable alternative parking to Tenant within walking distance of the
Building.
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<PAGE> 11
ARTICLE VI
TAXES
6.1 "Taxes" shall mean real estate taxes, assessments (general or
special), sewer rents, rates and charges, taxes based upon leases or the receipt
of rent, and any other federal, state or local governmental charge, general,
special, ordinary or extraordinary (but not including income or franchise taxes
or any other taxes imposed upon or measured by Landlord's or its beneficiary's
income or profits), which may now or hereafter be levied, assessed or imposed
against the Premises or any portion thereof or interest therein. Notwithstanding
anything contained in the foregoing definition to the contrary:
(a) If at any time the method of taxation then prevailing shall
be altered so that any new or additional tax, assessment, levy,
imposition or charge, or any part thereof, shall be imposed in place or
partly in place of any Taxes or contemplated increase therein, or in
addition to Taxes, and shall be measured by or be based in whole or in
part upon the Premises, the rents or other income therefrom or any
leases of any part thereof, then all such new taxes, assessments,
levies, impositions or charges or part thereof, to the extent that they
are so measured or based, shall be included in Taxes levied, assessed or
imposed against the Premises to the extent that such items would be
payable if the Premises were the only property of Landlord subject
thereto and the income received by Landlord from the Premises were the
only income of Landlord.
(b) Notwithstanding the year for which any such taxes or
assessments are levied, (i) in the case of special taxes or assessments
which may be payable in installments, the amount of each installment,
plus any interest payable thereon, payable during any year shall be
considered Taxes assessed and levied for that year, and (ii) if any
taxes or assessments payable during any year shall be computed with
respect to a period in excess of twelve (12) calendar months, then taxes
or assessments applicable to the excess period shall be considered Taxes
assessed and levied for that year, but only if such excess period falls
within the Term. Except as provided in the preceding sentence, all
references to Taxes assessed, levied, confirmed or imposed during a
particular year shall be deemed to refer to Taxes levied, assessed or
otherwise imposed during such year without regard to when such Taxes are
payable. Landlord has received no written notice of special assessments
affecting the Premises as of the date hereof.
(c) Taxes shall also include personal property taxes (if any)
imposed upon the furniture, fixtures, machinery, equipment, apparatus,
systems or appurtenances used in connection with the Premises or the
operation thereof.
(d) Landlord represents that (i) it has no current knowledge
that any special assessments have been levied against the Premises which
are currently in effect, and (ii) the Premises are not subject to any
outstanding obligations pursuant to any so-called "Recapture
Agreements." If any special assessments have previously been assessed
against the Premises and are currently in effect and/or if the Premises
are currently subject to any outstanding obligations pursuant to any
Recapture Agreements, Landlord shall pay all assessments, fees and
charges in connection therewith.
(e) Notwithstanding anything contained herein to the contrary,
Taxes shall not include any income or franchise taxes imposed upon or
measured by Landlord's or its beneficiary's income or profits.
6.2 Tenant shall pay, before any fine, penalty, interest or cost is
incurred, all Taxes which are assessed, levied, confirmed, imposed or which
become a lien upon the Premises with respect to any period of time within the
Term. Anything herein to the contrary notwithstanding, Landlord shall pay that
portion of the real estate taxes and installments of special assessments for the
year the Term commences (subject to the terms and provisions of Paragraph 6.5
below) and the year in which the Term expires by lapse of time which the number
of days in said year not within the Term bears to 363, and Tenant shall pay the
balance of said real estate taxes and installments of special assessments.
6.3 Tenant shall have the right, at its own cost and expense, to
contest the amount or validity, in whole or in part, of any Tax by appropriate
proceedings diligently conducted in good faith, but only after payment of such
Tax, unless such payment, or a
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<PAGE> 12
payment thereof under protest, would operate as a bar to such contest or
interfere materially with the prosecution thereof, in which event,
notwithstanding the provisions of Paragraph 6.2 hereof, Tenant may postpone or
defer payment of such Tax if (i) neither the Premises nor any portion thereof
would, by reason of such postponement or deferment, be in danger of being
forfeited or lost, and (ii) Tenant shall have deposited with Landlord in an
escrow account cash or a certificate of deposit payable to Landlord issued by a
national bank or Federal savings and loan association reasonably acceptable to
Landlord in the amount of the Tax so contested and unpaid, together with all
interest and penalties which may accrue in Landlord's reasonable judgment in
connection therewith, and all charges that may or might be assessed against or
become a charge on the Premises, or any portion thereof, during the pendency of
such proceedings, or such other form of security reasonably satisfactory to
Landlord. Tenant shall have the right, subject to Landlord's reasonable
approval, to select the counsel to be retained in connection with the
prosecution of any such proceedings. If, during the continuance of such
proceedings, Landlord shall, from time to time, reasonably deem the amount
deposited, as aforesaid, insufficient, Tenant shall, upon demand of Landlord,
make additional deposits of such additional sums of money or such additional
certificates of deposit as Landlord may reasonably request. Upon failure of
Tenant to make such additional deposits, the amount theretofore deposited may
be applied by Landlord to the payment, removal and discharge of such Tax and
any interest, fines and penalties incurred or imposed in connection therewith,
and any costs, fees (including attorneys' fees) and other liability (including
costs incurred by Landlord) accruing in any such proceedings. Upon the
termination of any such proceedings, Tenant shall pay the amount of such Tax or
part thereof, if any, as finally determined in such proceedings, the payment of
which may have been deferred during the prosecution of such proceedings,
together with any costs, fees, including attorneys' fees, interest, penalties,
fines and other liability incurred or imposed in connection therewith, and upon
such payment Landlord shall return all amounts or certificates deposited with
it with respect to the contest of such Tax, as aforesaid, or, at the written
direction of Tenant, Landlord shall make such payment out of the funds on
deposit with Landlord and the balance, if any, shall be returned to Tenant.
Tenant shall be entitled to the refund of any Tax, penalty, fine and interest
thereon received by Landlord which have been paid by Tenant or which have been
paid by Landlord but for which Landlord has been previously reimbursed in full
by Tenant. Landlord shall not be required to join in any proceedings referred
to in this Paragraph 6.3 unless the provisions of any law, rule or regulation
at the time in effect shall require that such proceedings be brought by or in
the name of Landlord, in which event Landlord shall join in such proceedings or
permit the same to be brought in Landlord's name upon compliance with such
conditions as Landlord may reasonably require. Landlord shall not ultimately be
subject to any liability for the payment of any fees, including attorneys'
fees, costs and expenses incurred or imposed in connection with such
proceedings. Tenant agrees to pay all such fees (including reasonable
attorneys' fees), costs and expenses, or, on demand, to make reimbursement to
Landlord for such payment. During the time when any such certificate of deposit
is on deposit with Landlord, and prior to the time when the same is returned to
Tenant or applied against the payment, removal or discharge of Taxes, as
above provided, Tenant shall be entitled to receive all interest paid
thereon; but Tenant shall bear the expense of any early withdrawal penalties.
Cash deposits shall bear interest at then current money market rates.
6.4. Tenant covenants to furnish Landlord with official receipts of
the appropriate taxing authority, or other appropriate proof reasonably
satisfactory to Landlord, evidencing the payment of any tax or other tax,
assessment, levy or charge that is payable by Tenant pursuant to the terms of
this Lease within ten (10) days of Tenant's receipt thereof. The certificate,
advice or bill of the appropriate official designated by law to make or issue
the same or to receive payment of any Tax or other tax, assessment, levy or
charge may be relied upon by Landlord as sufficient evidence that such Tax or
other tax, assessment, levy or charge is due and unpaid at the time of the
making or issuance of such certificate, advice or bill.
6.5. Attached hereto as Exhibit C and by this reference made a part
hereof are the 1988 notices of assessed valuation (the "Notices") with respect
to each of the Lots comprising the Premises, the Notices being issued by the
Supervisor of Assessments of DuPage County, Illinois. Notwithstanding anything
contained within this Article VI to the contrary, Landlord's obligation with
respect to the payment of real estate taxes levied against the Premises for the
first year of the Term shall be limited to Landlord's pro-rata share, determined
on a per diem basis, of the product obtained by multiplying (a) the assessed
valuation of the respective Lots, as indicated on Exhibit C, by (b) the tax rate
in effect during said year.
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6.6. If the Premises and any other property are covered by a single tax
bill, Landlord shall cause the Premises to be assessed separately from such
other property.
6.7. Intentionally Omitted.
ARTICLE VII
INSURANCE
7.1. Tenant, at its sole cost and expense, shall obtain and
continuously maintain in full force and effect during the Term "all risks"
property and casualty insurance covering the Building and the Improvements for
the benefit of Landlord, its beneficiaries, managing agents and Mortgagees, as
their respective interest may appear, as the named insured, against (i) loss or
damage by fire; (ii) loss or damage from such other risks or hazards now or
hereafter embraced by an "all risks" policy, including, but not limited to,
windstorm, hail, explosion, vandalism, riot and civil commotion, damage from
vehicles, smoke damage, water damage and debris removal; (iii) loss for flood if
the Premises is in a designated flood or floodinsurance area in an amount not
in excess of any limitations prescribed by federal law; (iv) loss from so-called
explosion, collapse and underground hazards; and (v) loss or damage from such
other risks or hazards of a similar or dissimilar nature which are now or may
hereafter be customarily insured against with respect to improvements similar in
construction, design, general location, use and occupancy to the Improvements.
At all times, such insurance coverage shall be in an amount equal to one hundred
percent (100%) of the then "Full Replacement Cost" of the Building and the
Improvements and shall include a so-called "Agreed Value Endorsement." Full
Replacement Cost shall be interpreted to mean the cost of replacing the Building
and the Improvements without deduction for depreciation or wear and tear, and it
shall include a reasonable sum for architectural, engineering, legal,
administrative and supervisory fees in connection with the restoration or
replacement of the Building and the Improvements in the event of damage thereto
or destruction thereof. Landlord and Tenant hereby acknowledging and agreeing
for purposes hereof that the Full Replacement Cost of the Building, following
completion of the construction of the Improved Space, shall be Eight Million
Five Hundred Thousand Dollars ($8,500,000.00). Full Replacement Cost shall be
determined from time to time (but not more frequently than once in any twelve
(12) month period), at the request of Landlord or its Mortgagee, by an
appraiser, engineer, architect or contractor designated and paid by Landlord. No
omission on the part of Landlord to request any such determination shall relieve
Tenant of any of its obligations under this Paragraph 7.1, nor shall any
acceptance or acquiescence by Landlord in any amount of insurance tendered or
offered to Landlord by Tenant relieve Tenant of any of its obligations in this
Lease. If a sprinkler system shall be located in the Improvements, sprinkler
leakage insurance in form and amount reasonably satisfactory to Landlord shall
be procured and continuously maintained by Tenant at Tenant's sole cost and
expense. For the period prior to the earlier of the Commencement Date or the
date when the Improved Space has been substantially completed, Landlord, at its
sole cost and expense, shall maintain in full force and effect, on a completed
value basis, insurance coverage on the Building or Builder's Risk or other
comparable coverage, and in connection therewith, Landlord shall, promptly after
the date hereof, furnish Tenant with a certificate of insurance evidencing such
coverage.
7.2. During the Term, Tenant, at its sole cost and expense, but for the
mutual benefit of Landlord and Tenant, shall obtain and continuously maintain in
full force and effect the following insurance coverage:
(a) Commercial general liability insurance against any loss,
liability or damage on, about or relating to the Premises, or any
portion thereof, with limits of not less than Five Million Dollars
($5,000,000.00) single limit coverage on an occurrence basis. Any such
insurance obtained and maintained by Tenant shall name Landlord,
Landlord's beneficiaries, managing agents and Mortgagees as additional
insureds therein. Such insurance shall contain a contractual liability
endorsement consistent with Tenant's obligations under Paragraph 27.3
hereof.
(b) Such other insurance, and in such amounts as may from time
to time be reasonably required by Landlord, against other insurable
hazards which at the time are commonly insured against in the case of
premises and/or buildings or improvements similar in construction,
design, general location, use and occupancy to those on or appurtenant
to the Premises.
The insurance set forth in this Paragraph 7.2 shall be maintained by Tenant at
not less than the limits set forth herein until reasonably required to be
changed from time to
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time by Landlord, in writing, whereupon Tenant covenants to obtain and maintain
thereafter such protection in the amount or amounts so required by Landlord.
7.3. All policies of insurance required by Paragraph 7.1 shall provide
that the proceeds thereof shall be payable to Landlord, and if Landlord so
requests, shall also be payable to any contract purchaser of the Premises and
any Mortgagee, as the interest of such purchaser or Mortgagee appears pursuant
to a standard named insured or mortgagee clause. Tenant shall not, on Tenant's
own initiative or pursuant to request or requirement of any third party, take
out separate insurance concurrent in form or contributing in the event of loss
with that required in Paragraph 7.1, unless Landlord and its beneficiaries,
managing agents and Mortgagees are included therein as additional insureds with
loss payable as in Paragraph 7.1. Tenant shall immediately notify Landlord in
writing whenever any such separate insurance is taken out and, notwithstanding
anything contained within this Lease to the contrary, Tenant shall deliver to
Landlord original certificates of insurance evidencing all insurance policies
Tenant is to obtain and maintain hereunder. All such policies of insurance that
Tenant is obligated to obtain and maintain shall provide that any loss shall be
payable to Landlord notwithstanding any act or omission or Tenant which might
otherwise result in a forfeiture or reduction of such insurance.
Each policy required under this Article VII shall not be cancelled or
materially changed without at least thirty (30) days' prior written notice to
Landlord, and shall have attached thereto an endorsement to the effect that the
insurance as to the interest of Landlord, its beneficiary, managing agents and
Mortgagees shall not be invalidated by any act or neglect of any person. All
policies of insurance shall be written in companies reasonably satisfactory
to Landlord and licensed in the State of Illinois, and shall be written in such
form and shall be distributed in such companies as shall be reasonably
satisfactory to Landlord. Such certificates of insurance acceptable to Landlord
shall be delivered to Landlord endorsed "Premium Paid" by the company or agent
issuing the same or accompanied by other evidence satisfactory to Landlord that
the premiums thereon have been paid. Such certificates of insurance acceptable
to Landlord and evidence of payment shall be delivered to Landlord upon
commencement of the Term; and prior to expiration of any policy required to be
maintained by Tenant hereunder, Tenant shall deliver new certificates of
insurance evidencing same to Landlord.
7.4. Landlord agrees that Tenant may cause to be inserted in the policy
or policies of insurance required by Paragraph 7.1 hereof a so-called "Waiver of
Subrogation Clause." Landlord shall cause all policies of insurance carried by
Landlord to contain a "Waiver of Subrogation Clause."
7.5. Tenant shall maintain insurance coverage (including loss of use
and business interruption coverage of at least 12 months) upon Tenant's
business and upon all personal property of Tenant or the personal property of
others kept, stored or maintained on the Premises against loss or damage by
fire, windstorm or other casualties or causes for such amount as Tenant may
desire, and Tenant agrees that such policies shall contain a waiver of
subrogation clause as to Landlord and its beneficiaries. Tenant hereby waives,
releases and discharges Landlord, its beneficiaries, managing agents and
Mortgagees from all claims whatsoever arising out of loss, claim, expense or
damage to or destruction of any such personal property or to Tenant's business
notwithstanding that such loss, claim, expense or damage may have been caused
by Landlord, its agents or employees, and Tenant agrees to look to the
insurance coverage only in the event of such loss. Landlord hereby waives,
releases and discharges Tenant from all claims whatsoever arising out of loss,
claim, expense or damage to Landlord's personal property or business
notwithstanding that such loss, claim, expense or damage may have been caused
by Tenant, its agents or employees, and Landlord agrees to look to the
insurance coverage only in the event of such loss.
7.6. Nothing in this Article shall prevent Tenant from taking out
insurance of the kind and in the amount provided for under the preceding
paragraphs of this Article under a blanket insurance policy or policies
(certificates thereof reasonably satisfactory to Landlord shall be delivered to
Landlord) which may cover other properties owned or operated by Tenant as well
as the Premises; provided, however, that any such policy of blanket insurance
of the kind provided for shall (i) specify therein the amounts thereof
exclusively allocated to the Premises or Tenant shall furnish Landlord and any
Mortgagee with a written statement from the insurers under such policies
specifying the amounts of the total insurance exclusively allocated to the
Premises, and (ii) not contain any clause which would result in the insured
thereunder being required to carry any insurance with respect to the property
covered thereby in an amount not less than any specific percentage of the Full
Replacement Cost of such property in order to prevent
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the insured therein named from becoming a co-insurer of any loss with the
insurer under such policy; and further provided, however, that such policies of
blanket insurance shall, as respects the Premises, contain the various
provisions required of such an insurance policy by the foregoing provisions of
this Article VII.
7.7. Tenant shall conform with all applicable fire codes of any
governmental authority, and with the rules and regulations of Landlord's fire
underwriters and their fire protection engineers, including, without limitation,
the installation of adequate fire extinguishers. If Landlord is providing a
sprinkler monitoring system with a direct connection to the local fire
department or monitoring service, then Tenant shall pay any monitoring service
charge and maintain such system in good working order. If the Premises are
served by a sprinkler system, but are not served by a sprinkler monitoring
system with direct connection to the local fire department or a monitoring
service, then Tenant shall, at its sole cost and expense, install such a
monitoring system, cause it to be connected to the local fire department or to a
qualified monitoring service approved by Landlord and maintain the same in
effect at all times during the Term.
7.8. Notwithstanding any other provision of this Lease to the contrary,
and without limitation of the provisions of Paragraph 7.5, whenever (a) any
loss, cost, damage or expense resulting from fire, explosion or any other
casualty or occurrence is incurred by either of the parties hereto, or anyone
claiming by, through, or under it in connection with the Premises, and (b) such
party is then covered in whole or in part by insurance with respect to such
loss, cost, damage or expense or is required under this Lease to be so insured,
then the party so insured (or so required) hereby waives any claims against and
releases the other party from any liability said other party may have on account
of such loss, cost, damage or expense to the extent of any amount recovered by
reason of such insurance (or which could have been recovered had such insurance
been carried as so required); provided that such waiver of claims or release of
liability shall not be operative in any case where the effect thereof is to
invalidate such insurance coverage.
ARTICLE VIII
UTILITIES
8.1. During the Term, Tenant will pay, when due, all charges for
utilities furnished to the Premises or chargeable against the Premises,
including all charges for water, sewage, heat, gas, light, garbage,
electricity, telephone, steam, power or other public or private utility
services. Prior to the commencement of the Term, Tenant and Landlord, as
applicable, shall each pay for all utilities or services at the Premises used
by it or its agents, employees, or contractors. To the extent any utility fees
payable by Landlord prior to the commencement of the Term relate specifically
to Landlord's construction obligations with respect to the Improved Space, said
fees shall be credited against the Construction Allowance, and all other
utility fees payable by Landlord prior to the commencement of the Term shall
not be credited against the Construction Allowance.
8.2. In the event that any charge or fee is required by the State of
Illinois, or by any agency, subdivision or instrumentality thereof, or by any
utility company furnishing services or utilities to the Premises, as a
condition precedent to furnishing or continuing to furnish utilities or
services to the Premises during the Term, such charge or fee shall be deemed to
be a utility charge payable by Tenant. The provisions of this paragraph shall
include, but not be limited to, any charges or fees for present or future water
or sewer capacity to serve the Premises, any charges for the underground
installation of gas or other utilities or services, and other charges relating
to the extension of or change in the facilities necessary to provide the
Premises with adequate utility services to the extent such installations or
extensions are not reflected in the Final Plans or any Changes relating
thereto. In the event that Landlord has paid any such charge or fee prior to
the date hereof and same relates specifically to Landlord's construction
obligations with respect to the Improved Space, said charge or fee shall be
credited against the Construction Allowance, and all other charges or fees
payable by Landlord prior to the commencement of the Term shall not be credited
against the Construction Allowance.
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ARTICLE IX
REPAIRS
9.1. At its sole cost and expense throughout the Term, Tenant shall,
(a) take good care of the Premises (including any Improvements now or hereafter
erected or installed on the Land); (b) keep the same in good order and
condition of repair; and (c) make and perform all maintenance thereof and all
necessary structural and non-structural repairs thereto, interior and exterior,
ordinary and extraordinary, foreseen and unforeseen, of every nature, kind and
description. When used in this Article IX, "repairs" shall include all
necessary replacements, renewals, alterations, additions and betterments. All
repairs made by Tenant shall be at least equal in quality and cost to the
original work performed in constructing the Improvements and shall be made by
Tenant in accordance with all laws, ordinances and regulations whether
heretofore or hereafter enacted. The necessity for or adequacy of maintenance
and repairs shall be measured by the standards which are appropriate for
improvements of similar construction and class, provided that Tenant shall in
any event make all repairs necessary to avoid any structural damage or other
damage or injury to the Improvements.
9.2. At its sole cost and expense throughout the Term, Tenant shall
take good care of and maintain all driveways, pathways, roadways, sidewalks,
curbs, spur tracks, parking areas, loading areas, landscaped areas, ponds,
entrances and passageways in good order and condition of repair and shall
promptly remove all accumulated snow, ice and debris from any and all
driveways, pathways, roadways, sidewalks, curbs, parking areas, loading areas,
entrances and passageways, and keep all portions of the Premises, including
areas appurtenant thereto, in a clean and orderly condition free of snow, ice,
dirt, rubbish, debris and unlawful obstructions.
9.3. Landlord shall not be required to furnish any services or
facilities or to make any repairs or alterations in, about or to the Premises
or any improvements now or hereafter erected thereon. Landlord agrees to
cooperate with Tenant in the enforcement by Tenant, at Tenant's sole cost and
expense, of any express warranties or guarantees of workmanship or materials
given by manufacturers, contractors, subcontractors or materialmen whether or
not assignable by Landlord to Tenant, which guarantee or warrant against
defective workmanship or materials, and to cooperate with Tenant in the
enforcement by Tenant, at Tenant's sole cost and expense, of any service
contracts that provide service, repair or maintenance to any item incorporated
within the Building. Tenant hereby assumes the full and sole responsibility for
the condition, operation, repair, replacement, maintenance and management of
the Premises and all improvements now or hereafter erected thereon.
9.4. Tenant shall not do or suffer any waste or damage, disfigurement
or injury to the Premises, or any Improvements now or hereafter erected
thereon, or to the fixtures or equipment therein, or permit or suffer any
overloading of the floors or other use of the Improvements that would place an
undue stress on the same or any portion thereof beyond that for which the same
was designed.
9.5. Tenant acknowledges that the Premises shall be subject to a
declaration of covenants, conditions and restrictions to be recorded in the
Office of the Recorder of Deeds of DuPage County, Illinois in the form attached
hereto as Exhibit D (hereinafter, as the same may be modified, amended or
supplemented from time to time, referred to as the "Declaration"), Tenant
shall, at Tenant's sole cost and expense, maintain the Premises in accordance
with the Declaration and comply with all requirements, perform all obligations
and obtain all approvals imposed on or as required of the owner, tenant or
occupant of the Premises by the Declaration (specifically including the
restrictions set forth in the Declaration regarding the exterior of the
Improvements and the provisions regarding outdoor maintenance). Tenant shall
also pay, as Additional Rent, all amounts imposed on the owner, tenant or
occupant of the Premises by the Declaration, including, without limitation, any
business park association dues and the proportion of costs of maintenance of
and taxes on common areas which is allocable to the Premises pursuant to the
Declaration. In the event of any conflict between the obligations of Tenant set
forth elsewhere in this Lease and the obligations hereby assumed by Tenant
under the Declaration, the more restrictive shall control. Landlord reserves to
itself all voting rights to which it is entitled pursuant to the Declaration.
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ARTICLE X
COMPLIANCE WITH LAWS AND ORDINANCES
10.1. Tenant shall, at its sole cost and expense throughout the Term,
promptly comply or cause compliance with or remove or cure any violation of any
and all present and future laws, ordinances, orders, rules, regulations and
requirements of all federal, state, municipal and other governmental bodies
having jurisdiction over the Premises and the appropriate departments,
commissions, boards and officers thereof, and the orders, rules and regulations
of the Board of Fire Underwriters where the Premises are situated, or any other
body now or hereafter constituted exercising lawful or valid authority over the
Premises, or any portion thereof, or the sidewalks, curbs, roadways, alleys,
entrances or railroad track facilities adjacent or appurtenant thereto, or
exercising authority with respect to the use or manner of use of the
Premises, or such adjacent or appurtenant facilities, and whether the
compliance, curing or removal of any such violation and the costs and expenses
necessitated thereby shall have been foreseen or unforeseen, ordinary or
extraordinary, and whether or not the same shall be presently within the
contemplation of Landlord or Tenant or shall involve any change of governmental
policy, or require structural or extraordinary repairs, alterations or
additions by Tenant and irrespective of the costs thereof; provided, however,
that notwithstanding anything contained in this Article X to the contrary, in
the event that (a) any compliance action is required by any such governmental
bodies having jurisdiction over the Premises; (b) the estimated costs of any
such required compliance action exceeds One Hundred Thousand Dollars
($100,000.00); and (c) the required compliance action relates specifically to
the Premises, Landlord shall pay all reasonable costs and expenses incurred in
effectuating the required compliance action, and in consideration thereof,
Tenant shall pay to Landlord, as Additional Rent hereunder throughout the Term
(including any Renewal Term), an amount equal to twelve percent (12%) per annum
of all such costs and expenses incurred by Landlord in completing the required
compliance action, on a monthly basis, in the manner and at the time monthly
installments of Base Rent are payable pursuant to the provisions of Article III
above.
10.2. At its sole cost and expense throughout the Term, Tenant shall
comply with all agreements, contracts, easements, restrictions, reservations or
covenants, if any, set forth in Exhibit A attached hereto, and with all
agreements, contracts, easements, restrictions, reservations or covenants
hereafter created, provided those hereafter created do not unreasonably
interfere with Tenant's on-going business operations at the Premises and are
otherwise reasonably acceptable to Tenant. Tenant shall also comply with,
observe and perform all provisions and requirements of all policies of insurance
at any time in force with respect to the Premises and required to be obtained
and maintained under this Lease and shall comply with all development permits
issued by governmental authorities issued in connection with development of the
Premises.
10.3. Notwithstanding that it may be usual and customary for Landlord
to assume responsibility and performance of any or all of the obligations set
forth in this Article X, and notwithstanding any order, rule or regulation
directed to Landlord to perform. Tenant hereby assumes, subject to the
provisions of Paragraph 10.1 above, such obligations because, by nature of this
Lease, the rents and income derived from this Lease by Landlord are net rentals
not to be diminished by any expense incident to the ownership, occupancy, use,
leasing, or possession of the Premises or any portion thereof.
10.4. After prior written notice to Landlord, Tenant shall, at its sole
cost and expense without cost or expense to Landlord, have the right to contest
the validity or application of any law or ordinance referred to in this Article
X in the name of Tenant or Landlord, or both, by appropriate legal proceedings
diligently conducted, but only if, by the terms of any such law or ordinance,
compliance therewith pending the prosecution of any such proceeding may legally
be delayed without the incurrence of any lien, charge or liability of any kind
against the Premises, or any portion thereof, and without subjecting Landlord or
Tenant to any liability, civil or criminal, for failure to so comply therewith
until the final determination of such proceeding; provided, however, if any
lien, charge or civil liability would be incurred by reason of any such delay,
Tenant nevertheless, with the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed, may contest as aforesaid and
delay as aforesaid, provided that such delay would not subject Tenant or
Landlord to criminal liability and Tenant (a) furnishes Landlord security,
reasonably satisfactory to Landlord, against any loss or injury by reason of any
such contest or delay; (b) prosecutes the contest with due diligence and in good
faith; and (c) agrees to indemnify, defend and hold harmless Landlord, its
beneficiaries, managing agents, Mortgagees and the Premises from any charge,
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liability or expense whatsoever. The security furnished to Landlord by Tenant
shall be in the form of a cash deposit, a certificate of deposit issued by a
national bank or Federal savings and loan association reasonably satisfactory
to Landlord and payable to Landlord or other security reasonably satisfactory
to Landlord. Said deposit shall be held in escrow, administered and distributed
in accordance with the provisions of Paragraph 6.3 hereof relating to the
contest of the amount of validity of any Tax.
If necessary or proper to permit Tenant to so contest the validity or
application of any such law or ordinance, Landlord shall, at Tenant's sole cost
and expense, including reasonable attorneys' fees incurred by Landlord, execute
and deliver any appropriate papers or other documents.
ARTICLE XI
MECHANIC'S LIENS AND OTHER LIENS
11.1. Tenant shall not suffer or permit any mechanic's lien or other
lien to be filed against the Premises, or any portion thereof, by reason of
work, labor, skill, services, equipment or materials supplied or claimed to have
been supplied to the Premises at the request of Tenant, or anyone holding the
Premises, or any portion thereof, by, through or under Tenant. If any such
mechanic's lien or other lien shall at any time be filed against the Premises,
or any portion thereof, Tenant shall cause the same to be discharged of record
within thirty (30) days after the date of filing the same. If Tenant shall fail
to discharge such mechanic's lien or liens or other lien within such period,
then, in addition to any other right or remedy of Landlord, Landlord may, but
shall not be obligated to, discharge the same by paying to the claimant the
amount claimed to be due or by procuring the discharge of such lien as to the
Premises by deposit of a cash sum or a bond or other security, or in such other
manner as is now or may in the future be provided by present or future law for
the discharge of such lien as a lien against the Premises. Any amount paid by
Landlord, or the value of any deposit so made by Landlord, together with all
costs, fees and expenses in connection therewith (including reasonable
attorneys' fees), together with interest thereon at the Maximum Rate of Interest
(as defined herein), shall be repaid by Tenant to Landlord on demand as
Additional Rent. Tenant shall indemnify and defend Landlord, its beneficiaries,
managing agents and Mortgagees against and save Landlord, its beneficiaries,
managing agents, Mortgagees, and the Premises (and any portion thereof),
harmless from all losses, costs, damages, expenses, liabilities, suits,
penalties, claims, demands and obligations, including, without limitation,
reasonable attorneys' fees, resulting from the assertion, filing, foreclosure or
other legal proceedings with respect to any such mechanic's lien or other lien.
11.2. The provisions of Paragraph 11.1 shall not apply to any
mechanic's lien or other lien for labor, services, materials, supplies,
machinery, fixtures or equipment furnished to the Premises in the performance
of Landlord's obligations to construct the Improved Space required by the
provisions of Article II, or otherwise arising from any act or omission of
Landlord, its beneficiary or managing agent, and Landlord does hereby agree to
indemnify and defend Tenant against and hold Tenant harmless from all losses,
costs, damages, expenses, liabilities and obligations, including, without
limitation, reasonable attorneys' fees, resulting from the assertion, filing,
foreclosure or other legal proceedings with respect to any such mechanic's lien
or other lien.
11.3. Tenant shall not create, permit or suffer, and shall promptly
discharge and satisfy of record, any other lien, encumbrance, charge, security
interest or other right or interest which shall be or become a lien,
encumbrance, charge or security interest upon the Premises, or any portion
thereof, or the income therefrom, or on the interest of Landlord, its
beneficiaries, Mortgagees or Tenant in the Premises, or any portion thereof,
save and except for those liens, encumbrances, charges, security interests, or
other rights or interests consented to in writing or created by Landlord or
covered by Paragraph 11.2 above, or those mortgages, assignments of rents,
assignments of leases and other mortgage documentation placed thereon by
Landlord in financing or refinancing the Premises or otherwise.
11.4. Tenant shall have the right to contest the validity or amount of
any mechanic's lien or other lien filed against the Premises, or any portion
thereof. Any such contest shall be undertaken by Tenant in accordance with the
provisions of Paragraph 6.3 above.
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ARTICLE XII
LANDLORD'S RIGHT TO CURE DEFAULT
12.1. If Tenant shall at any time fail to (a) pay any Tax in accordance
with the provisions of this Lease; (b) obtain, pay for, maintain and deliver any
of the insurance policies or certificates of insurance provided for in this
Lease; (c) make any other payment or perform any other act on its part to be
made or performed, and if any such failure is not cured within fifteen (15) days
after receipt by Tenant of written notice thereof from Landlord (or without
notice in case of an emergency) or if such failure cannot be cured within
fifteen (15) days, the extension of time provisions of Paragraph 13.1(c) shall
apply, then Landlord, without waiving or releasing Tenant from any obligation of
Tenant contained in this Lease, may, but shall be under no obligation to do so,
(i) pay any Tax payable by Tenant pursuant to the provisions of this Lease; (ii)
obtain, pay for and maintain any of the insurance policies provided for in this
Lease; or (iii) make any other payment or perform any other act on Tenant's part
to be paid or performed as provided in this Lease, and Landlord may enter upon
the Premises for any such purpose and take all such action therein or thereon as
may be necessary therefor. Nothing herein contained shall be deemed as a waiver
or release of Tenant from any obligation of Tenant contained in this Lease.
12.2. All sums so paid by Landlord and all reasonable costs and
expenses, including reasonable attorneys' fees, incurred by Landlord in
connection with the performance of any such act, together with interest thereon
at the Maximum Rate of Interest from the respective dates of Landlord's making
of each payment of such cost and expense, shall be deemed Additional Rent
hereunder and shall be paid by Tenant to Landlord within ten (10) days after
receipt by Tenant of Landlord's written demand. Landlord shall have, in addition
to any other right or remedy of Landlord, the same rights and remedies in the
event of nonpayment thereof by Tenant as in the case of default by Tenant in the
payment of Base Rent. Landlord shall not be limited in the proof of any damages
which Landlord may claim against Tenant arising out of or by reason of Tenant's
failure to provide and keep in force insurance as aforesaid, to the amount of
the insurance premium or premiums not paid or not incurred by Tenant, and which
would have been payable upon such insurance, but Landlord shall also be
entitled to recover as damages for such breach the uninsured amount of any loss
(to the extent of any deficiency between the dollar limits of insurance
required by the provisions of this Lease and the dollar limits of the insurance
actually carried by Tenant), damages, costs and expenses of suit, including
reasonable attorneys' fees, suffered or incurred by reason of damage to or
destruction of the Premises or any portion thereof, or other damage or loss
which Tenant is required to insure against hereunder, occurring during any
period when Tenant shall have failed or neglected to provide insurance as
aforesaid. If Tenant shall fail to perform any act required of it, Landlord may
perform the same, but shall not be required to do so, in such manner and to
such extent as Landlord may deem necessary or desirable, and in exercising any
such right to employ counsel and to pay necessary and incidental costs and
expenses, including reasonable attorneys' fees.
ARTICLE XIII
DEFAULTS OF TENANT
13.1. The occurrence of any one or more of the following events shall
constitute an "Event of Default":
(a) If default shall be made by Tenant under the provisions of
this Lease relating to assignment, sublease, mortgage or other transfer
of Tenant's interest in this Lease or in the Premises or in the income
arising therefrom;
(b) If default shall be made in the due and punctual payment of
any Base Rent or Additional Rent or in the payment of any other amount
to be paid by Tenant, when and as the same shall become due and payable,
and such default shall continue for a period of ten (10) days after the
receipt by Tenant of written notice thereof from Landlord;
(c) If default shall be made by Tenant in keeping, observing or
performing any of the terms contained in this Lease, other than those
referred to in subparagraphs (a) and (b) of this Paragraph 13.1, which
do not expose Landlord to criminal liability, and such default shall
continue for a period of thirty (30) days
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after written notice thereof given by Landlord to Tenant, or in the
event such a default cannot, with due diligence and in good faith, be
cured within thirty (30) days, and Tenant fails to proceed promptly and
with due diligence and in good faith to commence the cure of same within
said thirty (30) day period and thereafter to prosecute the curing of
such default with due diligence and in good faith, it being intended
that in connection with a default which does not expose Landlord to
criminal liability, not susceptible of being cured with due diligence
and in good faith within thirty (30) days, that the time allowed Tenant
within which to cure the same shall be extended for such period as may
be reasonably necessary for the curing thereof promptly with due
diligence and in good faith;
(d) If default shall be made by Tenant in keeping, observing or
performing any of the terms contained in this Lease, other than those
referred to in subparagraphs (a), (b) and (c) of this Paragraph 13.1,
and which exposes Landlord to criminal liability, and such default shall
continue for a period of fifteen (15) days after written notice thereof
given by Landlord to Tenant, it being intended that in connection with a
default which exposes Landlord to criminal liability, that Tenant shall
proceed immediately to cure or correct such condition with continuity
and with all due diligence and in good faith; or
(e) Subject to the federal bankruptcy laws and other applicable
statutes, laws, regulations and orders, if (i) Tenant shall make an
assignment for the benefit of creditors; (ii) a voluntary petition is
filed by Tenant under any law having for its purpose the adjudication of
Tenant a bankrupt, or Tenant be adjudged a bankrupt pursuant to an
involuntary petition in bankruptcy; (iii) proceedings are initiated to
appoint a receiver for the property of Tenant which proceeding are not
dismissed within thirty (30) days following filing; or (iv) any
department of the State of Illinois or the Federal government, or any
officer thereof duly authorized, shall take possession of the business
or property of Tenant.
13.2. If an Event of Default occurs, Landlord shall have the rights and
remedies hereinafter set forth, which shall be distinct, separate and
cumulative and shall not operate to exclude or deprive Landlord of any other
right to remedy allowed it at law or in equity or elsewhere in this Lease;
(a) Landlord may terminate this Lease by giving Tenant written
notice of its election to do so, in which event the Term shall end and
all right, title and interest of Tenant hereunder shall expire on the
date stated in such notice;
(b) Landlord may terminate Tenant's right to possess the
Premises without terminating this Lease by giving written notice to
Tenant that Tenant's right of possession shall end on the date stated in
such notice, whereupon Tenant's right to possess the Premises or any
part thereof shall cease on the date stated in such notice; and
(c) Landlord may seek to enforce the provisions of this Lease
and may seek to enforce and protect the rights of Landlord hereunder by
a suit or suits in equity or at law for the specific performance of any
covenant or agreement contained herein, and for the enforcement of any
other appropriate legal or equitable remedy, including, without
limitation, injunctive relief, and for recovery of all moneys due or to
become due from Tenant under any of the provisions of this Lease.
13.3. If Landlord exercises either of the remedies provided for in
Paragraphs 13.2(a) and (b), Tenant shall surrender possession of and vacate the
Premises and immediately deliver possession thereof to Landlord, and Landlord
may re-enter and take complete and peaceful possession of the Premises, with
process of law, full and complete license so to do being hereby granted to
Landlord, by lawful means, and Landlord may remove all occupants and property
therefrom, as permitted by law, without being deemed in any manner guilty of
trespass, eviction or forcible entry and detainer, and without relinquishing
Landlord's right to Rent or any other right given to Landlord hereunder or by
law or in equity.
13.4. If Landlord terminates Tenant's right to possess the Premises
without terminating this Lease, as provided for in Paragraph 13.2(b) above,
such termination of possession shall not release Tenant, in whole or in part,
from Tenant's obligation to pay the Rent hereunder for the full Term, and the
aggregate amount of the Rent (based on the latest applicable rate of Base Rent
and the rate of the latest determined Additional
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Rent) for the period from the date stated in the notice terminating possession
to the stated end of the Term discounted at a present value rate of six percent
(6%) per annum from the date of said notice shall be immediately due and payable
by Tenant to Landlord, together with any other moneys due hereunder, and
Landlord shall have the right to immediate recovery of all such amounts. In
addition, Landlord shall have the right, from time to time, to recover from
Tenant, and Tenant shall remain liable for, all Rent not theretofore accelerated
and paid pursuant to the foregoing sentence and any other sums thereafter
accruing as they become due under this Lease during the period from the date of
such notice of termination of possession to the stated end of the Term. In any
such case, Landlord shall, in good faith, use reasonable efforts to relet the
Premises or any part thereof for the account of Tenant for such reasonable rent,
on a net rent basis as provided herein, for such time (which may be for a term
extending beyond the Term) and upon such reasonable terms as Landlord, in
Landlord's reasonable commercial judgment, shall determine, and Landlord shall
be required to accept any tenant having a net worth in excess of Fifty Million
Dollars ($50,000,000.00) offered by Tenant but shall not be required to observe
any instructions given by Tenant relative to such reletting. Also, in any such
case, Landlord may make reasonable repairs, alterations and additions in or to
the Premises to the extent deemed by Landlord necessary or desirable, and in
connection therewith, Landlord may change the locks to the Premises and Tenant
shall, upon written demand, pay the cost thereof together with Landlord's
expenses of reletting. Landlord shall collect the rents from any such reletting
and apply the same first to the payment of the expenses of re-entry, repair and
alterations and the expenses of reletting and second to the payment of Rent
herein provided to be paid by Tenant, and any excess or residue shall operate
only as an offsetting credit against the amount of Rent due and owing or paid
as a result of acceleration or as the same thereafter becomes due and payable
hereunder, but the use of such offsetting credit to reduce the amount of Rent
due Landlord, if any, shall not be deemed to give Tenant any right, title or
interest in or to such excess or residue and any such excess or residue shall
belong to Landlord solely; provided that in no event shall Tenant be entitled to
a credit on its indebtedness to Landlord in excess of the aggregate sum
(including Base Rent and Additional Rent) which would have been paid by Tenant
for the period for which the credit to Tenant is being determined, had no Event
of Default occurred. No such re-entry, repossession, repairs, alterations,
additions or reletting shall be construed as an eviction or ouster of Tenant or
as an election on Landlord's part to terminate this Lease, unless a written
notice of such intention is given to Tenant, or shall operate to release Tenant,
in whole or in part, from any of Tenant's obligations hereunder, and Landlord
may, at any time and from time to time, sue for any deficiencies from time to
time remaining after the application from time to time of the proceeds of any
such reletting. In the event Landlord obtains a judgment against Tenant for an
amount attributable in part to the loss of future payments of Rent as provided
in this Paragraph 13.4 or Paragraph 13.5 below and Landlord collects the full
amount of such judgment from Tenant, from and after the date of receipt of such
funds Landlord will credit Tenant with rent payable as a result of any reletting
of the Premises (minus costs of reletting and collection) through the expiration
of the period of acceleration used in the determination of the amount of said
judgment (but in no event beyond the expiration of the Term). Landlord's
obligation to so reimburse Tenant shall survive the entry of the foregoing
judgment. Notwithstanding anything contained in Paragraphs 13.4 or 13.5 or
elsewhere in this Lease to the contrary, if an Event of Default occurs
hereunder, Landlord shall use commercially reasonable efforts to relet the
Premises for the highest rent obtainable, on a net rent basis as provided in
this Lease, and on reasonable terms and conditions.
13.5. In the event of the termination of this Lease by Landlord as
provided for by Paragraph 13.2(a), Landlord shall be entitled to recover from
Tenant all the fixed dollar amounts of Rent accrued and unpaid for the period
up to and including such termination date, as well as all other additional
accrued sums payable by Tenant, or for which Tenant is liable or with respect
to which Tenant has agreed to indemnify Landlord under any of the provisions
of this Lease, which may be then owing and unpaid, and all costs and expenses,
including, without limitation, court costs and reasonable attorneys' fees
incurred by Landlord in the enforcement of its rights and remedies hereunder,
and, in addition, Landlord shall be entitled to recover as damages for loss of
the bargain and not as a penalty: (a) the aggregate sum which at the time of
such termination represents the excess, if any, of the present value of the
aggregate rents at the annual rates for the remainder of the Term as provided
for in this Lease, over the then present value of the then aggregate fair
rental value of the Premises for the balance of the Term, such present value to
be computed in each case on the basis of a six percent (6%) per annum discount
from the respective dates upon which such rentals would have been payable
hereunder had this Lease not been terminated; and (b) any damages in addition
thereto (but which are not included in the above calculation), including
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reasonable attorneys' fees and court costs, which Landlord shall have sustained
by reason of the breach of any of the covenants of this Lease other than for
the payment of Rent.
13.6. All property removed from the Premises by Landlord pursuant to
any provisions of this Lease or by law may be handled, removed or stored by
Landlord at the cost and expense of Tenant, and Landlord shall in no event be
responsible for the value, preservation or safekeeping thereof, except for
loss, damage or destruction resulting from Landlord's fault or negligence.
Tenant shall pay Landlord, within ten (10) days of Landlord's written demand
therefor, for all expenses incurred by Landlord in such removal and for storage
charges for such property so long as the same shall be in Landlord's possession
or under Landlord's control. All such property not removed from the Premises or
retaken from storage by Tenant within thirty (30) days after the end of the
Term, however terminated, shall, at Landlord's option, be conclusively deemed
to have been conveyed by Tenant to Landlord as by bill of sale, without further
payment or credit by Landlord to Tenant.
13.7. Tenant shall pay all of Landlord's costs, charges and expenses,
including, without limitation, court costs and reasonable attorneys' fees,
incurred in enforcing Tenant's obligations under this Lease or incurred by
Landlord in any litigation, negotiation or transaction in which Tenant causes
Landlord, without Landlord's fault or negligence, to become involved or
concerned.
13.8. Landlord shall pay all of Tenant's costs, charges and expenses,
including, without limitation, court costs and reasonable attorneys' fees,
incurred in enforcing Landlord's obligations under this Lease or incurred by
Tenant in any litigation, negotiation or transaction in which Landlord causes
Tenant, without Tenant's fault or negligence, to become involved or concerned.
13.9. Except to the extent otherwise required under federal bankruptcy
laws, rules or orders or by a court of competent jurisdiction in the event a
petition is filed by or against Tenant under the federal bankruptcy laws now in
effect or as amended from time to time (the "Bankruptcy Code");
(1) Tenant, as debtor and debtor in possession, and any
trustee who may be appointed, agree to adequately
protect Landlord as follows: (a) to pay monthly in
advance on the first day of each month as reasonable
compensation for use and occupancy of the Premises an
amount equal to all Rent due pursuant to this Lease; (b)
to perform each and every obligation of Tenant under
this Lease until such time as this Lease is either
rejected or assumed by order of a court of competent
jurisdiction; (c) to determine within sixty (60) days
after filing of such petition whether to assume or
reject this Lease; (d) to give Landlord at least thirty
(30) days prior written notice, unless a shorter notice
period is agreed to in writing by the parties, of any
proceeding relating to any assumption or rejection of
this Lease; (e) to give at least thirty (30) days prior
written notice of any vacation or abandonment of the
Premises, any such vacation or abandonment to be deemed
a rejection of this Lease; and (f) to do all other
things of benefit to Landlord otherwise required under
the Bankruptcy Code. Tenant shall be deemed to have
rejected this Lease in the event of the failure to
comply with any of the above.
(ii) If Tenant or a trustee elects to reject this Lease
subsequent to the filing of a petition under the
Bankruptcy Code, or if this Lease is otherwise rejected,
Tenant shall immediately vacate and surrender possession
of the Premises.
(iii) If Tenant or a trustee elects to assume this Lease
subsequent to the filing of a petition under the
Bankruptcy Code, Tenant, as debtor and as debtor in
possession and any trustee who may be appointed agrees
as follows: (a) to cure each and every existing breach
by Tenant within not more than ninety (90) days of
assumption of this Lease; (b) to compensate Landlord for
any actual pecuniary loss resulting from any existing
breach, including without limitation, Landlord's
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reasonable costs, expenses and attorneys' fees
incurred as a result of the breach, as determined
by a court of competent jurisdiction, within ninety
(90) days of assumption of this Lease; (c) in the
event of an existing breach, to provide adequate
assurance of Tenant's future performance, including
without limitation (i) the deposit of an additional
sum equal to three months' Rent to be held (without
any allowance for interest thereof) to secure
Tenant's obligations under the Lease; (ii) the
production to Landlord of written documentation
establishing that Tenant has sufficient present and
anticipated financial ability to perform each and
every obligation of Tenant under this Lease; and
(iii) assurances, in form acceptable to Landlord,
as may be required under any applicable provision
of the Bankruptcy Code; (d) the assumption will not
breach any provision of this Lease; (e) the
assumption will be subject to all of the provisions
of this Lease unless the prior written consent of
Landlord is obtained; and (f) the prior written
consent to the assumption of any Mortgagee or
ground lessor to which this Lease has been assigned
as collateral security is obtained.
(iv) If Tenant assumes this Lease and proposes to assign
the same pursuant to the provisions of the
Bankruptcy Code to any person or entity who shall
have made a bona fide offer to accept an assignment
of this Lease on terms acceptable to Tenant, the
notice of such proposed assignment, setting forth
(a) the name and address of such person; (b) all
the terms and conditions of such offer; and (c) the
adequate assurance to be provided Landlord to
assure such person's future performance under the
Lease, including without limitation, the assurances
referred to in any applicable provision of the
Bankruptcy Code, shall be given to Landlord by
Tenant no later than twenty (20) days after receipt
by Tenant, but in any event no later than ten (10)
days prior to the date that Tenant shall make
application to a court of competent jurisdiction
for authority and approval to enter into such
assignment and assumption, and Landlord shall
thereupon have the prior right and option, to be
exercised by notice to Tenant given at any time
prior to the effective date of such proposed
assignment, to accept an assignment of this Lease
upon the same terms and conditions and for the same
consideration, if any, as the bona fide offer made
by such person, less any brokerage commissions
which may be payable out of the consideration to be
paid by such person for the assignment of this
Lease. The adequate assurance to be provided
Landlord to assure the assignee's future
performance under the Lease shall include without
limitation; (d) the deposit of a sum equal to three
months' Rent to be held (without any allowance for
interest thereon) as security for performance
hereunder; (e) a written demonstration that the
assignee meets all reasonable financial and other
criteria of Landlord as did Tenant and its business
at the time of execution of this Lease, including
the production of the most recent audited financial
statement of the assignee prepared by a certified
public accountant; (f) the assignee's use of the
Premises will be in form acceptable to Landlord, as
to all matters identified in any applicable
provision of the Bankruptcy Code.
(v) Neither Tenant nor any trustee who may be appointed
in the event of the filing of a petition under the
Bankruptcy Code shall conduct or permit the conduct
of any "fire," "bankruptcy," "going out of
business" or auction sale in or from the Premises.
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ARTICLE XIV
DESTRUCTION AND RESTORATION
14.1. Subject to the terms and provisions of any security documents
evidencing any first mortgage financing encumbering the Land, Tenant covenants
and agrees that in case of damage or destruction of the improvements after the
Commencement Date by fire or otherwise, Tenant, at its sole cost and expense,
shall restore, repair, replace and rebuild the same as nearly as possible to
the condition that the same were in immediately prior to such damage or
destruction with such changes or alterations (made in conformity with Article
XX hereof) as may be reasonably acceptable to Landlord or required by law;
provided, however, that Tenant's obligations set forth in this Paragraph 14.1
shall be expressly conditioned upon the net amount of insurance proceeds being
made available to Tenant for the Restoration, and if such net amount is not
made available, Tenant shall have the right to terminate this Lease, Tenant
shall give Landlord written notice of such damage or destruction promptly after
the occurrence thereof and specify in such notice, in reasonable detail, the
extent thereof. Such restoration, repairs, replacements, rebuilding, changes
and alterations, including the cost of temporary repairs for the protection of
the Premises, or any portion thereof, pending completion thereof, are sometimes
hereinafter referred to as the "Restoration." The Restoration shall be carried
on and completed in accordance with the provisions and conditions of Paragraph
14.2 and Article XX hereof. If the net amount of the insurance proceeds (after
deduction of all costs, expenses and fees related to recovery of the insurance
proceeds) recovered by all named insureds and loss payees and made available to
Tenant is insufficient to complete the Restoration of such improvements
(exclusive of Tenant's personal property and trade fixtures which shall be
restored, repaired or rebuilt out of Tenant's separate funds if Tenant so
elects), Tenant shall, upon request of Landlord or Mortgagee, deposit with
Landlord or Mortgagee a cash deposit equal to the reasonable estimate of the
amount necessary to complete the Restoration of such improvements less the
amount of such insurance proceeds available.
14.2. All insurance monies recovered on account of such damage or
destruction, less the costs, if any, of such recovery, plus the amount of any
funds deposited by Tenant with Landlord or Mortgagee pursuant to Paragraph
14.1, shall be applied by Landlord to the payment of the costs of the
Restoration and shall be paid out from time to time as the Restoration
progresses upon the written request of Tenant, accompanied by a certificate of
the architect or a qualified professional engineer in charge of the Restoration
stating that as of the date of such certificate (a) the sum requested is justly
due to the contractors, subcontractors, materialmen, laborers, engineers,
architects, or persons, firms or corporations furnishing or supplying work,
labor, services or materials for such Restoration, or is justly required to
reimburse Tenant for any expenditures made by Tenant in connection with such
Restoration, and when added to all sums previously paid out by Landlord or
Mortgagee, does not exceed the value of the Restoration performed to the date
of such certificate by all or said parties; (b) except for the amount, if any,
stated in such certificates to be then due as of the date of the applicable
certificate for work, labor, services or materials, there is no outstanding
indebtedness known to the person signing such certificate, after due inquiry,
which is then due for work, labor, services or materials in connection with
such Restoration, which, if unpaid, might become the basis of a mechanic's lien
or similar lien with respect to the Restoration or a lien upon the Premises, or
any portion thereof; and (c) the costs, as estimated by the person signing such
certificate, of the completion of the Restoration required to be done
subsequent to the date of such certificate in order to complete the Restoration
do not exceed the sum of the remaining insurance moneys, plus the amount
deposited by Tenant, if any, remaining in the hands of Landlord or Mortgagee
after payment of the sum requested in such certificate.
Tenant shall furnish Landlord or Mortgagee at the time of any such
payment with partial or final (as the case may be) waivers of lien and such
other evidence that there are no unpaid bills with respect to any work, labor,
services or materials performed, furnished or supplied in connection with such
Restoration as Landlord or Mortgagee may reasonably request. Landlord or
Mortgagee shall not be required to pay out any insurance moneys where Tenant
fails to supply satisfactory evidence of the payment for work, labor, services
or materials performed, furnished or supplied, as aforesaid.
If the insurance moneys in the hands of Landlord or Mortgagee, and such
other sums, if any, deposited with Landlord or Mortgagee pursuant to Paragraph
14.1 hereof, shall be insufficient to pay the entire costs of the Restoration,
Tenant shall pay any deficiency to Landlord or Mortgagee within ten (10) days
after receipt of Landlord's or
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Mortgagee's written demand. Upon completion of the Restoration and payment in
full thereof by Tenant, Landlord or Mortgagee's shall, within a reasonable
period of time thereafter, turn over to Tenant any insurance moneys or other
moneys then remaining upon submission of proof reasonably satisfactory to
Landlord or Mortgagee that the Restoration has been paid for in full and the
damaged or destroyed Building and other improvements repaired, restored or
rebuilt as nearly as possible to the condition they were in immediately prior
to such damage or destruction, or with such changes or alterations as may be
made in conformity with Paragraph 14.1 and Article XX hereof.
14.3. No destruction of or damage to the Premises, or any portion
thereof, by fire, casualty or otherwise shall permit Tenant to surrender this
Lease or shall relieve Tenant from its liability to pay to Landlord the Base
Rent and Additional Rent payable under this Lease or from any of its other
obligations under this Lease.
14.4. The foregoing provisions of this Article XIV apply only to damage
or destruction of the improvements by fire, casualty or other cause occurring
after the Commencement Date (or any pre-Term occupancy of the Premises by
Tenant pursuant to Paragraph 1.2 above, if applicable). Any such damage or
destruction occurring prior to such time shall be restored, repaired, replaced
and rebuilt by Landlord and during such period of construction, Landlord shall
obtain and maintain the builder's risk insurance coverage referred to in
Paragraph 7.1 hereof. All moneys received by Landlord under its builder's risk
insurance coverage shall be applied by Landlord to complete the Restoration of
such damage or destruction and if such insurance proceeds are insufficient,
Landlord shall provide all additional funds necessary to complete the
Restoration of the Improvements.
ARTICLE XV
CONDEMNATION
15.1. If, during the Term, the entire Premises shall be taken as the
result of the exercise of the power of eminent domain or conveyed under threat
thereof (hereinafter referred to as the "Proceedings"), this Lease and all
right, title and interest of Tenant hereunder shall terminate on the earlier of
taking of possession by the condemning authority or the date of vesting of title
pursuant to such Proceedings, and Landlord shall be entitled to and shall
receive the total award made in such Proceedings (except for any separate award
relating to Tenant's trade fixtures or other personal property, which separate
award shall be paid to Tenant), Tenant hereby assigning any interest in such
award, damages, consequential damages and compensation to Landlord, and Tenant
hereby waiving any right Tenant has now or may have under present or future law
to receive any separate award of damages for its interest in the Premises, or
any portion thereof, or its interest in this Lease.
15.2. If, during the Term, a portion of the Premises shall be taken in
any such Proceeding and as a result thereof, (i) Tenant is deprived of access to
the loading dock facilities at the Premises; (ii) Tenant is deprived of ingress
to or egress from the Premises; or (iii) there shall no longer be an adequate
number of parking spaces available at the Premises to support the business of
Tenant, and as a result of any said items delineated in clauses (i) through
(iii) above, (A) the business of Tenant conducted in the portion of the Premises
taken cannot reasonably be carried on with substantially the same utility and
efficiency in the remainder of the Premises (or any substitute space as referred
to in clause (B) hereof), and (B) substantially similar space to the space so
taken cannot be constructed on the remaining portion of the Premises, Tenant
may, at its option, terminate this Lease as to the remainder of the Premises.
Additionally, if, during the Term, less than the entire Premises, but more than
ten percent (10%) of the floor area of the Building, or more than ten percent
(10%) of the area of the Land, shall be taken in any such Proceedings, this
Lease shall, upon the earlier of taking of possession by the condemning
authority or vesting of title in the Proceedings, terminate as to the portion
of the Premises so taken, and Tenant may, at its option, terminate this Lease
as to the remainder of the Premises if, but only if, (a) the business of Tenant
conducted in the portion of the Premises taken cannot reasonably be carried on
with substantially the same utility and efficiency in the remainder of the
Premises (or any substitute space securable by Landlord pursuant to clause (b)
hereof) and (b) Landlord cannot construct or secure substantially similar space
to the space so taken on the remainder of the Premises. Either such termination
as to the remainder of the Premises shall be effected by notice in writing
given not more than sixty (60) days after the date of vesting of title in such
Proceedings, and shall specify a date not more than sixty (60) days after the
giving of such notice as the date for such termination. Upon the date
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specified in such notice, the Term, and all right, title and interest of Tenant
hereunder shall cease and terminate. If this Lease is terminated as provided in
this Paragraph 15.2, Landlord shall be entitled to and shall receive the total
award made in such Proceedings (except for any separate award relating to
Tenant's trade fixtures or other personal property, which separate award shall
be paid to Tenant). Tenant hereby assigning any interest in such award, damages,
consequential damages and compensation to Landlord, and Tenant hereby waiving
any right Tenant has now or may have under present or future law to receive any
separate award of damages for its interest in the Premises, or any portion
thereof, or its interest in this Lease. The right of Tenant to terminate this
Lease as provided in this Paragraph 15.2 shall be exercisable only upon the
condition that Tenant is not then in default in the performance or any of the
terms, convenants or conditions of this Lease on its part to be performed, and
such termination upon Tenant's part shall become effective only upon compliance
by Tenant with all such terms, covenants and conditions to the date of such
termination; provided, however, that if Tenant is then in default in the
performance of any of the terms, covenants or conditions of this Lease but
Tenant is prosecuting the curing of said default in accordance with the
applicable provisions of this Lease, Tenant shall have the right, within thirty
(30) days after completion of said cure, to terminate this Lease in accordance
with this Paragraph 15.2. In the event that Tenant elects not to terminate this
Lease as to the remainder of the Premises, the rights and obligations of
Landlord and Tenant shall be governed by the provisions of Paragraph 15.3
hereof.
15.3. If a portion of, but not the entire Premises is taken in any
Proceeding, but this Lease remains in effect, this Lease shall, upon the
earlier of taking of possession by the condemning authority or vesting of title
in the Proceedings, terminate as to the parts so taken, and Tenant shall have
no claim or interest in the award, damages, consequential damages and
compensation, or any part thereof (except for any separate award relating to
Tenant trade fixtures or personal property, which separate award shall be
payable to Tenant). Landlord shall be entitled to and shall receive the total
award made in such Proceedings (except for any separate award relating to
Tenant's trade fixtures or other personal property, which separate award shall
be payable to Tenant), Tenant hereby assigning any interest in such award,
damages, consequential damages and compensation to Landlord and Tenant hereby
waiving, except as expressly provided herein, any right Tenant has now or may
have under present or future law to receive any separate award of damages for
its interest in the Premises, or any portion thereof, or its interest in this
Lease. If any portion of, but not the entire Premises is taken but this lease
remains in effect, Landlord shall, within two hundred seventy (270) days of its
receipt of the award made in such Proceeding, but subject to Force Majeure
Events, promptly restore that portion of the Improvements on the Premises not
so taken to a complete architectural and mechanical unit for the use and
occupancy of Tenant. In the event that the amount of the award that may be
received by Landlord in any such Proceedings for physical damage to the
Improvements as a result of such partial taking is insufficient to pay all costs
of such restoration work, such additional sum shall be funded by Landlord.
15.4. In any taking of the Premises or any portion thereof, whether or
not this Lease is terminated as provided herein, Tenant shall have only the
limited right, if then available by law to Tenant, to separately pursue and to
receive any award which may be made for damages to or condemnation of Tenant's
movable trade fixtures and equipment, or for Tenant's moving expenses or
interruption of Tenant's business, provided that no such award shall in any
way diminish the award payable to Landlord as a result of such taking as
provided herein.
15.5. In the event of any termination of this Lease, or any part
thereof, as a result of any such Proceedings, Tenant shall pay to Landlord all
Base Rent and all Additional Rent and other charges payable hereunder with
respect to that portion of the Premises so taken, apportioned to the date of
such termination.
15.6. If Tenant is either not entitled to, or does not elect to,
terminate this Lease in the event of a partial taking of the Building, the Base
Rent payable hereunder during the period from and after the earlier of the
taking of possession by the condemning authority and the date of vesting of
title in such Proceedings to the expiration or termination of this Lease shall
be reduced to a sum equal to the product of the Base Rent provided for herein
multiplied by a fraction, the numerator of which is the number of square feet in
the Building after such taking and after the same has been restored to a
complete architectural unit, and the denominator of which is the number of
square feet in the Building prior to such taking.
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15.7. If a portion of the Land (which does not include any portion of
the Building) is taken and Tenant is either not entitled to, or does not elect
to, terminate this Lease, the Base Rent payable hereunder during the period
from and after the earlier of the taking of possession by the condemning
authority and the date of vesting of title in such Proceedings to the
expiration or earlier termination of the Lease shall be reduced by an amount
equal to ten percent (10%) of the award made in the Proceedings for the taking
of said portion of the Land (net of any portion of said award allocated for
landscaping, paving and/or curbing work).
ARTICLE XVI
ASSIGNMENT AND SUBLETTING
16.1. Tenant shall not, without the prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed (and the consent of
any holder of any first mortgage or trust deed encumbering the Premises, if
required pursuant to the terms thereof), in each instance, either prior or
subsequent to the Commencement Date, (a) assign, transfer, mortgage, pledge,
hypothecate or encumber or subject to or permit to exist upon or be subjected to
any lien or charge, this Lease or any interest under it; (b) allow to exist or
occur any transfer of or lien upon this Lease or Tenant's interest herein by
operation of law; (c) sublet the Premises or any part thereof; or (d) permit the
use or occupancy of the Premises or any part thereof for any purpose not
provided for under Article IV or by anyone other than the Tenant and Tenant's
employees. In no event shall this Lease be assigned or assignable by voluntary
or involuntary bankruptcy proceedings or otherwise, and in no event shall this
Lease or any rights or privileges hereunder be an asset of Tenant under any
bankruptcy, insolvency or reorganization proceedings, except as provided by law.
Notwithstanding anything contained within this Paragraph 16.1 to the contrary,
Tenant shall have the right, without the requirement of obtaining Landlord's
prior written consent thereto (but subject to the consent of the holder of any
mortgage or trust deed encumbering the Premises, if required pursuant to the
terms thereof, which consent shall not be unreasonably withheld or delayed), to
enter into an assignment of this Lease or a sublease of the Premises, or any
portion thereof, to the parent corporation of Tenant, any wholly owned
subsidiary corporation of Tenant, any corporation affiliated with Tenant, any
corporation succeeding to substantially all of the assets of Tenant as a result
of a consolidation or merger, or a corporation to which all or substantially all
of the assets of Tenant have been sold (collectively, an "Affiliate"); provided,
however, that the Affiliate shall assume in writing all of Tenant's obligations
hereunder. Notwithstanding any such assignment or sublease, Tenant shall not be
released from, and shall perform all, obligations imposed upon it hereunder to
the extent not performed by the Affiliate.
16.2. Without limiting the generality of the foregoing, Tenant
expressly covenants and agrees not to enter into any lease, sublease, license,
concession or other agreement for use, occupancy or utilization of the Premises
which provides for rental or other payment for such use, occupancy or
utilization based in whole or in part on the net income or profits derived by
any person from the property leased, used, occupied or utilized (other than an
amount based on a fixed percentage or percentages of receipts or sales), and
that any such purported lease, sublease, license, concession or other agreement
shall be absolutely void and ineffective as a conveyance of any right or
interest in the possession, use, occupancy or utilization of any part of the
Premises.
16.3. Consent by Landlord to any assignment, subletting, use,
occupancy, transfer or encumbrance shall not operate to relieve Tenant from any
covenant or obligation hereunder except to the extent, if any, expressly
provided for in such consent, or be deemed to be a consent to or relieve Tenant
from obtaining Landlord's consent to any subsequent assignment, subletting, use,
occupancy, transfer or encumbrance by Tenant or anyone claiming by, through or
under Tenant. Tenant shall pay all reasonable fees charged by any Mortgagee
that are incurred in connection with any assignment, subletting, use,
occupancy, transfer or encumbrance made or requested by Tenant.
16.4. Landlord shall not be deemed to have unreasonably withheld its
consent to a proposed assignment of this Lease or to a proposed sublease of all
or part of the Premises if its consent is withheld because: (a) Tenant is then
in default hereunder; (b) any notice of termination of this Lease or
termination of Tenant's possession shall have been given under Article XIII
hereof; (c) either the portion of the Premises which Tenant proposes to
sublease, or the remaining portion of the Premises, or the means of ingress or
egress to either the portion of the Premises which Tenant proposes to sublease
or the remaining portion of the Premises, or the proposed use of the Premises or
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any portion thereof by the proposed assignee or subtenant will violate any
village, city, state or federal law, ordinance or regulation, including,
without limitation, any applicable building code or zoning ordinances; (d) the
proposed use of the Premises by the proposed assignee or subtenant does not
conform with the use set forth in Article IV; (e) in the reasonable judgment of
Landlord, the proposed assignee or subtenant is of a character or is engaged in
a business which would be deleterious to the reputation of the Premises or
Landlord or any surrounding property owned by Landlord, or the proposed
assignee or subtenant is not sufficiently financially responsible or
experienced to perform its obligations under the proposed assignment or
sublease; or (f) the proposed assignee or subtenant is already a tenant at the
Center, except if said tenant is expanding its operations at the Center and
Landlord is unable to provide said tenant with suitable space in accordance
with its expansion requirements, or is a governmental body (or subdivision or
agency thereof); provided, however, that the foregoing are merely examples of
reasons for which Landlord may withhold its consent and shall not be deemed
exclusive of any permitted reasons for reasonably withholding consent, whether
similar or dissimilar to the foregoing examples. Tenant agrees that all
advertising by Tenant or on Tenant's behalf with respect to the assignment of
this Lease or subletting of any part of the Premises must be approved in
writing by Landlord prior to publication.
16.5. If Tenant, having first obtained Landlord's consent to any
assignment or sublease as required hereunder, or if Tenant, as debtor or debtor
in possession, or a trustee in bankruptcy for Tenant pursuant to the Bankruptcy
Code, 11 U.S.C. 101 et seq., as amended from time to time (the "Bankruptcy
Code"), shall assign this Lease or sublet the Premises, or any part thereof, at
a rental or for other consideration in excess of the Rent or prorata portion
thereof due and payable by Tenant under this Lease, then Landlord and Tenant
shall each be entitled to receive fifty percent (50%) of any such excess rent
or other consideration (net of any costs and expenses incurred in connection
therewith), Tenant hereby agreeing to remit Landlord's share thereof to
Landlord within five (5) days of its receipt thereof.
16.6. If Tenant shall assign this Lease as permitted herein, the
assignee shall expressly assume all of the obligations of Tenant hereunder in a
written instrument satisfactory to Landlord which shall be furnished to
Landlord not later than fifteen (15) days prior to the effective date of the
assignment, together with a certified copy of an appropriate corporate
resolution (if the assignee is a corporation) authorizing such assumption. If
Tenant shall sublease the Premises as permitted herein, Tenant shall obtain and
furnish to Landlord, not later than fifteen (15) days prior to the effective
date of such sublease and in form reasonably satisfactory to Landlord, the
written agreement of such subtenant to the effect that the subtenant will
attorn to Landlord, at Landlord's option and written request, in the event this
Lease terminates before the expiration of the sublease.
16.7. Tenant shall provide Landlord with a written notice of intention
to sublease or assign. Such notice shall set forth the name of the proposed
subtenant or assignee and the proposed commencement date of the sublease term
or the effective date of assignment, as applicable. Such notice shall be
delivered at least thirty (30) days prior to the commencement date of the
sublease term or the effective date of assignment, as applicable, and shall
attach a copy of the proposed sublease or the assignment of lease, which shall
have been executed by the proposed sub-tenant or assignee. Landlord shall
respond to Tenant's request for consent within seven (7) business days of
Landlord's receipt of Tenant's written notice and the proposed sublease or
assignment of lease, which proposed sublease or assignment of lease shall have
been executed by the proposed sub-tenant or assignee.
16.8. In all instances other than with respect to an assignment or a
sublease to an Affiliate, Landlord shall have the right, to be exercised by
giving written notice to Tenant within seven (7) business days after Landlord's
receipt of Tenant's written notice, as required by Paragraph 16.7 above,
together with a copy of the proposed sublease or assignment of lease, partially
executed, as aforesaid, to recapture the space to be demised or assigned
pursuant thereto. If such recapture notice is delivered to Tenant, it shall
serve to irrevocably cancel and terminate this Lease with respect to the
proposed sublease space, or the Premises with respect to an assignment of
lease, in either case as of the proposed commencement date of the sublease term
or the proposed effective date of assignment, and as fully and completely as if
said date had been definitely fixed for the expiration date of the Term;
provided, however, that no termination of this Lease with respect to all or any
portion of the Premises shall become effective without the prior written
consent of each Mortgagee, which consent shall not be unreasonably withheld
or delayed.
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ARTICLE XVII
SUBORDINATION, NONDISTURBANCE,
NOTICE TO MORTGAGEE AND ATTORNMENT
17.1. This Lease is and shall be subject and subordinate to the lien of
any mortgage, deed of trust, security instrument or other document of like
nature, hereinafter referred to as "Mortgage", which now or at any time
hereafter may be placed upon the Premises, or any portion thereof or interest
therein, and to all present and future ground or underlying leases of the Land,
and to any replacements, renewals, amendments, modifications, extensions or
refinancing of any of the foregoing, and to each and every advance made under
any Mortgage, unless the holder of any Mortgage or the lessor under any such
ground or underlying lease (such holder or lessor being hereinafter referred to
as a "Mortgagee") requires in writing that this Lease be superior thereto.
Tenant agrees at any time hereafter, and from time to time on demand of
Landlord, to execute and deliver to Landlord any instruments, releases or other
documents that may be reasonably required to effect or confirm the
subordination or superiority of this Lease to the lien of any such Mortgage or
to any such ground or underlying lease. It is agreed, nevertheless, that so
long as Tenant is not in default in the payment of Base Rent and Additional
Rent and the performance and observance of all covenants, conditions,
provisions, terms and agreements to be performed and observed by Tenant under
this Lease, that such subordination, subordination agreement or other
instrument, release or document shall not interfere with, hinder or molest
Tenant's right to quiet enjoyment under this Lease, nor the right of Tenant to
continue to occupy the Premises and all portions thereof, and to conduct its
business thereon in accordance with the covenants, conditions, provisions,
terms and agreements of this Lease. The lien of any such Mortgage shall not
cover Tenant's trade fixtures or other personal property located in or on the
Premises. Upon execution of this Lease, Landlord shall deliver to Tenant a
non-disturbance agreement from each Mortgagee, in form and substance reasonably
satisfactory to Tenant, which provides that Tenant shall have the right to
remain in possession under this Lease and to enforce the option to purchase the
Premises provided for in Article XXV below even if Mortgagee forecloses its
Mortgage or accepts a deed in lieu of foreclosure. Before any additional
Mortgage is placed on the Premises, a similar non-disturbance agreement shall
be obtained from the Mortgagee thereunder and shall be delivered to Tenant.
17.2. In the event of any act or omission of Landlord constituting a
default by Landlord, Tenant agrees to give each Mortgagee, by registered or
certified mail, a copy of any notice or claim of default served upon Landlord
by Tenant, provided that prior to such notice Tenant has been notified in
writing (by way of service on Tenant of a copy of an assignment of Landlord's
interest in leases, or otherwise) of the address of such Mortgagee. Tenant
further agrees that if Landlord shall have failed to cure such default within
thirty (30) days after such notice to Landlord (or if such default cannot be
cured or corrected within that time, then such additional time as may be
necessary if Landlord has commenced, within such thirty (30) days, and is
diligently pursuing the remedies or steps necessary to cure or correct such
default) then such Mortgagee shall have an additional thirty (30) days within
which to cure or correct such default (or if such default cannot be cured or
corrected within that time, then such additional time as may be necessary to
cure or correct such default) before Tenant may exercise any right or remedy
which it may have on account of any such default of Landlord; provided,
however, that the foregoing cure provisions shall not apply if Tenant is
deprived of the use and occupancy of the Premises. Nothing herein contained
shall be construed or interpreted as requiring any Mortgagee to remedy such act
or omission.
17.3. If any Mortgagee shall succeed to the rights of Landlord under
this Lease or to ownership of the Premises, whether through possession or
foreclosure or the delivery of a deed in lieu thereof, then upon the written
request of such Mortgagee, Tenant shall attorn to and recognize such Mortgagee
as Tenant's landlord under this Lease, and shall promptly execute and deliver
any instrument that such Mortgagee may reasonably request to evidence such
attornment. In the event of any other transfer of Landlord's interest
hereunder, upon the written request of the transferee and Landlord, Tenant
shall attorn to and recognize such transferee as Tenant's landlord under this
Lease and shall promptly execute and deliver any instrument that such
transferee and Landlord may reasonably request to evidence such attornment.
17.4. Notwithstanding anything contained herein to the contrary,
Landlord covenants and agrees that at no time during the initial sixty (60)
months of the Term shall the aggregate amount of the Mortgages encumbering the
Premises exceed the sum of
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(a) Eight Million Five Hundred Thousand Dollars ($8,500,000.00) plus (b) the
excess of (i) the costs of the Improved Space over (ii) the Construction
Allowance.
17.5. Tenant agrees to execute and deliver any amendment to this Lease
reasonably required by any Mortgagee provided such amendment does not materially
adversely affect Tenants rights and obligations hereunder.
ARTICLE XVIII
SIGNS
Tenant may erect one (1) sign on the landscaped area adjacent to the
Building, provided that such sign (i) does not violate applicable governmental
laws, ordinances, rules or regulations; (ii) does not violate any covenants,
conditions or restrictions affecting the Premises; (iii) is compatible with the
architecture of the Building and the landscaped area adjacent thereto and of
surrounding properties; and (iv) has received the written approval of Landlord,
which approval shall not be unreasonably withheld or delayed, and in connection
therewith and upon Tenant's request. Tenant shall be solely responsible for the
construction, installation and maintenance of such sign. Tenant shall not erect
or attach any sign to the exterior of the Building. Upon the expiration of the
Term or earlier termination thereof, Tenant shall, at its sole cost and
expense, remove the sign and repair any damage or injury to the Premises caused
thereby.
ARTICLE XIX
REPORTS BY TENANT
Upon the request of Landlord at any time after one hundred thirty five
(135) days following the expiration of the applicable fiscal year of Tenant,
Tenant shall deliver to Landlord (within fifteen (15) days after receipt of
written request) ten (10) copies of Tenant's annual report to stockholders for
such fiscal year.
ARTICLE XX
CHANGES AND ALTERATIONS
20.1. Tenant shall have the right from time to time to make such
changes and alterations, structural or otherwise, to the Building as Tenant
shall deem necessary or desirable in connection with the requirements of its
business, which changes and alterations shall be made in all cases subject to
the following conditions, which Tenant covenants to observe and perform:
(a) No change or alteration shall be undertaken until Tenant
shall have procured and paid for all required permits and authorizations
of the various governmental bodies and departments having jurisdiction
of the Premises.
(b) No change or alteration shall be undertaken until detailed
plans and specifications therefor prepared and approved in writing by a
licensed architect or licensed professional engineer selected and paid
for by Tenant, who shall supervise any such work (the "Alterations
Architect or Engineer"), and of each amendment and change thereto, have
been first submitted to and approved in writing by Landlord, which
approval shall not be unreasonably withheld or delayed (but such consent
may be withheld if the change or alteration would, in the reasonable
judgment of Landlord, impair the value or usefulness of the Land or
Improvements, or any substantial part thereof). Before commencement of
any change, alteration, restoration or construction (hereinafter
sometimes referred to as "Work") involving in the aggregate an estimated
cost of more than Fifty Thousand Dollars ($50,000.00) or which, in
Landlord's reasonable judgment, would materially alter the mechanical,
structural or electrical systems of the Improvements. Tenant shall, in
addition, obtain Landlord's prior written approval, which shall not be
unreasonably withheld or delayed, of all general contractors for the
Work. Notwithstanding anything to the contrary contained herein,
Landlord may require the prior written consent or approval of any
Mortgagee as a condition to granting any consent or approval which
Tenant is required to obtain from Landlord hereunder. Upon completion of
any Work, Tenant shall provide Landlord with such documents as Landlord
or any Mortgagee may
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reasonably require (including, without limitation, sworn statements,
affidavits and waivers of lien) evidencing payment for such work, and
"as-built" plans and specifications. Tenant shall pay all costs and
expenses reasonably incurred by any Mortgagee in reviewing materials
submitted to them for approval for any Work which involves, in the
aggregate, an estimated cost of more than Fifty Thousand Dollars
($50,000.00); provided, however, that said costs and expenses shall not
exceed Five Thousand Dollars ($5,000.00) per occurrence.
(c) Any change or alteration shall, when completed, be of such
character as not to reduce the value or utility of the Premises or the
Building to which such change or alteration is made below its value or
utility thereof immediately prior to such change or alteration, nor
shall such change or alteration reduce the area or cubic content of the
Building, nor change the character of the Premises or the Building as to
use without Landlord's express written consent.
(d) All Work done in connection with any change or alteration
shall be done in a good and workmanlike manner, with new, high-quality
materials, in compliance with all building and zoning laws of the
jurisdiction in which the Premises are situated and with all laws,
ordinances, orders, rules, regulations and requirements of all Federal,
state and municipal governments and appropriate departments,
commissions, boards and officers thereof and in accordance with the
orders, rules and regulations of the Board of Fire Underwriters where
the Premises are located, or any other body exercising similar
functions. The cost of any such change or alteration shall be paid in
cash by arrangements approved in advance by Landlord, which approval
shall not be unreasonably withheld or delayed, so that the Premises and
all portions thereof shall at all times be free of liens for labor and
materials supplied to the Premises or any portion thereof. The Work of
any change or alteration shall be prosecuted with reasonable dispatch,
delays due to strikes, lockouts, acts of God, inability to obtain labor
or materials, governmental restrictions or similar causes beyond the
control of Tenant excepted. Tenant shall obtain and maintain, at its
sole cost and expense, during the performance of the Work, workers'
compensation, comprehensive general liability, and adequacy of design
insurance satisfactory to Landlord, and the fire insurance with "all
risks" endorsement required by Paragraph 7.1 hereof shall be
supplemented with "builder's risk" insurance on a completed value form
or other comparable coverage on the Work. All such insurance shall be
with a company or companies authorized to do business in the State of
Illinois and reasonably satisfactory to Landlord, and all such
certificates of insurance evidencing such coverage shall be delivered to
Landlord endorsed "Premium Paid" by the company or agency issuing the
same, or with other evidence of payment of the premium therefor
reasonably satisfactory to Landlord.
(e) Intentionally Omitted
(f) No change, alteration, restoration or new construction shall
be in or connect the Improvements with any property, building or other
improvement located outside the boundaries of the Land, nor shall the
same obstruct or interfere with any easement.
ARTICLE XXI
SURRENDER
21.1. Surrender; Removal of Tenant's Alterations. Upon the termination
of this Lease, whether by forfeiture, lapse of time or otherwise, or upon
termination of Tenant's right to possession of the Premises, Tenant will at
once surrender and deliver up the Premises, together with all improvements
thereon, to Landlord, in good condition and repair, taking by eminent domain or
condemnation, reasonable wear and tear and loss, damage or destruction caused
by a casualty or condemnation pursuant to which this Lease is terminated in
accordance with the terms and conditions hereof excepted, but without any
so-called deferred maintenance that is necessary under the terms hereof in
order to maintain the quality standards prescribed herein; said improvements
shall include all plumbing, lighting, electrical, heating, cooling and
ventilating fixtures and equipment, and all alterations. Notwithstanding
anything contained in the immediately preceding sentence to the contrary,
concurrently with Tenant's written request for Landlord's consent to any items
of Work as required in Paragraph 20.1(b) above, Tenant shall have the right to
request Landlord's determination as to whether or not Landlord shall require
Tenant to remove said alterations,
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additions and improvements upon the termination of this Lease; Landlord's
written response thereto, which shall be delivered to Tenant within thirty (30)
days of Landlord's receipt of Tenant's written request, shall be binding upon
Landlord and Tenant. Except as expressly provided in the immediately preceding
sentence, all alterations, additions and improvements, temporary or permanent,
made in or upon the Premises by Tenant shall become Landlord's property and
shall remain upon the Premises on any such termination without compensation,
allowance or credit to Tenant: provided, however, that Landlord shall have the
right to require Tenant to remove any alterations, additions and improvements
and to restore the Premises to their condition prior to the making of such
alterations, additions and improvements, repairing any damage occasioned by
such removal and restoration if a determination as to removal or non-removal
has not been previously made by Landlord as provided herein. Said right shall
be exercised by Landlord's giving written notice thereof to Tenant on or before
thirty (30) days after any such termination. If Landlord requires removal of
any alterations, additions and improvements, and Tenant does not make such
removal in accordance with the foregoing at the time of such termination, or
promptly after Landlord's written request, whichever is later, Landlord may
remove the same (and repair any damage occasioned thereby), and dispose
thereof or, at its election, deliver the same to any other place of business of
Tenant or warehouse the same. Tenant shall pay the costs of such removal,
repair, delivery and warehousing to Landlord on demand, together with interest
thereon at the Maximum Rate of Interest. Tenant's obligations hereunder shall
survive the expiration or termination of this Lease.
21.2. Removal of Tenant's Property. Upon the termination of this
Lease, Tenant shall remove Tenant's personal property, trade fixtures and
equipment; provided, however, that Tenant shall repair any injury or damage to
the Premises which may result from such removal, and shall restore the Premises
to the same condition as prior to the installation thereof, ordinary wear and
tear excepted; provided, however, that nothing contained herein shall require
Tenant to repaint the Premises upon the expiration of the Term. If Tenant does
not remove Tenant's personal property, trade fixtures and equipment from the
Premises prior to the expiration or earlier termination of the Term, Landlord
may, at its option, remove the same (and repair any damage occasioned thereby)
and dispose thereof or deliver the same to any other place of business of
Tenant or warehouse the same, and Tenant shall pay the cost of such removal,
repair, delivery and warehousing to Landlord on demand, or Landlord may treat
such personal property as having been conveyed to Landlord with this Lease as a
bill of sale, without further payment or credit by Landlord to Tenant. Tenant's
obligations hereunder shall survive the expiration or termination of this Lease.
21.3. Holding Over. Tenant shall have no right to occupy the Premises
or any portion thereof after the expiration or earlier termination of this
Lease or of Tenant's right of possession of the Premises. In the event Tenant
or any party claiming by, through or under Tenant retains possession of the
Premises, or any portion thereof, after the expiration or earlier termination
of this Lease or of Tenant's right of possession of the Premises, Landlord may
exercise any and all remedies available to it at law or in equity to recover
possession of the Premises, and for any actual damages Landlord suffers in the
event Tenant's holding over results in a breach of any obligation of Landlord
to any successor tenant of the Premises or any contract vendee thereof. For
each and every month or partial month that Tenant or any party claiming by,
through or under Tenant remains in occupancy of all or any portion of the
Premises after the expiration or earlier termination of the Lease or Tenant's
right of possession of the Premises, Tenant shall pay Rent on the first day of
each month or portion thereof for which Tenant retains possession of the
Premises at a rate equal to one hundred fifty percent (150%) of the Rent
payable by Tenant hereunder during the last month of the Term or Renewal Term,
as applicable. The acceptance by Landlord of any lesser sum shall be construed
as a payment on account and not in satisfaction of damages for such
holding over.
ARTICLE XXII
ENVIRONMENTAL
22.1. Defined Terms:
(a) "Claim" shall mean and include any demand, cause of action,
proceeding or suit (i) for any and all damages, losses, injuries to person or
property, damages to natural resources, fines, penalties, interest, or
contribution; (ii) for
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the costs of site investigations, feasibility studies, information
requests, health or risk assessments or Response actions; or (iii) for
enforcing this Article XXII.
(b) "Environmental Law" shall mean and include all federal,
state and local statutes, ordinances, regulations and rules relating to
environmental quality, health, safety, contamination and clean-up,
including, without limitation, the Clean Air Act, 42 U.S.C. Section 7401
et seq.; the Clean Water Act, 33 U.S.C. Section 1251 et seq., and the
Water Quality Act of 1987; the Federal Insecticide, Fungicide, and
Rodenticide Act ("FIFRA"), 7 U.S.C. Section 136 et seq.; the Marine
Protection, Research, and Sanctuaries Act, 33 U.S.C. Section 1401 et
seq.; the National Environmental Policy Act, 42 U.S.C. Section 4321 et
seq.; the Noise Control Act, 42 U.S.C. Section 4901 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901
et seq., as amended by the Hazardous and Solid Waste Amendments of 1984;
the Safe Drinking Water Act, 42 U.S.C. Section 3001 et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the Superfund
Amendments and Reauthorization Act, the Emergency Planning and Community
Right-to-Know Act, and Radon Gas and Indoor Air Quality Research Act;
the Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et
seq.; the Atomic Energy Act, 42 U.S.C. Section 2011 et seq., and the
Nuclear Waste Policy Act of 1982, 42 U.S.C. Section 10101 et seq.; and
the Environmental Protection Act of Illinois ("IEPA"), Ill. Rev. Stat.
ch. 111 1/2, par. 1001 et seq., and state lien and superlien and
environmental clean-up statutes, with implementing regulations and
guidelines. Environmental Laws shall also include all state, regional,
county, municipal and other local laws, regulations and ordinances
insofar as they are equivalent or similar to the federal laws recited
above or purport to regulate Hazardous Materials.
(c) "Hazardous Materials" shall mean and include the following,
including mixtures thereof: any hazardous substance, pollutant,
contaminant, waste, by-product or constituent regulated under CERCLA;
oil and petroleum products and natural gas, natural gas liquids,
liquefied natural gas and synthetic gas usable for fuel; pesticides
regulated under the FIFRA; asbestos and asbestos-containing materials,
PCBs and other substances regulated under TSCA; source material, special
nuclear material, byproduct material and any other radioactive materials
or radioactive wastes, however produced, regulated under the Atomic
Energy Act or the Nuclear Waste Policy Act; chemicals subject to the
OSHA Hazard Communication Standard, 29 C.F.R. Sec. 1910.1200 et seq.;
and industrial process and pollution control wastes whether or not
hazardous within the meaning of RCRA.
(d) "Manage" means to generate, manufacture, process, treat,
store, use, re-use, refine, recycle, reclaim, blend or burn for energy
recovery, incinerate, accumulate speculatively, transport, transfer,
dispose of or abandon Hazardous Materials.
(e) "Release" or "Released" shall mean any actual or threatened
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing of Hazardous
Materials into the environment, as "environment" is defined in CERCLA.
(f) "Response" or "Respond" shall mean action taken in
compliance with Environmental Laws to correct, remove, remediate,
cleanup, prevent, mitigate, monitor, evaluate, investigate, assess or
abate the Release of a Hazardous Material.
22.2. During the Term (including any Renewal Term), Tenant shall (a) at
its sole cost and expense, comply with all Environmental Laws and permits
issued thereunder; (b) not conduct or authorize the Management of any Hazardous
Materials on the Premises, including installation of any underground storage
tanks, without prior written disclosure to and approval by Landlord, which
approval is hereby given for all Hazardous Materials used in the manufacture of
electronic and electrical products and related activities; (c) not take any
action that would subject the Premises to permit requirements under RCRA for
on-site disposal of Hazardous Materials; (d) not discharge Hazardous Materials
into common drains or sewers except in full compliance with Environmental Laws
and local sewer regulations relating to wastewater discharges; (e) not cause or
allow the Release of any Hazardous Materials on, to or from the Premises.
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except in full compliance with Environmental Laws and permits issued
thereunder; (1) at its sole cost and expense, arrange for the lawful
transportation and off-site disposal of all Hazardous Materials that it
generates; (g) at its sole cost and expense, secure, maintain, and comply with
all permits required by Environmental Laws; and (h) subject to Paragraph 22.9B.
below, not be responsible for any Hazardous Materials whose existence on the
Premises predates the date of this Lease.
22.3. During the Term (including any Renewal Term), Tenant shall
promptly provide Landlord with copies of all summons, citations, directives,
information inquiries or requests, notices of potential responsibility, notices
of violation or deficiency, orders or decrees, Claims, complaints,
investigations, judgments, letters, notices of environmental liens or response
actions in progress, and other communications from the United States
Environmental Protection Agency, Occupational Safety and Health
Administration, Illinois Environmental Protection Agency, or other federal,
state, or local agency or authority, or any other entity or individual,
concerning (a) any Release of a Hazardous Material on, to or from the Premises;
(b) the imposition of any lien on the Premises; or (c) any alleged violation of
or responsibility under Environmental Laws.
22.4. During the Term (including any Renewal Term), Tenant shall not
drill or install monitoring wells, take soil borings or otherwise test, sample
or monitor soil, surface water or groundwater on or under the Premises without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed. If Landlord provides such written consent, Tenant shall be
solely responsible for all costs and expenses of such activities, including but
not limited to, costs of installing, maintaining, securing, removing and
closing monitoring wells, repairing any damage to the Premises, restoring the
Premises to their original condition, landscaping and screening well heads.
Responding to any Releases created or aggravated by such activities and
complying with such other reasonable conditions as Landlord may require in
writing pursuant to its consent. This Paragraph 22.4 shall not be construed to
require Tenant to perform any environmental studies or tests of the Premises,
other than as required by Environmental Laws or permits issued thereunder.
22.5. Landlord and Landlord's agents and employees shall have the right
to enter upon the Premises and/or conduct appropriate inspections or tests in
order to determine the condition of the Premises or Tenant's compliance with
Environmental Laws, provided that (a) such inspections and tests shall be
performed at the sole cost and expense of Landlord, unless an Event of Default
has occurred hereunder, in which event Tenant alone shall bear all reasonable
costs and expenses of such inspections and tests; (b) Landlord shall provide
Tenant with written notice not less than five (5) days prior to conducting such
inspections or tests; (c) such tests shall be performed at times reasonably
designated by Tenant, shall not unreasonably interfere with Tenant's business
operations and shall be in compliance with Tenant's reasonable security
procedures; and (d) Landlord shall promptly deliver copies of such test results
to Tenant. Tenant agrees that any documents or information furnished by
Landlord to Tenant under this Article XXII shall be confidential and shall not
be disclosed to any third party without the prior written consent of Landlord
unless required by law, this Lease or the terms of any documents evidencing or
securing Mortgagee's loan encumbering the Premises.
22.6. Upon written request by Landlord, Tenant shall provide Landlord
with lists of raw materials, chemicals, and fuels used by Tenant on the
Premises, with the results of environmental studies, reports and tests,
including those commissioned prior to or during the Term (including any Renewal
Term), with transportation and disposal contracts for Hazardous Materials, with
any permits issued under Environmental Laws and with any other relevant or
applicable documents pertaining to the condition of the Premises or
demonstrating that Tenant complies with this Article XXII and all Environmental
Laws relating to the Premises. Landord agrees that any documents or information
furnished by Tenant to Landlord under this Article XXII shall be confidential
and shall not be disclosed to any third party without the prior written consent
of Tenant unless required by law, this Lease or the terms of any documents
evidencing or securing Mortgagee's loan encumbering the Premises. This
Paragraph 22.6 shall not be construed to require Tenant to perform any
environmental studies or tests of the Premises, other than as required by
Environmental Laws or permits issued thereunder.
22.7. If Tenant's Management of Hazardous Materials at the Premises (a)
results in or causes a Release which is not in compliance with Environmental
Laws or permits issued thereunder; (b) gives rise to liability, a Claim, or a
Response Action under common law or any Environmental Law or permit issued
thereunder; (c) causes a significant
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public health effect; or (d) creates a nuisance, Tenant shall, in any and all
such occurrences, and at its sole cost and expense, promptly take all
applicable action in Response.
22.8. Tenant shall indemnify, defend and hold harmless Landlord, its
beneficiary, managing agents and Mortgagees from all Claims arising from or
attributable to any breach by Tenant of any of its warranties, representations
or covenants in this Article XXII. Tenant's obligations hereunder shall survive
the expiration or earlier termination of this Lease.
22.9. (a) Landlord represents, warrants and covenants to Tenant
that, to the best knowledge of Landlord, (i) before the date of this
Lease, no Hazardous Materials were Released on, to or from the Premises
in violation of Environmental Laws; (ii) the Premises as of the date of
this Lease, do not contain any Hazardous Materials in violation of any
Environmental Laws; and (iii) the Premises were not used before the
date of this Lease as a landfill, a garbage or waste dump, or a
cemetery or burial ground. Landlord further represents, warrants and
covenants that it has no knowledge of any material facts which could
adversely affect the value or Tenant's proposed use of the Premises.
As used herein, the knowledge of Landlord means the knowledge of
Landlord. Landlord's beneficiary or any of the general partners of
Landlord's beneficiary. Landlord further represents, warrants and
covenants that its knowledge is based solely on the report commissioned
by Landlord from Precision Energy Systems, Inc. dated December 20,
1988 and that certain letter from Converse Environmental East dated
November 3, 1988 (collectively the "Report"), as provided to Tenant.
Landlord represents, warrants and covenants that it knows of no
environmental conditions or Hazardous Materials existing on the
Premises as of the date of this Lease, other than those contained
within the Report, or of any facts which would render the Report
unsound, inaccurate or incomplete.
(b) Landlord shall indemnify, defend and hold harmless
Tenant from all Claims (a) arising from or attributable to any breach
by Landlord of any of its representations, warranties or covenants in
this Article XXII, and (b) relating to any Hazardous Material whose
existence on the Premises predates the date of this Lease and which
was defined under Environmental Laws as a Hazardous Material on or
before the date of this Lease: provided, however, that the obligation
for indemnification under this Paragraph 22.9(b) shall not apply to
any Hazardous Material whose existence is disclosed in written
environmental reports and studies (including the Report) provided to or
commissioned by Tenant before the date of this Lease or whose existence
Tenant had actual knowledge of on or before the date of this Lease.
Landlord's obligation for indemnification under this Paragraph 22.9(b)
shall survive expiration or earlier termination of this Lease, but
shall terminate upon Tenant's exercise of its option to purchase the
Premises as provided herein. The general partners of Landlord's
beneficiary shall execute and deliver to Tenant a guarantee of
Landlord's obligations pursuant to this Paragraph 22.9(b) within ten
(10) days from the date of this Lease, which guarantee shall be in form
and content reasonably satisfactory to Tenant.
(c) In the event Tenant does not exercise its option to
purchase the Premises, Landlord shall indemnify, defend and hold
harmless Tenant form all Claims relating to any Hazardous Materials
Released on, to or from the Premises after the expiration or earlier
termination of this Lease by persons other than Tenant or its
employees, agents, contractors or subcontractors. Landlord's obligation
for indemnification under this Paragraph 22.9(c) shall survive
expiration or earlier termination of this Lease. The general partners
of Landlord's beneficiary shall execute and deliver to Tenant a
guarantee of Landlord's obligations pursuant to this Paragraph 22.9(c)
within ten (10) days from the date of this Lease, which guarantee shall
be in form and content reasonably satisfactory to Tenant.
(d) Landlord further represents, warrants and covenants
that its construction activities on the Premises during the Term
(including any Renewal Term) shall be conducted in compliance with
Environmental Laws and that Landlord shall promptly Respond to any
Release by Landlord or its employees, agents, contractors or
subcontractors that is not in compliance with Environmental Laws.
22.10. In the event Tenant exercises its option to purchase the
Premise, Tenant shall indemnify, defend and hold harmless Landlord, its
beneficiary, managing
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agents and Mortgagees from all Claims relating to any Hazardous Materials
Released onto or from the Premises (a) before the commencement of the Term
whose existence was disclosed in written environmental reports and studies
(including the Report) provided to or commissioned by Tenant before the date of
this Lease, or whose existence Tenant had actual knowledge of on or before the
date of this Lease, or (b) after the commencement of the Term (including any
Renewal Term) except for matters for which Landlord is responsible pursuant to
Paragraphs 22.9 (a) and (b).
ARTICLE XXIII
CANCELLATION OPTION
23.1. Tenant shall have the option to cancel and terminate this Lease
as of the last day of the sixtieth (60th) complete calendar month of the
original Term; provided, however, that in order to effectively exercise said
option. Tenant shall (a) deliver written notice thereof to Landlord on or prior
to the last day of the fifty first (51st) complete calendar month of the
original Term; and (b) remit to Landlord on or before the first day of the
sixtieth (60) complete calendar month of the original Term, concurrently with
Tenant's remittance of the installment of Monthly Base Rent and any other sums
due and payable by Tenant on said date, the sum of Seven Hundred Fifty Thousand
Dollars ($750,000.00), and (ii) the unamortized portion of excess Costs payable
by Tenant pursuant to Paragraph 2.1, whereupon this Lease shall terminate.
23.2. Tenant may only exercise said option to cancel and terminate, and
an exercise thereof shall only be effective if, at the time of Tenant's
exercise of the option and as of the proposed termination date, this Lease is
in full force and effect and no event which, with the passage of time or giving
of notice, or both, would constitute an Event of Default, is then outstanding;
provided, however, that Tenant shall have the right to exercise said option if
Tenant is prosecuting the curing of a default in accordance with the applicable
provisions of this Lease.
ARTICLE XXIV
RENEWAL OPTION
24.1. Subject to the provisions hereinafter set forth in this Article
XXIV, Landlord hereby grants Tenant the option to extend the Term on the same
terms, conditions and provisions as contained herein, except as otherwise
provided herein, for two (2) periods of five (5) years each (the "First Renewal
Term" and the "Second Renewal Term", as applicable; collectively, the "Renewal
Terms"). The First Renewal Term shall commence on the day following the last
day of the Term and shall expire on the last day of the sixtieth (60th)
complete calendar month thereafter. The Second Renewal Term shall commence on
the day following the last day of the First Renewal Term and shall expire on
the last day of the sixtieth (60th) complete calendar month thereafter.
24.2. Said options to renew shall be exercisable by written notice from
Tenant to Landlord of Tenant's election to exercise same, given not later than
twelve (12) months prior to the expiration of the original Term or the First
Renewal Term, as applicable. If Tenant fails to exercise its option to renew
for the First Renewal Term in a timely manner, Tenant's rights under this
Article XXIV shall cease and terminate and its rights to occupy and possess the
Premises shall expire on the last day of the original Term; if Tenant fails to
exercise its option to renew for the Second Renewal Term in a timely manner,
Tenant's rights under this Article XXIV shall cease and terminate and its right
to occupy and possess the Premises shall expire on the last day of the First
Renewal Term.
24.3. Tenant may only exercise said options to renew, and an exercise
thereof shall only be effective if, at the time of Tenant's exercise of the
option and on the commencement date of the applicable Renewal Term, this Lease
is in full force and effect and no event which, with the passage of time or
giving of notice, or both, would constitute an Event of Default, is then
outstanding; provided, however, that Tenant shall have the right to exercise
said option if Tenant is prosecuting the curing of a default in accordance with
the applicable provisions of this Lease.
24.4. (a) Base Rent during the Renewal Terms shall be equal to the
greater of (i) the Base Rent in effect during the month immediately preceding
the
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commencement of such Renewal Term and (ii) 95% of the Market Rent in
effect on the commencement date of such Renewal Term. For the purposes
of this Article XXIV, the term "Market Rent" shall mean the average
rental rate being offered by landlords for triple net leases of property
of similar size and utility to the Premises in the general vicinity of
the Premises.
(b) The determination of Base Rent for the Renewal Terms, as
provided herein, shall be effectuated by Landlord, who shall notify
Tenant of same as soon as commercially possible after the Market Rent is
available. The determination shall be subject to verification by Tenant.
24.5. Tenant shall not have any option to extend the term of this Lease
beyond the expiration of the Second Renewal Term.
24.6. All references to the "Term" of this Lease shall be deemed to
include the Renewal Terms, where the context so requires.
ARTICLE XXV
PURCHASE OPTION
25.1. In consideration of the mutual covenants contained herein,
Landlord hereby grants to Tenant the option to purchase the Premises (except
such portion as may theretofore have been taken by eminent domain; the
Premises, less the portion so taken, shall, for purposes of this Article XXV,
be referred to as the "Premises") described on Exhibit A attached hereto,
including the Land, the Building, the Improved Space and all alterations,
additions and improvements, fixtures and equipment as of the last day of the
sixtieth (60th) complete calendar month of the original Term in accordance with
the terms and provisions set forth in this Article XXV. Said option to purchase
shall be exercisable by written notice from Tenant to Landlord of Tenant's
election to exercise same, given not later than the last day of the fifty first
(51st) complete calendar month of the original Term. If Tenant fails to
exercise said option to purchase in a timely manner, Tenant's rights under this
Article XXV shall cease and terminate.
25.2. Tenant may only exercise said option to purchase, and the
exercise thereof shall only be effective if, at the time of Tenant's exercise
of the option and on the closing date of the purchase and sale of the Premises,
this Lease is in full force and effect and no event which, with the passage of
time or the giving of notice, or both, would constitute an Event of Default, is
then outstanding; provided, however, that Tenant shall have the right to
exercise said option if Tenant is prosecuting the curing of a default in
accordance with the applicable provisions of this Lease.
25.3. The purchase price of the Premises shall be Eleven Million Seven
Hundred Fifty Seven Thousand Three Hundred Eighteen Dollars ($11,757,318.00).
Tenant shall have the option to acquire Landlord's interest in the Premises
subject to any Mortgage in existence at such time, subject to the prior written
consent of, and in accordance with any requirements of, the respective
Mortgagees, in which event Tenant shall receive a credit against the purchase
price payable at closing in the amount of the outstanding principal balance and
any accrued and unpaid interest under such Mortgage as of the date of closing.
25.4. Except as provided in Paragraph 25.6 or Paragraph 25.7(b) below
for termination of the option to purchase, Tenant's notice of exercise of the
option to purchase the Premises shall constitute the binding and irrevocable
commitment of Tenant to purchase the Premises and Landlord shall thereby become
irrevocably bound to sell the Premises to Tenant.
25.5. The closing shall take place at the offices of the Title Company
(as defined herein) or at any other location mutually agreeable to the parties.
The sale shall be closed through an escrow with the Title Company, and the
parties shall cause standard deed and money escrow instructions to be issued to
the Title Company, with such additional terms as are necessary to consummate
the contemplated sale and which are reasonably satisfactory to Landlord and
Tenant. As a condition precedent to Tenant's acquisition of the Premises,
Tenant shall satisfy in full any and all monetary obligations then due and
owing by Tenant to landlord hereunder.
25.6. The purchase price shall be payable to Landlord at the closing by
wire transfer of federal funds, upon delivery of the deed to Tenant (or its
designee or
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assignee) and performance of Landlord's other obligations set forth herein. The
conveyance of the Premises shall be made by a recordable Trustee's Deed which
shall convey good and marketable title thereto in fee simple to Tenant (or its
designee or assignee), subject only to (i) covenants, conditions, building
lines and restrictions of record; (ii) private, public and utility easements
and roads and highways, if any; (iii) general real estate taxes and special
assessments; (iv) liens and encumbrances existing on the date hereof or caused,
created or consented to by Tenant or made pursuant to the provisions of this
Lease; (v) liens and encumbrances not caused or created by Landlord which are
reasonably acceptable to Tenant; (vi) intentionally omitted; (vii) any on-going
condemnation proceedings or takings by governmental authority; provided,
however, that if the ultimate resolution thereof would entitle Tenant to
terminate this Lease pursuant to Article XV above, Tenant shall have the right
to rescind its election to purchase the Premises upon written notice thereof to
Landlord within fifteen (15) days of its receipt of notification of said
proceedings, in which event Tenant's rights under this Lease shall be governed
by the terms and provisions of this Lease other than this Article XXV; (viii)
intentionally omitted; or (ix) liens, encumbrances and other matters of title
over which the title insurer is willing to insure at standard rates
(collectively, the "Permitted Title Exceptions").
25.7. If the option is exercised by Tenant as aforesaid, Landlord shall
deliver to Tenant, not later than forty five (45) days after Landlord's receipt
of Tenant's written notice as required in Paragraph 25.1 above, as evidence of
Landlord's good and marketable title in and to the Premises, a commitment for
an owner's title insurance policy (the "Title Commitment") in the aggregate
amount of the purchase price from a title insurance company (the "Title
Company") reasonably acceptable to Tenant which insures against marketability
of title, together with an extended coverage endorsement, the cost of said
endorsement to be paid for by Tenant. The Title Commitment shall name Tenant as
the proposed insured, subject only to (i) the Permitted Title Exceptions; and
(ii) other title exceptions pertaining to liens or encumbrances of a definite
or ascertainable amount which may be removed at the closing by the payment of
money and which Landlord shall so remove or cause to be removed concurrently
with the closing.
(a) At least ten (10) days, but not more than twenty (20) days,
prior to the anticipated closing date, Landlord shall deliver to Tenant
(i) a later dated commitment for an owner's title insurance policy (the
"Date Down Commitment"), in the form required of the original Title
Commitment, effective as of a date not earlier than thirty (30) days
prior to the anticipated closing date, in the form required for the
original Title Commitment, and (ii) a survey of the Premises, dated not
more than thirty (30) days prior to the date of delivery thereof,
complying with Illinois land survey standards, prepared by a licensed
Illinois land surveyor in accordance with the survey standards of the
American Land Title Association, showing the location of all
improvements on the Premises, showing all improvements thereon to be
within the lot lines, showing no encroachment of buildings or other
improvements onto or from adjoining properties, showing compliance with
all set back lines and showing non-interference with all easements of
record.
(b) If the Date Down Commitment, or the recorded documents
referred to therein, disclose defects ("title defects") other than the
exceptions set forth in clauses (i) and (ii) of Paragraph 25.8 above, or
if the Survey discloses matters that render the title unmarketable or
encroachments onto or from adjoining properties or onto easements or set
back lines ("survey defects"), Landlord shall have thirty (30) days
from date of delivery of the Date Down Commitment to cure such title
and/or survey defects or to have the Title Company commit to insure
against loss or damage that may be occasioned by such title and/or
survey defects, and if this is not done, Tenant may terminate the option
to purchase or may elect, upon written notice thereof to Landlord with
ten (10) days after the expiration of the thirty (30) days period, to
take title as it then is with the right to deduct from the purchase
price liens or encumbrances of a definite or ascertainable amount. If
Tenant does not so elect, Tenant's exercise of the option to purchase
shall become null and void and be terminated without further action of
the parties.
(c) At the time of closing, Landlord shall deliver (or cause to
be delivered) to Tenant or Tenant's designee, the following:
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(i) A duly executed, acknowledged, recordable Trustee's Deed
conveying good and marketable title to the Premises to
Tenant.
(ii) A completed Real Estate Transfer Declaration in the form
required by the Illinois Real Estate Transfer Tax Act and
any declaration required to meet other requirements as
established by any county and local ordinance with regard
to a transfer or transaction tax.
(iii) An ALTA Owner's title insurance policy issued by the
Title Company which insures marketability of the title to
the Premises, with extended coverage, in the full amount
of the Purchase Price, subject only to the Permitted
Exceptions.
(iv) ALTA Loan and Extended Coverage Statement.
(v) A Closing Statement in form and substance reasonably
satisfactory to Tenant itemizing the respective credits
and debits to each of the parties.
(vi) An affidavit of compliance with Section 1445 of the U.S.
Internal Revenue Code.
(vii) A "Gap" Undertaking to the Title Company.
(viii) All other documents which may reasonably be required in
order to consummate the sale contemplated by this Lease.
(d) At the time of closing, Tenant shall deliver (or cause to be
delivered) to Landlord, the following documents;
(i) ALTA Loan and Extended Coverage Statement.
(ii) The purchase price by federal funds wire transfer.
(iii) The Real Estate Transfer Declarations.
(iv) The Closing Statement.
(v) A "Gap" Undertaking to the Title Company.
(vi) All other documents which may reasonably be required in
order to consummate the sale contemplated by this Lease.
(e) Landlord shall pay the title insurance policy premium, the
cost of the survey, all transfer taxes, documentary stamps and similar
taxes, excepting only any transfer tax which may be imposed by the
Village of Bloomingdale, one-half of the escrow fees, fees for recording
releases of mortgages and other documents to clear Landlord's title and
the cost of delivering title to the Premises to Tenant in the condition
required by this Article XXV.
(f) Tenant shall pay the cost of any endorsements which Tenant
requests be attached to the title insurance policy (including the cost
of any extended coverage endorsement), any transfer tax which may be
imposed by the Village of Bloomingdale, one-half of the escrow fees and
fees for recording and filing all documents other than those specified
in paragraph (e) above.
(g) Landlord and Tenant shall each be solely responsible for the
fees of their respective attorneys' accountants, consultants and other
professionals.
25.8. Upon conveyance of title and payment of purchase price, as
provided in this Article XXV, this Lease and Tenant's obligations as Tenant
hereunder to Landlord, except obligations which shall have theretofore accrued
and remain unsatisfied, shall
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terminate and Landlord's obligations as Landlord hereunder to Tenant, except
obligations which shall have theretofore accrued and remain unsatisfied, shall
terminate.
25.9. Since, pursuant to the terms and conditions of this Lease, Tenant
is responsible for all Taxes and expenses applicable to the Premises other than
debt service due and payable in accordance with the Mortgage, if any, no
prorations are required or appropriate except for Rent payable hereunder (or
debt service due and payable under any Mortgage. If Tenant purchases the
Premises subject thereto), and which shall be prorated between Landlord and
Tenant as of the date of closing. Additionally, Tenant shall pay to Landlord
at closing all Additional Rent, exclusive of any components thereof which are
paid to third parties by Tenant, that has accrued in accordance with this Lease
and remains unpaid.
25.10. It is understood that the Premises shall be sold in "AS IS"
condition and any and all warranties relating thereto shall be and are hereby
disclaimed by Landlord.
25.11. During the period that the option to purchase remains in effect,
Landlord shall not convey title to any party other than Tenant unless such
conveyance shall be made expressly subject to this option to purchase.
ARTICLE XXVI
INTENTIONALLY DELETED
ARTICLE XXVII
MISCELLANEOUS PROVISIONS
27.1. Upon prior notice to Tenant, Tenant agrees to permit Landlord and
its authorized representatives to enter upon the Premises at all reasonable
times during ordinary business hours, subject to Tenant's security requirements,
for the purpose of inspecting the same and making any necessary repairs to
comply with any laws, ordinances, rules, regulations or requirements of any
public body, or the Board of Fire Underwriters, or any similar body, or pursuant
to Article XII of this Lease. Nothing herein contained shall imply any duty upon
the part of Landlord to do any such work which, under any provision of this
Lease, Tenant may be required to perform and the performance thereof by Landlord
shall not constitute a waiver of Tenant's default in failing to perform the
same. Landlord may, during the progress of any work, keep and store upon the
Premises all necessary materials, tools and equipment, but Landlord shall not
interfere with Tenant's business or Tenant's use, occupancy, possession or
enjoyment of the Premises. Landlord shall not in any event be liable for
inconvenience, annoyance, disturbance, loss of business or other damage to
Tenant (other than as a result of Landlord's negligence or willful misconduct)
by reason of making repairs or the performance of bringing material, supplies
and equipment into, upon or through the Premises during the course thereof, and
the obligations of Tenant under this Lease shall not be thereby affected in any
manner whatsoever.
27.2. Landlord is hereby given the right during usual business hours at
any time during the Term, upon prior notice to Tenant, to enter upon the
Premises, subject to Tenant's security regulations, and to exhibit the same for
the purpose of mortgaging or selling the same. During the final nine (9) months
of the Term, First Renewal Term or Second Renewal Term, as applicable, or when
Tenant is in default, Landlord shall be entitled to display on the Premises, in
such manner as to not unreasonably interfere with Tenant's business, signs
indicating that the Premises are for rent or sale and suitably identifying
Landlord or its agent.
27.3. (a) To the fullest extent allowed by law, Tenant shall at all
times indemnify, defend and hold Landlord, its beneficiaries, managing
agents and Mortgagees harmless from and against any and all claims by or
on behalf of any person or persons, firm or firms, corporation or
corporations, arising from the conduct or management, or from any work
or things whatsoever done upon the Premises (except to the extent
arising out of Landlord's, its beneficiary's or its managing agent's
willful misconduct or negligence), and will further indemnify, defend
and hold Landlord, its beneficiaries, managing agents and Mortgagees
harmless against and from any and all claims arising during the Term
from any condition of the Improvements, except for conditions which are
the responsibility of Landlord, or the Premises, or of any passageways
or space therein, or
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arising from any act or neglect of Tenant, its agents, servants,
employees, licensees, or contractors, or arising from any accident,
injury or damage whatsoever caused to any person, firm or corporation
occurring during the Term upon the Premises, and from and against all
costs, reasonable attorneys' fees, expenses and liabilities incurred in
or about any such claim or action or proceeding brought thereon; and in
case any action or proceeding be brought against Landlord by reason of
any such claim, Tenant, at Landlord's option, covenants to defend such
action or proceeding. Tenant's obligations under this Paragraph 27.3
shall be insured by contractual liability endorsement on Tenant's
policies of insurance required under the provisions of Paragraph 7.2
hereof. Tenant's obligations hereunder shall survive the expiration or
termination of this Lease.
(b) To the fullest extent allowed by law, Landlord shall at all
times indemnify, defend and hold Tenant harmless against and from any
and all claims by and on behalf of any person or persons, firm or firms,
corporation or corporations, for or on account of injury to person,
including death, or damage to property but only if and to the extent
proximately caused by the willful misconduct or negligence of Landlord
or its managing agent, and from and against all costs, reasonable
attorneys' fees, expenses and liabilities incurred in and about any such
claim or action or proceedings brought thereon, and in case any action
or proceeding be brought against Tenant by reason of any such claim,
Landlord, at Tenants option, covenants to defend such action or
proceeding.
27.4. All notices, demands and requests which may be or are required to
be given, demanded or requested by either party to the other shall be in
writing. All notices, demands and requests by Landlord to Tenant shall be
delivered personally or shall be sent by United States registered or certified
mail, return receipt requested, postage prepaid, addressed to:
Corporate Real Estate Department
Motorola, Inc.
1303 East Algonquin Road
Schaumburg, Illinois 60196
or at such other place as Tenant may from time to time designate by written
notice to Landlord.
All notices, demands and requests by Tenant to Landlord shall be
delivered personally or shall be sent by United States registered or
certified mail, return receipt requested, postage prepaid, addressed to
Landlord in care of:
Hiffman Shaffer Anderson, Inc.
118 South Clinton Street
Suite 700
Chicago, Illinois 60606
Attention: Mr. John E. Shaffer
With a copy to: Harold B. Pomerantz, Esq.
Rudnick & Wolfe
203 North LaSalle Street
Suite 1800
Chicago, Illinois 60601
or at such other place as Landlord from time to time may designate by written
notice to Tenant. Notice, demands and requests which shall be served upon
Landlord by Tenant, or upon Tenant by Landlord, in the manner aforesaid, shall
be deemed to be sufficiently served or given for all purposes hereunder at the
time such notice, demand or request shall be personally delivered, or if
mailed, within three (3) business days from the date same is deposited with the
United States Postal Service, as evidenced by the postal receipt.
27.5. Landlord covenants and agrees that Tenant, upon paying the Rent
and upon observing and keeping the covenants, agreements and conditions of this
Lease on its part to be kept, observed and performed, shall lawfully and
quietly hold, occupy and enjoy the Premises (subject to the provisions of this
Lease) during the Term without hindrance or molestation by Landlord or by any
person or persons claiming by, through, against or under Landlord.
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27.6. The term "Landlord", as used in this Lease so far as covenants or
obligations on the part of Landlord are concerned shall be limited to mean and
include only the owner or owners at the time in question of the fee of the
Premises, and in the event of any transfer or transfers or conveyance where the
successor to Landlord is bound by the terms of this Lease, the then grantor
shall be automatically freed and relieved from and after the date of such
transfer or conveyance of all liability as respects the performance of any
covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed (provided, however, that no conveyance or transfer
shall relieve or free the then grantor of any liability accrued or existing
prior to or at the time of the transfer or conveyance), provided that any funds
in the hands of such Landlord or the then grantor at the time of such transfer
in which Tenant has an interest shall be turned over to the grantee, and any
amount then due and payable to Tenant by Landlord or the then grantor under any
provision of this Lease shall be paid to Tenant, it being intended hereby that
the covenants and obligations contained in this Lease on the part of
Landlord shall, subject to the aforesaid, be binding on Landlord, its
successors and assigns, only during and in respect of their respective
successive periods of ownership. Nothing herein contained shall be construed as
relieving, or shall relieve, Landlord of its obligations under Article II
above. Landlord covenants that no conveyance, transfer, assignment by or other
change of interest of Landlord in the Premises, whether recorded or unrecorded,
shall be binding upon Tenant unless and until Tenant shall be actually notified
thereof, and, other than as provided elsewhere in this Lease, in no event shall
such conveyance, transfer, assignment or other change of interest affect this
Lease or any renewal or purchase option of Tenant hereunder or any liability of
Landlord accrued prior to or existing at the time of such conveyance, transfer,
assignment or other change of interest.
27.7. Tenant and Landlord (to the extent applicable to Landlord) shall,
each without charge at any time and from time to time, within twenty (20) days
after written request by the other party, certify by written instrument, duly
executed, acknowledged and delivered to any Mortgagee, assignee of a Mortgagee,
proposed Mortgagee, or to any purchaser or proposed purchaser, or to any other
person dealing with Landlord, Tenant or the Premises;
(a) That this Lease is unmodified and in full force and effect,
(or, if there have been modifications, that the same is in full force
and effect, as modified, and stating the modifications);
(b) The dates to which the Base Rent or Additional Rent have
been paid in advance;
(c) Whether or not there are then existing any breaches or
defaults by such party or the other party known by such party under
any of the covenants, conditions, provisions, terms or agreements of
this Lease, and specifying such breach or default, if any, or any
setoffs or defenses against the enforcement of any covenant, condition,
provision, term or agreement of this Lease upon the part of Landlord
or Tenant, as the case may be, to be performed or complied with (and,
if so, specifying the same and the steps being taken to remedy the
same);
(d) Whether or not Tenant has made any advancements to or on
behalf of Landlord for which it has the right to deduct from, or offset
against, future Rent payments;
(e) All Improvements have been completed by Landlord in
accordance with the Final Plans, if such be the fact;
(f) Tenant has accepted the Premises and is in full and
complete possession thereof, if such be the fact; and
(g) Such other factual statements which are within Tenant's
knowledge as Landlord or any Mortgagee may reasonably request.
It is the intention of the parties hereto that any statement delivered pursuant
to this Paragraph 27.7 may be relied upon by any of such parties dealing with
Landlord, Tenant or the Premises.
27.8. Tenant shall, upon the execution and delivery hereof by Tenant,
without charge to Landlord, and from time to time thereafter within thirty (30)
days after
40
<PAGE> 43
written request by Landlord, deliver to Landlord, in connection with any
proposed sale or mortgage of the Premises, the following instruments and
documents:
(a) Certificate of Good Standing in the State of Delaware and
in the State of Illinois issued by the appropriate state authority and
bearing a current date.
(b) Intentionally Omitted.
(c) An opinion of Tenant's counsel that this Lease has been
duly authorized and is valid and binding upon Tenant.
(d) Intentionally Omitted.
27.9. Concurrently with the commencement of the Term, the parties
hereto agree to execute and deliver to each other a memorandum of lease, in
recordable form, setting forth the following:
(a) The date of this Lease:
(b) The parties to this Lease;
(c) The Term of this Lease, including the Renewal Terms;
(d) The legal description of the Premises;
(e) Tenant's option to purchase the Premises; and
(f) Such other matters reasonably requested by Landlord or
Tenant to be stated therein.
27.10. If any covenant, condition, provision, term or agreement of
this Lease shall, to any extent, be held invalid or unenforceable, the
remaining covenants, conditions, provisions, terms and agreements of this
Lease shall not be affected thereby, but each covenant, condition, provision,
term or agreement of this Lease shall be valid and in force to the fullest
extent permitted by law; provided, however, that if, as a result of any such
invalidity or unenforceability, Tenant is deprived of any material rights,
benefits, privileges or options hereunder, Landlord and Tenant shall, in good
faith, attempt to negotiate a reasonable resolution with respect to said
deprivation. This Lease shall be construed and be enforceable in accordance
with the laws of the State of Illinois.
27.11. The covenants and agreements herein contained shall be binding
upon and inure to the benefit of Landlord, its successors and assigns, and
Tenant and its permitted successors and permitted assigns.
27.12. The caption of each article of this Lease is for convenience and
reference only, and in no way defines, limits or describes the scope or intent
of such article or of this Lease.
27.13. This Lease does not create the relationship of principal and
agent, or of partnership, joint venture, or of any association or relationship
between Landlord and Tenant, the sole relationship between Landlord and Tenant
being that of landlord and tenant.
27.14. This Lease contains the entire agreement between the parties and
shall not be modified or amended in any manner except by an instrument in
writing executed by duly authorized representatives of the parties hereto.
27.15. There shall be no merger of this Lease or the leasehold estate
created by this Lease with any other estate or interest in the Premises by
reason of the fact that the same person, firm, corporation or other entity may
acquire, hold or own directly or indirectly, (a) this Lease or the leasehold
interest created by this Lease or any interest therein, and (b) any such other
estate or interest in the Premises or any portion thereof. No such merger shall
occur unless and until all persons, firms, corporations or other entities
having an interest (including a security interest) in (1) this Lease or the
leashold estate created hereby, and (2) any such other estate or interest in
the Premises or any portion thereof, shall join in a written instrument
expressly effecting such merger and shall duly record the same.
41
<PAGE> 44
27.16. No surrender to Landlord of this Lease or of the Premises, or
any portion thereof, or any interest therein, prior to the expiration of the
Term (or any Renewal Term, if applicable) or other termination shall be valid
or effective unless agreed to and accepted in writing by Landlord and consented
to in writing by all Mortgagees, and no act or omission by Landlord or any
representative or agent of Landlord, other than such a written acceptance by
landlord consented to by all Mortgagees, as aforesaid, shall constitute an
acceptance of any such surrender.
27.17. All obligations of Landlord and Tenant, monetary or otherwise
(together with interest on monetary obligations at the Maximum Rate of interest
accruing prior to the expiration of the Term shall survive the expiration or
earlier termination of this Lease.
27.18. Time is of the essence of this Lease, and all provisions herein
relating thereto shall be strictly construed.
27.19. Each party represents and warrants to the other that it has
directly dealt with and only with Mesirow Realty Brokerage and Hiffman Shaffer
Anderson, Inc., Chicago, Illinois (whose commissions shall be paid by Landlord
pursuant to separate agreement) as brokers in connection with this Lease and
agrees to indemnify and hold the other party, its beneficiaries, managing
agents and Mortgagees harmless from all losses, damages and liabilities,
claims, liens, costs and expenses, including, without limitation, reasonable
attorneys' fees, arising from any claims or demands of any other broker or
brokers, salespersons or finders for any commission or fee alleged to be due
such other broker or brokers, salespersons or finders claiming to have dealt
with the indemnifying party in connection with this Lease.
27.20. To the extent either party indemnifies and agrees to defend the
other under the terms of this Lease, the indemnifying party shall have the
right to select counsel to undertake such defense, which counsel shall be
reasonably acceptable to the indemnified party.
27.21. As used herein, the term "Maximum Rate of Interest" shall mean
the annual rate of interest equal to the rate of interest announced from time
to time by The First National Bank of Chicago, Chicago, Illinois, as its
"Corporate Base Rate", plus two percent (2%) (or any successor rate of interest
selected by Landlord), unless a lesser rate shall then be the maximum rate of
interest permissible by law, in which event said lesser rate shall be charged.
27.22. As used herein, the term "Force Majeure Event" shall mean any
event whereby the party hereto who is obligated or required to perform any act
shall be delayed or hindered in or prevented from the performance of any act
required hereunder by reasons of acts of God, strikes, lockouts, labor
troubles, inability to procure construction materials, failure of power,
restrictive governmental laws or regulations, riots, insurrection, war or other
reasons of a like nature not the fault of the party delayed in performing work
or doing acts required under the terms of this Lease; and in any such event,
the performance of such act shall be excused for the period of delay and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay.
27.23. In the event of litigation between Landlord and Tenant to
enforce any provision of this Lease, the unsuccessful party shall pay to the
successful party all costs and expenses incurred in connection with said
litigation, including reasonable attorneys' fees.
27.24. If Landlord shall breach or otherwise fail to perform any term,
covenant, condition or agreement contained in this Lease and if such breach or
failure to perform shall continue for a period of thirty (30) days after the
receipt by Landlord of written notice thereof from Tenant, or in the event such
a breach or failure to perform cannot, with due diligence and in good faith, be
cured within thirty (30) days, and Landlord fails to proceed promptly and with
due diligence and in good faith to commence the cure of same within said thirty
(30) day period and thereafter to prosecute the curing of such default with due
diligence and in good faith, Tenant shall have the right to (a) sue Landlord
for damages, and (b) pursue any other remedy available at law or in equity.
42
<PAGE> 45
ARTICLE XXVIII
EXCULPATORY PROVISIONS
It is expressly understood and agreed by and between the parties hereto,
anything herein to the contrary notwithstanding, that each and all of the
representations, warranties, environmental indemnities, covenants, undertakings
and agreements herein made on the part of any Landlord while in form purporting
to be the representations, warranties, environmental indemnities, covenants,
undertakings and agreements of such Landlord are nevertheless each and every one
of them made and intended, not as personal representations, warranties,
environmental indemnities, covenants, undertakings and agreements by such
Landlord, or for the purpose or with the intention of binding such landlord
personally, but are made and intended for the purpose only of subjecting such
Landlord's interest in the Premises to the terms of this Lease and for no other
purpose whatsoever, and in case of default hereunder by such Landlord (or
default through, under or by any of its beneficiaries, or any of the agents or
representatives of said beneficiaries), Tenant shall look solely to the
interests of such landlord in the Premises; and this Lease is executed and
delivered by Landlord not in its own right, but solely in the exercise of the
powers conferred upon it as Trustee; that no Landlord which is a land trust or
any of its beneficiaries shall have any personal liability to pay any
indebtedness accruing hereunder or to perform any covenant, either express or
implied, herein contained and no liability or duty shall rest upon any Landlord
which is a land trust to sequester the trust estate or the rents, issues and
profits arising therefrom, or the proceeds arising from any sale or other
disposition thereof; that no personal liability or personal responsibility of
any sort is assumed by, nor shall at any time be asserted or enforceable
against, Landlord, individually or personally, or against any of its
beneficiaries or any of the beneficiaries under any land trust which may become
42.5
<PAGE> 46
the owner of the Premises or any portion thereof or interest therein on account
of this Lease or on account of any representation, warranty, covenant,
undertaking or agreement of Landlord in this Lease contained, either express or
implied, all such personal liability, if any, begin expressly waived and
released by Tenant and by all persons claiming by, through or under Tenant.
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease to
be duly executed as of the day and year first above written.
TENANT: LANDLORD:
MOTOROLA, INC., AMERICAN NATIONAL BANK AND
a Delaware corporation TRUST COMPANY OF CHICAGO, not
individually, solely as Trustee as
aforesaid
By: /s/ By: /s/
--------------------------- --------------------------------
Its: Senior Vice President Its: Second Vice President
and General Manager
ATTEST:
By: /s/
---------------------------
Its: Assistant Secretary
(Corporate Seal)
43
<PAGE> 47
FIRST AMENDMENT TO LEASE
This First Amendment to Lease (the "First Amendment") is made and
entered into as of this 30th day of June, 1990 by and between American
National Bank and Trust Company of Chicago, not individually, but solely as
Trustee under Trust Agreement dated December 28, 1988 and known as Trust No.
J06990-07 ("Landlord"), and Motorola Microwave, a Delaware partnership (the
"Tenant"), successor in interest to Motorola, Inc., a Delaware corporation
("Motorola"):
W I T N E S S E T H:
WHEREAS, Landlord and Motorola entered into that certain Lease dated as
of October 27, 1989 (the "Lease") whereby Landlord agreed to lease to Tenant,
and Tenant agreed to lease from Landlord, that certain parcel of real property
legally described in the Lease (the "Land");
WHEREAS, Motorola assigned, transferred and conveyed to Tenant its
leasehold estate created by and under the Lease pursuant to that certain
Assignment and Assumption Agreement dated December 31, 1989 between Motorola
and Tenant, and consented to by Landlord; and
WHEREAS, Landlord is obtaining a permanent loan (the "Loan") from
Hartford Life Insurance Company, a Connecticut corporation ("Hartford") to be
secured, in part, by a mortgage on the Land;
WHEREAS, pursuant to Section 17.5 of the Lease, Tenant agreed to
execute and deliver any amendment to the Lease reasonably required by
any mortgagee of the Land;
WHEREAS, as a condition to making the Loan, Hartford desires certain
changes to the Lease; and
WHEREAS, Landlord and Tenant desire to enter into this First Amendment
in order to set forth the agreements and understandings of Landlord and Tenant
as set forth hereinbelow.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein set forth and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. The foregoing preambles are hereby incorporated herein by this
reference as it set forth fully herein. All initially capitalized terms not
specifically defined herein shall have the meanings ascribed to said terms in
the Lease.
2. In the tenth (10th) and eleventh (11th) lines of Section 14.1 of
the Lease, the words "if any" are inserted between the words "proceeds" and
"being".
3. In the eleventh (11th) line of Section 14.1 of the Lease, the words
"by Landlord or any Mortgagee" are inserted between the words "available" and
"to".
<PAGE> 48
4. In the eighth (8th) line of Section 27.24 of the Lease the
following language is inserted between the words "right" and "to":
"subject to its having complied with, and the rights of any
Mortgagee under, Section 17.2 hereof.".
5. This First Amendment may be executed in one or more counterparts
and all such counterparts shall constitute one First Amendment that is binding
on the parties hereto, notwithstanding that all of said parties are not
signatories to the original or same counterpart.
6. Except as specifically amended and modified by this First
Amendment, the Lease shall remain in full force and effect. In the event of any
conflict between the terms of the Lease and the terms of this First Amendment,
the terms of this First Amendment shall govern and control.
IN WITNESS WHEREOF, the undersigned have executed this First Amendment
as of the date first above written.
LANDLORD:
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO, not
individually but solely as Trustee, as
aforesaid
By: /s/
------------------------------------
Name:
-----------------------------
Its:
-----------------------------
TENANT:
MOTOROLA MICROWAVE,
a Delaware partnership
By: /s/ RONALD W. SMITH
------------------------------------
Name: Ronald W. Smith
----------------------------
Its: Vice President and Assistant
General Manager
2
<PAGE> 49
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease (the "Second Amendment") is made and
entered into as of this 30th day of June, 1994 by and between American National
Bank and Trust Company of Chicago, not personally, but solely as Trustee under
Trust Agreement dated December 28, 1988 and known as Trust No. 106990-07
("Landlord") and California Microwave-Telecom Transmission Systems, Inc., a
Delaware corporation ("Tenant"), the successor in interest to Telesciences
Transmissions Systems, Inc., a Delaware corporation ("Telesciences"), which
such entity was the successor in interest to Motorola Microwave, a Delaware
partnership ("Motorola Microwave"), which such entity was the successor in
interest to Motorola, Inc., a Delaware corporation ("Motorola").
W I T N E S S E T H:
WHEREAS, Landlord and Motorola, as tenant, entered into that certain
Lease (the "Lease") dated as of October 27, 1989, pursuant to which Landlord
agreed to lease to Motorola and Motorola agreed to lease from Landlord, that
certain parcel of real property consisting of approximately 7.72 acres and
commonly known as 171 Covington Drive in Covington Corporate Center,
Bloomingdale, Illinois, as legally described in the Lease and as improved with
a building containing 110,063 square feet of office, light manufacturing,
assembly and warehouse space (the real estate and improvements are collectively
referred to as the "Premises"); and
WHEREAS, Motorola assigned, transferred and conveyed to Motorola
Microwave all of Motorola's leasehold estate created by and under the Lease
pursuant to that certain Assignment and Assumption Agreement dated December 31,
1989 by and between Motorola and Motorola Microwave and consented to by
Landlord; and
WHEREAS, the Lease was amended by that certain First Amendment to Lease
dated as of June 30, 1990 by and between Motorola Microwave and Landlord and
was also modified on August 15, 1990 by that certain letter agreement by such
parties (the Lease, as amended, is collectively referred to as the "Lease"); and
WHEREAS, Telesciences, as successor in interest to Motorola Microwave,
assigned, transferred and conveyed to CMI Sub, Inc., a Delaware corporation
("CMI Sub") all of Telesciences' leasehold estate created by and under the
Lease pursuant to that certain Assignment and Assumption of Lease Agreement
dated October 13, 1993 by and between Telesciences and CMI Sub and consented to
by Landlord; and
WHEREAS, Tenant, as successor in interest to CMI Sub, and Landlord
desire to extend to term of the Lease and to otherwise modify the Lease upon
the terms, provisions and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration the receipt,
adequacy and sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby agree as follows:
1. The recitals set forth above are hereby incorporated herein by this
reference as if set forth below in full. Unless otherwise defined
herein, all capitalized terms used in this Second Amendment shall
have the same meanings as are ascribed thereto in the Lease.
2. The first grammatical paragraph of Section 1.2 of the Lease is
hereby deleted in its entirety and the following paragraph is
inserted in lieu thereof:
<PAGE> 50
"1.2. The term hereof (the "Term") shall commence on July 1, 1994
(the "Commencement Date") and shall expire on June 30, 2009 (the
"Expiration Date")."
3. Article II (Construction of Improvements) of this Lease is hereby
deleted in its entirety.
4. Section 3.1 of the Lease is hereby amended to provide for the
payment of Base Rent and Monthly Base Rent during the Term (as
revised in Paragraph 2 hereinabove of this Second Amendment) of this
Lease and, accordingly, Section 3.1 of the lease is hereby deleted in
its entirety and the following is inserted in lieu thereof:
"3.1. Tenant covenants to pay annual base rent ("Base Rent") during
the Term in equal monthly installments ("Monthly Base Rent") in the
amounts set forth below, in advance on the first day of each and
every calendar month during the Term, and at the same rate prorated
for fractions of a month if the Commencement Date occurs on any day
other than the first day of a calendar month or the Term ends on any
day other than the last day of a calendar month. Base Rent and
Monthly Base Rent shall be payable in the following amounts:
<TABLE>
<CAPTION>
MONTHLY BASE RENT
MONTH BASE RENT (ANNUAL)
----- --------- ---------
<S> <C> <C>
1 through 60................ $71,082.35 $ 852,988.25
61 through 120.............. 81,630.06 979,560.70
121 through 180............. 93,553.55 1,122,642.60
</TABLE>
Such Base Rent and Monthly Base Rent shall be the only Rent due under
this Lease except for the Additional Rent due thereunder as provided
at Section 3.2(a) of the Lease."
5. Section 23.1 of the Lease is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"23.1. In the event, and only in the event, that Tenant is relocating
its business operations to a location other than the States of
Illinois, Indiana or Wisconsin, Tenant shall have the option to
cancel and terminate this Lease as of the last day of the seventy
second (72nd) complete calendar month of the Term (the "Lease
Cancellation Date") provided, however, that in order to effectively
exercise said option, Tenant shall (a) deliver written notice thereof
to Landlord on or prior to two hundred seventy (270) days prior to
the Lease Cancellation Date, and (b) (i) remit to Landlord on or
before the first day of the seventy second (72nd) complete calendar
month of the Term, concurrently with Tenant's remittance of the
installment of Monthly Base Rent and any other sums due and payable
by Tenant on said date, the sum of Seven Hundred Twenty Five Thousand
Dollars ($725,000.00). In the event that Tenant has not elected to
exercise its option to cause the Lease to be cancelled as of the
Lease Cancellation Date, Tenant shall have the option to cancel and
terminate the Lease as of the last day of the one hundred thirty
second (132nd) complete calendar month of the Term (the "Second Lease
Cancellation Date") provided, however, that in order to effectively
exercise said option, Tenant shall (a) deliver written notice thereof
to Landlord on or prior to two hundred seventy (270) days prior to
the Second Lease Cancellation Date, and (b) remit to Landlord on or
before the first day of the one hundred thirty second (132nd)
complete calendar month of the Term, concurrently with Tenant's
remittance of the installment of Monthly Base Rent and any other sums
due and
2
<PAGE> 51
payable by Tenant on said date, the sum of Three Hundred Seventy Five
Thousand Dollars ($375,000). Upon payment of the amounts required as
set forth in this Paragraph 23.1, the Lease shall terminate effective
as of the applicable Lease Cancellation Date or Second Lease
Cancellation Date."
6. Section 24.2 of this Lease is hereby amended by deleting the
reference to "twelve (12)" in the second line thereof and inserting
in lieu thereof "nine (9)".
7. Section 24.4 of this Lease is hereby deleted in its entirety and
the following is inserted in lieu thereof:
"24.4. Base Rent for the First Renewal Term shall be equal to
$1,265,724.50 annually (Base Monthly Rent shall be equal to
$105,477.04). Base Rent for the Second Renewal Term shall be equal to
$1,469,341 annually (Base Monthly Rent shall be equal to
$122,445.08)."
8. Article XXV (Purchase Option) of this Lease is hereby deleted in
its entirety.
9. Section 27.4 of this Lease is hereby deleted in its entirety and
the following is inserted in lieu thereof:
"27.4. All notices, demands and requests which may be or are required
to be given, demanded or requested by either party to the other shall
be in writing. All notices, demands and requests by Landlord to
Tenant shall be delivered personally or shall be sent by a nationally
recognized overnight courier service or by United States registered
or certified mail, return receipt requested, postage prepaid,
addressed to:
California Mircrowave-Telecom Transmission
Systems, Inc.
c/o California Microwave, Inc.
985 Almanor Ave.
Sunnyvale, CA 94086
Attn: George L. Spillane
or at such other place as Tenant may from time to time designate by
written notice to Landlord.
All notices, demands and requests by Tenant to Landlord shall be
delivered personally or shall be sent by a nationally recognized
overnight courier service or by United States registered or certified
mail, return receipt requested, postage prepaid, addressed to
Landlord in care of:
Hiffman Shaffer Associates, Inc.
180 North Wacker Drive
Suite 500
Chicago, Illinois 60606
Attention: Mr. John E. Shaffer and
Mr. E. Thomas Collins, Jr.
With a copy to: The Guardian Life Insurance Company of America
201 Park Avenue South
New York, New York 10003
Attention: Mr. Michael McGoldrick
Real Estate Investment Department
and Karen L. Farnsworth, Esq.
Legal Department
3
<PAGE> 52
or at such other place as Landlord from time to time may designate by
written notice to Tenant. Notices, demands and requests which shall be
served upon Landlord by Tenant, or upon Tenant by Landlord, in the
manner aforesaid, shall be deemed to be sufficiently served or given for
all purposes hereunder at the time such notice, demand or request shall
be personally delivered or delivered by such nationally recognized
courier service, or if mailed, within three (3) business days from the
date same is deposited with the United States Postal Service, as
evidenced by the postal receipt."
10. Tenant and Landlord hereby acknowledge and agree that Tenant's
obligation to pay Rent during the Term and, if applicable, the First
Renewal Term and the Second Renewal Term of this Lease and all other
payments to be made by Tenant under this Lease, as well as the full
performance and observance by Tenant of all the other terms, covenants,
conditions and agreements thereof to be performed and observed by Tenant
shall be absolutely and unconditionally guaranteed by California
Microwave, Inc., a Delaware corporation, as evidenced by the Guaranty
executed by California Microwave, Inc. of even date herewith, an
original counterpart of which is attached hereto and made a part hereof.
11. The Lease is hereby amended by adding the following Article XXIX, Right
of First Refusal, to read as follows:
"Article XXIX
Right of First Refusal
In the event at any time during the Term or the First Renewal Term
or the Second Renewal Term of this Lease Landlord receives and is
prepared to accept a bona fide third party offer (the "Offer") to
purchase the Premises and any other improvements located thereon,
Landlord shall immediately deliver a copy of the Offer to Tenant
("Offeree") at the address set forth in this Lease, or at such other
location designated in writing by Offeree to Landlord. Offeree shall
have the right, exercisable within (a) ten (10) business days
following Offeree's receipt of the Offer to purchase the Premises
identified in the Offer upon the express terms and conditions set
forth therein. In the event Landlord is not notified of Offeree's
exercise of the right described herein upon the expiration of the
applicable time period specified above, or in the event Offeree
notifies Landlord that it does not intend to exercise its rights
hereunder with respect to the Offer, Offeree shall be deemed to have
waived any rights hereunder with respect to the Offer and Landlord
shall thereafter have the right to consummate the sale of the
Premises pursuant to the Offer. In the event Offeree has waived or
is deemed to have waived its rights hereunder but the transaction
contemplated in the Offer is not consummated by Landlord and the
third party offeror, Offeree's rights hereunder shall be reinstated
and shall apply to any subsequent bona fide third party offer
received by Landlord thereafter. Notwithstanding the foregoing,
Tenant acknowledges and agrees that the terms and provisions of this
Article XXIX shall become immediately null and void in the event any
Mortgagee acquires possession of the Premises in conjunction with
proceedings instituted to foreclose its lien, the Premises are sold
to a third party at foreclosure sale, or the Premises are conveyed
to any Mortgagee pursuant to a deed in lieu of foreclosure or
comparable conveyance."
4
<PAGE> 53
12. In the event of any conflicts between the terms and provisions of the
Lease and the terms and provisions of this Second Amendment, the terms and
provisions of this Second Amendment shall govern and control.
13. This Second Amendment may be executed in one or more counterparts and all
such counterparts shall constitute one and the same Second Amendment
binding on all parties hereto, notwithstanding that all of said parties
are not signatories to the original or same counterpart.
14. Except as expressly amended or modified herein, all of the terms,
conditions, agreements, covenants, representations, warranties and
indemnities contained in the Lease shall remain in full force and effect.
15. This Second Amendment is binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
16. It is expressly understood and agreed by and between the parties hereto,
anything herein to the contrary notwithstanding, that each and all of the
representations, warranties, covenants, undertakings and agreements herein
made on the part of Landlord, while in form purporting to be the
representations, warranties, covenants, undertakings and agreements of
Landlord, are nevertheless each and every one of them made and intended,
not as personal representations, warranties, covenants, undertakings and
agreements by Landlord or for the purpose or with the intention of binding
Landlord personally, but are made and intended for the purpose only of
subjecting Landlord's interest in the Premises to the terms of the Lease
and this Second Amendment and for no other purpose whatsoever, and in
case of default hereunder by Landlord (or default through, under or by any
of its beneficiaries, or agents and representatives of said
beneficiaries), Tenant shall look solely to the interests of Landlord in
the Premises; that this Second Amendment is executed and delivered by
Landlord not in its own right, but solely in the exercise of the powers
conferred upon it as Trustee; that neither Landlord nor any of Landlord's
beneficiaries shall have any personal liability to pay any indebtedness
accruing hereunder or to perform any covenant, either express or implied,
herein contained, and no liability or duty shall rest upon Landlord to
sequester the trust estate or the rents, issues and profits arising
therefrom or the proceeds arising from any sale or other disposition
thereof; and that no personal liability or personal responsibility of any
sort is assumed by, nor shall at any time be asserted or enforceable
against, said Landlord, individually or personally, but only as Trustee
under the provisions of the Trust Agreement establishing the Trust, or
against any of the beneficiaries under the Trust Agreement establishing
the Trust on account of the Lease and this Second Amendment or on account
of any representation, warranty, covenant, undertaking or agreement of
Landlord in the Lease or in this Second Amendment contained, either
express or implied, all such personal liability, if any, being expressly
waived and released by Tenant and by all persons claiming, by through or
under Tenant.
5
<PAGE> 54
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed as of the date first written above.
LANDLORD:
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO, not
personally but solely as Trustee as aforesaid
By: /s/
------------------------------------------
Vice President
ATTEST:
/s/
- --------------------------
Assistant Secretary
TENANT:
CALIFORNIA MICROWAVE -
TELECOM TRANSMISSION
SYSTEMS, INC., a Delaware corporation
By: /s/ George L. Spillane
--------------------------------------
Name: George L. Spillane
Title: Vice-President
ATTEST:
/s/ Douglas Morais
- -------------------------------
Name: Douglas Morais
Title: President
6
<PAGE> 55
GUARANTY
FOR VALUE RECEIVED, and in consideration for, and as an inducement to
American National Bank and Trust Company of Chicago, as Trustee under Trust
Agreement dated December 28, 1988 and known as Trust Number 106990-07, as
Landlord, to enter into the foregoing Lease dated October 27, 1989, as amended
by that certain First Amendment to Lease dated as of June 30, 1990, that
certain letter agreement dated August 15, 1990, and by that certain Second
Amendment to Lease dated as of June 30, 1994 (collectively the "Lease") with
Motorola, Inc., a Delaware corporation, and which such tenant's interest in the
Lease is now held by California Microwave-Telecom Transmission Systems, Inc., a
Delaware corporation, as Tenant, the undersigned hereby absolutely and
unconditionally guarantees to Landlord, its successors and assigns, (i) the
prompt and full payment of all Rent payable throughout the Term of the Lease,
as well as the First Renewal Term and Second Renewal Term, as applicable,
including, without limitation, each installment of Monthly Base Rent and
Additional Rent, and all other payments to be made by Tenant under the Lease,
and the full performance and observance by Tenant of all the other terms,
covenants, conditions and agreements therein provided to be performed and
observed by Tenant, for which the undersigned shall be jointly and severally
liable with Tenant, and (ii) the prompt and full payment of any and all costs
associated with any reletting of the Premises necessitated by an Event of
Default of Tenant under the Lease including, without limitation, any leasing
commissions, tenant improvement costs and reasonable attorneys' fees and
expenses incurred as a result thereof.
The undersigned hereby waives any notice of nonpayment, nonperformance
or nonobservance, or proof of notice or demand. The undersigned agrees that
in the event of an Event of Default by Tenant under the Lease, Landlord may
proceed against the undersigned before, after or simultaneously with
proceedings against Tenant.
This Guaranty shall not be terminated, affected or impaired in any
manner by reason of: (1) the assertion by Landlord against Tenant of any of the
rights or remedies reserved to Landlord pursuant to the provisions of the
Lease; (2) the relief of Tenant from any of Tenant's obligations under the
Lease by operation of law or otherwise; provided, however, that Guarantor shall
have the benefit of and may assert any defenses available to Tenant; (3) the
commencement of summary or other proceedings against Tenant; (4) the failure of
Landlord to enforce any of its rights against Tenant; or (5) the granting by
Landlord of any extensions of time to Tenant; and the undersigned hereby waives
all defenses of suretyship. The undersigned further covenants and agrees that:
(a) the undersigned shall be bound by all the provisions, terms, conditions,
restrictions and limitation contained in the Lease which are to be observed or
performed by Tenant thereunder, the same as if the undersigned were named as
Tenant; and (b) this Guaranty shall be absolute and unconditional and shall be
in full force and effect, notwithstanding any amendment, addition, assignment,
sublease, transfer, renewal, extension or other modification of the Lease,
whether or not the undersigned shall have knowledge or have been notified of or
agreed or consented thereto.
The failure of Landlord to insist in any one or more instances upon the
strict performance or observance of any of the terms, provisions or covenants
of the Lease or to exercise any right therein contained shall not be construed
or deemed to be a waiver or relinquishment for the future of such term,
provision, covenant or right, but the same shall continue and remain in full
force and effect.
If Landlord at any time is compelled to take any action, by legal
proceedings or otherwise, to enforce or compel compliance with the terms of
this Guaranty, the undersigned shall, in addition to any other rights or
remedies to which Landlord may be entitled hereunder or as a matter of law or
in equity, pay to Landlord all costs, including reasonable attorneys' fees,
incurred or expended by Landlord in connection therewith.
<PAGE> 56
In the event the Lease is disaffirmed by a trustee in Bankruptcy for
Tenant, the undersigned agrees that it shall, at the election of Landlord,
either assume the Lease and perform all of the covenants, terms and conditions
of Tenant thereunder or enter into a new lease, which said new lease shall be
in form and substance identical to the Lease.
The undersigned hereby agrees, as a material inducement to Landlord to
enter into the Lease with Tenant, to furnish to Landlord, immediately upon
written demand by Landlord, copies of its most recent annual reports and 10Q
reports.
This Guaranty shall be construed and interpreted in accordance with and
shall be governed by the laws of the State of Illinois, except to the extent
preempted by United States federal law. Landlord may bring any action or
proceeding to enforce or compel compliance with the terms of this Guaranty or
with respect to any matter arising out of this Guaranty in any court of
competent jurisdiction. If Landlord commences such an action in a court located
in the County of Cook, State of Illinois or the United States District Court for
the Eastern Division of the Northern District of Illinois, the undersigned
hereby agrees that it will submit and does hereby irrevocably submit to the
personal jurisdiction of such courts and will not attempt to have such action
dismissed, abated or transferred on the ground of forum non conveniens or
similar grounds; provided, however, that nothing contained herein shall prohibit
the undersigned from seeking, by appropriate motion, to remove an action brought
in a Illinois state court to the United States District Court for the Eastern
Division of the Northern District of Illinois. If such action is so removed,
however, the undersigned shall not seek to transfer such action to any other
district, nor shall the undersigned seek to transfer to any other district any
action which Landlord originally commences in such federal court. Any action or
proceeding brought by the undersigned arising out of this Guaranty shall be
brought solely in a court of competent jurisdiction located in the County of
Cook, State of Illinois or in the United States District for the Eastern
Division of the Northern District of Illinois.
The undersigned agrees that a summons and complaint or equivalent
documents commencing an action or proceeding in any court shall be validly and
properly served and shall confer personal jurisdiction over the undersigned if
served to George L. Spillane or Garrett E. Pierce, each of whom the undersigned
hereby designates and appoints as the undersigned's authorized agent to accept
and acknowledge on its behalf service of any and all process which may be served
in such action or proceeding in any such court. The undersigned shall be sent,
by certified mail to the undersigned's notice address as provided herein, a copy
of such summons and complaint at the time of service upon either of such agents;
provided, however, that any such copy shall be sent solely as a courtesy to the
undersigned and the undersigned's failure to receive such copy shall in no way
affect the validity and propriety of the service made on the undersigned through
such agent. The undersigned waives any objection which it may now or hereafter
have to venue of any such action or proceeding and waives any right to seek
removal of any action or proceeding commenced in accordance herewith. The
undersigned agrees that if it desires to make any change in its agents for
service, such change shall be subject to Landlord's written approval, which
approval shall not be unreasonably withheld. The undersigned's notice address is
as follows:
California Microwave, Inc.
985 Almanor Ave.
Sunnyvale, California 96086
Attention: George L. Spillane
All duties and obligations of the undersigned pursuant to this Guaranty
shall be binding upon the successors and assigns of the undersigned. For
purposes of this Guaranty, the word "Tenant" shall also include the successors
and assigns of Tenant.
All capitalized terms used in this Guaranty shall have the same
meanings as are given to such terms in the Lease, unless otherwise specifically
defined in this Guaranty.
2
<PAGE> 57
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be
executed as of this 30th day of June, 1994.
CALIFORNIA MICROWAVE, INC., a
Delaware corporation
By: /s/ George L. Spillane
-------------------------
Name: George L. Spillane
Its: Vice President
ATTEST: /s/ Douglas Morais
---------------------------
Name: DOUGLAS MORAIS
Its: President, Wireless Products Group
3
<PAGE> 1
EXHIBIT 10.32
LEASE
855 Mission Court
Fremont, California
(Building One of Mission Corporate Center)
LANDLORD: METROPOLITAN LIFE INSURANCE COMPANY,
a New York corporation
TENANT: TELESCIENCES, INC.
a Delaware corporation
<PAGE> 2
LEASE
SUMMARY OF BASIC TERMS
A. REFERENCE DATE: February 24, 1992
B. LANDLORD: Metropolitan Life Insurance Company,
a New York corporation
C. TENANT: TeleSciences, Inc.
a Delaware corporation
D. TRADE NAME (if any): Not Applicable
E. GUARANTOR (if any): Not Applicable
F. PREMISES (Section 1.1, Exhibit A): Approximately 36,348 square feet of
rentable area, comprising all of the Rentable Area in Building One (the
"Building") of Mission Corporate Center, known as 855 Mission Court, located
in the City of Fremont, County of Alameda, State of California, more
particularly described on Exhibit A attached hereto.
Project: The Building, other buildings, landscaping, parking spaces,
roadways and walkways on the land commonly known as Mission Corporate
Center, Fremont, California, which Project is more particularly described in
Exhibit 8 attached hereto.
G. Parking Spaces (Section 1.3): Use of 135 Parking Spaces on an unassigned,
unreserved basis and the use of 10 Parking Spaces on a reserved basis.
H. TERM (Section 2.1):
Projected Commencement Date: April 15, 1992
Expiration Date: The last day of the sixty (60) month period which
begins on the Commencement Date.
The Term may be extended pursuant to Rider No. 1.
I. BASE ANNUAL RENT (Section 3.1):
Advance Rent paid upon Tenant's execution: $19,991.40
Base Annual Rent*:
Monthly installments*:
Months 1 - 24: $19,991.40
Months 25 - 60: $23,262.72
* Subject to increase pursuant to Section 3.3.
Base Annual Rent and Monthly installments during the Option Period are
set forth in Rider No. 1.
J. PERMITTED USE (Section 4.1): Subject to the limitation on the use of
Hazardous Material and other limitations and provisions of Article 4:
office, research and development, assembly, warehousing and light
manufacturing.
K. ADDRESS FOR NOTICES (Article 23):
To Landlord: With Copies To:
Metropolitan Life Insurance Company Metropolitan Life Insurance Company
101 Lincoln Centre Drive, Suite 600 3 Lagoon Drive, Suite 300
Foster City, CA 94404 Redwood City, CA 94065
Attention: Vice President Attention: Assistant Vice President
- i -
<PAGE> 3
To Tenant:
Before Commencement Date: After Commencement Date:
TeleSciences, Inc. The Premises
600 Montgomery Street, 45th Floor
San Francisco, CA 94111
Attention: Robert F. Onraet
Executive Vice President
& Chief Financial Officer
L. TAXES AND OPERATING COSTS (Section 3.4):
Tenant's Building Share: 100%
Tenant's Project Share: 11.24%
M. SECURITY DEPOSIT (Article 24):
BASE SECURITY DEPOSIT (Article 24): Twenty-Three Thousand Two Hundred
Sixty-Two Dollars and Seventy-Two Cents ($23,262.72), subject to increase
as provided in Article 24.
SUPPLEMENTAL SECURITY DEPOSIT (Article 24): Two Hundred Eighteen Thousand
Eighty-Eight Dollars ($218,088.00).
N. BROKER(S) (Article 25):
J.R. Parrish, Inc.
1960 The Alameda, Suite 100
San Jose, CA 95126
Attn: Steven Condrey
License No.: 00490878
COOPERATING BROKERS:
J.R. Parrish, Inc.
1960 The Alameda, Suite 100
San Jose, CA 95126
Attn: Michael L. Rosendin
License No.: 00490878
The General Lease Provisions identified above in parentheses are those
provisions making reference to above-described Basic Terms. Each such reference
in the General Lease Provisions shall incorporate the applicable Basic Terms.
The Summary of Basic Terms and the General Lease Provisions each comprise a part
of this Lease, and in the event of any conflict between the Summary of Basic
Terms and the General Lease Provisions, the latter shall control.
TENANT: LANDLORD:
TELESCIENCES, INC., METROPOLITAN LIFE INSURANCE COMPANY,
a Delaware corporation a New York corporation
By: /s/ ROBERT F. ONRAET By: /s/ EDWARD J. HAYES
----------------------------- -----------------------------
Robert F. Onraet Print Name: Edward J. Hayes
Its Executive Vice President Its: Assistant Vice President
& Chief Financial Officer
By: /s/ JOHN MCGUIRE
-----------------------------
John McGuire
Its Vice President
- ii -
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY OF BASIC TERMS ....................................................................... i
TABLE OF CONTENTS ............................................................................ iii
ARTICLE 1 - PREMISES/COMMON AREAS/PARKING .................................................... 1
Section 1.1 - Premises ............................................................... 1
Section 1.2 - Common Areas ........................................................... 1
Section 1.3 - Parking ................................................................ 2
ARTICLE 2 - TERM/CONSTRUCTION OF PREMISES .................................................... 2
Section 2.1 - Term ................................................................... 2
Section 2.2 - Construction of Premises ............................................... 3
Section 2.3 - Acceptance by Tenant ................................................... 3
ARTICLE 3 - RENT; BASE ANNUAL RENT; TAXES, BUILDING COSTS AND PROJECT COSTS .................. 3
Section 3.1 - Rent ................................................................... 3
Section 3.2 - Base Annual Rent ....................................................... 4
Section 3.3 - Increases in Base Annual Rent .......................................... 4
Section 3.4 - Taxes, Building Costs and Project Costs ................................ 4
Section 3.5 - Additional Taxes ....................................................... 7
Section 3.6 - Late Payments; Charges; Interest; Default Rate ......................... 8
Section 3.7 - Consideration .......................................................... 8
Section 3.8 - Time and Manner of Payment in General .................................. 8
ARTICLE 4 - USE AND OCCUPANCY ................................................................ 9
Section 4.1 - Permitted Use .......................................................... 9
Section 4.2 - Compliance with Law .................................................... 9
Section 4.3 - Compliance with Insurance Requirements ................................. 9
Section 4.4 - Certificates of Occupancy .............................................. 9
Section 4.5 - Life-Safety Systems .................................................... 10
Section 4.6 - Prohibited Uses ........................................................ 10
Section 4.7 - Definition of Hazardous Material ....................................... 10
Section 4.8 - Tenant's Obligations ................................................... 10
Section 4.9 - Landlord's Exculpation ................................................. 12
Section 4.10 - Right of Contribution ................................................. 13
Section 4.11 - Monitoring ............................................................ 13
Section 4.12 - Abatement Activities .................................................. 14
Section 4.13 - Effect on Proposed Assignments and Sublets ............................ 14
Section 4.14 - Hazardous Materials Management Plan ................................... 14
Section 4.15 - Limitation of Tenant's Responsibility ................................. 15
ARTICLE 5 - ASSIGNMENT/SUBLETTING/MORTGAGE ................................................... 15
Section 5.1 - Prohibition; Definitions ............................................... 15
Section 5.2 - Assignments or Subleases Subject to Landlord's Prior Written Consent ... 16
Section 5.3 - Share of Proceeds of Assignment or Sublease ............................ 17
Section 5.4 - Landlord Options to Terminate Lease .................................... 17
ARTICLE 6 - ALTERATIONS ...................................................................... 18
Section 6.1 - Alterations ............................................................ 18
Section 6.2 - Mechanics' Liens ....................................................... 19
Section 6.3 - Alterations as Landlord's Property ..................................... 19
Section 6.4 - Indemnification ........................................................ 19
Section 6.5 - Survival ............................................................... 19
ARTICLE 7 - REPAIRS .......................................................................... 19
Section 7.1 - Tenant's Obligations/Procedures ........................................ 19
Section 7.2 - Landlord's Obligations and Rights ...................................... 20
Section 7.3 - Statutory Waivers ...................................................... 21
Section 7.4 - No Liability of Landlord ............................................... 21
ARTICLE 8 - SUBORDINATION/PROTECTION OF LENDERS .............................................. 21
Section 8.1 - Subordination .......................................................... 21
Section 8.2 - Attornment to Successor ................................................ 21
Section 8.3 - Lender's Right to Cure ................................................. 22
Section 8.4 - Tenant's Financial Statements .......................................... 22
Section 8.5 - Lease Modifications .................................................... 22
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE 9 - LIABILITY/INDEMNIFICATION ........................................................ 22
Section 9.1 - Landlord's Exculpation and Limited Liability ........................... 22
Section 9.2 - Tenant's Liability, Indemnification and Hold Harmless .................. 23
Section 9.3 - Survival and Conflicts with other Indemnity Provisions ................. 23
ARTICLE 10 - DAMAGE/DESTRUCTION .............................................................. 23
Section 10.1 - Destruction and Repair ................................................ 23
Section 10.2 - 180 Day and 60 Day Repair Criteria .................................... 24
Section 10.3 - Lack of Insurance Proceeds ............................................ 24
Section 10.4 - No Release of Liability ............................................... 24
Section 10.5 - Tenant's Negligence ................................................... 24
Section 10.6 - Express Agreement Re Damage and Destruction ........................... 24
ARTICLE 11 - EMINENT DOMAIN .................................................................. 25
Section 11.1 - Partial or Total Taking ............................................... 25
Section 11.2 - Award ................................................................. 25
Section 11.3 - Sale to Condemning Authority .......................................... 25
Section 11.4 - Proration/Abatement of Base Annual Rent ............................... 25
Section 11.5 - Temporary Taking ...................................................... 25
ARTICLE 12 - UTILITIES ....................................................................... 26
Section 12.1 - Utilities ............................................................. 26
ARTICLE 13 - LANDLORD'S RIGHT OF ENTRY ....................................................... 26
ARTICLE 14 - TENANT'S INSURANCE .............................................................. 26
Section 14.1 - Tenant's Insurance .................................................... 26
Section 14.2 - General Requirements of Tenant's Insurance ............................ 27
Section 14.3 - Waiver of Subrogation ................................................. 27
Section 14.4 - Landlord's Insurance .................................................. 28
ARTICLE 15 - INSOLVENCY OR BANKRUPTCY ........................................................ 28
Section 15.1 - Insolvency or Bankruptcy .............................................. 28
Section 15.2 - Measure of Damages .................................................... 29
Section 15.3 - Provision of Services and Assumption of Lease ......................... 29
ARTICLE 16 - DEFAULT/REMEDIES ................................................................ 29
Section 16.1 - Events of Default ..................................................... 29
Section 16.2 - Termination of the Right to Possession ................................ 30
Section 16.3 - Rights Upon Termination ............................................... 30
Section 16.4 - Continuance of Lease .................................................. 31
Section 16.5 - Other Remedies ........................................................ 31
Section 16.6 - Waiver of Rights of Redemption and Time for Service of Notice ......... 31
Section 16.7 - Procedural Matters .................................................... 31
ARTICLE 17 - LANDLORD'S RIGHT TO PERFORM ..................................................... 31
ARTICLE 18 - END OF TERM ..................................................................... 32
Section 18.1 - Condition of Premises ................................................. 32
Section 18.2 - Holding Over .......................................................... 32
Section 18.3 - Conditions of Termination ............................................. 32
ARTICLE 19 - QUIET POSSESSION ................................................................ 32
ARTICLE 20 - RULES AND REGULATIONS ........................................................... 33
ARTICLE 21 - NO WAIVER/ENTIRE AGREEMENT/MODIFICATION ......................................... 33
ARTICLE 22 - LANDLORD'S DEFAULT/LIABILITY .................................................... 33
Section 22.1 - Force Majeure ......................................................... 33
Section 22.2 - Notice/Right to Cure .................................................. 33
Section 22.3 - Limitation of Landlord's Liability .................................... 34
Section 22.4 - Sale by Landlord ...................................................... 34
ARTICLE 23 - NOTICES ......................................................................... 34
Section 23.1 - Notices to Tenant ..................................................... 34
Section 23.2 - Notices to Landlord ................................................... 34
Section 23.3 - Notices Generally ..................................................... 34
</TABLE>
- iv -
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE 24 - SECURITY DEPOSIT ................................................................ 35
Section 24.1 - General ............................................................... 35
Section 24.2 - Supplemental Security Deposit & Changeover Date ....................... 35
Section 24.3 - Letter of Credit ...................................................... 35
ARTICLE 25 - BROKERAGE ....................................................................... 36
ARTICLE 26 - MISCELLANEOUS ................................................................... 36
Section 26.1 - Captions and Construction ............................................. 36
Section 26.2 - Definitions ........................................................... 36
Section 26.3 - Successors and Assigns ................................................ 37
Section 26.4 - Landlord's Approval ................................................... 37
Section 26.5 - Joint and Several Liability ........................................... 37
Section 26.6 - Governing Law ......................................................... 37
Section 26.7 - Severability .......................................................... 37
Section 26.8 - Security Systems ...................................................... 37
Section 26.9 - Time of the Essence ................................................... 37
Section 26.10 - Recordation .......................................................... 37
Section 26.11 - Change of Name ....................................................... 38
Section 26.12 - Estoppel Certificates ................................................ 38
Section 26.13 - Authority ............................................................ 38
Section 26.14 - Attorneys' Fees ...................................................... 38
Section 26.15 - Waiver of Trial By Jury; Venue; Jurisdiction ......................... 38
Section 26.16 - INTENTIONALLY OMITTED ................................................ 38
Section 26.17 - Binding Effect ....................................................... 39
Section 26.18 - Signs ................................................................ 39
Section 26.19 - No Merger ............................................................ 39
Section 26.20 - Acknowledgement of Waivers and Limitations ........................... 39
Section 26.21 - Exhibits; Riders; Addenda ............................................ 39
</TABLE>
LIST OF EXHIBITS
EXHIBIT A - Premises
EXHIBIT B - Project Description
EXHIBIT C - Confirmation of Lease Term
EXHIBIT D - Work Letter and Construction Agreement
EXHIBIT E - Rules and Regulations
EXHIBIT F - Sign Program
EXHIBIT G - List of Hazardous Materials
EXHIBIT H - Form of Subordination, Non-Disturbance and Attornment Agreement
<PAGE> 7
- v -
GENERAL LEASE PROVISIONS
ARTICLE 1 - PREMISES/COMMON AREAS/PARKING
Section 1.1 - Premises
Upon and subject to the terms, covenants and conditions hereinafter set
forth, Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
the Premises comprising the area described in Paragraph F of the Summary of
Basic Terms, substantially as outlined on the floor plan(s) that have been
signed by Landlord and Tenant and comprise Exhibit A hereto. The plan(s) set
forth in Exhibit A are used solely for the purpose of identifying or
designating the Premises under the terms of this Lease and any markings,
measurements, dimensions, footages or notes of any kind contained thereon have
no bearing upon any of the terms, covenants, conditions, provisions or
agreements of this Lease and are not to be considered a part thereof.
Section 1.2 - Common Areas
1.2.1 Tenant shall have the right to the nonexclusive use of all areas
and facilities outside the Premises that are provided and designated by Landlord
from time to time for the general non-exclusive use of tenants at the Project,
and which are located outside the Building and outside other buildings designed
for occupancy by tenants (and constructed from time to time by Landlord), but
within the exterior boundary lines of the Project, including, without
limitation, parking areas, loading and unloading areas, roadways, walkways and
landscaped area (herein called "Project Common Area" or "Common Areas").
Landlord shall at all times have the right to use such Common Areas.
1.2.2 Landlord shall maintain the Common Areas in a manner comparable
to the manner other properties similar in size, character and location are
maintained and operated by institutional owners. The manner in which the Common
Areas are operated and the expenditures therefor shall be at the sole discretion
of Landlord. The use of Common Areas shall be subject to the Rules and
Regulations (as defined in Article 20) and the provisions of any covenants,
conditions and restrictions affecting the Project, as Landlord shall make from
time to time, as further provided in Section 1.2.4 and Article 20.
Notwithstanding anything to the contrary in the Lease, Landlord shall not enact
or modify any covenants, conditions or restrictions ("CC&Rs") or Rules and
Regulations if such enactment or modification would unreasonably interfere with
Tenant's use of the Premises. Landlord shall use its reasonable efforts to
enforce such Rules and Regulations as against other tenants or occupants if
nonenforcement would adversely and materially affect Tenant's use of the
premises or Tenant's parking rights under the Lease.
1.2.3 Exhibit A and Exhibit B show the approximate location of the
Premises, Common Areas and Project and are not meant to constitute an agreement
as to the specific location of the Premises, Common Areas or the elements
thereby or of the means of access to the Premises, Building or the Project.
Landlord hereby reserves the right, at any time and from time to time, as long
as reasonable access to the Premises and Building remains available, to (a) use
the Common Areas while engaged in making alterations in or additions or repairs
to the Project, and (b) close temporarily any of the Common Areas for
maintenance purposes. Tenant agrees that no diminution of light, air, or view
by any structure that may be erected in, about or outside the Project after the
date hereof shall entitle Tenant to any reduction of Base Annual Rent or any
other Rent (as defined below) or result in any liability of Landlord to Tenant.
1.2.4 Landlord reserves the right, from time to time, to grant such
easements, rights and dedications as Landlord deems necessary or desirable, and
to cause the recordation of parcel maps and covenants, conditions and
restrictions in addition to the covenants, conditions and restrictions existing
as of the Lease Date affecting the Project. Unless required by governmental
authorities, Landlord shall not exercise its rights under this Section 1.2.4 if
such easements, rights, conditions, maps and covenants, conditions and
restrictions unreasonably interfere with Tenant's use of the Premises. At
Landlord's request, Tenant shall promptly join in the execution of any of the
aforementioned documents, subject to the provisions of Section 1.2.2, and Tenant
shall be given a reasonable opportunity to review such documents before
executing them. The Building and the Project may be known by any name that
Landlord may choose, which name may be changed from time to time in Landlord's
sole discretion.
1.2.5 The rights of Tenant hereunder in and to the Common Areas shall
at all times be subject to the rights of Landlord specified under this Lease.
Tenant shall not use the Common Areas for its day-to-day business other than
using appropriately designated areas of the Common Areas for ingress and
egress, parking, or loading and unloading. Without limiting the generality of
the foregoing, storage, either permanent or temporary, of any materials,
supplies, equipment or refuse in the Common Areas is strictly prohibited.
Should Tenant violate this provision of the Lease, in addition to and without
waiver or limitation of any other rights of Landlord under this Lease, Landlord
may, at its
- 1 -
<PAGE> 8
option after ten (10) days written advance notice to Tenant, remove said
materials, supplies or equipment from the Common Areas and place such items in
storage, the reasonable cost thereof to be paid by Tenant to landlord as
additional Rent under this Lease within thirty (30) days after Landlord gives
Tenant a statement therefor. All subsequent reasonable costs in connection with
the storage of said items shall be paid to Landlord by Tenant as accrued.
Tenant agrees that receiving and shipping goods and merchandise and all removal
of refuse shall be made only by way of the designated loading areas immediately
adjacent to and serving the Premises. If, in the opinion of the Landlord,
unauthorized persons are using the Common Areas by reason of the presence of
Tenant in the Premises, Tenant, upon demand of Landlord, shall correct such
situation by appropriate action or proceedings against all such unauthorized
persons. Nothing herein shall affect the right of Landlord at any time to
remove any such unauthorized persons from said areas or to prevent the use of
any of said areas by unauthorized persons. Notwithstanding any provision of
this Section 1.2.5 to the contrary, Landlord shall exercise its rights in and
to the Common Areas in a good faith manner that shall not unreasonably
interfere with Tenant's use of the Premises.
Section 1.3 - Parking
Tenant shall have the right for the benefit of Tenant and its employees,
customers and invitees to the use of "Parking Spaces" for parking by vehicles no
larger than full-sized passenger automobiles or pick-up trucks on those
portions of the Project Common Areas provided and designated by Landlord from
time to time for parking as follows: (i) to the use of one hundred thirty-five
(135) Parking Spaces on an unassigned, unreserved basis and (ii) to the use of
ten (10) Parking Spaces on an assigned, reserved basis ("Reserved Spaces").
Landlord shall permit Tenant, at Tenant's sole cost, to designate the Reserved
Spaces as reserved for Tenant's use, in a location adjacent to the lobby area of
the Premises, subject to Section 4.2, including without limitation, all
requirements relating to handicap or disabled parking and the location or
relocation of such parking spaces. Landlord shall have no obligation for
unauthorized use of the Reserved Spaces, nor shall Landlord be required to
patrol or police the use of such spaces. Tenant shall not at any time park or
permit the parking of motor vehicles, belonging to it or to others, so as to
interfere with the walkways, roadways, or loading areas, or in any portion of
the parking areas not designated by Landlord for such use by Tenant.
ARTICLE 2 - TERM/CONSTRUCTION OF PREMISES
Section 2.1 - Term
2.1.1 The term of this Lease (the "Term") shall commence upon the date
of Substantial Completion (as defined below) of the Premises, advanced for any
Tenant Delay as provided below (the "Commencement Date") which the parties
estimate will occur on the Projected Commencement Date and, except as otherwise
provided herein or in any exhibit or addendum hereto, shall continue in full
force to and including the Expiration Date. Should the Commencement Date be a
date other than the Projected Commencement Date, Landlord and Tenant shall
promptly execute a Confirmation of Lease Term in the form set forth as Exhibit C
hereto, but the failure of either or both to do so shall not affect the
establishment of the Commencement Date.
2.1.2 "Substantial Completion" shall mean (and the Premises shall be
deemed "Substantially Complete" upon) the later of (i) April 15, 1992 or (ii)
that date by which all of the following have occurred: (a) Landlord has
substantially completed Landlord's Work as defined in and in accordance with the
Work Letter and Construction Agreement by and between Landlord and Tenant dated
of even date herewith, a form of which is Exhibit D (the "Work Letter") of this
Lease and in accordance with other provisions of this Lease, subject to
Landlord's completion of punchlist work and repair of latent defects pursuant to
Section 2.3 below so that completion of the remaining punchlist items for
Landlord's Work would not materially and adversely affect Tenant's use of the
Premises, provided, however, that if Tenant occupies or uses the Premises for
purposes other than fixturing as permitted under the Work Letter, the Premises
shall be deemed to be in a condition which does not materially and adversely
affect Tenant's use; (b) electric, water and sanitary sewer utilities are hooked
up and available for use by Tenant; (c) the governmental entity responsible for
issuing certificates of occupancy or equivalent occupancy approvals with respect
to Landlord's work has issued the same or has provided Landlord with all
documents or occupancy approvals (written or oral) which are customarily given
prior to the actual delivery of a certificate of occupancy, whichever first
occurs; and (d) Landlord has tendered actual possession of the Premises to
Tenant. Landlord shall use its good faith efforts to notify Tenant thirty (30)
days in advance of Landlord's estimate of the date upon which Substantial
Completion will occur in order to provide Tenant additional information to make
move-in arrangements, but in no event shall Landlord's failure to give such
notice or to Substantially Complete Landlord's Work on the date estimated
result in any liability of Landlord or default hereunder or in any way affect
the determination of the Commencement Date under this Lease. For purposes of
establishing the commencement of Tenant's obligations under this lease which
have not previously commenced, such date shall be advanced to before the date of
Substantial Completion by one day for each day of Tenant Delay (as defined in
the Work Letter).
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Section 2.2 - Construction of Premises
2.2.1 Landlord shall perform the work and make the installations in
the Premises substantially as set forth in the Work Letter (the "Landlord's
Work"). Landlord's Work shall be performed by a general contractor as provided
in the Work Letter. Other than Landlord's Work as described in the Work Letter,
Landlord has no obligation to improve, alter, repair or remodel the Premises.
All such installations shall immediately become and remain the property of
Landlord.
2.2.2 If Landlord shall be unable to give possession of the Premises
on the Projected Commencement Date by reason of the fact that the Premises is
not Substantially Complete, or for any other reason, any such delay resulting
therefrom shall be deemed excused and Landlord shall not be subject to any
liability for the failure to give possession on said date. Under such
circumstances, except to the extent such delay results from Tenant Delay (as
defined in the Work Letter) or is otherwise caused by activities of Tenant, its
agents, its representatives or its contractors at the Project, neither the Term
nor Tenant's obligation to pay Monthly Installments (as defined below) shall
commence until possession of the premises is given or the Premises is available
for occupancy by Tenant, as fixed in a notice given by Landlord to Tenant. No
such failure to give possession on the Commencement Date shall in any way
affect or impair the validity of this Lease or the obligations of Tenant
hereunder, nor shall the same be construed in any way to extend the Expiration
Date.
2.2.3 Tenant shall have the right to enter into possession of and
occupy all or any portion of the Premises prior to the Commencement Date,
provided that Tenant first requests Landlord's permission adequately in advance
of the proposed entry and provided that Tenant's entry in Landlord's opinion
will not (i) delay the completion of Landlord's Work; (ii) interfere with or
cause any delay in Landlord's Work; (iii) violate any applicable laws or
regulations; or (iv) jeopardize any insurance maintained in connection with the
Premises or Project or increase the premiums with respect thereto. If Tenant
enters into the possession of and occupies all or any portion of the Premises
prior to the Commencement Date to conduct its business operations, as
contracted to and subject to entry for the limited purpose of Fixturing in
accordance with the Work Letter, such occupancy shall be deemed to be under all
the terms, covenants, conditions, provisions, and agreements of this Lease,
including without limitation Tenant's obligation to pay Rent.
Section 2.3 - Acceptance by Tenant
Neither Landlord nor Landlord's representatives have made any
representations or promises with respect to the Project, Building or the
Premises except as herein expressly set forth. Tenant acknowledges and agrees:
(a) that Tenant has been afforded ample opportunity to inspect the Premises and
the Building, and has investigated their condition to the extent Tenant desires
to do so, including their environmental condition, and (b) that Landlord has no
obligation to remodel or to make any repairs, alterations or improvements to the
Premises or the Building or remediate any condition therein, except as expressly
provided in the Lease. The taking of possession of the Premises by Tenant shall
be conclusive evidence, as against Tenant, that Tenant accepts the same in its
then existing condition and that the Premises, the Building and the Project were
in good and satisfactory condition at the time such possession was so taken
subject to: (i) completion of a written punchlist mutually agreed upon by
Landlord and Tenant, and (ii) latent defects in any portion of Landlord's Work
or the Premises reported to Landlord in writing within one hundred eighty (180)
days after the Commencement Date. As Tenant's sole right and remedy, and as
Landlord's sole obligation, with respect to such punchlist items and latent
defects, Landlord shall, with reasonable diligence, cause such items to be
completed or corrected at its own expense; Landlord shall have no
responsibility, liability, duty to indemnify, defend or hold Tenant harmless
from any damages, losses, claims, liabilities, awards or actions related,
directly or indirectly, to such items. For purposes of this Section 2.3 latent
defects shall not include any defects which were readily apparent at the time
the punchlist was delivered to Landlord. Notwithstanding the foregoing,
Landlord's obligation with respect to latent defects shall not apply to
equipment, materials or items specified by Tenant, but Landlord shall assign to
Tenant Landlord's interest in any warranty from a subcontractor regarding such
equipment or material after Tenant's written request for same. Landlord shall
cooperate with Tenant to enforce all warranties with respect to the Premises
which would reduce Tenant's maintenance obligations hereunder.
ARTICLE 3 - RENT; BASE ANNUAL RENT; TAXES, BUILDING COSTS AND PROJECT COSTS
Section 3.1 - Rent
"Rent" as used herein shall refer to the Base Annual Rent (as defined
in Section 3.2, below), and it may be adjusted as hereinafter provided in this
Lease, plus all other sums and monetary obligations of Tenant payable to
Landlord under this Lease including, but not limited to the following:
(a) Any late charges or interest due pursuant to Section 3.6.1 and
3.6.2;
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(b) Tenant's Building Share of Building Costs due pursuant to
this Article 3;
(c) Tenant's Project Share of Taxes and Project Costs due
pursuant to this Article 3:
(d) Any consideration received by Tenant which is due to
Landlord pursuant to Article 2; and
(e) Sums payable pursuant to Section 7.1.4.
Section 3.2 - Base Annual Rent
Tenant shall pay to Landlord commencing on the Commencement Date and
thereafter during the Term the Base Annual Rent set forth in the Summary of
Basic Terms, which sum shall be payable by Tenant in consecutive monthly
installments on or before the first day of each month ("monthly
installment(s)"), in advance, in the manner described more particularly in
Section 3.8.1, provided, however, that Tenant shall pay the amount of Advance
Rent set forth in Paragraph 1 of the Summary of Basic Terms concurrently with
Tenant's execution of this Lease, which shall be a credit against the first
monthly installments as they become due. If the Commencement Date should occur
on a day other than the first day of a calendar month, or the Expiration Date
should occur on a day other than the last day of a calendar month, then the
Monthly Installment for such fractional month shall be prorated on a daily
basis based upon a thirty (30) day calendar month. In addition to the Base
Annual Rent, Tenant shall pay the amount of any Rent, Rent increase or
adjustment, and additional payments when and as hereinafter provided in this
Lease.
Section 3.3 - Increases in Base Annual Rent
3.3.1 Each Monthly Installment of Base Annual Rent payable by Tenant
under Section 3.2 shall be increased by adding to the amount of each Monthly
Installment set forth in the Summary of Basic Terms additional sums determined
as set forth below:
(a) The product of Fifteen Thousandths of a Dollar ($0.015)
multiplied by the amount of the Second Level Tenant Improvement Allowance (as
defined in the Work Letter) paid by the Landlord; plus
(b) The product of Twenty Thousandths of a Dollar ($0.20)
multiplied by the amount of the Third Level Tenant Improvement Allowance (as
defined in the Work Letter) paid by Landlord; plus
(c) The product of Two Hundred and Twenty-Five Ten Thousandths
of a Dollar ($0.0225) multiplied by the amount of the Fourth Level Tenant
Improvement Allowance (as defined in the Work Letter) paid by Landlord.
3.3.2 As soon as Landlord obtains the necessary data, it shall
determine and notify Tenant in writing of the increases in Monthly
Installments. Commencing with the Monthly Installment next following at least
ten (10) days after such notice was given by Landlord, Tenant shall (i) from
that date through the end of the Term pay the Monthly Installments as so
increased, as and when due, and (ii) on that date pay retroactively the
cumulative amount of increases with respect to the Monthly Installments which
were previously paid or payable by Tenant.
Section 3.4 - Taxes, Building Costs and Project Costs
3.4.1 Definitions. The following terms shall be defined as set forth
below:
(a) "Computation Year" shall mean the calendar year, provided
that Landlord, upon notice to Tenant, may in good faith change the Computation
Year from time to time to any other twelve (12) consecutive month period and,
in the event of any such change, Tenant's Building Share of Building Costs and
Tenant's Project Share of Taxes and Project Costs shall be equitably adjusted
for the Computation Years involved in any such change.
(b) "Tenant's Building Share" shall be One Hundred percent
(100%) and has been computed by dividing the Rentable Area of the Premises by
the total Rentable Area of the Building. Rentable Area of the Premises shall be
36,348 square feet and Rentable Area of the Building shall be 36,348 square
feet.
(c) "Tenant's Project Share" shall be Eleven and Twenty-Four
hundredths percent (11.24%) and has been computed by dividing the Rentable Area
of the Premises by the total Rentable Area of the Project. Rentable Area of the
Project shall be 323,241 square feet. Tenant acknowledges that it has been
given an opportunity to verify the accuracy of the square footage figures set
forth in the foregoing Section 3.4.1(b) and this Section 3.4.1(c). Whether or
not Tenant has taken the opportunity to verify the foregoing figures, Tenant
agrees to accept such square footage figures as being accurate. Landlord
reserves the right to increase or decrease the size of the Project or the
buildings therein designed for occupancy by tenants, and to recalculate the
Rentable Area contained
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therein, and in the event of any such increase, decrease or recalculation,
Landlord shall recompute Tenant's Project Share.
(d) "Taxes" shall mean all taxes and assessments, general or special,
ordinary or extraordinary, unforeseen as well as foreseen, levied upon or with
respect to all or any portion of the Project and the areas used in connection
with the operation of the Project, the Rent, and the personal property
contained in the Project and used in connection with the management and
maintenance of the Project imposed by federal, state or local governments or
governmental assessment districts. Taxes shall not include Landlord's income,
franchise, capital stock, estate or inheritance taxes. Taxes shall include,
without limitation, all general real property taxes, general and special
assessments, gross receipts taxes, annual or periodic license or use fees,
excise, transit charges, housing fund and child care assessments, charges
imposed for social services, police, fire, or environmental protection, other
business taxes and the cost of contesting by appropriate proceedings any of the
aforementioned Taxes (with respect either to validity or amount). If, because
of any change in the method of taxation of real estate, any tax or assessment
is imposed upon Landlord or upon the owner of the land and/or the Building
and/or the Project or any part thereof and/or the areas used in connection
with the operation of the Building and/or the Project or the rents or income
therefrom, in substitution for or in lieu of any tax or assessment which would
otherwise be a real estate tax or assessment, or with respect to any subject
matter which was during the fiscal year 1977-1978 the subject of real estate
tax or assessment, such other tax or assessment shall be deemed to be included
in Taxes. If any Taxes are specially assessed by reason of the occupancy or
activities of one or more tenants and not the occupancy or activities of the
tenants as a whole, such taxes shall be allocated by Landlord to the tenant or
tenants whose occupancy or activities brought about such assessment and Tenant
shall pay any such taxes so allocated to Tenant. In case there shall be a
reduction of the assessed valuation for any tax year, the Rent on account of
Tenant's Project Share of Taxes shall be recalculated and Landlord, after
receiving a refund or after the delinquency date of its next tax bill in the
event Landlord is given a credit, will credit against the Rent on account of
Tenant's Project Share of Taxes next becoming due from Tenant such sums as may
be due to Tenant by reason of the recalculation, less the expenses incurred in
effecting such reduction.
(e) "Building Costs" shall mean the aggregate amount of all Operating
Costs (defined below) to the extent the same are incurred with respect to the
Building, as distinguished from the portion of Operating Costs incurred solely
with respect to the Project Common Areas or solely with respect to the Project
generally.
(f) "Project Costs" shall mean the aggregate amount of (i) Insurance
Costs (defined below) plus (ii) Operating Costs, but for purposes of this
Section 3.4.1(f) excluding Building Costs from Operating Costs.
(g) "Insurance Costs" shall mean, with respect to all or any portion of
the Project, including, without limitation, the Building, other buildings and
improvements in the Project, Project Common Areas and the areas used in
connection with the Project, the aggregate amount of all costs, expenses and
expenditures paid or incurred by Landlord or Landlord's authorized
representatives of fire, extended coverage, all-risk, property damage, boiler,
sprinkler, rent, public liability or commercial general liability, earthquake
or other insurance and the deductible portion of any insured loss otherwise
covered by such insurance.
(h) No Double Counting. In no event shall any portion of Building
Costs, Project Costs or Insurance Costs be assessed or counted against Tenant
more than once.
(i) "Operating Costs" shall mean, with respect to the Building or to
all or any portion of the Project and the areas used in connection therewith,
as the case may be, the aggregate amount of all costs, expenses and
expenditures paid or incurred, by Landlord or Landlord's authorized
representatives of: (i) wage and labor costs and expenses applicable to
persons engaged in the management, operation, maintenance, overhaul or repair,
whether they be employed by Landlord or as independent contractors (including,
without limitation, the cost effect of any increase or decrease in the hours of
employment or the number of paid holidays or vacation days, social security
taxes, unemployment insurance taxes and the cost (if any) of providing
disability, hospitalization, medical, welfare, pension, retirement, or other
benefits applicable with respect to such employees); (ii) utilities, utilities
surcharges, water and sewer charges, fuel, building supplies and materials,
other supplies and materials, equipment, tools, service contracts, security, or
any costs levied, assessed or imposed by, or at the direction of, or resulting
from statutes or regulations or interpretations thereof, promulgated by any
federal, state, regional, municipal or local government authority in connection
with the use or occupancy of the Building or the Common Areas or the Project,
including, without limitation, the parking facilities serving the Project;
(iii) a management fee and costs incurred in or associated with the management
of the Project; (iv) the repair, replacement and maintenance of the
nonstructural portions of the Project or any portion thereof, (including,
without limitation, the plumbing, heating, ventilating, air-conditioning,
elevator, electrical, security, fire and life-safety systems installed or
furnished by Landlord and the nonstructural portions of the
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roof of the Building; (v) costs incurred in or associated with providing,
operating, maintaining, repairing and replacing the Common Areas and facilities
therein; (vi) gardening and landscaping maintenance of signs and tenant
directories, repairs, repainting, maintenance, resurfacing, painting, lighting,
cleaning, janitorial services, refuse removal and similar items; (vii)
association fees, assessments or maintenance charges if the Landlord is
obligated to pay such charges; (viii) capital expenditures together with all
costs and interest thereon at an annual rate equal to the reference rate of
interest announced publicly from time to time by Bank of America M.T. & S.A.
(or any successor bank) at its San Francisco Headquarters, or any successor
rate of interest thereto (the "Reference Rate") plus two (2) percentage points,
but in no event in excess of the maximum rate of interest permitted to be
contracted by law, all amortized over their actual useful life; (ix) rental of
personal property used in connection with any of the foregoing; (x) the costs
and expenses paid or incurred by Landlord or Landlord's authorized
representatives of legal, accounting and consulting fees and of permits,
certificates and licenses required in connection with the Project or any
portion thereof; (xi) amortized cost of personal property used exclusively for
the management or operation of the Project (or a reasonable and equitable pro
rata share of such amortization if such personal property is not so exclusively
used); and (xii) such other items as are now or hereafter customarily included
in the cost and expense of managing, operating, maintaining, overhauling and
repairing all or any portion of the Project and areas used in connection with
the operation thereof. All such costs, expenses and expenditures shall be
determined in accordance with generally accepted accounting principles which
shall be consistently applied (with accruals appropriate to Landlord's
business). Notwithstanding anything to the contrary contained herein, Landlord
agrees that in any event the replacement of the following items shall be
amortized over their actual useful life with interest thereon at an annual rate
equal to the Reference Rate plus two (2) percentage points: (1) entire or the
major portion of the roof membrane (but not the patching of lesser portions of
the roof membrane from time to time) of the Building, (ii) condenser,
compressor, cooling coils and blower which are part of the heating, ventilating
and air conditioning system of the Building, (iii) ceiling or wall mounted
space heaters of the Building, and (iv) the resurfacing (but not resealing) of
the parking area. Operating Costs shall not include "Operating Costs
Exclusions" defined below.
(j) "Operating Costs Exclusions" shall mean (i) the initial
construction cost of the Project, or the costs of Tenant Improvements to be paid
pursuant to the Work Letter, or depreciation of such costs; (ii) debt service
(including, without limitation, interest, principal and any impound payments)
required to be made on any mortgage or deed of trust recorded with respect to
all or any part of the Project other than debt service and financing charges
imposed pursuant to Section 3.4.1(i)(viii); (iii) any rent payable under any
ground lease now or hereafter affecting the Project; (iv) leasing commissions
and other costs and expenses incurred in connection with negotiations or
disputes with prospective or present tenants in the Project; (v) expenditures
relating to the repair of the structural components of each of the following:
foundations, exterior walls, roof and any interior load bearing walls of the
Building (but with respect to the roof these provisions do not exclude and
Tenant shall, subject to Section 3.4.1(i), Section 3.4.1(j)(vi) and Section 7.2,
bear all other roof costs); (vi) expenditures allocable to the first twelve (12)
months of the Term of this Lease for necessary repairs of the window glazing,
roof membrane and expenditures for repair of the heating, ventilating and air
conditioning systems of the Building which exceed the cost of the contract for
maintenance of the heating, ventilating and air conditioning system; (vii)
capital expenditures relating to repairs, alterations or improvements to the
Building or the Project required by governmental authorities to comply with
building code provisions existing as of the Lease Date or required to comply
with requirements of Landlord's Insurance or of covenants, conditions and
restrictions applicable as of the Lease Date; (viii) costs, expenses and
expenditures to the extent incurred with respect to other buildings designed for
occupancy by tenants in the Project, as distinguished from costs, expenses and
expenditures incurred solely with respect to Project Common Areas or solely with
respect to the Project generally; (ix) specific costs which, pursuant to other
provisions of this Lease, Tenant is obligated to pay in full, including without
limitation costs of Tenant's performance of obligations to be performed by
Tenant under this Lease and payments which Tenant is obligated to make directly
to any party, including, without limitation, providers of goods, services,
utilities or labor; (x) fines and penalties imposed because of willful violation
of law by Landlord or its agents, employees or contractors without a good faith
basis for contesting the law or its applicability; (xi) fines and penalties
imposed because of a violation of law by any other occupant of the Project or
its respective agents, employees or contractors; (xii) specific costs for which
Landlord is legally entitled to reimbursement from others (other than
contribution by other tenants of the Project comparable to Tenant's
contributions based upon Tenant's Project Share); and (xiii) costs to correct
any defect in Landlord's Work or the Premises pursuant to Section 2.3.
3.4.2 Tenant shall pay in advance on the first day of each month to
Landlord as additional Rent one twelfth (1/12) of each of (a) Tenant's Building
Share of Building Costs for each Computation Year and (b) Tenant's Project
Share of Taxes and Project Costs for each Computation Year, in an amount
estimated by Landlord and billed by Landlord to Tenant. Landlord shall have
the right to revise such estimate from time to time. Any assessments which
are included as Taxes shall be payable over the maximum allowable term that
the same can be paid without penalty or additional charge of any kind payable
to the taxing authority. Without limiting the generality of the foregoing, if
any general or special assessments for public improvements are levied against
the
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Premises, the Building or the Project, Landlord may elect either to pay the
assessment in full or to allow the assessment to go to bond and pay it in
installments. In either case, however, for the purposes of calculation of the
amount payable as Tenant's Project Share of Taxes for each Computation Year, a
sum equal to the installments of principal and interest which would have become
due during the Term had Landlord allowed the assessment to go to bond shall be
included in Taxes and the premium for any bond, if any, shall be included in
Taxes when such premium is paid by Landlord or over such other period as
Landlord may elect. With reasonable promptness after Landlord has received the
tax bills and support for Operating Costs for a Computation Year, but not more
than one hundred eighty (180) days after the close of such year, Landlord shall
furnish Tenant with a statement (herein called "Landlord's Statement") showing
a comparison of estimated Building Costs, Taxes and Project Costs to the actual
costs of the same for such Computation Year, and Tenant's Building Share and
Tenant's Project Share of those estimated and actual amounts. If Tenant's
Building Share of actual Building Costs and Tenant's Project Share of actual
taxes and Project Costs for such Computation Year exceeds Tenant's payments of
the estimated amounts of such categories for such Computation Year, Tenant
shall pay to Landlord the difference within thirty (30) days after Landlord's
Statement is given to Tenant, and if the total amount of Building Costs, Taxes
and Project Costs respectively paid by Tenant for any such Computation Year
shall exceed Tenant's Building Share of actual Building Costs and Tenant's
Project Share of actual Taxes and Project Costs for such Computation Year, such
excess shall be credited against the next installments of Tenant's Building
Share of Building Costs and Tenant's Project Share of Taxes and Project costs
due from Tenant to Landlord hereunder. If there is an increase in Taxes (by
reason of an increase in assessed valuation or otherwise) affecting prior
Computation Year(s) at any time after rendition of Landlord's Statement for
such year(s), Tenant shall pay to Landlord the Tenant's Project Share of such
increase in Taxes attributable to such year(s) within thirty (30) days after
Landlord's Statement is given to Tenant.
3.4.3 If the Term shall commence or the Lease shall terminate on a
date other than the first or last day of a Computation Year, Tenant's Building
Share of Building Costs and Tenant's Project Share of Taxes and Project Costs
for such partial Computation Year shall be appropriately adjusted by Landlord.
To the extent such Building Costs, Taxes and Project Costs are not affected by
Tenant's occupancy of the Premises or by this Lease, Tenant's Building Share
and Tenant's Project Share of those items shall be in the proportion that the
number of days of the Term included in such partial Computation Year bears to
365. During such partial Computation Year(s) Tenant shall pay Tenant's Building
Share of Building Costs and Tenant's Project Share of Taxes and Project Costs
in the same time and manner provided in Section 3.4.2 with the following
exceptions that (i) if the Commencement Date is not the first day of a
Computation Year, on or before the first day of the Term, or as soon thereafter
as practicable, Landlord may bill Tenant, and Tenant shall pay, an amount
payable per month for the remainder of the Computation Year which in the
aggregate shall equal Tenant's Building Share of estimated Building Costs and
Tenant's Project Share of estimated Taxes and Project Costs for the partial
Computation Year, and (ii) if the Lease terminates before the end of a
Computation Year and if Landlord's Statement shows that (a) Tenant has
overpaid, Landlord shall remit the amount of such overpayment to Tenant within
fifteen (15) days after issuance of Landlord's Statement or (b) Tenant has
underpaid, Tenant shall pay Landlord the amount of such underpayment to
Landlord within fifteen (15) days after issuance of Landlord's Statement.
3.4.4 For purposes of calculating estimated and actual Taxes, Building
Costs and Project Costs for any period during which the Building or Project is
less than one hundred percent (100%) occupied Landlord may, at its option, add
these amounts of Taxes, Building Costs and Project Costs which Landlord
determines, in good faith, it would have incurred had the Project been one
hundred percent (100%) occupied during any such period.
3.4.5 At Tenant's written request made within thirty (30) days after
Landlord's Statement is given to Tenant for the Computation Year in question,
Landlord shall within a reasonable time after each such request make available
for review by Tenant any invoices, statements and other documents evidencing
the Building Costs, Project Costs and Taxes for those categories of such costs
and taxes which are specifically identified by Tenant in such request.
Section 3.5 - Additional Taxes
In addition to the Base Annual Rent and other Rent to be paid by Tenant
hereunder, as additional Rent hereunder, Tenant shall reimburse Landlord, upon
demand, for any and all taxes payable by Landlord (other than net income
taxes) whether or not now customary or within the contemplation of the parties
hereto: (a) by reason of the manner of occupancy or activities of Tenant; or
(b) upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises,
the Building, the Project, or any portion thereof; or (c) upon the value of
Tenant's personal property located in the Premises or in any storeroom, garage
or any other place in the Premises or the Building or the Project, or the areas
used in connection with the operation of the Building or Project, it being
the intention of Landlord and Tenant that, to the extent possible, such
personal property taxes shall be billed to and paid directly by Tenant, or
(d) resulting from overstandard tenant improvements to the Premises whether
title thereto is in Landlord or Tenant; or (e) upon this transaction; or
(f) upon, allocable to, or
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measured by the Rent payable hereunder, including without limitation, any gross
receipts tax or excise tax levied by any governmental or taxing body with
respect to the receipt of such Rent. The taxes described in this Section 3.5
may be referred to as "Additional Taxes". Additional Taxes paid by Tenant
pursuant to this Section 3.5 shall not be included in any computation pursuant
to Section 3.4.
Section 3.6 - Late Payments; Charges; Interest; Default Rate
3.6.1 Tenant acknowledges that the late payment of Rent or any other
sum due from Tenant will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and impractical
to fix. Such costs include, without limitation, processing and accounting
charges, late charges that may be imposed on Landlord by the terms of any
encumbrance, or notes secured by any encumbrance, covering the Premises and the
cost of money used by Landlord in place of such Rent or other sum. Therefore,
if any installment of Rent or other sum due from Tenant is not received by
Landlord on the date the same is due, Tenant shall pay to Landlord as additional
Rent, on demand, an additional sum of five percent (5%) of said installment of
Rent or other amount as a late charge. The parties agree that this late charge
represents a fair and reasonable estimate of the costs that Landlord will incur
by reason of late payment by Tenant. Acceptance of any late charges shall not
constitute a waiver of Tenant's default with respect to the overdue amount, or
prevent Landlord from exercising any of the rights and remedies available to
Landlord under this Lease or under law or equity. Notwithstanding the
foregoing, no late payment charge shall be payable as provided in this Section
with respect to the first two occasions of delinquency during any twelve (12)
month period during the Term hereof if the Rent in question is paid within five
(5) business days after the date it is due, whether or not tenant has been given
written or oral notice of a failure to pay Rent.
3.6.2 Notwithstanding any other provisions of this Lease, any Rent or
other sums due to Landlord hereunder not paid to Landlord when due hereunder
shall bear interest from the date such payment is due until the same have been
fully paid, at a rate (the "Default Rate") that is equal to the lesser of
(i) four (4) percentage points above the Reference Rate (defined in
Section 3.4.1) adjusted monthly on the first day of each month, and (ii) the
highest rate permitted to be contracted for by law. The payment of such
interest shall not constitute a waiver by Landlord of any default by Tenant
hereunder. Notwithstanding the foregoing, no interest shall be payable as
provided in this Section with respect to the first two occasions of delinquency
during any twelve (12) month period during the Term hereof if the Rent in
question is paid within five (5) business days after the date it is due,
whether or not Tenant has been given written or oral notice of a failure to
pay Rent.
Section 3.7 - Consideration
The Base Annual Rent has been established in contemplation that
(i) Tenant will occupy the Premises for the entire Term and (ii) in the event
of any Assignment of this Lease or Sublease of substantially all of the
Premises, Landlord and Tenant have agreed that Landlord shall have the rights
provided in Section 5.4 to terminate this Lease. Tenant expressly acknowledges
and agrees that this Section 3.7 was a material inducement to Landlord in
establishing the Base Annual Rent in the amount herein provided and that
Landlord has relied on this covenant and agreement in executing this Lease.
Section 3.8 - Time and Manner of Payment in General
3.8.1 All Rent shall be payable in lawful money of the United States
of America at the address specified for Landlord in the summary of Basic Terms,
or at such other place as Landlord shall designate in writing, without any
prior demand therefor and without any abatement, deduction or cutoff whatsoever.
3.8.2 Except where a longer or shorter period is specifically
provided for in this Lease with respect to a particular expenditure, Tenant
shall pay to Landlord, within ten (10) days after notice by Landlord to Tenant
of bills or statements therefor: (a) sums equal in all reasonable expenditures
made and monetary obligations incurred by Landlord in connection with the
remedying by Landlord of Tenant's default, including, without limitation,
reasonable expenditures made and obligations incurred for reasonable legal
counsel fees, (b) sums equal to all losses, costs, liabilities, damages and
expenses referred to in Article 9, and (c) sums equal to all reasonable
expenditures made and monetary obligations incurred by Landlord in collecting
or attempting to collect the Base Annual Rent, or any other Rent or sum of
money accruing under this Lease or in enforcing or attempting to enforce any
rights of Landlord under this Lease or pursuant to law, including, without
limitation, reasonable expenditures made and obligations incurred for
reasonable legal counsel fees. Tenant's obligations under this Article 3 shall
survive the termination of this Lease.
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ARTICLE 4 USE AND OCCUPANCY
Section 4.1 - Permitted Use
Tenant shall use and occupy the Premises only for the specific purposes
set forth in Paragraph J of the Summary of Basic Terms, and for no other
purpose. The character of the occupancy of the Premises, as restricted by this
Article 4 and as further restricted by Article 5, and any of the Rules and
Regulations attached to this Lease or hereafter adopted, is an additional
consideration and inducement to Landlord for the granting of this Lease.
Section 4.2 - Compliance with Law
4.2.1 Tenant, at Tenant's expense, shall comply with all laws, rules,
orders, ordinances, directions, regulations and requirements of federal, state,
county and municipal authorities (a) pertaining to Tenant's use of the Premises
and (b) relating to Tenant's use or occupancy of the Premises, the Building and
the Project and with the recorded covenants, conditions and restrictions,
regardless of when they become effective, including, without limitation, all
applicable federal, state and local laws, regulations or ordinances pertaining
to air and water quality, Hazardous Materials (as defined below), and waste
disposal, air emissions and other environmental matters, all zoning and other
land use matters, and utility availability and with any direction of any public
officer or officers, pursuant to law, which shall impose any duty upon Landlord
or Tenant with respect to the use or occupancy of the Premises. Notwithstanding
the foregoing, Tenant shall have no obligation to make capital expenditures (or
take any other action) relating to repairs, alterations or improvements to the
Premises required by governmental authorities to comply with building code
provisions existing as of the Lease Date. Without limiting the generality of the
foregoing, Tenant shall at Tenant's sole cost and expense take all proper and
necessary action to cause the Premises to be kept, maintained, used and occupied
in compliance with the Americans With Disabilities Act of 1990, as amended from
time to time.
4.2.2 Without limiting its obligations under Section 4.2.1, Tenant
covenants and agrees to comply with all laws, rules, regulations and guidelines
now or hereafter made applicable to the Premises by government or other public
authorities respecting the disposal of waste, trash, garbage and other matter
(liquid or solid), generated by Tenant, its employees, agents, contractors
invitees, licensees, guests and visitors, the disposal of which is not
otherwise the express obligation of Landlord under this Lease, including, but
not limited to, laws, rules, regulations and guidelines respecting recycling
and other forms of reclamation (all of which are herein collectively referred
to as "Waste Management Requirements"). Tenant covenants and agrees to
comply with all rules and regulations established by Landlord to enable
Landlord from time to time to comply with Waste Management Requirements
applicable to Landlord (i) as owner of the Premises and (ii) in performing
Landlord's obligations under this Lease, if any.
Section 4.3 - Compliance with Insurance Requirements
Tenant shall not do or permit to be done any act or thing in or upon the
Premises which will invalidate or be in conflict with any insurance policy
covering the Building or Project or any of the areas used in connection with
the operation thereof or its fixtures, appurtenances or equipment or the
property located therein, and shall not do, or permit anything to be done, in
or upon the Premises, or bring or keep anything therein, which shall increase
the rates of any insurance on the Building or Project or any of the areas used
in connection with the operation thereof or its fixtures, appurtenances or
equipment or on property located therein. So long as such use is otherwise
permitted by the terms of this Lease, and provided that such use does not pose
an unreasonable risk of harm to persons or property, the fact that Tenant's use
increases Landlord's insurance rates shall not be deemed an event of default
under this Lease, so long as Tenant pays the increased cost of any applicable
insurance premium. If by reason of the failure of Tenant to comply with the
provisions of this Article 4 any insurance premium shall at any time be higher
than it otherwise would be, then, without Landlord's waiving any rights it may
have against Tenant hereunder as a result of such failure, Tenant shall
reimburse landlord for that part of all such premiums thereafter paid by
Landlord which shall have been charged because of such violations by Tenant,
and shall make such reimbursement upon the first day of the month following
such expenditure by Landlord.
Section 4.4 - Certificates of Occupancy
Tenant shall not at any time use or occupy the Premises in violation of
the certificates of occupancy issued for the Premises, Building or Project. In
the event that any department of the city or county of the state in which the
Project is located shall hereafter at any time contend or declare that the
Premises are used for a purpose which is in violation of such certificate or
certificates of occupancy, Tenant shall immediately discontinue such use of the
Premises. Failure by Tenant to discontinue such use after such notice shall be
considered a default under this Lease and Landlord shall have the right to
exercise any and all rights and privileges and remedies given to Landlord by
and pursuant to the provisions of Article 16 hereof. Any statement in this
Lease of the nature of
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the business to be conducted by Tenant in the Premises shall not be deemed or
construed to constitute a representation or guaranty by Landlord that such
business is lawful or permissible or will continue to be lawful or permissible
under any certificate of occupancy issued for the Premises, Building or Project
or otherwise permitted by law.
Section 4.5 - Life-Safety Systems
If there now is or shall be installed in the Building or Project a
sprinkler system, heat or smoke detection system or any other so-called
life-safety system and (i) any such system or any of its appliances shall be
damaged or injured or not in proper working order by reason of any act or
omission of Tenant or Tenant's agents, servants, employees, contractors,
visitors or licensees, then, subject to the provisions of Section 14.3 below,
Tenant shall forthwith restore the same to good working condition; and (ii) if
the Insurance Services Office or any similar body of any bureau, department or
official of the state, county or city government, or any governmental authority
having jurisdiction over the Premises, shall require or recommend that any
changes, modifications, alterations, or additional equipment be made or
supplied in or to any such system by reason of Tenant's specific business, or
the location of partitions, trade fixtures, or other contents of the Premises
installed by Tenant, Tenant shall, at Tenant's expense, promptly make and
supply such changes, modifications, alterations, or additional equipment.
Section 4.6 - Prohibited Uses
4.6.1 Tenant shall not occupy or permit any portion of the Premises to
be occupied for a use which would be prohibited by any other portion of this
Lease (including but not limited to any Rules and Regulations then in effect)
or in violation of law. Nothing in this Section 4.6.1 shall expand the
permitted use of the Premises as set forth in Section 4.1.
4.6.2 Tenant shall not do or permit to be done any act or thing upon
the Premises which would subject Landlord to any liability or responsibility for
injury to any person or persons or to any property by reason of any business or
operation being carried on upon the Premises or for any other reason, and
Tenant hereby indemnifies and agrees to protect, defend and hold harmless
Landlord against any such liability or responsibility. Business machines and
mechanical equipment shall be placed and maintained by Tenant at Tenant's
expense in settings sufficient to absorb and prevent vibration. Tenant shall
not install any machine or equipment which may adversely affect the structure
of the Building without obtaining Landlord's prior written consent, which
consent may be conditioned on such terms as Landlord may require. Tenant shall
not place a load upon any floor of the Premises exceeding the floor load per
square foot area which such floor was designed to carry and which is allowed by
law.
Section 4.7 - Definition of Hazardous Material
As used herein, the terms "Hazardous Material" or "Hazardous Materials"
shall mean any hazardous or toxic substance, material or waste which is or
becomes regulated by any local governmental authority, the State of California
or the United States Government and include, without limitation, any material or
substance which is (i) defined as "extremely hazardous waste" under Section
25115, "hazardous waste" under Section 25117, "restricted hazardous waste" under
Section 25122.7, or listed pursuant to Section 25140, of the California Health
and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii)
defined as a "hazardous substance" under Section 25316 of the California Health
and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous
Substance Account Act), (iii) defined as a "hazardous material", "hazardous
substance", or "hazardous waste" under Section 25501 of the California Health
and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response
Plans and Inventory), (iv) defined as a "hazardous substance" under Section
25281 of the California Health and Safety Code, Division 20, Chapter 6.7
(Underground Storage of Hazardous Substances), (v) petroleum, natural gas,
synthetic gas or any form or combination of any of the foregoing, (vi) asbestos,
(vii) listed under Article 9 or defined as hazardous or extremely hazardous
pursuant to Article 11 of Title 22 of the California Administrative Code,
Division 4, Chapter 20, (viii) designated as a "hazardous substance" pursuant to
Section 1317 of the Federal Water Pollution Control Act (33 U.S.C. Section 1251
et. seq.), (ix) defined as "hazardous waste" pursuant to Section 6903 of the
Federal Resource Conservation and Recovery Act, (42 U.S.C. Section 6901 et
seq.), (x) defined as "hazardous substances" pursuant to Section 9601 of the
Comprehensive Environmental Response, Compensation and Liability Act, (42 U.S.C.
Section 9601 et. seq.) or (xi) identified in Sections 66680 through 66685 of
Title 22 of the California Administrative Code, Division 4, Chapter 30, as all
of the foregoing may be amended from time to time.
Section 4.8 - Tenant's Obligations
4.8.1 Tenant shall not use, generate, handle, manufacture, produce,
store, release, discharge or dispose of, on, under, in or about the Project or
Premises, or transport to or from the Project or Premises, any Hazardous
Material or allow its employees, agents, contractors, invitees or any other
person or entity to do so, except to the extent of the types and quantities of
Hazardous Materials
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expressly identified on Exhibit G to this Lease. Without in any way limiting,
affecting or derogating from the foregoing prohibition, Tenant shall be bound
by, observe and perform the conditions, covenants and provisions set forth in
this Article 4 with respect to Hazardous Materials. The foregoing prohibition
of Hazardous Materials shall not apply to any ordinary use and incidental
storage of small and insignificant amounts of substances in the regular and
ordinary use of common office business machines provided the same do not
constitute, give rise to, or create any substantial risk of any occurrence,
condition, or event as a consequence of which pursuant to any Environmental
Law: (i) Tenant, Landlord, or any owner, occupant, or person having any
interest in the Premises shall be liable, or (ii) the Premises shall be
subject to any legal restriction on use, ownership or transferability, or
(iii) any Remedial Work (defined below) shall be required.
4.8.2 Tenant, at its sole cost, shall comply with all Environmental
Laws (defined below) relating to Hazardous Materials on, under or about the
Project, Premises or Building, including the responsibility to obtain and
maintain current all permits required for its operations in connection with
Hazardous Materials. Any and all federal, state or local laws, ordinances,
rules or regulations pertaining to Hazardous Materials or to health, industrial
hygiene or environmental conditions on, under or about the Project, Premises or
Building including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et.
seq. ("CERCLA"), the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901 et. seq. ("RCRA"), the Clean Air Act, 42 U.S.C. Section 7401 et.
seq., the Porter Cologne Water Quality Control Act, California Water Code
Section 13000 et. seq., California Hazardous Waste Control Act, Health and
Safety Code Section 25100 et. seq., Carpenter-Presley-Tanner Hazardous
Substance Account Act, California Health and Safety Code Section 25300 et.
seq., those laws described in Section 4.7 hereof and implementing regulations
and rules, all as amended, are herein collectively referred to as
"Environmental Laws".
4.8.3 Tenant shall be responsible for and shall protect, defend,
indemnify, and hold Landlord and its directors, officers, employees, agents,
representatives, contractors, successors and assigns, any lessor under any
ground or underlying lease and any mortgagee or beneficiary under any mortgage
or deed of trust encumbering the Project, Premises or Building (for purposes of
this Section 4.8 collectively "Landlord Indemnitees") harmless from and
against all claims, costs, damages (consequential or otherwise), fines,
judgments, penalties, losses and liabilities, (including, without limitation,
(i) diminution in value of the Premises, Building or Project, (ii) damages
for the loss or restriction on use of rentable or usable space or of any
amenity on the Premises, Building or Project, (iii) loss of rental income,
(iv) cost of any investigation, monitoring, removal, restoration, abatement,
repair, clean-up, detoxification or other ameliorative work of any kind or
nature required by any governmental agency having jurisdiction thereof, or
by Landlord indemnitees in the exercise of their good faith business judgment,
or by any third party having reasonable grounds to request such work
(collectively "Remedial Work"), (v) damages arising from any adverse impact on
marketing of space in the Building or Project, (vi) costs of the preparation
and implementation or any closure, remedial or other required plans, (vii)
damage to natural resources or to property other than the Premises, Building or
Project or harm to any person or animal, and (viii) sums paid in settlement of
claims, attorneys' fees, consultant fees and expert fees, to the extent the
foregoing claims, fees or expenses arise (directly or indirectly) out of or
attributable to Tenant's or its employees', agents', representatives',
contractors', successors', assigns', sublessees', Transferees' (as defined
hereinbelow) and invitees' (collectively herein "Agents") use, generation,
handling, manufacture, production, storage, release, threatened release,
discharge, disposal or transportation of Hazardous Materials on, under, in or
about the Project Premises or Building (collectively a "Release" or "Released").
4.8.4 In the event of the occurrence of a Release, Tenant shall, at
its sole expense and within thirty (30) days after demand by Landlord (or such
shorter period of time as may be required under applicable laws or by any
governmental entity having jurisdiction thereof) commence to perform
(commencing to perform shall include, without limitation, retention of any
necessary third party consultants or contractors) and thereafter diligently
prosecute to completion such remedial work as is necessary to restore the
Premises and the Project to the condition existing prior to such Release and to
remediate the effects of any Release. All such Remedial Work shall be performed
in conformance with the requirements of Landlord, in the exercise of its good
faith business judgment, and all applicable laws including, but not limited to
all Environmental Laws and regulations relating to Hazardous Materials. All
Remedial Work shall be performed in accordance with the terms and conditions of
this Lease and by one or more contractors, approved in advance in writing by
Landlord, and under the supervision of a consulting engineer approved in
advance in writing by Landlord, in the exercise of its good faith business
judgment. Such approvals shall not be unreasonably delayed. All costs and
expenses of such Remedial Work shall be paid by Tenant including, without
limitation, the charges of such contractor(s) and/or the consulting engineer,
and Landlord's reasonable attorneys' fees and costs incurred in connection with
monitoring or review of such Remedial Work. In the event Tenant shall fail to
timely commence, or cause to be commenced, or fail to diligently prosecute to
completion such Remedial Work, Landlord may, but shall not be required to,
cause such Remedial Work to be performed and all costs and expenses thereof, or
incurred in connection therewith, shall become immediately due and payable.
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4.8.5 In the event there is a release, discharge or disposal of or
contamination by a Hazardous Material which is of the type that has been
stored, handled, transported or otherwise used by Tenant or its Agents on,
under, in or about the Premises or Project and such Hazardous Material is of
the type not known to exist prior to the Commencement Date on or about the
Premises, Building or Project, Tenant shall have the burden of proving that
such release, discharge, disposal or contamination is not a Release then such
release, discharge, disposal or contamination shall be deemed a Release
and the provisions of this Section 4.8 would be applicable thereto.
4.8.6 Upon the expiration or earlier termination of this Lease, Tenant
shall remove from the Premises, Building and Project all Hazardous placed or
Released on, under or in the Premises, Building and Project by Tenant or its
Agents, and all trade fixtures, furnishings and/or equipment associated with
the use, storage or disposal of Hazardous Materials placed on, under or in the
Premises, Building or Project by Tenant or its Agents, and perform any closure
work, investigation and environmental remedial work required by applicable
Environmental Laws or by any governmental authority having jurisdiction with
respect to the Premises or Tenant's activities thereon. Removal and disposal of
any and all such Hazardous Materials, equipment or fixtures shall be performed
in strict accordance with all applicable Environmental Laws.
4.8.7 In any matter covered by this Section 4.8 the Landlord
Indemnitees shall have the right to employ its or their own counsel at the
expense of Tenant. The Landlord Indemnitees shall have the right, but not the
obligation, at the expense of Tenant, to settle, adjust or compromise any
claim, suit or judgment against the Landlord Indemnitees arising out of the
matters covered herein.
4.8.8 Tenant shall give immediate written notice to Landlord of:
(a) Any action, proceeding or inquiry by any governmental
authority (including, without limitation, the California State Department of
Health Services, the State or any Regional Water Quality Control Board, the Bay
Area Air Quality Management District or any local governmental entity) with
respect to the presence of any Hazardous Material on the Project, Premises or
Building or the migration thereof from or to other property;
(b) All demands or claims made or threatened by any third party
against Tenant or the Project, Premises or Building relating to any loss or
injury resulting from any Hazardous Materials; and
(c) Any spill, release, discharge or nonroutine disposal of
Hazardous Materials that occurs with respect to the Project, Premises or
Building or Tenant's operations, including, without limitation, those that would
constitute a violation of Health and Safety Code Section 25249.5 or any other
Environmental Law;
(d) All matters of which Tenant is required to give notice
pursuant to Section 25359.7 of the California Health and Safety Code; and
(e) Tenant's discovery of any occurrence or condition on, under,
in or about the Project, Premises or Building or any real property adjoining or
in the vicinity of the Project, Premises or Building which may cause the
Premises, Building or Project or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use under any
Environmental Law including without limitation, Tenant's discovery of any
occurrence or conditions on, under or in any real property adjoining or in the
vicinity of the Project, Premises or Building that could cause the Project,
Premises or Building or any part thereof to be classified as "border-zone
property" under the provisions of California Health and Safety Code Sections
25220 et. seq. or any regulation adopted in accordance therewith, or to be
otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Project, Premises or Building under any
Environmental Law.
4.8.9 Tenant's obligations under this Article 4 shall survive the
termination of this Lease.
Section 4.9 - Landlord's Exculpation
4.9.1 Landlord and Tenant acknowledge that Landlord may become legally
liable for the costs of complying with Environmental Laws relating to Hazardous
Materials which are not the responsibility of Landlord or Tenant, including the
following: (i) Hazardous Materials present in the soil or ground water on,
under or in the Premises, Building or Project of which Landlord has no actual
knowledge as of the Commencement Date; (ii) a change in Environmental Laws
which make Hazardous Materials which are present on, under or in the Premises,
Building or Project as of the Commencement Date, whether known or unknown to
Landlord, a violation of such new Environmental Laws; (iii) Hazardous Materials
that migrate, flow, percolate, diffuse or in any way move to or under the
Premises, Building or Project; or (iv) Hazardous Materials present on, under,
or in the Premises, Building or Project as a result of any discharge, dumping
or spilling (whether accidental or
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otherwise) by prior or other occupants or lessees of the Premises, Building or
Project or their agents, employees, contractors or invitees, or by others.
4.9.2 In the event any of the circumstances described in Section 4.9.1
materialize, Landlord and Tenant agree that under such circumstances (i)
Landlord shall have no liability to Tenant for and no obligation to indemnify,
defend, protect and hold Tenant harmless from any damages, claims, penalties,
judgments, fines, costs, liabilities or losses (including, without limitation,
diminution in value of the Premises, Building or Project, damages for the loss
or restriction on use of rentable or usable space or of any amenity on or in
the Premises, Building or Project, loss of business, damages for harm to
natural resources or to property other than the Premises, Building or Project
or injury to persons or animals, and sums paid in settlement of claims,
attorneys' fees, consultant and expert fees) which Tenant may incur during or
after the Term as a result of such contamination, (ii) the provisions of
Article 10 shall apply in the event there is any restriction on Tenant's use
of the Premises, and (iii) the cost of complying with the Environmental Laws
relating to Hazardous Materials affecting the Premises, Building or Project for
which Landlord is legally liable and which are paid or incurred by Landlord
shall be Project Operating Costs unless the cost of such compliance, as between
Landlord and Tenant, is made the responsibility of Tenant pursuant to Section
4.3. To the extent any such Project Operating Costs relating to Hazardous
Materials are subsequently recovered or reimbursed through insurance, or
recovery from responsible third parties, or other action, Tenant shall be
entitled to a proportionate reimbursement to the extent it has paid its share
of such Project Operating Costs to which such recovery or reimbursement
relates.
Section 4.10 - Right of Contribution
Except as expressly provided in this Article 4 to the contrary, neither
Landlord nor Tenant shall be deemed to have waived any rights of contribution
which either party may have against the other party at law in connection with
costs, claims, damages or liabilities arising out of or resulting from the use,
presence, disposal or clean-ups of Hazardous Materials in the Premises,
Building or Project.
Section 4.11 - Monitoring
4.11.1 Entry for Inspection and Testing. Tenant expressly agrees that
Landlord shall have the right to enter the Premises to inspect the Premises
and/or to perform an environmental investigation and assessment of the Premises
(an "Environmental Assessment") upon reasonable notice to Tenant, and that this
right to perform an investigation and assessment shall include, without
limitation, the right to test for any release, threatened release, discharge or
disposal or any Hazardous Material. Landlord's entry shall be carried out in a
manner so as not unreasonably to interrupt or interfere with Tenant's business
operations. An Environmental Assessment may include, without limitation, the
review of any documents, materials, inventory, financial data or notices or
correspondence to or from private parties or governmental authorities relating
to Hazardous Materials, the review of any storage, use and disposal facilities
and procedures associated with the storage, use and disposal of Hazardous
Materials, and the testing of the soils and groundwater at or under the
Premises. Tenant shall pay for the cost of such Environmental Assessments if
in the reasonable judgment of Landlord or its environmental consultant, a
release, threatened release, discharge or disposal of any Hazardous Material
caused by Tenant has occurred or in the event of a default by Tenant in any of
its obligations under Section 4.7 through Section 4.13. In all other cases, the
cost of such Environmental Assessments shall be Project Operating Costs. If
Landlord, in the exercise of its good faith business judgment, so required,
Tenant shall comply, at its sole cost and expense, with all recommendations
contained in any Environmental Assessment, including any recommendation with
respect to the precautions which should be taken with respect to activities of
Tenant or its Agents on, under or in the Premises or any recommendations for
additional testing and studies to detect the presence of Hazardous Materials
Released or placed on, under or in the Premises, Building or Project by Tenant
or its Agents.
4.11.2 Monitoring Wells Generally. Landlord and Tenant acknowledge
and agree that Landlord has previously installed on the Project a number of
permanent monitoring wells for the purpose of enabling Landlord to have tests
performed to detect the presence of Hazardous Materials and that Landlord may,
if it deems necessary, cause additional permanent monitoring wells to be
installed on the Project in locations reasonably approved by Tenant and that
Landlord may, if it deems necessary, cause the ground water to be tested to
detect the presence of Hazardous Material at least once every twelve (12)
months during the Term by the use of such additional wells as are then
customarily used for such purposes. One half of the cost of installing and
constructing such wells shall be Operating Costs; the other half of such costs
shall be borne by Landlord, unless such tests reveal a release, discharge or
disposal of Hazardous Materials attributable to use, generation, handling,
manufacture, production, storage or transportation of Hazardous Materials by
Tenant or its Agents on or about the Premises, Building or Project, in which
event such costs shall be borne entirely by Tenant and shall be excluded from
Operating Costs. Landlord shall, at Tenant's written request, provide to
Tenant any reports received by Landlord of the results of testing performed
in the Premises by Landlord pursuant to Section 4.11.2. The cost of such tests
and of the maintenance and repair of such wells and any
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additional wells installed during the term of this lease shall be Operating
Costs, unless such tests reveal Hazardous Materials contamination attributable
to use, generation, handling, manufacture, production, storage or transportation
of Hazardous Materials by Tenant or its Agents on, under, in or about the
Premises, Building or Project, in which event such costs shall be borne entirely
by Tenant and shall be excluded from Operating Costs. Unless required by a
governmental agency, Tenant shall have no right to install wells or perform any
other tests relating to the presence of Hazardous Materials in the Project and
any such required installation or testing shall be further subject to the
requirements regarding Remedial Work set forth in Section 4.8.4.
Section 4.12 - Abatement Activities
To the extent that any testing or monitoring demonstrates that
significant levels of contamination by Hazardous Materials at the Project exist
or are increasing, Landlord shall have the right but not the obligation to
identify the source of the contamination and seek to have it abated by the
responsible parties. Landlord may undertake, or cause to be undertaken,
voluntary clean-up activities to ameliorate or stabilize any Hazardous
Materials in the Project. The determination whether to undertake any clean-up
activities shall be made by Landlord in its sole and absolute discretion based
upon its consultant's or expert's recommendations and Landlord's determination
of the feasibility of the proposed activities, their cost, their projected
efficiency, and the levels of contamination of the Hazardous Materials in the
Project in comparison with the levels of contamination in other properties in
the vicinity of the Project. Tenant agrees to cooperate fully with Landlord and
with any parties designated by Landlord to perform testing, monitoring or
clean-up activities in the Project so long as such activities do not
unreasonably interfere with Tenant's use or occupancy of the Premises.
Section 4.13 - Effect on Proposed Assignments and Sublets
Without in any way limiting or affecting Landlord's right to withhold
its consent for other reasons, it shall not be unreasonable for Landlord to
withhold its consent to any proposed transfer, assignment or sublease if (i)
the proposed transferee's anticipated use of the Premises or Project involves
the use, generation, handling, manufacture, production, storage, testing,
treatment, discharge or disposal of Hazardous Materials other than those
expressly permitted pursuant to this Lease; (ii) the proposed transferee has
been required by any prior landlord, lender or governmental authority to take
remedial action in connection with Hazardous Material contaminating a property
if the contamination resulted from such transferee's actions or use of the
property in question; or (iii) the proposed transferee is subject to an
enforcement order issued by any governmental authority in connection with the
use, disposal or storage of Hazardous Materials.
Section 4.14 - Hazardous Materials Management Plan
(a) Prior to Tenant transporting onto the Premises, Building or
Project, or using, handling or storing any materials shown on Exhibit C, and
without limiting the generality of Tenant's other obligations under this
Article 4, Tenant shall: (i) submit to Landlord a Hazardous Materials
Management Plan ("HMMP") for Landlord's review and approval (which approval
shall not be unreasonably withheld or delayed), (ii) submit the HMMP to all
governmental agencies having jurisdiction, including, without limitation, the
City of Fremont, and Tenant agrees to diligently pursue approval of the HMMP,
and (iii) the HMMP shall have been approved by all governmental agencies having
jurisdiction, or Tenant shall have satisfied Landlord, in its good faith
discretion, that introduction of such Hazardous Materials prior to obtaining
approval from all governmental agencies having jurisdiction complies
with Environmental Laws or that approval of an HMMP is not required by any
governmental agency or Environmental Law. The HMMP shall describe: (a) the
quantities of each material to be used, (b) the purpose for which each material
is to be used, (c) the method of storage of each material, (d) the method of
transporting each material to and from the Premises and within the Premises,
(e) the methods Tenant will employ to monitor the use of the material and to
detect and to respond to any leak, releases, threatened releases or potential
hazards, and (f) any other information which any department of any governmental
agency (federal, state or city) requires prior to the issuance of any required
permit for the material or for the Premises or during Tenant's occupancy of the
Premises. Landlord shall have the right, but shall have no obligation to review
the foregoing information and HMMP, and such review and approval or failure to
review and approve shall not act as an estoppel or otherwise waive Landlord's
rights under this Lease or relieve Tenant of its obligations under this Lease.
If Landlord determines in its good faith judgment by inspection of the Premises
or review of the HMMP that the methods in use or described by Tenant are not
adequate to prevent or eliminate the existence of environmental hazards, then
Tenant shall not transport, use, handle, or store such Hazardous Material at or
about the Premises, Building or Project unless and until such methods are
approved by Landlord in good faith and added to an approved HMMP. Once approved
by Landlord, Tenant shall strictly comply with the HMMP and shall not change
its use, operations or procedures with respect to Hazardous Substances without
submitting an amended HMMP for Landlord's review and approval as provided
above.
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(b) If at any time after Landlord's approval of the original HMMP, the
City of Fremont or any other governmental authority requires Tenant to modify
the HMMP ("City Required Change"), Landlord shall have the right, but not the
obligation, to review and approve such modification at Landlord's own expense.
If at any time after Landlord's approval of the original HMMP, Tenant proposes
to modify the HMMP due to a change in Tenant's process or business operations
or any other reason other than a City Required Change, Tenant shall pay to
Landlord when Tenant submits the proposed modification the amount reasonably
determined by Landlord to cover all Landlord's costs and expenses reasonably
incurred in connection with Landlord's review of the HMMP, which costs and
expenses shall include, among other things, Landlord's then applicable
processing fee (currently $500) and all reasonable out-of-pocket fees of
attorneys, architects, or other consultants incurred by Landlord in connection
with Landlord's review of the modification. Landlord shall have no obligation
to consider a request for consent to a proposed modification unless and until
Tenant has paid all such costs and expenses to Landlord, and Tenant shall pay
all such costs and expenses to Landlord irrespective of whether Landlord
consents to such proposed modification. Tenant shall pay to Landlord on demand
the excess, if any, of such costs and expenses actually incurred by Landlord
over the amount of such costs and expenses actually paid by Tenant, and
Landlord shall promptly refund to Tenant the excess, if any, of such costs and
expenses actually paid by Tenant over the amount of such costs and expenses
actually incurred by Landlord. Tenant shall also comply at its expense with any
recommendations of Landlord or Landlord's consultant with respect to the
modified HMMP. Tenant shall not be required to stop its operations involving
Hazardous Substances during the period of implementation of such
recommendations, unless, in its good faith business judgment, Landlord
determines that it is prudent for Tenant to stop such operations during the
implementation period.
Section 4.15 - Limitation of Tenant's Responsibility
4.15.1 For purposes of this Lease, "Existing Levels" shall mean the
levels of Hazardous Materials, if any, existing immediately before the
Commencement Date on, under, in or about the Premises, Building or Project,
provided, however, that Existing Levels shall not mean or include such amount
or level of Hazardous Materials attributable to any Release by Tenant or its
Agents on or under the Premises, Building or Project in connection with entry,
if any, by Tenant or its Agents prior to the Commencement Date onto the
Premises, Building or Project.
4.15.2 Notwithstanding anything to the contrary in this Lease, Tenant
shall have no obligation to perform Remedial Work applicable to and to the
extent of the Existing Levels or to protect, defend, indemnify or save harmless
Landlord or the Landlord Indemnitees with respect to and to the extent of the
Existing Levels, and Tenant shall have no obligation to pay or reimburse
Landlord for any cost or expense, including, without limitation, fees of
consultants and attorneys, of Remedial Work applicable to and to the extent of
the Existing Levels (and Landlord waives any right of contribution against
Tenant for Remedial Work applicable to and to the extent of the Existing Levels)
or such indemnity obligations with respect to and to the extent of the Existing
Levels, provided, however, Landlord may include all such costs as Project
Operating Costs, subject to the limitation set forth in Section 4.15.3.
4.15.3 In no event shall Tenant contribute more than Fifteen Thousand
Dollars ($15,000) per Computation Year on a non-cumulative basis for Tenant's
Project Share of (a) the costs described in Section 4.9 and Section 4.15.2 and
the costs of any Remedial Work with respect to the presence or possible presence
of Hazardous Materials above or beyond the Existing Levels on, under, in or
about the Premises, Building or Project, whether or not such Remedial Work is
required by any Environmental Law or governmental agency having jurisdiction,
plus (b) any taxes, general and special assessments or charges imposed for
environmental protection or imposed pursuant to any environmental law which have
been included as taxes.
ARTICLE 5 - ASSIGNMENT/SUBLETTING/MORTGAGE
Section 5.1 - Prohibition: Definitions
5.1.1 Subject only to the exceptions provided in Section 5.2 below,
neither Tenant nor Tenant's legal representatives, successors or assigns shall
assign this Lease ("Assign" or "Assignment"), or transfer, sublet, license or
permit the Premises or any part thereof to be used or occupied by others
(collectively, "Sublet" or "Sublease"); furthermore, in no event shall Tenant or
Tenant's legal representatives or assigns pledge, hypothecate, mortgage or
otherwise encumber this lease (collectively, "Mortgage"). Any such Assignment,
Sublease or Mortgage (whether voluntary or by operation of law) shall be
voidable at the option of Landlord, and shall constitute a material breach of
this Lease. No interest of Tenant in this Lease or the Premises shall be
assignable or assigned by operation of law and Tenant shall not suffer or permit
either such an assignment or any involuntary assignment of any nature
whatsoever. By way of example and not limitation it shall be deemed an
Assignment under this Lease and shall be subject to all the provisions of this
Article 5, if either (a) Tenant consists of more than one party and there is a
purported assignment from one such party to any other or others of such parties
constituting Tenant, or (b) there is any transfer of control of Tenant, whether
by transfer of shares of stock, partnership interests or otherwise or
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(c) there is a transfer of a major portion of Tenant's assets but not an
assignment and assumption of this Lease in accordance with Section 5.2. As used
in the immediately preceding sentence, the term "Tenant" shall also mean any
entity that has guaranteed Tenant's obligations under this Lease. As used in
this Article, the term "control" or "controls" or "controlled" shall mean
either the possession, directly or indirectly, through one or more
intermediaries, of the power to direct or cause the direction of the
management and policies of the controlled Person (as defined below) or the
ownership, directly or indirectly, of fifty percent (50%) of the voting power
of, or the equity interests in the controlled Person (as defined below). The
term Person shall mean individuals, groups, partnerships, firms, associations,
corporations, trusts or any other form of business or legal entity. The Person
who is the actual assignee, sublessee, licensee, occupant, transferee or any
other recipient of an Assignment or Sublease is herein referred to as
"Transferee". Notwithstanding anything to the contrary contained
herein, if Tenant is a corporation, any public offering of stock by Tenant
shall not be considered an "Assignment" for the purposes of this Article 5.
5.1.2 If there is an Assignment or Sublet, whether in violation of or in
compliance with this Article, then: (a) Landlord may collect rent from the
Transferee and apply the net amount collected to the rent herein reserved, but
no such collection shall be deemed either a waiver of the covenants and
conditions of this Article 5, or the acceptance of the Transferee as Tenant, or
a release of Tenant from the further performance by Tenant of the obligations on
the part of Tenant herein contained or an alteration of Tenant's primary
liability for such obligations; or (b) in the event of default by any
Transferee, or any other successor of Tenant, in the performance or observance
of any of the terms of this Lease or any Sublease or Assignment agreement,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against such Transferee or successor.
Section 5.2 - Assignments or Subleases Subject to Landlord's Prior Written
Consent
Notwithstanding any contrary provision of Article 5.1.1. Tenant may
Assign or Sublet only upon the following express conditions which are agreed
to be reasonable:
5.2.1 The proposed Assignment or Sublease shall be subject to and
conditioned on the prior written consent of Landlord, which consent will not be
unreasonably withheld or conditioned or delayed and, without limiting the
generality of the foregoing, it shall be deemed reasonable for Landlord to
withhold, condition, revoke or delay such consent if among other things the
following conditions are not satisfied:
5.2.1.1 the use to be made of the Premises by the proposed
Transferee is the expressly permitted use under Section 4.1 and would not be
prohibited by any other portion of this Lease (including but not limited to
any Rules and Regulations then in effect) and would not create greater
demands upon the facilities, systems or services of the Premises, the Building
or Project or any part thereof than the demands created by Tenant;
5.2.1.2 the character, business stability, reputation, history of
timely lease performance and financial responsibility of the proposed
Transferee are both (a) of high quality and (b) satisfactory to Landlord in the
good faith exercise of its business judgment, and in any event the proposed
Transferee demonstrates, by virtue or its net worth, ratio of assets to
liabilities, net income and cash flow, among other things, the ability to
perform (i) all obligations of Tenant in the case of an Assignment and (ii)
the obligations of Tenant allocable to the Sublease space in the case of a
Sublease;
5.2.1.3 the proposed Transferee is then neither a prospective
tenant of the Project with whom Landlord is in negotiation for rental of space
in the Project nor a Tenant of the Project;
5.2.1.4 the rent and other amounts payable with respect to the
proposed Assignment or with respect to a proposed Sublease of more than 10,000
square feet of rentable area shall be no less than would be payable at
Landlord's then current rate for similar space in the Project;
5.2.1.5 any proposal for alterations to the Premises requested
by the proposed Transferee satisfies the covenants and conditions of Article 6;
and
5.2.1.6 all of the conditions set forth below are satisfied.
5.2.2 Tenant shall pay to Landlord Landlord's then standard processing
fee (currently Five Hundred Dollars ($500)) and any taxes and other charges
imposed upon Landlord or the Project as a result of such Assignment or
Sublease, and shall reimburse Landlord for all costs, including the reasonable
fees of attorneys, architects, engineers or other consultants incurred by
Landlord in connection with such Assignment or Sublease, whether or not such
proposed Assignment or Sublease is consented to by Landlord.
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5.2.3 Tenant shall deliver to Landlord with its request for Landlord's
consent the proposed Assignment or Sublease and current financial statements of
the proposed Transferee, prepared by an independent certified public
accountant, and promptly upon Landlord's request for same, any additional
documents or information reasonably related to the proposed transaction or
Transferee.
5.2.4 Tenant shall deliver to Landlord an executed original
counterpart of the Assignment or Sublease, which by its terms shall be binding
on Tenant and the Transferee subject only to Landlord's consent being obtained
and the execution by Tenant, the proposed Transferee and Landlord of Landlord's
consent. Every Assignment or Sublease shall provide, among other things, that:
(a) it is and shall be subject and subordinate to the provisions of this Lease,
(b) the termination of this Lease shall, at Landlord's sole election,
constitute a termination of every such Assignment or Sublease and (c) the
covenants and conditions of this Lease shall be covenants and conditions of the
Assignment or Sublease, and the proposed Transferee shall assume for the
benefit of Landlord, and shall perform faithfully and shall be bound by, all of
the covenants and conditions of this Lease from and after the effective date of
the Assignment or Sublease, limited, in the case of a Sublease, to the extent
they apply to the space in question.
5.2.5 The consent by Landlord to an Assignment or Sublease shall not
in any way be construed to relieve Tenant or the assignee or sublessee from
obtaining the express consent in writing of Landlord with respect to any
subsequent Assignment or Sublease. Landlord may, but shall not be obligated to,
consent to subsequent Assignments or Subletting or this Lease or amendments or
modifications of this Lease with Transferees or other successors of Tenant,
without notifying Tenant, and without obtaining its consent thereto and such
action shall not relieve Tenant or liability under this Lease.
5.2.6 Tenant shall not be released from Tenant's obligations under
this Lease nor shall Tenant's primary liability to pay Rent and to perform all
other obligations to be performed by Tenant under this Lease be altered by (a)
any Assignment or Sublease, regardless of Landlord's consent, or (b) any
failure by Landlord after any Assignment or Sublease, regardless of Landlord's
consent, to give Tenant notice of default under or in respect of any of the
terms, covenants, conditions, provisions of this Lease.
Section 5.3 - Share of Proceeds of Assignment or Sublease
Fifty percent (50%) of that portion of rent and all other consideration
payable to or for the benefit of Tenant in connection with any Assignment or
Sublease which is in excess of the sum of (i) the Rent (which for purposes of
this Section 5.3 shall mean the Base Annual Rent plus those Building Costs,
Project Costs, Taxes and Additional Taxes payable by Tenant pursuant to
Sections 3.4 and 3.5, respectively) which Tenant is obligated to pay Landlord
under this Lease (in the event of a Sublease or Assignment of less than the
entire Premises, prorated to reflect obligations allocable to that portion of
the Premises that is the subject of the Sublease or Assignment and (ii) the
"Transaction Expenses" (as defined below) shall be payable to Landlord as
additional Rent under this Lease without affecting or reducing any other
obligation of Tenant under this Lease. For purposes of this Section 5.3,
Transaction Expenses shall mean (i) any commercially reasonable brokerage
commission actually incurred by Tenant arising out of the consummation of such
Assignment or Sublease, (ii) the reasonable attorneys' fees actually incurred
by Tenant in the consummation of such Assignment or Sublease, and (iii) the
reasonable costs of any tenant improvements made by TeleSciences, Inc. to the
Premises (or, in the case of an Assignment or Sublease of less than all of the
Premises, to the portion of the Premises that is the subject of such sublease)
solely as an inducement to the Transferee to enter into such Assignment or
Sublease. Such excess shall be payable to Landlord at the same time as such
rent or other consideration is payable to Tenant, provided, however, that
fifty percent (50%) of the cash equivalent of any non-cash consideration
payable to or for the benefit of Tenant at any time in connection with an
Assignment or Sublease shall be paid by Tenant to Landlord at the time
Landlord gives its consent.
Section 5.4 - Landlord Options to Terminate Lease
With respect to any Assignment or Sublet except any made in
accordance with Landlord's prior written consent, it is expressly agreed and
understood that in addition to Landlord's other rights set forth in this
Article 5, Landlord shall have the option, exercisable in Landlord's sole
discretion, in the event of a Sublease or Assignment of substantially all the
Premises, to terminate this Lease as of the date proposed by Tenant for the
commencement of the term of the proposed Sublease or Assignment. If Landlord
exercises this option to terminate under this Section 5.4, the provisions of
this Lease applicable to Tenant's obligations on expiration or termination
shall apply.
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ARTICLE 6 - ALTERATIONS
Section 6.1 - Alterations
Tenant shall not make any alterations, additions or improvements,
except any provided under the work letter with respect to initial construction
of the Tenant Improvements, in or to the Premises or parking space configuration
in the Project Common Areas (collectively, "Alterations") without first meeting
the following requirements:
(a) Prior to the commencement of any Alterations, Tenant shall
submit plans and specifications prepared by an architect and/or structural
engineer licensed by the state where Project is located for Landlord's approval,
which approval shall not be unreasonably withheld or delayed, and obtain any
necessary governmental permits and deliver a copy thereof to Landlord;
(b) The Alterations shall be made a Tenant's sole cost and
expense and by a contractor or mechanic chosen by Tenant and approved by
Landlord, which approval shall not be unreasonably withheld or delayed;
(c) Tenant shall provide satisfactory evidence of contractor's
comprehensive general liability insurance covering Landlord, builder's risk
insurance, and workmen's compensation insurance all in form and substance
satisfactory to Landlord;
(d) Tenant shall provide a performance and payment bond
satisfactory in form and substance to Landlord for all Alterations which in
Landlord's reasonable judgment will cost more than Twenty-Five Thousand Dollars
($25,000) to complete, and such other security as Landlord may reasonably
require to insure payment for the completion of all Alterations free and clear
of liens;
(e) Tenant shall give Landlord at least ten (10) business
days' notice before commencing any proposed Alterations so that Landlord can
post and record a notice of nonresponsibility and any other notice as may be
permitted by law, to protect Landlord from having its interest in Premises made
subject to a mechanic's lien;
(f) All Alterations shall be made in full compliance with all
laws, rules, orders, ordinances, directions, regulations and requirements of
all governmental agencies, offices, departments, Bureaus and boards having
jurisdiction;
(g) All of Tenant's contractors, subcontractors, employees,
servants and agents must work in harmony with and shall not interfere with any
labor employed by Landlord, or Landlord's contractors;
(h) Tenant shall be fully responsible if any shutdown of
plumbing, electrical or air conditioning equipment jeopardizes or invalidates
any warranties covering the Building, provided Landlord shall inform Tenant in
advance of such warranty limitations;
(i) Landlord expressly reserves the right to revoke its
consent upon notice to Tenant in the event of the breach of any of the terms or
conditions hereof, in which case all work on the Alterations shall immediately
cease to the extent directed by Landlord in such notice until the breach in
question is cured to Landlord's satisfaction;
(j) Tenant shall reimburse Landlord for any and all costs or
expenses reasonably incurred by Landlord in connection with the Alterations,
including without limitation architectural or engineers' fees and attorneys'
fees; and
(k) Tenant shall provide Landlord with a cost and expense
breakdown of the Alterations.
6.1.1 Notwithstanding any provision of Section 6.1(a) to the contrary,
Tenant may make Alterations in or to the Premises which cost less than
Twenty-Five Thousand Dollars ($25,000) in the aggregate per year, without
obtaining Landlord's prior written consent provided (i) such Alterations do not
adversely affect the foundations, structural components, exterior walls, roof or
roof membrane, or the heating, ventilating and air conditioning systems of the
Building, or its exterior appearance, (ii) such Alterations do not impair the
use of the Building or materially reduce the value or marketability of the
Premises and/or Building, (iii) Tenant complies with all other provisions of
Section 6.1. Tenant shall have no right to make any Alterations to the structure
of the Building or the roof under this Lease.
6.1.2 At the same time Tenant submits detailed specifications, floor
plans and necessary permits to Landlord for review for the purpose of obtaining
Landlord's consent to any proposed Alteration, Tenant may request Landlord to
indicate whether or not such proposed alteration or addition shall be removed
from the Premises upon the expiration of the Term of this Lease and whether
Tenant shall perform all restoration made necessary by the removal of any such
Alteration. In the
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event Tenant does not request Landlord to make such indication, or when Tenant
does not obtain Landlord's prior consent to any alteration or addition pursuant
to Section 6.1.1, Landlord shall have the right to require Tenant to remove any
alteration or addition upon expiration of the Term of this Lease and to perform
all restoration made necessary by such removal.
Section 6.2 - Mechanics' Liens
Any mechanics' lien filed against the Premises, Building or Project for
work done or claimed to have been done by or materials claimed to have been
furnished to Tenant or its agents shall be discharged by Tenant at its expense
within ten (10) days after Tenant's receipt of written notice from the lien
claimant or Landlord by the filing of the bond required by law, by payment, by
satisfaction or otherwise. Failure to so discharge any such Lien shall
constitute a default hereunder. If Tenant has not caused the lien to be so
released within such 10-day period, Landlord, in addition to all other remedies
provided in this Lease and by law, shall have the right, but shall not be
obligated, to cause the lien to be released by such means as Landlord deems
proper, including payment of the claim giving rise to the lien. All payments
made and expenses incurred by landlord in connection with the lien shall be
considered additional Rent pursuant to Section 3.1 above.
Section 6.3 - Alterations as Landlord's Property
All Alterations, whether made and/or paid for by Tenant or Landlord,
shall immediately become a part of the realty and shall be and remain
Landlord's property, provided, however, except as otherwise provided herein,
Tenant may remove all Alterations (but not any Tenant improvements constructed
pursuant to the Work Letter) upon the expiration of the lease term provided
that Tenant shall perform all restoration made necessary by such removal.
Notwithstanding the foregoing, all goods, effects, personal property, cubicles,
partitions, local area network cabling, detachable walls, business and trade
fixtures, machinery and equipment owned by Tenant or installed at Tenant's
expense in the Premises shall remain the personal property of Tenant and may be
removed by Tenant at any time, and from time to time, during the Term of this
Lease provided Tenant shall, in removing any such property, repair or, at
Landlord's option, shall pay to Landlord the cost of repairing all damage to
the Premises and the Building caused by such removal and to restore the
Premises to their original condition as of the Commencement Date.
Section 6.4 - Indemnification
Tenant's indemnity obligations under Article 9 of this Lease shall
include any matter arising out of or connected with (i) the making,
maintenance, repair, installation, removal or existence of any Alterations
(including, but not limited to, claims or liability for breach of warranty,
worker's compensation, personal injury or property damages) and (ii) Tenant's
performance and observance of, or failure to timely perform and observe, its
obligations under this Article 6. Notwithstanding the previous sentence,
Landlord shall have no right to settle mechanics' or materialmen's liens within
the ten (10) day period described in Section 6.2 or any liens which are bonded
over.
Section 6.5 - Survival
Tenant's obligations under this Article 6 shall survive the expiration
or earlier termination of this Lease.
ARTICLE 7 - REPAIRS
Section 7.1 - Tenant's Obligations/Procedures
7.1.1 Subject to the provisions of Section 7.1.2, Section 7.2, Article
10, Article 11 and Section 14.3, Tenant shall operate, maintain, keep clean,
provide janitorial services for, and take good care of the Premises and the
fixtures therein (including, without limitation, the floor and window
coverings), and provide for the disposal of trash, garbage, and waste arising
in connection with Tenant's use or occupancy, all at Tenant's sole cost and
expense and, further subject to the provisions of Article 6 hereof, shall make
all repairs and replacements, at its sole cost and expense as and when Landlord
deems reasonably necessary to preserve in good working order and condition the
Premises and every part thereof, including, without limitation, all plumbing,
electrical and lighting facilities and equipment, fixtures, interior walls,
interior surfaces of exterior walls, ceilings, roof, doors, windows, plate
glass, skylights, glazing for windows, plate glass and skylights and the
heating, ventilating and air conditioning systems located within the Premises
or serving the Premises and located within or on the Building, except if and to
the extent any of such Building systems are located within the premises of any
other tenant of the Building and to such extent, after reasonable written
notice to Landlord, Landlord shall cause such work to be performed at Tenant's
sole cost and expense. Tenant shall maintain, repair and operate the Premises,
the fixtures therein and such Building systems serving the Premises, in a good
condition comparable to the manner other buildings in projects similar in size,
character and location are maintained and operated by institutional owners. All
repairs and replacements shall be quality and class equal to the original work.
Upon
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the expiration or other termination of the Term of this Lease, Tenant shall
surrender the Premises to Landlord in as good order, condition and repair as
they were received by Tenant, ordinary wear excepted. All repairs and
replacements made by Tenant pursuant to this Section 7.1 shall be subject to
the conditions set forth in Article 6.
7.1.2 At Landlord's option exercisable from time to time, either
Landlord or Tenant shall procure and maintain, at Tenant's expense (payable by
Tenant directly to the provider of such service), a heating, ventilating and
air conditioning system maintenance contract to provide for inspection,
maintenance and repair of such systems. If Landlord elects to have Tenant
obtain such contract, the form and substance of the contract and the
qualifications of the service provider shall be satisfactory to Landlord.
Without limiting the generality of the foregoing, such contract shall name
Landlord as an express third party beneficiary of the contract, shall be
assignable to Landlord, shall be terminable upon thirty (30) days advance
written notice, shall provide for inspections, repairs and maintenance to be
performed at a minimum frequency of once every three (3) months, shall provide
for a written report to Landlord of each such occasion of inspection,
maintenance or repair, and an original of such contract shall be delivered to
Landlord. If Landlord elects to procure and maintain such maintenance contract,
Tenant shall pay to Landlord from time to time, within ten (10) days after
delivery of a statement therefor, the cost of such contract.
7.1.3 Supplementing the provisions of Section 7.1.1 and 7.1.2 and not in
limitation or derogation thereof, Tenant shall be obligated to pay directly to
the parties entitled thereto all direct and indirect fees, costs and expenses,
in connection with performance of Tenant's obligations set forth in Sections
7.1.1 and 7.1.2, including, without limitation, the following: (i) all wage and
labor costs and expenses paid or incurred by Tenant or Tenant's authorized
representatives and applicable to the persons engaged in the operation,
maintenance, overhaul or repair of all or any portion of the Premises or
fixtures therein, whether they be employed by Tenant or as independent
contractors (including, without limitation, the cost effect of any increase or
decrease in the hours of employment or the number of paid holidays or vacation
days, social security taxes, unemployment insurance taxes and the cost (if any)
of providing disability, hospitalization, medical, welfare, pension,
retirement, or other benefits applicable with respect to such persons); (ii) the
cost and expense of utilities, utility surcharges, water and sewer charges,
fuel, building supplies and materials, services contracts, janitorial services,
or any costs levied, assessed or imposed by, or at the direction of, or
resulting from statutes or regulations or interpretations thereof, promulgated
by any federal, state, regional, municipal or local government authority in
connection with the use or occupancy of the Premises.
7.1.4 Notwithstanding any other provision of this Article 7, if Tenant's
maintenance, repair or replacement obligations under this Lease would require
Tenant to perform or pay for any item which would be properly capitalized under
generally accepted accounting principles consistently applied, then after
written notice from Tenant in each instance of such particular maintenance,
repair or replacement item to be done, Landlord shall within a reasonable period
thereafter perform such repair or maintenance or make such replacement. Tenant
shall pay Landlord as additional Rent hereunder (as set forth below in this
section and otherwise at the same time and in the same manner as for payment of
Base Annual Rent) in equal monthly installments that amount necessary to pay to
Landlord for all costs paid or incurred by Landlord or Landlord's authorized
representatives of such maintenance, repair or replacement, together with
interest thereon at the Reference Rate (as defined in Section 3.4.1) plus two
(2) percentage points, but in no event in excess of the maximum rate of interest
permitted to be contracted by law, amortized over the shorter period of either
(i) the actual useful life of the maintenance, repair or replacement or (ii) the
Term of the Lease remaining until its expiration (including any Option Period)
or earlier termination.
Section 7.2 - Landlord's Obligations and Rights
Landlord, subject to reimbursement pursuant to Article 3 and further
subject to the provisions of Article 10 and Article 11, shall keep in good
condition and repair the following: (a) the foundations, exterior walls,
structural condition of interior bearing walls and roof of the Premises,
including, without limitation, any bearing pillars supporting the structural
elements of the roof; (b) the Common Areas, including, without limitation, the
parking lots, loading areas, utilities installations, roadways, walkways,
landscaping, fences an Project signs; and (c) only during the first twelve (12)
months of the Term of the Lease, the window glazing, roof membrane and the
heating, ventilating and air conditioning system of the Building.
Notwithstanding the foregoing sentence, (i) Landlord shall not be responsible
for any such maintenance, upkeep, repair or replacement to the extent that the
same may be made necessary by or arise from placement or servicing of, or other
activities in relation to the location of, equipment which Tenant causes or
permits to be placed on the roof of the Premises or the Building, or penetration
of the roof by such equipment, regardless of Tenant's having obtained, prior to
the placement of any such equipment, the written approval of Landlord, unless
and until Tenant pays Landlord therefor, including at Landlord's option advance
payment on an estimated basis, the full cost of any such maintenance, upkeep,
repair or replacement; (ii) Landlord shall not, unless and except as otherwise
expressly provided in the Work Letter, be obligated to paint the exterior or
interior surface of exterior walls, nor shall Landlord be required
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to maintain, repair or replace doors, windows or plate glass of the Premises;
and (iii) subject to the provisions of Section 14.3, Landlord shall have no
obligation to repair, but without obligation to do so may elect to repair, at
the expense of Tenant, all damage or injury to the Premises, or to the Building
or Project and its fixtures, appurtenances or equipment or to any of the areas
used in connection with the operation of the Building or Project, caused or
done by Tenant or Tenant's agents, servants, employees, contractors, visitors
or licensees or caused by moving property of Tenant in or out of the Building
or the Project, or by the installation or removal of furniture or other
property, or resulting from fire, heating, ventilating or air conditioning unit
or system, short circuits, overflow or leakage of water, steam, gas, sewage or
odors, or by frost or by bursting or leaking of pipes or plumbing works, or
gas, or from any other source, due to the carelessness, negligence, or
improper conduct of Tenant or Tenant's agents, servants, employees,
contractors, visitors or licensees.
Section 7.3 - Statutory Waivers
Tenant hereby waives all rights under the provisions of Sections
1932(1), 1941 and 1942 of the California Civil Code, and all rights under any
law in existence during the Term authorizing a tenant to make repairs at the
expense of a landlord or to terminate the lease.
Section 7.4 - No Liability of Landlord
Unless and except to the extent caused by Landlord's active negligence
or willful misconduct and except as provided in this Lease, there shall be no
allowance to Tenant for diminution of rental value, and no liability on the part
of Landlord by reason of inconvenience, annoyance or injury to business arising
from the making of, or the failure to make, any repairs, alterations,
decorations, additions or improvements in or to any portion of the Premises,
Building or the Project (or any of the areas used in connection with the
operation thereof or in or to any fixtures, appurtenances or equipment), or by
reason of the active or passive negligence of Tenant or any other tenant or
occupant of the Building or Project. In no event shall Landlord be responsible
for any consequential damages arising or alleged to have arisen from any of the
foregoing matters. Notwithstanding the foregoing, if Landlord receives, as the
result of any interruption in services or as a result of the making of or
failure to make any of the above-mentioned repairs, alterations, decorations,
additions or improvements, when any of the foregoing prevented Tenant's use of
the Premises, rental insurance proceeds, then to the extent of such proceeds
received, Tenant's Rent shall be abated.
ARTICLE 8 - SUBORDINATION/PROTECTION OF LENDERS
Section 8.1 - Subordination
8.1.1 This Lease shall be subject and subordinate to all ground or
underlying leases, mortgages and deeds of trust which now or hereafter encumber
or otherwise affect the real property of which the Premises forms a part or
encumber or affect the ground or underlying leases, and all renewals,
modifications, consolidations, replacements and extensions thereof, without the
necessity of executing any instrument to effectuate such subordination;
provided, however, upon the request of Landlord, Tenant, or Tenant's
successors-in-interest, shall execute and deliver any and all instruments
desired by Landlord evidencing such subordination in the manner requested by
Landlord. Notwithstanding the foregoing, within ten (10) days after the written
request by Landlord, Tenant agrees to execute any appropriate instrument making
this lease and the leasehold estate created hereby superior to the lien of any
ground or underlying lease, mortgage or deed of trust.
8.1.2 Notwithstanding the foregoing, as long as Tenant is not in
default of its obligations under this Lease and provided Tenant executes a
Subordination, Non-Disturbance and Attornment Agreement substantially in the
form set forth as Exhibit H hereto, as to leases, mortgages and deeds of trust
which first affect said real property, Building or Project as of a date
subsequent to the execution of this Lease, the respective lessor, mortgagee or
beneficiary shall recognize the rights of Tenant under this Lease upon
succeeding to the interests of Landlord, substantially in accordance with the
subject to the terms and conditions of the form of Subordination,
Non-Disturbance and Attornment Agreement set forth as Exhibit H to this Lease.
Notwithstanding the provisions of Section 8.1.1, Tenant shall not be required to
subordinate its interest under this Lease to any ground lease, mortgage or deed
of trust, the Landlord, mortgagee or beneficiary of which fails to execute a
non-disturbance agreement reasonably acceptable to Tenant. Tenant hereby agrees
that a Non-Disturbance and Attornment Agreement substantially in the form of the
agreement set forth as Exhibit H shall be reasonably acceptable to Tenant.
Section 8.2 - Attornment to Successor
8.2.1 Subject to Section 8.1.2, Tenant agrees that, at the option of
the landlord under any ground or underlying lease now or hereafter affecting the
real property of which the Premises forms a part, Tenant shall attorn to said
landlord in the event of the termination or cancellation of such ground or
underlying lease and, if requested by said landlord, shall enter into a new
lease with said
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landlord (or a successor ground lessee designated by said landlord) for the
balance of the Term then remaining hereunder upon the same terms and conditions
as those herein provided.
8.2.2 In the event of foreclosure or exercise of power of sale under
any mortgage or deed of trust now or hereafter affecting the real property of
which the Premises forms a part, the holder of any such mortgage or deed of
trust ("Holder") (or purchaser at any sale pursuant thereto) shall have the
option (a) subject to Section 8.1.2, to require Tenant to attorn to such Holder
or purchaser, and to enter into a new lease with such Holder or purchaser (as
Landlord) for the balance of the term then remaining hereunder upon the same
terms and conditions as those herein provided, or (b) notwithstanding this
Article 8, to elect that this Lease become or remain, as the case may be,
superior to said mortgage or deed of trust and to require Tenant to attorn.
Tenant agrees to execute and deliver any further instruments requested by such
Holder or purchaser to evidence such attornment or superiority.
Section 8.3 - Lender's Right to Cure
If Landlord is in default, Tenant will accept cure of any default by
any Holder whose name and address shall have been furnished to Tenant in
writing. Tenant may not terminate this Lease for Landlord's default unless
Tenant gives notice of such intent to terminate to each such Holder and the
default is not cured within thirty (30) days after the time period given to
Landlord to cure any such default in this Lease or within such greater time as
may be reasonably necessary to cure such default. A default which cannot
reasonably be cured within said thirty (30) day period shall be deemed cured
within said period if work necessary to cure the default is commenced within
such time and the Holder proceeds diligently thereafter with such work until
the default is cured.
Section 8.4 - Tenant's Financial Statements
8.4.1 Tenant agrees that Landlord is hereby authorized to request a
credit report on Tenant at any time and from time to time subsequent to the
Reference Date from any third party.
8.4.2 Upon default under this Lease by Tenant, or upon any request by
Tenant for Landlord's approval of an Assignment or Sublease pursuant to Article
5 above, or upon request of Landlord made not more than once during any
Computation Year for any reason whatsoever, Tenant agrees to promptly provide
Landlord with a full, true and correct current audited annual financial
statement (certified by Tenant's regular certified public accountant) or, if a
current annual audited financial statement should not be available, a full,
true and correct current unaudited annual financial statement (certified by the
chief financial officer of Tenant), covering the financial condition of Tenant,
the same to be accompanied by all financial statements of any kind issued by
Tenant to any bank or other financial institution or credit reporting service
at any time during the twelve (12) months next immediately preceding the date
of said current financial statement.
8.4.3 Within ten (10) days after Landlord's written request, Tenant
shall deliver to Landlord, or to any actual or prospective Holder that Landlord
designates, such the most recent quarterly financial statements as are
available to verify the financial condition of Tenant, or any Transferee or
guarantor of Tenant, to facilitate the financing or refinancing of the Building
or Project, or the creation, extension or renewal of any underlying or ground
lease affecting the Project.
8.4.4 Tenant represents and warrants to Landlord and such Holder that
each financial statement delivered by Tenant is or shall be, as the case may
be, accurate in all material respects to the best of Tenant's actual knowledge
as of the date of such statement. Landlord (and any party to whom such
statements are furnished) shall hold such statements as confidential.
Section 8.5 - Lease Modifications
If any prospective Holder should require, as a condition of any ground
or underlying lease, mortgage, or deed of trust, or modification of any
provision of this Lease, Tenant shall approve and execute any such
modifications within ten (10) days after written request, provided such
modifications do not increase any monetary obligation of Tenant hereunder or
otherwise materially and adversely alter the rights or obligations of Landlord
or Tenant hereunder.
ARTICLE 9 - LIABILITY/INDEMNIFICATION
Section 9.1 - Landlord's Exculpation and Limited Liability
Except as otherwise expressly provided in this Lease, Landlord, its
employees and agents shall not be liable to Tenant and Tenant waives all claims
against Landlord for any injury to or death of any person or for loss of use of
or damage to or destruction of property in or about the Premises, Building or
the Project by or from any cause whatsoever, including without limitation: (i)
earthquake or earth movement, gas leak, fire, oil spills or contamination,
electricity or leakage
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from the roof, walls, basement or other portion of the Premises, Building or
the Project, except to the extent caused by the active negligence or willful
misconduct of Landlord, its employees or agents, and (ii) the acts or omissions
of persons occupying space adjacent to or connected with the Premises, or
occupying space elsewhere in the Building or the Project. Notwithstanding
anything in the preceding sentence to the contrary, in no event shall Landlord
be liable for consequential damages, including, without limitation, loss of
profits or damages from business interruptions.
Section 9.2 - Tenant's Liability, Indemnification and Hold Harmless
Tenant hereby indemnifies and agrees to protect, defend and hold
Landlord, its employees, its agents, any Lessor under any ground or underlying
lease and any mortgagee or beneficiary under any mortgage or deed of trust
encumbering the Project or any portion thereof harmless against all claims,
liability, damages or loss of every nature whatsoever and against all costs and
expenses, including, but not limited to, reasonable fees of attorneys of
Landlord's choice and expert witnesses and expenses in connection therewith, to
the extent arising out of either (i) any failure of Tenant to timely perform or
observe its obligations hereunder or (ii) arising out of or connected with any
matter expressly referenced elsewhere in the Lease as being included within
Tenant's indemnity obligation under this Article 9 or any injury to or death of
any person or for loss of use of or damage to or destruction of property or for
violation of law (A) occurring in, on or about the Premises, from any cause
whatsoever, except to the extent caused by the active negligence or willful
misconduct of Landlord or its employees or its agents or (B) occurring in, on or
about any portion of the Building or Project or areas used in connection with
the Project, the use of which Tenant has in common with other tenants
(including, without limitation, elevators, stairways, passageways or hallways
and other portions of the Common Areas), to the extent such claim, injury or
damage is caused in whole or in part by the act, neglect, default, or omission
of Tenant, its employees, agents, contractors, invitees, licensees, visitors,
assignees or subtenants or otherwise by any conduct of any of said persons in or
about the Premises, the Building or the Project or areas used in connection with
the Project, including, without limitation, the default by Tenant in the
observance or performance of any of its obligations hereunder. Landlord reserves
the right to settle, compromise or dispose of any and all suits, claims and
actions related to the foregoing indemnities in its sole discretion and the
exercise of said right shall not reduce Tenant's obligations hereunder. Any
defense made by Tenant under this Article 9 shall be made only with counsel (i)
previously approved in writing by Landlord in its sole discretion, and (ii)
willing to cooperate with counsel of Landlord's choice in connection with such
defense.
Section 9.3 - Survival and Conflicts with other Indemnity Provisions
The provisions of this Article 9 shall not diminish Landlord's rights
and Tenant's obligations set forth in Article 4 and Section 6.4. The provisions
of this Article 9 shall survive the expiration or earlier termination of this
Lease. Any waiver of claims against Landlord and/or Indemnification of Landlord
pursuant to the terms of this Lease, including without limitation the terms of
this Article 9, shall in no event be deemed to apply to Landlord's fraud,
willful injury to the person or property of another, or violation of any law,
whether willful or negligent, to the extent such waiver or indemnity would
violate California Civil Code section 1668.
ARTICLE 10 DAMAGE/DESTRUCTION
Section 10.1 - Destruction and Repair
If the Premises shall be damaged by fire or other casualty, and if
Tenant shall give prompt notice to Landlord of such damage, Landlord, at
Landlord's expense, shall repair such damage and restore the Premises to
substantially the condition it was in prior to such fire or casualty; provided,
however, that Landlord shall have no obligation to repair any damage or to
replace Tenant's personal property, trade fixtures or equipment, Alterations or
any other property or effects of Tenant. Notwithstanding the foregoing,
Landlord shall have no obligation to repair such damage and restore the
Premises to substantially the condition it was in prior to such fire or
casualty; (i) to the extent there are governmental restrictions which preclude
Landlord from repairing and restoring the Premises or the Building to
substantially the condition it was in prior to such fire or other casualty; or
(ii) if Tenant is in default as defined in Section 16.1 of this Lease. Except
as otherwise provided in this Article 10, if the entire Premises shall be
rendered untenantable by reason of any such damage, the Base Annual Rent shall
abate for the period from the date of such damage to the date when such damage
to the Premises shall have been repaired, and if only a part of the Premises
shall be rendered untenantable, the Base Annual Rent shall abate for such
period in the proportion that the area of the part of the Premises so rendered
untenantable bears to the total area of the Premises; provided, however, if,
prior to the date when all of such damage shall have been repaired, any part of
the Premises so damaged shall be rendered tenantable and reasonably usable by
Tenant or shall be used or occupied by Tenant or any person or persons claiming
through or under Tenant, then the amount by which Base Annual Rent shall abate
shall be equitably apportioned for the period from the date of any such use or
occupancy to the date when all such damage shall have been repaired.
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Section 10.2 - 180 Day and 60 Day Repair Criteria
10.2.1 Notwithstanding the provisions of Section 10.1, if prior to or
during the Term, the Premises shall be so damaged by fire or other casualty
that, in Landlord's architect's or contractor's reasonable and good faith
opinion determined in its reasonable discretion, it will take longer than
two hundred seventy (270) days from the date of the casualty to substantially
complete the repair and restoration of the Premises or Building, then Landlord
shall give to Tenant as soon as possible but in no event later than sixty (60)
days after the casualty, notice of such opinion ("the 270 Day Notice"). If such
repairs and restoration cannot in Landlord's architect's or contractor's
opinion be substantially completed within two hundred seventy (270) days after
the date of the casualty, Landlord and Tenant shall each have the right to
terminate this Lease by giving written notice to the other within fifteen (15)
days after Tenant's receipt of the 180 Day Notice.
10.2.2 Notwithstanding any provision herein to the contrary, Landlord
and Tenant shall each have the right to terminate this Lease in the event the
Premises is damaged by a fire or other casualty during the last year of the
Term of this Lease if in Landlord's architect's or contractor's reasonable and
good faith opinion determined in its reasonable discretion it will take longer
than sixty (60) days to substantially complete the repair and restoration of
the Premises, Landlord shall give notice of such opinion (the "60 Day Notice")
as soon as possible, but in no event later than thirty (30) days after such
casualty. In the event either party elects to terminate this Lease pursuant to
this Section 10.2.2 such party shall give written notice to the other, which
must be received by the other party no later than five (5) days after Tenant's
receipt of the 60 Day Notice.
10.2.3 In the event Landlord or Tenant delivers such a written
termination notice pursuant to Section 10.2.1 or Section 10.2.2, this Lease and
the Term shall terminate thirty (30) days thereafter with the same effect as if
the expiration of such thirty (30) day period was the Expiration Date, and Rent
shall be apportioned as of such date. In the event that this Lease is not so
terminated and the actual time to substantially complete the repair and
restoration of the Premises takes longer than two hundred seventy (270) days (or
sixty (60) days in the event Landlord gives a 60 Day Notice), Tenant shall have
no claim or remedy of any kind whatsoever against Landlord for any costs,
damages, losses, liabilities or penalties it incurs, provided Landlord
diligently prosecutes the repair and restoration of the Premises to
substantial completion.
Section 10.3 - Lack of Insurance Proceeds
Notwithstanding anything contained in this Article 10 to the contrary,
in no event shall Landlord be required to spend for any repair, replacement or
reconstruction of the Premises an amount greater than the insurance proceeds
actually received by Landlord (plus the amount of reimbursement of deductibles
actually received from Tenant as Building Costs or Project Costs) as a result
of the fire or other casualty causing such loss, damage or destruction.
Section 10.4 - No Release of Liability
Except to the extent expressly provided otherwise in this Lease,
nothing contained in this Lease shall relieve Tenant of any liability to
Landlord or to its insurance carriers that Tenant may have under law or under
the provisions of this Lease in connection with any damage to the Premises or
the Project by fire or other causualty.
Section 10.5 - Tenant's Negligence
Notwithstanding the provisions of Section 10.1, if any such damage is
due to the fault or neglect of Tenant, any person claiming through or under
Tenant, or any of their employees, suppliers, shippers, customers or invitees,
then there shall be no abatement of Base Annual Rent by reason of such damage,
unless Landlord is reimbursed for such abatement of Base Annual Rent pursuant
to any rental insurance policies that Landlord may, in its sole discretion,
elect to carry.
Section 10.6 - Express Agreement Re Damage and Destruction
The provisions of this Lease, including this Article 10, constitute an
express agreement between Landlord and Tenant with respect to any and all
damage to, or destruction of, all or any part of the Premises, the Building or
any other portion of the Project through fire or other casualty, and it is
agreed that any statute or regulation of the State of California, including,
without limitation, Sections 1932(2) and 1933(4) of the California Civil Code,
with respect to any rights or obligations concerning damage or destruction in
the absence of an express agreement between the parties, and any similar
statute or regulation, now or hereafter in effect, shall have no application to
this Lease or to any damage to or destruction of all or any part of the
Premises, the Building or any other portion of the Project.
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ARTICLE 11 - EMINENT DOMAIN
Section 11.1 - Partial or Total Taking
If all or substantially all of the Premises or Building is condemned or
taken in any manner for public or quasi-public use, including, but not limited
to, a conveyance or assignment in lieu of a condemnation or taking, this Lease
shall automatically terminate as of the earlier of the date of the vesting of
title or the date of dispossession of Tenant as a result of such condemnation or
other taking. If less than all or substantially all of the Premises is so
condemned or taken, this Lease shall automatically terminate only as to the
portion of the Premises so taken as of the earlier of the date of the vesting of
title or the date of dispossession of Tenant as a result of such condemnation or
taking, provided that if so much of the Premises is taken as to materially and
adversely impair Tenant's use of the Premises, Tenant shall have the right to
terminate this Lease exercisable by giving Landlord written notice of such
termination within sixty (60) days after the date of notice to Landlord of the
date on which said vesting or dispossession will occur. Such termination by
Tenant shall be effective as of the earlier of the date of vesting of title or
the date of dispossession of Tenant, if such portion of the Premises is
condemned or otherwise taken so as to require, in the opinion of Landlord, a
substantial alteration or reconstruction of the remaining portions thereof, this
Lease may be terminated by Landlord, as of the earlier of the date of the
vesting of title or the date of dispossession of Tenant as a result of such
condemnation or taking, by written notice to Tenant given within sixty (60) days
following notice to Landlord of the date on which said vesting or dispossession
will occur. Tenant hereby waives any right which it may have during the Lease
Term under California Code of Civil Procedure Sections 1263.110 through
1265.140, and any similar law now or hereafter in effect, including, without
limitation, the right to petition a court to terminate this Lease in the event
of a partial taking of the Premises.
Section 11.2 - Award
Landlord shall be entitled to the entire award in any condemnation
proceeding or other proceeding for taking for public or quasi-public use,
including, without limitation, any award made for the value of the Leasehold
estate created by this Lease and Alterations which are the property of Landlord.
No award for any partial or entire taking shall be apportioned, and Tenant
hereby assigns to Landlord any award that may be made in such condemnation or
other taking, together with any and all rights of Tenant now or hereafter
arising in or to same or any part thereof; provided, however, that nothing
contained herein shall be deemed to give Landlord any interest in, or to require
Tenant to assign to Landlord, any award made to Tenant specifically for its
relocation expenses, the taking of personal property and trade fixtures
belonging to Tenant, or the interruption of or damage to Tenant's business if
such award is made separately to Tenant and not as part of the damages
recoverable by Landlord.
Section 11.3 - Sale to Condemning Authority
Landlord may, without any obligation to Tenant and without obtaining
Tenant's consent, agree to sell and/or convey to the condemnor the Premises,
Building or Project or any portion thereof sought by the condemnor, free from
this Lease and the rights of Tenant hereunder, without first requiring that any
action or proceeding be instituted or, if instituted, pursued to a judgment. In
the event Landlord sells and/or conveys all or any portion of the Premises.
Building or Project to a condemnor this Lease shall terminate on the date the
deed or other document evidencing such conveyance is recorded.
Section 11.4 - Proration/Abatement of Base Annual Rent
In the event of an automatic or elective termination of this Lease
pursuant to Section 11.1 or of sale pursuant to Section 11.3, the Rent shall be
equitably prorated as of the date of termination of this Lease. In the event of
a partial condemnation or taking that is permanent, but does not result in a
termination of this Lease as to the entire Premises pursuant to section 11.1,
the Rent shall abate in proportion to the portion of the Premises taken by such
condemnation or other taking.
Section 11.5 - Temporary Taking
If all or any portion of the Premises is condemned or otherwise taken
for public or quasi-public use for a limited or temporary period of time, this
Lease shall remain in full force and effect unless the Lease is terminated as
provided above and Tenant shall continue to perform all terms, conditions and
covenants of this Lease, except that the Base Annual Rate shall be abated in
accordance with Section 11.3 but only during the period of any such limited or
temporary condemnation or taking. This apportionment of any award shall be
governed by the provisions of Section 11.2.
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ARTICLE 12 - UTILITIES
Section 12.1 - Utilities
12.1.1 Tenant shall pay directly to the providers of all services for
separately metered or directly billed water, gas, heat, light, power, telephone
and other utilities and services supplied to the Premises, all fees, costs and
expenses of such services, together with any Taxes thereon. Landlord makes no
representation with respect to the adequacy or fitness of the heating,
ventilating or air conditioning equipment in the Project to maintain
temperatures that may be required for, or because of, any equipment of Tenant,
and Landlord shall have no liability for loss or damage in connection therewith.
12.1.2 In the event any governmental entity promulgates or revises any
statute, ordinance or building, fire or other code or imposes mandatory controls
or guidelines on Landlord, the Project or any part thereof, relating to the use
or conservation of energy, water, gas, light or electricity or the reduction of
automobile or other emissions or the provision of any other utility or service
provided with respect to this Lease, or in the event Landlord is required to
make alterations to the Project or any other part thereof in order to comply
with such mandatory controls or guidelines, Landlord may, in its sole
discretion, require tenant to comply with such mandatory controls or guidelines
or Landlord may, in its sole discretion, make such alterations to the Project or
any other part thereof. All costs incurred by Landlord in connection with such
laws, ordinances, guidelines or controls, including alterations to the Project
shall be included in Operating Costs and assessed to Tenant pursuant to Section
3.4, except to the extent that such costs are to be entirely the responsibility
of Tenant pursuant to this Lease, in which latter case such costs shall be
entirely assessed to Tenant. Neither such compliance nor the making of such
alterations shall in any event entitle Tenant to any damages, relieve Tenant of
the obligation to pay the full Rent reserved hereunder or constitute or be
construed as a constructive or other eviction of Tenant.
ARTICLE 13 - LANDLORD'S RIGHT OF ENTRY
Landlord and Landlord's agents shall have the right to enter the
Premises at all reasonable times, to examine the same and to make such repairs
or alterations, decorations, additions or improvements as Landlord may
reasonably deem necessary, including without limitation the use and maintenance
of pipes and conduits in and through the Premises, and Landlord and Landlord's
agents shall be allowed to take all material into and upon the Premises that
may be required therefor without the same constituting an eviction of Tenant in
whole or in part, and subject to the provisions of Article 10, the Base Annual
Rent reserved shall in no way abate while said repairs, alterations,
decorations, additions or improvements are being made by reason of
inconvenience, annoyance or injury to the business of Tenant because of the
prosecution of any such work, or otherwise. Landlord and Landlord's agents are
expressly granted permission to inspect the premises at any reasonable time and
to show the Premises at any reasonable time to prospective tenants, mortgagees,
purchasers, lessees of the Building or Project and other persons with a
business interest therein. If, during the last month of the Term, Tenant shall
have removed all or substantially all of Tenant's property therefrom, Landlord
may immediately enter and alter, renovate and redecorate the Premises, without
elimination or abatement of Rent or other compensation, and such acts shall
have no effect upon this Lease. If Tenant shall not be personally present to
open and permit an entry into the Premises, at any time, when for any reason
entry therein shall be reasonably necessary or permissible hereunder, Landlord
or Landlord's agents may enter the same by a master key, or may forcibly enter
the same, without rendering Landlord or such agents liable therefor (if during
such entry Landlord or Landlord's agents shall accord reasonable care to
Tenant's property), and without in any manner affecting the obligations, terms,
covenants, conditions, provisions or agreements of this Lease. Nothing herein
contained, however, shall be deemed or construed to impose upon Landlord any
obligation, responsibility or liability whatsoever, for the care, supervision
or repair of the Project or the Building or any part thereof, other than as
otherwise provided in this Lease. Notwithstanding any provision in this Article
13 to the contrary, Landlord agrees to provide Tenant with at least 24 hours
prior notice (except when Landlord reasonably determines that an emergency
situation exists) and Tenant shall have the right to accompany Landlord or
Landlord's employees, agents, contractors and representatives when Landlord
enters the Premises. Landlord shall use reasonable efforts to accommodate
Tenant's desire to have all entry into the Premises during normal business
hours.
ARTICLE 14 - TENANT'S INSURANCE
Section 14.1 - Tenant's Insurance
Tenant shall carry at its expense and maintain in force during the Term
the following insurance:
(a) Comprehensive General Liability Insurance with a Broad Form
Liability Endorsement (including protective liability coverage on operations of
independent contractors engaged in
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construction and also blanket contractual liability insurance) on an
"occurrence" basis against claims for "personal injury" liability, including
without limitation bodily injury, death or property damage liability with a
limit of not less than Five Million Dollars ($5,000,000) in the event of
"personal injury" to any number of persons or of damages to property arising out
of any one "occurrence"; such insurance shall cover Tenant's indemnity
obligations hereunder (excluding the indemnity obligations relating to Hazardous
Materials, so long as such indemnity obligations are not generally insured for
by tenants in the vicinity of the Project) and may be furnished under a
"primary" policy and an "umbrella" policy, provided that it is primary insurance
and not excess over or contributory with any insurance in force for Landlord;
(b) insurance against loss or damage by fire and such other risks and
hazards as are insurable under present and future standard forms of fire and
extended coverage insurance policies, to the personal property, furniture,
furnishings and fixtures belonging to tenant located in the Premises for not
less than 100% of the actual replacement value thereof;
(c) Worker's Compensation and Employee's Liability insurance (as
required by state law); and
(d) such other insurance as is generally required by owners or lenders
on buildings similar in size, character, age and location as the Building.
Section 14.2 - General Requirements of Tenant's Insurance
14.2.1 All such insurance shall name Landlord, any mortgagee and/or
ground or underlying lessor as additional insureds and shall provide that
Landlord and such additional insureds shall receive thirty (30) days' written
notice from the insurer prior to any cancellation or change of coverage, and
shall contain a cross liability or severability clause.
14.2.2 All insurance required to be carried by Tenant hereunder shall
be written only as primary insurance and non-contributing and shall be effected
with only such companies as Landlord shall reasonably approve, but in any event
not with any company of less repute than those having a general policy rating of
A and a financial rating of XV as rated in the most current available "Best's
Insurance Reports". In the event, "Best's Insurance Reports" is not currently
published, such minimum standard shall be that published by any other nationally
recognized publisher of such information. Landlord's approval shall be deemed to
have been given unless Landlord in writing disapproves such company (i) not
later than one month after submission of a policy or certificate to Landlord or
(ii) at any time due to claims experience. Any insurance carried by Landlord
shall not be contributory.
14.2.3 Tenant shall deliver true and correct copies of the policies of
insurance required hereunder and original certificates thereof to Landlord at
least ten (10) days before the Commencement Date, and thereafter at least
thirty (30) days before the expiration dates of expiring policies.
14.2.4 In the event Tenant shall fail to procure such insurance, or to
deliver such policies or certificates, Landlord may, at its option, without
waiving any rights or remedies which Landlord may have for Tenant's default
hereunder, procure such insurance for the account of Tenant, and the cost
thereof shall be paid to Landlord within ten (10) days after delivery to Tenant
of bills therefor. Nothing contained in this Article 14 shall be construed as a
limitation of Tenant's liability hereunder.
Section 14.3 - Waiver of Subrogation
(a) Subject to the rights of Landlord under Article 3 to collect,
utilize and replenish Building Costs and Project Costs for the purposes therein
set forth, and notwithstanding any other provision to the contrary contained to
this Lease, Landlord waives any and all rights of recovery against Tenant for
or arising out of damage to or destruction of the Premises, the Building or the
Project, or any part thereof, from causes then included under standard "all
risk" coverage owner's property insurance policies or endorsements whether or
not such policies are in effect covering Landlord or Tenant and whether or not
such damage or destruction shall have been caused by the negligence of Tenant,
its agents, employees, contractors, visitors or licensees, but only to the
extent that Landlord's insurance policies then in force permit such waiver.
Tenant waives any and all rights of recovery against Landlord for or arising
out of damage to or destruction of any property of Tenant, from causes then
included under standard "all risk" coverage property insurance policies or
endorsements whether or not such policies are then in effect covering Landlord
or Tenant and whether or not caused by the negligence of Landlord, its agents,
employees, contractors, visitors or licensees, but only to the extent that
Tenant's insurance policies then in force permit such waiver. Landlord and
Tenant represent that their present insurance policies now in force permit such
waiver.
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(b) If at any time during the term of this Lease either party shall
give no less than five (5) days prior notice to the other certifying that any
insurance carrier which has issued any such policy covering any of the property
above mentioned has refused to consent to the aforesaid waiver of subrogation,
or such carrier revokes a consent previously given or cancels or threatens to
cancel any policy previously issued and then in force and effect because of
such waiver of subrogation, then, in any of such events, the waiver in this
Article 14 shall thereupon be of no further force and effect as to the loss,
damage or destruction covered by such policy; provided, however, that if at any
time thereafter such consent shall be obtained therefor from any existing or
substitute insurance company, the waiver hereinabove provided for shall again
become effective. The cost of obtaining any such waiver shall be deemed a cost
of such policy.
Section 14.4 - Landlord's Insurance
Landlord shall procure, at Tenant's cost and expense as an Operating
Cost under Article 3, the following insurance:
(a) Comprehensive General Liability Insurance (including protective
liability coverage on operations of independent contractors engaged in
construction and also blanket contractual liability insurance) on an
"occurrence" basis for the benefit of Landlord as named insured against claims
for "personal injury" liability, including, without limitation, bodily injury,
death or property damage liability;
(b) Insurance against loss or damage by fire and such other risks and
hazards as are insurable under present and future standard forms of fire and
extended coverage insurance policies, covering all the Premises, including
Landlord's Work; and
(c) Landlord may, but is not obligated to carry such other insurance
(including, without limitation, insurance against loss of rents and/or
earthquake insurance) with respect to the Landlord or the Premises, Building
and/or Project: (i) as is generally carried by Metropolitan Life Insurance
Company for similar properties, for as long as Metropolitan Life Insurance
Company has an ownership interest in the Landlord or any portion of the
Project; and (ii) after Metropolitan no longer has an ownership interest in the
Landlord or any portion of the Project, as is generally carried by owners of,
or required by lenders on, buildings or projects similar in size, character and
location as the Building or Project.
Tenant shall be entitled to obtain at its own cost and expense any
additional Insurance Tenant reasonably desires to protect itself as a result of
Tenant agreeing to the exculpatory language in Articles 6 and 9.
ARTICLE 15 - INSOLVENCY OR BANKRUPTCY
Section 15.1 - Insolvency or Bankruptcy
15.1.1 In addition to the occurrences set forth in Section 16.1
hereinafter, the following events shall constitute a default under this Lease:
(i) Tenant admits in writing its inability to pay its debts as they mature;
(ii) Tenant makes an assignment for the benefit of creditors or takes any other
similar action for the protection or benefit of creditors; (iii) Tenant gives
notice to any governmental body of insolvency or pending insolvency, or
suspension or pending suspension of operations; (iv) Tenant files a voluntary
petition in bankruptcy or has an involuntary petition filed against him, her or
it and such petition has not been dismissed within sixty (60) days; (v) Tenant
files any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or other similar relief
under any present or future bankruptcy statute, regulation or law; (vi) a court
of competent jurisdiction enters an order, judgment or decree approving a
petition filed against Tenant seeking any relief described in the preceding
subparagraph (v) and such order, judgment or decree shall remain unvacated and
unstayed for an aggregate of sixty (60) days from the date of entry thereof;
(vii) a trustee, receiver, conservator or liquidator of Tenant or of all or any
substantial part of its property or its interest in the Premises is employed or
appointed and such receivership remains undissolved for sixty (60) days; or
(viii) this lease or any estate of Tenant hereunder is levied upon under any
writ of attachment or execution, and such writ shall remain unvacated and
unstayed for ten (10) days.
15.1.2 Upon the filing of a petition by or against Tenant under the
United States Bankruptcy Code, Tenant, as debtor in possession, and any trustee
who may be appointed agree to:
(a) perform each and every obligation of Tenant under this Lease until
such time as this Lease is either rejected or assumed by order of the United
States Bankruptcy Court;
(b) pay in the manner and at the time provided hereunder as reasonable
compensation for use and occupancy of the Premises;
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(c) reject or assume this Lease within sixty (60) days of the
filing of such petition under Chapter 7 of the Bankruptcy Code or within one
hundred twenty (120) days of the filing of a petition under any other Chapter;
(d) give Landlord at least forty-five (45) days prior written
notice of any abandonment of the Premises; any such abandonment to be deemed a
rejection of this Lease; and
(c) do all other things of benefit to Landlord otherwise
required under the Bankruptcy Code.
Tenant, as debtor in possession, and any such trustee shall be deemed
to have rejected this Lease in the event of the failure to comply with any of
the above requirements and to have consented to the entry of an order by an
appropriate Bankruptcy Court requiring compliance with any of the above
requirements, waiving all rights to notice of the entry of such order.
Section 15.2 - Measure of Damages
In the event of the termination of this Lease pursuant to Section 15.1,
Landlord shall be entitled to the same rights and remedies as these set forth
in Sections 16.3 and 16.5 and in Article 1a of this Lease.
Section 15.3 - Provision of Services and Assumption of Lease
In the event of the occurrence of any of those events specified in
Section 15.1, if Landlord shall not choose to exercise, or by law shall not be
able to exercise, its rights hereunder to terminate this Lease upon the
occurrence of such events, then, in addition to any other rights of Landlord
hereunder or by law, (i) Landlord shall not be obligated to provide Tenant with
any of the services specified in Article 12, unless Landlord has received
compensation in advance for such services, and the parties agree that Landlord's
reasonable estimate of the compensation required with respect to such services
shall control, and (ii) neither Tenant, as debtor-in-possession, nor any trustee
or other person (hereinafter collectively called the ""Assuming Tenant'') shall
be entitled to assume this Lease unless, on or before the date of such
assumption, the Assuming Tenant (x) cures, or provides adequate assurance that
the latter will promptly cure, any existing default under this Lease, (y)
compensates, or provides adequate assurance that the Assuming Tenant will
promptly compensate, Landlord for any pecuniary loss (including, without
limitation, attorneys' fees and disbursements) resulting from such default, and
provides adequate assurance of future performance under this Lease, it being
covenanted and agreed by the parties that, for such purposes, any cure or
compensation shall be effected by the immediate payment of any monetary default
or any required compensation, or the immediate correction or handing of any
nonmonetary default; any "adequate assurance" of such cure or compensation shall
be affected by the establishment of an escrow fund for the amount at issue or by
bonding and "adequate assurance" of future performance shall be affected by the
establishment of an escrow fund for the amount at issue or by bonding, it being
covenanted and agreed by Landlord and Tenant that the foregoing provision was a
material part of the consideration for this Lease.
ARTICLE 16 - DEFAULT/REMEDIES
Section 16.1 - Events of Default
It shall be deemed conclusively a material breach of this Lease, and
the occurrence of any of the following, if not cured within any time period
provided, shall constitute a default by Tenant:
(a) Tenant fails to make any payment of Rent pursuant to this
Lease when due; or
(b) Tenant fails to perform or honor any obligation, covenant,
condition or representation required to be performed or made by Tenant under
this Lease (other than those described above in Section 16.1(a) and except as
otherwise provided below in Sections 16.1(c) through 16.1(g)) and shall fail,
for a period of fifteen (15) days after written notice from Landlord specifying
such failure ("Landlord's Nonmonetary Default Notice"), to cure said failure
(which cure shall include payment to Landlord in compensation for any damages
suffered and costs incurred, including, without limitation, attorneys' fees, by
Landlord due to such failure and prior to such cure), unless such failure
cannot be cured within said fifteen (15) days, in which case it shall be deemed
an event of default under this Lease if Tenant either (i) fails to commence to
cure the applicable default within such fifteen (15) day period, (ii) fails,
after commencing to cure within such fifteen (15) day period, to use due
diligence to cure the applicable default within such period of time as may be
reasonably necessary, or (iii) fails to cure the applicable defaults within
sixty (60) days after Landlord's Nonmonetary Default Notice; or
(c) Tenant abandons the Premises or Tenant vacates the
Premises and/or removes substantially all of Tenant's furniture or other
property therefrom for a period of thirty (30)
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days, and Tenant fails to (i) give Landlord prior written notice of such intent
to vacate and (ii) keep in place all signage it has erected or constructed in
the Common Areas, Premises, Building or Project; or
(d) Tenant fails to timely perform or observe any obligation
required to be performed or observed by Tenant under this Lease within any time
period specifically set forth in this Lease for such performance or observance;
or
(e) Any of the events described in Section 15.1.1 shall occur;
or
(f) Tenant assigns, or transfers, by operation of law or
otherwise, or enters into an agreement to assign or transfer any or all of its
interests under this Lease without obtaining Landlord's prior written consent
(other than as expressly permitted under Article 5 hereof) or permits, commits,
suffers or maintains any unlawful set, nuisance or waste on or about the
Premises, the Building or the Project or areas used in connection therewith; or
(g) Tenant fails to pay, or deposit with Landlord, timely any
amount of money due to Landlord pursuant to Exhibit D or Tenant Delay under
Exhibit D exceeds thirty (30) days; or
Section 16.2 - Termination of the Right to Possession
In the event that Tenant is in default hereunder, Landlord may elect to
terminate this Lease by giving notice of such election to Tenant. Said notice
may consist of a three (3) days' notice to quit pursuant to California Code of
Civil Procedure Section 1161, in which event, at the expiration of said three
(3) day period (and unless said notice provides an option to cure within said
three (3) day period and Tenant cures the default within said three (3) day
period) Tenant's right to possession shall be terminated (including, without
limitation, for purposes of California Civil Code Section 1951.2) and this
Lease shall thereby terminate and Tenant shall vacate and deliver possession of
the Premises to Landlord, but Tenant shall remain liable as hereinafter
provided.
Section 16.3 - Rights Upon Termination
In the event of Landlord's termination of this Lease as a result of
Tenant's breach or default of this Lease, Landlord shall have:
(a) The right, subject to applicable law, to re-enter the
Premises and dispossess Tenant and the legal representatives of Tenant and all
other occupants of the Premises by unlawful detainer or other summary
proceedings, or otherwise as permitted by law, and remove their property and
regain possession of the Premises (but Landlord shall not be obligated to
effect such removal) and said property may, at Landlord's option, be stored or
otherwise dealt with as provided within this Lease or as applicable law may
then provide or permit, including but not limited to the right of Landlord to
sell or otherwise dispose of the same or to store the same, or any part
thereof, in a warehouse or elsewhere at the expense and risk of and for the
account of Tenant.
(b) The rights and remedies provided by California Civil Code
Section 1951.2 to recover from Tenant upon termination of the Lease:
(i) the worth at the time of award of the unpaid Rent
and other charges which had been earned at the time of termination;
(ii) the worth at the time of award of the amount by
which the unpaid rent and other charges which would have been earned
after termination until the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided;
(iii) subject to subdivision (c) of the California
Civil Code Section 1951.2, the worth at the time of award of the amount by
which the unpaid rent and other charges for the balance of the Term after
the time of award exceeds the amount of rental loss that Tenant proves
could be reasonably avoided; and
(iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform
its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom. The "worth at the time of
award" of the amounts referred to in clauses (1) and (2) of this Section
16.3 shall be computed by allowing interest at the Default Rate. The
"worth at the time of the award" of the amount referred to in clause (3)
of this Section 16.3 shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time
of award plus 1%.
(c) The right to enforce, to the extent permitted by the laws of the
State of California then in force and effect, any other rights or remedies set
forth in this Lease or otherwise applicable hereto by operation or law or
contract.
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Section 16.4 - Continuance of Lease
In the event of any breach of this Lease by Tenant (and regardless of
whether or not Tenant has abandoned the Premises), this Lease shall not
terminate unless Landlord, at Landlord's option, elects at any time when Tenant
is in breach of this Lease to terminate Tenant's right to possession as provided
in Subsection 16.2 of this Article 16 or, at Landlord's further option, by the
giving of any notice (including but not limited to any notice preliminary or
prerequisite to the bringing of legal proceedings in unlawful detainer)
terminates Tenant's right to possession. For so long as this Lease continues in
effect, Landlord shall have the rights and remedies provided by California Civil
Code Section 1951.4 and Landlord may enforce all of Landlord's rights and
remedies under this Lease, including the right to recover all Rent as it becomes
due hereunder. For the purpose of this Section 16.4, the following shall not
constitute termination of Tenant's right to possession: (i) acts of maintenance
or preservation or efforts to relet the Premises, or (ii) the appointment of a
receiver upon initiative of Landlord to protect Landlord's interest under this
Lease.
Section 16.5 - Other Remedies
In the event of a breach or threatened breach by Tenant of any of the
terms, covenants, conditions, provisions or agreements of this Lease, Landlord
shall additionally have the right of injunction and Tenant agrees to pay the
premium for any bond required in connection with such injunction. Provision in
this Lease of any particular remedy shall not preclude Landlord from any other
remedy, at law or in equity.
Section 16.6 - Waiver of Rights of Redemption and Time for Service of Notice
Tenant hereby expressly waives any and all rights (i) to require that
Landlord serve a notice of default for unpaid rent within one year after such
rent becomes due, as provided in California Code of Civil Procedure Section
1161, subsection 2, and (ii) to relief from forfeiture, redemption or
reinstatement granted by or under any present or future law (including, without
limitation, California Code of Civil Procedure Sections 1174 and 1179) in the
event of Tenant's being evicted or dispossessed for any cause, or in the event
of Landlord's obtaining the right to possession of the Premises, by reason of
the violation by Tenant of any of the terms, covenants, conditions, provisions
of agreements of this Lease, or otherwise.
Section 16.7 - Procedural Matters
(a) Tenant hereby waives the requirement that any notice of default
served pursuant to this Article 16 or under the California unlawful detainer
statutes shall be required to be served on any subtenant in possession or
actual occupation of the Premises. Tenant also waives its right to require
under California Civil Code Section 1164 that any subtenant in actual
occupation of the Premises when the complaint and unlawful detainer be filed
need be made a party defendant.
(b) Exercise by Landlord of any one or more remedies granted herein or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises by Tenant, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Landlord and Tenant.
(c) The voluntary or other surrender or termination of this Lease, or a
mutual termination or cancellation thereof, shall not work a merger and shall,
at the option of Landlord, either (i) terminate all or any existing
assignments, subleases or subtenancies, or (ii) operate as an assignment to
Landlord of any or all of such assignments, subleases or subtenancies.
(d) Notwithstanding any other provision of this Lease, a notice to
Tenant given under this Article 16 or pursuant to California Code of Civil
Procedure Section 1161 or Article 23 of this Lease and any notice served by
mail shall be deemed served, and the requisite waiting period deemed to begin
under said Code of Civil Procedure Section upon mailing, without any additional
waiting requirement under Code of Civil Procedure Section 1011 et seq. or by
other law. For purposes of Code of Civil Procedure Section 1162, Tenant's
"place of residence", "usual place of business", "the property" and "the place
where the property is situated" shall mean and be the Premises, whether or not
Tenant has vacated same at the time of service.
ARTICLE 17 - LANDLORD'S RIGHT TO PERFORM
If Tenant shall default in the timely performance of any obligation on
Tenant's part to be performed under this Lease, after giving effect to any
notice and cure periods provided in this Lease, Landlord may immediately, or
at any time thereafter, without notice, perform the same for the account of
Tenant. If Landlord at any time is compelled to pay or elects to pay any sum of
money or do any act which will require the payment of any sum of money
(including but not limited to employment of attorneys or incurring of costs) by
reason of the failure of Tenant to comply with any
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term, covenant, condition, provision or agreement hereof, the reasonable sum or
sums so paid or incurred by Landlord with interest at the Default Rate shall be
due from tenant to Landlord promptly upon demand by Landlord, as additional
rent.
ARTICLE 18 - END OF TERM
Section 18.1 - Condition of Premises
Upon the expiration or other termination of the Term, Tenant shall quit
and surrender the Premises to Landlord, broom clean, in as good order,
condition and repair as it now is or may hereafter be placed, ordinary wear
excepted and subject to the provisions of Article 10, Article 11 and Sections
4.7-4.14. Tenant shall remove all personal property of Tenant from on or about
the Premises. Subject to Section 6.1.2, at Landlord's option, Landlord may
require Tenant to remove any Alterations or other improvements installed on
Tenant's behalf in the Premises. If Tenant shall remove any such property,
Alterations or improvements permitted or required to be removed from the
Premises, Tenant shall repair or, at Landlord's option, shall pay to Landlord
the cost of repairing, any damage arising from such removal. Any property left
on the Premises at the expiration or other termination of this Lease, or after
the happening of any of the events of default set forth in Article 16, may, at
the option of Landlord, either be deemed abandoned or be placed in storage at a
public warehouse in the name of and for the account of and at expense and risk
of Tenant or otherwise disposed of by Landlord in the manner provided by law.
Tenant expressly releases Landlord of and from any claims and liability for
damage to or destruction or loss of property left by Tenant upon the Premises
at the expiration or other termination of the Lease and Tenant hereby
indemnifies Landlord against any and all claims and liability with respect
thereto.
Section 18.2 - Holding Over
If Tenant holds over after the Term with the express written consent of
Landlord such tenancy shall be from month to month only and shall not be a
renewal hereof, and Tenant shall pay as Rent to Landlord for the use and
occupancy of the Premises for each month Tenant holds over an amount agreed to
be one and one quarter (1.25) times the Rent which is due on the last month of
the Term, and Tenant shall also comply with all of the terms, covenants,
conditions, provisions and agreements of this Lease for the time during which
Tenant holds over. If without the express written consent of Landlord, Tenant
shall fail to vacate the Premises after the expiration of the Term or sooner
termination of this Lease for any cause or after Tenant's right to occupy the
Premises ceases, thereafter, and notwithstanding anything to the contrary
contained elsewhere in this Lease. Tenant shall pay as Rent to Landlord for the
use and occupancy of the Premises for each month Tenant holds over an amount
agreed to be two (2) times the Rent which is due on the last month of the Term,
and Tenant shall also comply with all of the terms, covenants, conditions,
provisions and agreements of this Lease for the time during which Tenant holds
over. If the Premises are not surrendered at the end of the Term or of a
permitted hold over period, Tenant shall be additionally responsible to
Landlord for all damage (including but not limited to the loss of Rent) which
Landlord shall suffer by reason thereof, and Tenant hereby indemnifies Landlord
against all claims made by any succeeding lessee against Landlord, resulting
from delay by Landlord in delivering possession of the Premises to such
succeeding Tenant. Tenant's obligation to observe or perform all of the terms,
covenants, conditions, provisions and agreements of this Article shall survive
termination of this Lease.
Section 18.3 - Conditions of Termination
In the event that this Lease terminates for any reason prior to the
Expiration Date, including but not limited to termination by Landlord, but not
including execution of a new lease with a lender or ground lessor under Article
5, such termination will terminate any and all agreements for the extension of
this Lease, whether expressed in an option, exercised or not, or in a
collateral document or otherwise. Any right herein contained on the part of
Landlord to terminate this Lease shall continue during any extension hereof.
Any option on the part of Tenant herein contained for an extension hereof shall
not be deemed to give Tenant any option for a further extension beyond the
first extended term. No act or thing done by Landlord or Landlord's agents
during the Term shall be deemed an acceptance of a surrender of the Premises,
and no agreement to accept such surrender shall be valid unless in writing
signed by Landlord. No employee of Landlord or Landlord's agents shall have any
power to accept the keys of the Premises prior to the termination of this Lease.
ARTICLE 19 - QUIET POSSESSION
Landlord hereby expressly covenants and agrees with Tenant, in lieu of any
implied covenant of quiet possession, that upon Tenant's paying Rent and all
other charges and observing and performing all the terms, covenants,
conditions, provisions and agreements of this Lease on Tenant's part to be
observed or performed, Tenant shall have quiet possession of the Premises for
the Term as to anyone claiming by, through or under Landlord, subject, however,
to the terms of this Lease and of any ground leases, underlying Leases,
mortgages, deeds of trust, and covenants, conditions and
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restrictions affecting all or any portion of the Project or any of the areas
used in connection with the operation of the Project.
ARTICLE 20 - RULES AND REGULATIONS
Tenant and Tenant's agents, employees, contractors, visitors and
licensees shall observe faithfully and comply strictly with the Rules and
Regulations set forth as Exhibit E hereto, and such other and further
reasonable Rules and Regulations as Landlord or Landlord's representatives may
from time to time adopt. Any addition or change in the Rules and Regulations
shall become effective within five (5) days after written notice thereof given
by Landlord or its representatives. Landlord shall not be responsible for the
performance of, and shall not be liable to Tenant or any other Person for
violation of, any of said Rules and Regulations, or the breach of any term,
covenant, condition, provision or agreement in any lease or in any covenants,
conditions and restrictions affecting the Project, by any other tenant in the
Project or other Person.
ARTICLE 21 - NO WAIVER/ENTIRE AGREEMENT/MODIFICATION
The failure of Landlord or Tenant to seek redress for violation of, or
to insist upon the strict performance of any term, covenant, condition,
provision or agreement of this Lease, or any of the Rules and Regulations
attached to this Lease or hereafter adopted by Landlord, shall not prevent a
subsequent act, which would have originally constituted a violation, from
having all the force and effect of any original violation. No provision of this
Lease shall be deemed to have been waived by Landlord or Tenant, unless such
waiver be in writing signed by the waiving party. The acceptance by Landlord of
Rent with knowledge of the breach of any term, covenant, condition, provision
or agreement of this Lease shall not be deemed a waiver of such breach. No
payment by Tenant or receipt by Landlord of a lesser amount than the Monthly
Installment shall be deemed to be other than on account of the earliest
stipulated Rent, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as Rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice
to Landlord's right to recover the balance of such Rent or pursue any other
remedy in this Lease provided. This Lease contains the entire agreement between
the parties, and recites the entire consideration given and accepted by the
parties. There are no oral agreements between Landlord and Tenant affecting
this Lease, and this Lease supersedes and cancels any and all prior
negotiations, arrangements, correspondence, communications, brochures,
agreements and understandings, if any, whether oral or written, between
Landlord and Tenant or displayed by Landlord to Tenant with respect to the
subject matter of this Lease. There are no representations between Landlord
and Tenant other than those contained in this Lease and all reliance with
respect to any representations is based solely upon the terms of this Lease.
Any agreement hereafter made shall be ineffective to change, modify, waive or
discharge any provision of this Lease in whole or in part unless such agreement
is in writing and signed by the party against whom enforcement of the change,
modification, waiver or discharge is sought. This Lease may be executed in one
or more duplicates or counterparts, each of which shall be deemed an original,
but all of which together shall constitute but one and the same instrument.
ARTICLE 22 - LANDLORD'S DEFAULT/LIABILITY
Section 22.1 - Force Majeure
This Lease and the obligation of Tenant to pay Rent and all other sums
due hereunder to keep, observe and perform all of the other terms, covenants,
conditions, provisions and agreements of this Lease on the part of Tenant to be
kept, observed or performed shall in no way be affected, impaired or excused
because Landlord is unable to fulfill any of its obligations under this Lease,
or is delayed or curtailed in any way from doing so, by reason of any cause
beyond Landlord's reasonable control, including, but not limited to, acts of
God, strike or labor troubles, fuel or energy shortages, governmental
preemption or curtailment in connection with a national emergency or in
connection with any rule, order, guideline or regulation of any department or
governmental agency or by reason of the conditions of supply and demand which
have been or are affected by a war or other emergency. Any such prevention,
delay or curtailment shall be deemed excused and Landlord shall not be subject
to any liability resulting therefrom. Tenant waives and releases its right to
terminate this Lease under Section 1932(1) of the California Civil Code or
under any similar law or statute now or hereafter in effect.
Section 22.2 - Notice/Right to Cure
Landlord shall not be deemed to be in default in the performance of any
obligation required to be performed by it hereunder unless and until it has
failed to perform such obligation within thirty (30) days after written notice
by Tenant to Landlord specifying the nature of Landlord's failure to perform
such obligation; provided, however, that if the nature of Landlord's obligation
is such that more than thirty (30) days are required for its performance, then
Landlord shall not be deemed to be in default if it shall commence such
performance within such thirty (30) day period and thereafter shall diligently
prosecute the same to completion. All rights to cure provided to Landlord under
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this Section 22.2 shall also be accorded to any mortgages, ground lessor or
beneficiary under a deed of trust encumbering the Building or the Project.
Section 22.3 - Limitation of Landlord's Liability
22.3.1 The liability of Landlord hereunder or in connection with the
Premises, Building or Project shall be limited to the greater of Landlord's
equity interest in the Building or ten percent (10%) of the value of the
Building, and in no event shall any other assets of Landlord be subject to any
claim arising out of or in connection with the Lease, Premises, Building or
Project.
22.3.2 If, at any time during the term of this Lease, the holder of
Landlord's interest hereunder is a partnership or joint venture, Tenant agrees
to look only to the assets of such partnership or joint venture in the Project
and neither Landlord nor its partners or joint venturers shall have personal
liability with respect to any obligations or payments due or which may become
due from Landlord hereunder. A deficit in the capital account of any partner or
joint venturer shall not be considered an asset of such partnership or joint
venture.
Section 22.4 - Sale by Landlord
In the event that the original Landlord hereunder, or any successor to the
Landlord's interest in the Building, shall sell, convey, transfer or assign the
Landlord's interest in the Building, all liabilities and obligations on the
part of the original Landlord, or such successor, under this Lease shall
thereupon and thereby be released, and thereupon all such liabilities and
obligations shall be binding upon the new owner and Tenant shall look solely to
such new owner for the performance of any of Landlord's obligations hereunder.
This Lease and Tenant's rights and obligations hereunder shall not otherwise be
affected by any such sale, conveyance, transfer or assignment and Tenant agrees
to attorn to such new owner.
ARTICLE 23 - NOTICES
Section 23.1 - Notices to Tenant
Except as otherwise in this Lease provided, a bill, demand, statement,
consent, notice or communication which Landlord may desire or be required to
give to Tenant shall be deemed sufficiently given or rendered if in writing,
delivered personally to Tenant or sent by certified, registered or express
United States mail, return receipt requested and postage prepaid, or sent
prepaid by overnight or same day carrier or courier service which maintains
records of delivery, attempts at delivery and receipts in a manner similar to
those records kept by the U.S. Postal Service for its certified mail, return
receipt requested service, with such return receipt service requested from such
carrier or courier, addressed to Tenant at the address set forth in Paragraph K
of the Summary of Basic Terms, or at such other address as Tenant shall
designate by notice given as herein provided.
Section 23.2 - Notices to landlord
Any notice, request, demand or communication by Tenant to Landlord must be
in writing and delivered prsonally to an officer of Landlord or sent by
certified, registered or express United States mail, return receipt requested
and postage prepaid or sent prepaid by overnight or same day carrier or courier
service which maintains records of delivery, attempts at delivery and receipts
in a manner similar to those records kept by the U.S. Postal Service for its
certified mail, return receipt requested service, with such return receipt
service requested from such carrier or courier, addressed to Landlord, at the
address set forth in Paragraph K of the Summary of Basic Terms, or at such
other address as Landlord shall designate by notice given as herein provided.
If Tenant is notified of the identity and address of Landlord's mortgagee or
beneficiary under a deed of trust, or ground or underlying lessor, Tenant shall
give such party notice of any default by Landlord hereunder in the same manner
Tenant is to give Landlord notice hereunder, and if an opportunity to cure such
default is provided hereunder, such party shall have the period of time set
forth in Section 8.3 to effectuate a cure before Tenant exercises its remedies
on account of a default by Landlord hereunder.
Section 23.3 - Notices Generally
Rejection or refusal to accept a notice, request, demand or communication
given in the manner required by this Article, or the inability to deliver same
because of a changed address of which no notice was given, shall be deemed to
be a receipt of the notice, request or demand sent. Notwithstanding any
provision to the contrary contained in this Lease, no provision in this Lease
shall preclude service of notices in accordance with any state or local law.
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ARTICLE 24 - SECURITY DEPOSIT
Section 24.1 - General
Tenant shall deposit in cash with Landlord the Base Security Deposit and
the Supplemental Security Deposit specified in this Article as security for the
faithful performance by Tenant of all the terms, covenants and conditions of
this Lease (collectively, the "Security Deposit"). Paragraph N of the Summary
of Basic Terms sets forth the initial amount of Tenant's Base Security Deposit,
which Tenant shall deposit with Landlord upon Tenant's execution of this Lease.
Tenant shall increase the Base Security Deposit by depositing in cash with
Landlord an additional amount equal to the amount per month of all increases in
Monthly Installments which Tenant becomes obligated to pay pursuant to Section
3.3.1, which deposit shall be made within thirty (30) days after Notice from
Landlord to Tenant of the amount of such increase. Further, if the Monthly
Installments of Base Annual Rent at the commencement of any Option Term would be
greater than the amount of the Monthly Installment of Base Annual Rent
immediately preceding the applicable Option Term, Tenant shall, before such
Option Term commences, deposit in cash with Landlord an additional amount so
that the amount of the Security Deposit equals one Monthly Installment of Base
Annual Rent due during the Option Term. Landlord shall have the right, without
waiving any of Landlord's other rights and remedies under the Lease, upon the
occurrence of any default described in Section 16.1, to apply the Security
Deposit to cure any such default and compensate Landlord for all the detriment
proximately caused by such default. Landlord will within thirty (30) days
following the termination hereof return the Security Deposit to Tenant or the
last permitted assignee of Tenant's interest hereunder at the expiration of the
Term except to the extent Landlord has applied the Security Deposit pursuant to
this Article. Should Landlord use any portion of the Security Deposit to cure
any default by Tenant hereunder, Tenant shall replenish the Security Deposit to
the full amount within ten (10) days after notice. Landlord shall not be
required to keep the Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on any portion of the Security Deposit.
Upon any sale or transfer of its interest in the Building, Landlord may transfer
the Security Deposit to its successor in interest and thereupon, Landlord shall
be released from any liability or obligation with respect thereto.
Section 24.2 - Supplemental Security Deposit & Changeover Date
Paragraph M of the Summary of Basic Terms sets forth the amount of
Tenant's Supplemental Security Deposit, which Tenant shall deposit with
Landlord upon Tenant's execution of this Lease. Notwithstanding any provision
of Section 24.1 to the contrary, on the last day of the thirty-sixth (36th)
month after the Commencement Date (the "Changeover Date") Landlord will become
obligated to return the Supplemental Security Deposit to Tenant or the last
permitted assignee of Tenant's interest hereunder on the Changeover Date
except to the extent Landlord has applied the Supplemental Security Deposit
pursuant to this Article, and Landlord shall return such amount no later than
thirty (30) days after the Changeover Date, provided, however, if on the
Changeover Date there exists a default described in Section 16.1 or an event or
condition which with the giving of notice or passage of time or both would
constitute a default described in Section 16.1, Landlord shall be entitled to
continue to hold the Supplemental Security Deposit in an amount sufficient to
cure any such default, event or condition and compensate Landlord for all the
detriment proximately caused by such default, event or condition until
Landlord is entitled to apply all or part of such amount or Tenant has timely
cured such default or timely satisfied or performed such event or condition. If
Tenant timely delivers to Landlord a Letter of Credit in accordance with the
provisions of Section 24.3, then notwithstanding any provision of this Section
24.2 to the contrary, on the date Tenant delivers to Landlord such Letter of
Credit ("Letter of Credit Delivery Date") Landlord will become obligated to
return the cash held as the Supplemental Security Deposit to Tenant or the last
permitted assignee of Tenant's interest hereunder on the Letter of Credit
Delivery Date except to the extent Landlord has applied the cash held as the
Supplemental Security Deposit pursuant to this Article, and Landlord shall
return such amount no later than thirty (30) days after the Letter of Credit
Delivery Date, provided, however, if on the Letter of Credit Delivery Date
there exists a default described in Section 16.1 or an event or condition which
with the giving of notice or passage of time or both would constitute a default
described in Section 16.1, Landlord shall be entitled to continue to hold the
cash in lieu of accepting the Letter of Credit as the Supplemental Security
Deposit.
Section 24.3 - Letter of Credit
Notwithstanding any provision of the foregoing to the contrary, for the
period ending at the close of business on the Changeover Date, Tenant may
deliver to Landlord, upon Tenant's execution of the Lease or, subject to the
last sentence of Section 24.2 within six (6) months after the Reference Date, a
clean unconditional, irrevocable, transferrable letter of credit without
documents in a form acceptable to Landlord, providing for payment against
presentation of Landlord's drafts at sight, in whole or partial draws, and
issued by a financial institution acceptable to Landlord, in Landlord's sole
discretion, in the amount of the Supplemental Security Deposit ("Letter of
Credit") in lieu of depositing cash for such portion of the Security Deposit.
The Letter of Credit shall be maintained in effect, whether through renewal,
extension or replacement through and including the Changeover
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Date, and in no event shall any individual Letter of Credit have a term of less
than three (3) years (or equal to the period remaining through and including the
Changeover Date if such period is less than three (3) years). Tenant shall
deliver a certificate of renewal or extension or a replacement Letter of Credit
to Landlord at least thirty (30) days prior to the expiration of the Letter of
Credit, in each case at such time meeting the requirements set forth above for
the Letter of Credit. Failure to timely deliver to Landlord such certificate of
renewal or extension or such replacement Letter of Credit shall entitle Landlord
to draw upon the Letter of Credit in full and retain such proceeds as a part of
the Security Deposit in accordance with Section 24.3 of the Lease, until and
unless Tenant delivers to Landlord a replacement Letter of Credit meeting the
requirements of this Article 24, in which event Landlord shall promptly refund
any unapplied balance of such proceeds to Tenant. Landlord shall be entitled to
draw, in whole or partial draws, upon such Letter of Credit upon the occurrence
of any default described in Section 16.1 and to apply the proceeds to cure such
default and compensate Landlord for all the detriment proximately caused by such
default. Notwithstanding the provisions of the immediately preceding sentence,
(a) such provisions shall not be construed as a waiver or limitation of, or
otherwise adversely affect, Landlord's rights provided above in the
circumstances of expiration of the Letter of Credit, (b) such provisions shall
not be construed as a waiver or limitation of, or otherwise adversely effect,
Landlord's rights to a clean Letter of Credit in the form described above, or to
draw upon the Letter of Credit by sight draft, without documents, or Landlord's
other rights against the financial institution issuing the Letter of Credit as
provided above, and (c) if on the Changeover Date there exists an event or
condition which with the giving of notice or passage of time or both would
constitute a default described in Section 16.1, Landlord shall be entitled to
draw upon the Letter of Credit in an amount sufficient to cure such default and
compensate Landlord for all the detriment proximately caused by such default and
retain such proceeds as a portion of the Security Deposit until Landlord is
entitled to apply all or part of such amount or Tenant has timely cured such
default or timely satisfied or performed such event or condition. If the
Changeover Date does not occur on a business day, the last business day before
the Changeover Date shall be used as the date for Landlord (i) to determine if
it is entitled to draw upon and apply all or any portion of the Letter of Credit
and (ii) to so draw. In connection with any sale or transfer of Landlord's
interest in the Building, Landlord shall be entitled to transfer the Letter of
Credit to Landlord's successor in interest and thereupon, Landlord shall be
released from any liability or obligation with respect to the Letter of Credit
and the Supplemental Security Deposit. Through and including the Changeover
Date, within ten (10) days after any such draw, Tenant shall cause the face
amount of the Letter of Credit to be restored to the original amount within ten
(10) days after notice by Landlord. Tenant shall pay all fees and other expenses
attendant to the issuance and maintenance of the Letter of Credit, including,
without limitation, any renewal, extension, replacement or transfer thereof.
ARTICLE 25 - BROKERAGE
Tenant represents and warrants that the broker or brokers specified in
Article N of the Summary of Basic Terms was/were the sole broker or brokers who
negotiated and brought about the consummation of this Lease, and that no
discussions or negotiations were had with any other broker, agent or finder
concerning the leasing of the Premises. Based on the foregoing representation
and warranty, Landlord has agreed with Tenant that Landlord shall pay such
commission or compensation due to said broker or brokers in connection with
the consummation of this Lease pursuant to any agreement between Landlord and
such broker. Each party hereby agrees to indemnify, protect, defend and hold
the other harmless from and against any claims for brokerage commissions made
by any broker, agent or finder not specified in Article N of the Summary of
Basic Terms arising out of any dealings, actions, discussions, negotiations or
contracts allegedly had with or on behalf of such party, and from and against
any and all losses, costs, expenses, liabilities and damages suffered or
incurred by such party as a consequence thereof, including, without limitation,
attorneys' fees and costs.
ARTICLE 26 - MISCELLANEOUS
Section 26.1 - Captions and Construction
The marginal notes and headings are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
or intent of this Lease nor do they in any way affect this Lease. The language
in all parts of this Lease shall be construed according to its normal and usual
meaning and not strictly for or against either Landlord or Tenant.
Section 26.2 - Definitions
The term "Landlord" as used in this Lease means only the owner or
mortgagee in possession or grantee in possession under a deed of trust, or the
owner of a lease of the Project (or part thereof in which the Premises is
situated) for the time being. The words "re-enter" and "re-entry" as used in
this Lease are not restricted to their technical legal meaning.
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Section 26.3 - Successors and Assigns
The covenants contained in this Lease shall bind and inure to the benefit
of Landlord and Tenant and their respective legal representatives and
successors, and, except as otherwise provided in this Lease, their assigns.
Section 26.4 - Landlord's Approval
The review, approval, inspection or examination by Landlord of any item to
be reviewed, approved, inspected or examined by Landlord under the terms of
this Lease or the Exhibits attached hereto shall not constitute the assumption
of any responsibility by Landlord for either the accuracy or sufficiency of any
such item or the quality or suitability of such item for its intended use, and
shall not constitute an assumption of risk with respect to same, nor a
representation or certification by Landlord nor an estoppel against Landlord
that such matter is safe or reasonable or in compliance with applicable laws.
Any such review, approval, inspection or examination by Landlord is for the
sole purpose of protecting Landlord's interests in the Project and under this
Lease, and no third parties, including, without limitation Tenant or any person
or entity claiming through or under Tenant, or the contractors, agents,
employees, visitors or licensees of Tenant or any such person or entity, shall
have any rights hereunder.
Section 26.5 - Joint and Several Liability
If a partnership or more than one legal person at any time constitutes
Tenant, (1) each partner and each legal person is jointly and severally liable
for the keeping, observing and performing of all of the terms, covenants,
conditions, provisions and agreements of this Lease to be kept, observed or
performed by Tenant, and (2) the term "Tenant" as used in this Lease shall
mean and include each such partner or legal person jointly and severally and
the act of or notice from or notice or refund to, or the signature of, any one
or more of them, with respect to this Lease, including but not limited to any
renewal, extension, expiration, termination or modification of this Lease,
shall be binding upon each and all of the persons executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted
or so given or received such notice or refund or so signed.
Section 26.6 - Governing Law
This Lease shall be governed by and construed in accordance with the laws
of the State of California.
Section 26.7 - Severability
In the event any term, covenant, condition, provision or agreement herein
contained is held to be invalid or void by any court of competent jurisdiction,
the invalidity of any such term, covenant, condition, provision or agreement
shall in no way affect any other term, covenant, condition, provision or
agreement herein contained, unless the elimination of such term materially
affects the fundamental rights and benefits of either party to this Lease.
Section 26.8 - Security Systems
Landlord shall not be obligated to provide or maintain any security patrol
or security system. However, if Landlord elects to provide such patrol or
system in the Building or the Common Areas, the cost thereof shall be included
in Operating Costs as defined in Section 3.4.1. Landlord shall not be
responsible for the quality of any patrol or system which is presently or in
the future provided in the Premises, Building or Project, or for damage or
injury to Tenant, its employees, invitees or others due to the failure, action
or inaction of such patrol or system.
Section 26.9 - Time of the Essence
Time is of the essence with respect to the performance of each and every
provision of this Lease to be performed by Tenant and Landlord.
Section 26.10 - Recordation
Neither this Lease, nor any notice nor memorandum regarding the terms
hereof, shall be recorded by Tenant. Any such unauthorized recording shall give
Landlord the right to declare a breach of this Lease and pursue the remedies
provided herein. Tenant agrees to execute and acknowledge, at the request of
Landlord, a memorandum of this Lease, in recordable form.
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Section 26.11 - Change of Name
If the name of Tenant or any successor or assign shall be changed
during the term of this Lease, such party shall promptly notify Landlord
thereof, which notice shall be accompanied by a certified copy of the document
affecting such change of name.
Section 26.12 - Estoppel Certificates
26.12.1 Tenant shall at any time and from time to time upon not less
than ten (10) days' prior notice from Landlord, execute, acknowledge and
deliver to Landlord a statement in writing certifying to those facts for which
such estoppel certificate has been reasonably requested by Landlord or any
current or prospective purchaser, mortgagee (or beneficiary under a deed of
trust), ground lessor or underlying lessor, including without limitation (a)
that this Lease is unmodified and in full force and effect (or, if modified,
adequately identifying such modification and certifying that this Lease, as so
modified, is in full force and effect) and (b) the dates to which the Base
Annual Rent, additional payments and other charges are paid, (c) whether or not
there is any default by Landlord to the best of Tenant's actual knowledge, or
by Tenant, in the performance of any term, covenant, condition, provision or
agreement contained in this Lease and (d) whether or to the best of Tenant's
actual knowledge, not there are any setoffs, defenses or counterclaims against
enforcement of the obligations to be performed under this Lease and, if there
are, specifying each default, setoff, defense or counterclaim. Any such
statement may be conclusively relied upon by any prospective purchaser or
lessee, encumbrance or ground lessor of the Premises or of all or any portion
of the Project. Tenant's failure to deliver such statement within such time
shall be deemed a statement that this Lease is in full force and effect,
without modification except as may be represented by Landlord, that there are
no uncured defaults in Landlord's performance, nor any setoffs, defenses or
counterclaims, and that no more than one month's Base Annual Rent has been paid
in advance.
26.12.2. Landlord shall upon not less than ten (10) business days
prior notice from a prospective purchaser or lender of Tenant, execute and
deliver to Tenant a statement in writing certifying to the following: (a) that
this Lease is unmodified and in full force and effect (or, if modified,
adequately identifying such modification and certifying that this Lease, as so
modified, is in full force and effect) and (b) the dates to which the Base
Annual Rent, additional payments and other charges are paid, (c) whether or not
there is any default by Tenant to the best of Landlord's actual knowledge, or
by Landlord, in the performance of any term, covenant, condition, provision or
agreement contained in this Lease.
Section 26.13 - Authority
If Tenant or Landlord signs as a corporation or partnership, each of
the persons executing this Lease on behalf of Tenant or Landlord does hereby
covenant and warrant that the party on whose behalf such person(s) sign is a
duly authorized and existing entity, has and is qualified to do business in the
state where the Project is located, has full right and authority to enter into
this Lease, and that each and every person signing on behalf of such party is
authorized to do so. Upon Landlord's or Tenant's request, the other party shall
provide the requesting party with evidence satisfactory to the requesting party
confirming the foregoing covenants and warranties.
Section 26.14 - Attorneys' Fees
In the event that either Landlord or Tenant fails to perform any of its
obligations under this Lease or in the event a dispute arises concerning the
meaning or interpretation of any provision of this Lease, the basis of the
dispute shall be settled by judicial proceedings and the defaulting party or
the party not prevailing in such dispute, as the case may be, shall pay all
costs and expenses incurred by the other party in enforcing or establishing its
rights hereunder, including without limitation, court costs and all fees, costs
and expenses for legal representation, including, without limitation, expert
witness fees.
Section 26.15 - Waiver of Trial by Jury; Venue; Jurisdiction
The respective parties hereto hereby waive trial by jury and any
objection to venue in Alameda County, and agree and consent to personal
jurisdiction of the courts of the State of California, in any action,
proceeding or counterclaim brought by either of the parties herein against the
other on any matter whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of
the Premises, or any claim of injury or damage, or the enforcement of any
remedy under any statute, emergency or otherwise.
Section 26.16 - INTENTIONALLY OMITTED
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Section 26.17 - Binding Effect
Submission of this instrument for examination or signature by Tenant
does not constitute an offer to Lease, or a reservation of or option for a
Lease, and it is not effective as a lease or otherwise until execution by and
delivery to both Landlord and Tenant.
Section 26.18 - Signs
Tenant shall have the right to display and maintain, at Tenant's
expense, on the exterior of the Premises, or in the interior of the Premises if
visible from the exterior of the Premises, only such signs, names, insignia,
trademarks and other descriptive, symbolic or decorative material of any kind
("Sign" or "Signs"): (a) as shall have first received the written approval of
Landlord as to type, size, color, location and other design features; (b) as
shall comply with the provisions and criteria of the Sign Program set forth in
Exhibit F hereto to the extent applicable; and (c) for which Tenant has first
obtained, at Tenant's expense, all required governmental approvals. Landlord's
review of Signs shall be made in accordance with the provisions and criteria
set forth in Exhibit F to the extent applicable. Notwithstanding any other
provision of this Lease, in no event shall Tenant make any alteration or
addition to or improvement on or visible from the exterior of the Premises
without Landlord's prior written consent, which may be withheld in Landlord's
sale and absolute discretion.
Section 26.19 - No Merger
The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Landlord terminate all or any existing subleases or subtenancies, or may, at the
option of Landlord, operate as an assignment to it of any or all such subleases
or subtenancies.
Section 26.20 - Acknowledgement of Waivers and Limitations
TENANT SPECIFICALLY ACKNOWLEDGES THAT THIS LEASE CONTAINS CERTAIN
WAIVERS OF CERTAIN STATUTORY AND COMMON LAW RIGHTS AND CERTAIN LIMITATIONS ON
DAMAGES AND THAT TENANT HAS AGREED THERETO.
Section 26.21 - Exhibits; Riders; Addenda
This lease consists of pages 1 through 39, inclusive, together with the
Summary of Basic Terms, Exhibits A through H and Rider No. 1, all of which are
made a part hereof as though fully set forth herein.
IN WITNESS HEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year set forth in Paragraph A of the Summary of
Basic Terms.
TENANT: LANDLORD:
TELESCIENCES, INC., METROPOLITAN LIFE INSURANCE COMPANY,
a Delaware Corporation a New York corporation
By: /s/ Robert F. Onraet By: /s/ Edward J. Hayes
------------------------ ----------------------------
Robert F. Onraet Print name: /s/ Edward J. Hayes
--------------------
Its Executive Vice President Its: ASSISTANT VICE PRESIDENT
& Chief Financial Officer ------------------------
By: /s/ John McGuire
------------------------
John McGuire
Its Vice President
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